THE COMPTROLLER and Auditor General has begun an investigation into the manner in which public voluntary hospital facilities appear to have been used as security to raise funding to build the new St Vincent’s private hospital.
The St Vincent’s Healthcare Group (SVHG) recently opened a new private hospital with more than 236 beds but to raise funding for the project a lien was placed on other facilities in the group so that a bank loan could be secured to construct the €190 million private facility.
The Health Service Executive discovered the matter when in discussions about the construction of a new ward block at St Vincent’s University Hospital, which will include long-awaited facilities for cystic fibrosis patients and on which construction work has just begun.
It had serious concerns about the banking arrangement which had been entered into as if the new hospital were ever to fail, the bank would have had first call on the public voluntary hospital on the same site. In a statement to The Irish Times yesterday the HSE said: “Arising out of serious concerns in relation to the use of a lien on a publicly funded voluntary hospital by St Vincent’s Hospital Group in the development of its private hospital, in September 2010 the HSE contacted the office of the Comptroller and Auditor General and referred the issue for consideration by them. The HSE now awaits the CAG report on this issue.”
A spokesman for the CAG said it was looking at this matter and the broader issue of “the security the State has over property it has funded”. He said the CAG was still gathering information and hadn’t determined yet whether it would be issuing a full report on its findings.
The hospital group says the concerns raised by the HSE about a “floating charge” on the group as a result of the construction of the private hospital had been resolved as far as it was concerned through a new covenant.
“We are confident that the State’s interest is fully protected by the recent covenant signed with the HSE: this ensures that the St Vincent’s Healthcare Group’s facilities would be used for healthcare and the HSE has been given first call against the assets of St Vincent’s University Hospital for any funds provided by the HSE to SVUH: these assets are considerably more valuable than the funds advanced,” it said.
“However, if the CAG were to find that the covenant was not robust enough in protecting the HSE’s interests, SVHG would happily re-enter discussions with the HSE to secure the HSE/State’s interest in all money advanced to SVUH,” it added.
It also confirmed that the CAG audited a number of aspects of expenditure of HSE money at St Vincent’s in December including salaries and wages and tendering processes, and the new ward block. “They did not raise any concerns in their debrief to St Vincent’s University Hospital management,” a spokesman said.
He also said it was important to be aware that St Vincent’s University Hospital does not sit on a public site. The Sisters of Charity bought the land and built the hospital, with limited State assistance. In turn, the hospital has been used to treat public patients.