Two companies which received more than €1.5 million between them in contracts awarded by University Hospital Limerick without a competitive procurement process were owned or part-owned by employees at the facility.
Health Service Executive internal auditors also found that a third company which received a contract of nearly €400,000 had a HSE employee at a different hospital as a director.
An internal audit report, released on Monday, stated €14.2 million was paid out to third-party providers by University Hospital Limerick in 2023 under a Government initiative to reduce waiting lists without an open competitiveness procurement process.
Auditors said that management at the University of Limerick Hospital Group confirmed that it had no dedicated procurement function.
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The audit said one contract for €714,087 and a second for €919,885 had gone to separate companies which had a director who were staff members at the Limerick hospital at the time the work was undertaken.
Auditors said there was no evidence of the HSE employees being involved in the awarding of the contracts.
The audit found that, in 2021, the HSE implemented a “dynamic purchasing system (DPS)” to provide insourcing of clinical services. It said such a model was used widely by public bodies across the EU.
“At the time of the audit, there were 14 healthcare providers who were on this DPS framework having met the standard terms for the provision of clinical services. When a hospital has a non-recurring funding initiative, they can conduct a mini competition open to the providers on the DPS framework, rather than a full tender process.”
The auditors found that while the use of this DPS framework by hospitals to provide insourced services was standard, “the practice of engaging staff in a private capacity requires further consideration regarding any legal and human resource implications”.
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Management told the auditors that “in most incidents the DPS company employed the local HSE consultant and other staff to provide the service”.
“Internal audit was informed this is standard practice across all hospitals that use companies on the DPS framework,” the report said.
HSE Mid West said: “We fully accept the findings of the internal audit report and we are working with colleagues nationally on the establishment of an enhanced procurement support function within the HSE Mid West to ensure full compliance in future.”
It said reducing waiting times for patients was a key priority.
The audit said Minister for Health Stephen Donnelly had committed to providing €240 million to the HSE and the National Treatment Purchase Fund to try to clear waiting list backlogs.
It said last year the HSE allocated €99 million for this purpose. Once their application was approved, hospitals could either deliver the additional services themselves by recruiting additional personnel or by means of overtime. Alternatively, they could contract a private provider to carry out the work on their behalf. The private provider could either deliver the service at the public hospital (an insourcing arrangement) or at its own facility (an outsourcing arrangement).
Management in Limerick told the auditors that the rationale for procuring services had been the geographic location of patients; the availability, capacity and qualifications of service providers; and their availability to deliver continuity of care for patients.
Management said all initiatives were subject to review by the scheduled care oversight committee at the hospital.
Auditors said an assessment of a sample of waiting list initiatives in other locations found “an open competitive tender process was not completed for one initiative out of 12 sampled in Galway University Hospital and one of the 10 sampled at Tallaght”.
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