St James’s Hospital in Dublin paid €1.44 million last year to an unlimited company owned by members of staff to provide diagnostic services.
Comptroller and Auditor General Seamus McCarthy told the Dáil Public Accounts Committee on Thursday that the vast bulk of this money had been paid without the services provided to the hospital being subject to a public procurement process.
He also said the staff concerned had not set out their interest in the company in their annual declarations under Standards in Public Office (Sipo) requirements.
The comptroller told Fine Gael TD James Geoghegan that while services to the value of about €40,000 had been subject to a procurement process, those worth €1.399 million had not.
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The hospital, in a statement on Thursday, said €1.44 million had been paid to St James Consultant Radiologist Group Unlimited Company, which was owned by current members of its staff, and that each of the individuals involved had fulfilled their contractual obligations.
The hospital said it had used resources provided by the National Treatment Purchase Fund “to safeguard patient care and ensure timely access to essential imaging services”, in particular for those with cancer or requiring cardiac care.
“St James’s Hospital continues to experience a sustained and exponential increase in demand for radiology services, particularly in the areas of cancer and cardiovascular diagnostics. In 2024, demand exceeded capacity by approximately 22 per cent, with CT, MRI, and ultrasound services most significantly impacted.”
It said all insourced and outsourced imaging was independently scheduled, ordered strictly on a clinical basis and prioritised for urgent cases.
In-sourcing generally involves public hospital staff, frequently engaged by a third-party company, providing services to clear waiting lists using State-funded facilities and equipment outside of core working hours. Outsourcing refers to the practice of sending patients from a public hospital to an outside healthcare provider.
In September 2024, The Irish Times reported that Health Service Executive internal auditors had found that 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.
The revelations by the auditors ultimately led to a broader investigation into the practice by HSE chiefs and plans to phase out insourcing arrangements by next summer.
St James’s Hospital said it acknowledged that €1.4 million in expenditure, while used for essential radiology services, was not subject to open competition.
“All current services provided by this vendor are provided in line with HSE guidelines,” it said, adding that relevant Sipo requirements had since been “addressed and rectified”.
“The individuals concerned were informed of the audit findings and have since submitted or corrected their returns. This included outlining the compelling reasons for undertaking the additional work, which in this case was to provide time-critical cancer and cardiovascular diagnostics.”
Sinn Féin committee chairman John Brady said the issue was very serious and it would seek a full briefing.
