Fine Gael has called on the Government to clarify the "very unusual" circumstances surrounding the signing of a €56 million computer contract between the Health Service Executive (HSE) and iSoft, a British firm at the centre of two inquiries into accounting irregularities.
It has emerged that the Department of Finance gave oral rather than written approval for the contract, which was then signed outside of business hours on Saturday, April 30th, 2005.
The contract was also the subject of a query to the Attorney General's office for advice on whether it complied with official tendering procedures.
It is likely that the contract will now fall within the remit of separate inquiries by two British financial watchdogs, which will concentrate on the firm's activities in the 24-month period ending April 30th, 2005.
The inquiries centre around concerns that the firm inflated revenues by incorrectly including contract revenue it had yet to receive.
Specifically, the Financial Services Authority will be investigating whether iSoft misled investors through incorrect claims about profitability. The Accountants Disciplinary Board is also to investigate more detailed aspects of the firm's accounting policies.
The firm last Friday posted losses of more than €500 million after it was forced to make major adjustments to its accounting procedures.
Its own auditors, Deloitte, have also raised concerns that it had incorrectly included revenue in its accounts "earlier than it should have been".
The firm's share price has plummeted since the revelations, while key staff involved in the controversy have either left or been suspended.
The firm holds one of the biggest technology contracts in the world, the €9 billion overhaul of the British National Health Service's patient record system, which is already two years behind schedule. The €56 million contract with the HSE is for a similar project in Irish hospitals.
The HSE has said €10 million has been paid to iSoft for its work to date, and that it was monitoring events "closely in the UK". However, it said there were various "safeguards" in the contract that protected the HSE's interest.
Concerns about the iSoft contract were first raised in the Dáil by Fine Gael last November.
Yesterday, Fine Gael leader Enda Kenny said that following the latest revelations about iSoft, the Government "must now explain if the irregular handling of this €56 million contract is part of the investigation being carried out by UK watchdogs".
He called on the Government to clarify if the events in the UK meant the original contract was now in jeopardy.
When the contract was first raised last November, the HSE said iSoft was originally chosen as preferred bidder in early 2003 following a full procurement process, but that the signing of the contract was delayed because of the restructuring of the health service at the time.
Yesterday a Department of Finance spokesman said the department provided verbal approval for the spending on April 29th. This was followed by written approval early the next month.