A total of €1 million will have to be paid by the North Eastern Health Board towards the funding of 30 extra staff for St Mary's Hospital in Drumcar.
The board chief executive, Mr Paul Robinson, said yesterday the money will be taken out of the board's contingency fund for this year.
Conditions at the hospital, including the fact that some patients had to be restrained due to lack of staff, were highlighted in The Irish Times last month.
The conditions were revealed in an independent report commissioned by the St John of God's Order, who run the hospital.
The report made a number of recommendations including the immediate filling of 30 posts, it said 94 additional positions are needed to address all their concerns.
All the recommendations in the report will be acted on and progressed "as a matter of priority" and resources permitting, will be in place by 2005, he told board members.
Board member, Dr Teresa Carey said she took her hat off to St John of God's and the way in which they "maximised" the impact of the report with "a well organised press launch."
She said the way the 30 posts have been found and filled was "astonishing" and suggested the board learn from the order how to manage the Department of Health.
Vice-chairman Jimmy Mangan said the €1 million should be reclaimed from the Department as it was a service they should fund directly.
Mr Robinson said the need for additional staff for night duties was being addressed by the appointment of the 30 additional posts and it would not impact on the boards own employment ceiling.