N.L. auditor general reveals $132M spent on agency nurses in 2024, with signs of fraud, overspending, and mismanagement across health authority contracts.
Massive Overspending Uncovered
Newfoundland and Labrador Health Services (NLHS) spent over $132 million on agency nurses in 2024 alone—a sevenfold increase from 2022—according to a bombshell report released this week by provincial Auditor General Denise Hanrahan. The total payout to 11 staffing agencies since 2022 has now surpassed $241 million, raising red flags over financial oversight, procurement practices, and contract management.
Hanrahan’s investigation found that the average annual cost per agency nurse topped $400,000, compared to roughly $118,000 for a mid-career nurse within the public system.
Flawed Contracts and Questionable Payments
The AG report, tabled Wednesday, paints a picture of widespread mismanagement. Hanrahan said a sample audit of 84 invoices uncovered more than $4 million in overspending, including non-reimbursable expenses and unverified overtime payments. Contracts with nursing agencies were often executed under emergency exemptions and contained vague or unfavorable terms, without competitive bidding or due diligence.
“This wasn’t just bad practice,” said Hanrahan. “It showed a complete lack of respect for public funds.”
Conflict of Interest and Rent Deals
One of the report’s more startling findings was the conflict of interest involving 49 NLHS staff members, who entered 53 lease agreements with agency nurses—providing housing at a 90% markup. These arrangements cost the health authority nearly $1.9 million in rent, despite staff not being required to sign a conflict of interest declaration or code of conduct.
The AG also discovered that personal rental properties were used to house nurses, benefiting senior managers directly.
Suspicious Vehicle Rentals and Potential Fraud
The report highlighted possible billing fraud involving Agency A, one of the largest recipients of NLHS contracts. Despite a proposal rejection in early 2023, the agency continued to supply nurses with electric vehicles, submitting 60 invoices totaling over $546,000.
At least $91,000 in charges related to eight-week rentals were tied to nurses who, the report notes, never appeared to have worked in the province. Hanrahan warned of escalating fraudulent patterns: “You try a little, then a little more, and then keep going.”
Leadership Response and Next Steps
In response, NLHS CEO Pat Parfrey said work is underway to address the findings. The authority has accepted all 15 of the AG’s recommendations, including a complete audit of Agency A’s invoices and potential cost recovery. Contracts with the agency have been terminated, and a new standardized agreement for agency nurses is being developed.
Parfrey acknowledged the need for urgent hiring during the COVID-19 crisis but defended recent reforms: “We now have a plan that focuses on value, safety, quality, and long-term staffing stability.”
A System Under Scrutiny
This is not the first time concerns have been raised about agency nurse spending. Registered nurse representatives had called for an audit in early 2024, after it was revealed that $35.6 million was spent on agency nurses in just five months of 2023.
Hanrahan expressed frustration over repeating audit themes. “It’s about basic financial controls,” she said. “Public money should never be spent without confirming what you’re paying for.”
Her office emphasized that while no issues were found with patient care, the audit highlights an urgent need for systemic reform in financial governance.
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