Bombshell AG report finds NLHS overspent millions on agency nurses in N.L.
NLHS has spent $241 million on agency nurses since 2022, report finds
Another bombshell report from Newfoundland and Labrador's auditor general found the province's health authority hired agency nurses at a frivolous pace without proper financial or credential oversight.
The report also shows millions of dollars of ineligible expenses being paid and instances of possible fraud.
Denise Hanrahan said Newfoundland and Labrador Health Services spent over $132 million on agency nurses to fill gaps in the health-care system in 2024, a massive increase from just $18 million spent in 2022.
In total, the health authority has paid out over $241 million to 11 agencies since 2022.
According to Hanrahan's report, the health authority's current spending means that the average agency nurse is costing it over $400,000 annually. By comparison, a mid-career nurse already in the provincial health-care system costs around $118,000.
"At the start of this audit, I expected the health authority to manage those contracts appropriately," she said.
"To say our audit found the opposite of that is an understatement. The heath authority did not follow their own processes in the procurement of agency nursing services, or even best practice."
Hanrahan said a sample size of 84 invoices showed over $4 million in overspending, including instances where non-reimbursable expenses were paid. There were also incidences of overtime being paid out with no proof it was actually worked.
She said the health authority also accepted language in its contracts with nursing agencies that was often unfavourable, and that there was little evidence of credibility checks when negotiating with agencies. Those contracts were often signed using emergency exemptions, rather than open, public bidding.
"The vague contract language meant money was also wasted on other charges that should never have been paid. In my opinion, it shows a complete lack of respect for public funds," she said.
Hanrahan pointed to a specific example where NLHS signed a $28-million contract with a nursing agency in 2022 that had less than two years of experience, calling it "simply not acceptable."
Those who represent registered nurses already in the province's health-care system first made calls for Hanrahan to investigate agency nurse spending in early 2024. At the time, it was revealed that the health authority spent $35.6 million on agency nurses from April to August 2023.
Hanrahan said almost the same amount had been spent on agency nurses between January and March 2025, and questioned the spending given reporting from the health authority in February that the use of agency nurses had dropped by 42 per cent from its highest point.
"To me, it's disingenuous to say you have almost a 50 per cent reduction in travel nurses, and that's head count ... but you're spending the same amount."
The health authority also offered agency nurses jobs in the public system, along with personal rental properties for the personal benefit of managers.
In her report, Hanrahan found 49 health authority staff violated conflict of interest rules by entering into 53 lease agreements. However, staff are not required to sign a conflict of interest agreement or a code of conduct, she added.
A total of $1.9 million was paid in rent to those employees at a 90 per cent premium.
Electric vehicle spending could be fraudulent
The report also outlines a series of payments to the same company that NLHS signed the $28-million contract with — referred to as Agency A — for the rental of electric vehicles.
"Despite rejection of a proposal from Agency A by the central region in March 2023, Agency A continued to supply its nurses with electric vehicles, as proposed," the 56-page report reads.
The agency submitted 60 invoices to the health authority, totalling $546,657.
The report said the practice showed "strong indications of potential billing fraud" as payment sizes increased, and included over $91,000 for eight weeks of rentals for nurses who did not appear to have ever been in Newfoundland and Labrador.
"For us, from a fraud perspective, it's a lot of times how that happens, right? You try a little bit, you try some more, you keep going," Hanrahan said.
"It just shows the importance of making sure when somebody makes a decision to spend one dollar of public money, it's the right thing to pay."
Hanrahan has served as Newfoundland and Labrador's auditor general for four years, and called this audit a significant one — while also voicing frustration over having to critique similar mistakes across her audits.
"I think my frustration is starting to show with respect to repetitive issues that are solvable," she said.
"I think it's overall management of processes, of administration. Nothing in this audit dealt with care.... Knowing that someone paid an invoice using public money, and didn't have the information to confirm what was on that invoice, makes no sense."
Work underway: NLHS
The report offers 15 recommendations, which Hanrahan said the health authority has accepted.
NLHS CEO Pat Parfrey said work to bring them in has already begun. He said the health authority already planned to standardize its 17 current agency nursing contracts into one agreement, while working to create an agency nurse reduction plan with a focus on value, safety, quality, recruitment and retention.
"What happened in COVID is the key piece. We needed agency nurses and fast as possible and immediately, because people were dying," Parfrey told reporters.
"I personally think that how we're going forward at the present moment is actually good, and we have a plan in how we go forward."
Another recommendation involves the health authority completing a comprehensive audit of all amounts paid to Agency A, and recover as much as it can.
Debbie Molloy, NLHS vice-president of human resources, said the health authority hasn't worked with Agency A since contracts were renewed in April, and several of the contracts with Agency A were ended early.
"If there's actually fraud there, we will follow through on it. And we do have to do a deeper dive into the various invoices that were submitted, to actually see how they evolved," Parfrey added.
Speaking on the rental agreements between agency nurses and registered nurses, Parfrey said registered nurses won't face discipline.
"I don't think there was badness done. We needed to get leased accommodation for these nurses coming into the province, and we needed to get the accommodation in various places," he said.
"Much of what the auditor general is requesting, we've already instituted. And we agree with her."
Download our free CBC News app to sign up for push alerts for CBC Newfoundland and Labrador. Sign up for our daily headlines newsletter here. Click here to visit our landing page.
Corrections
- A previous version of this story said 49 private agency nurses entered into 53 lease agreements. In fact, 49 health authority staff entered into 53 lease agreements with agency nurses.Jun 25, 2025 5:47 PM EDT
With files from Heather Gillis