Calls continue for police, judicial involvement in Liberals’ agency nursing scandal

Calls are mounting for transparency and accountability following a public accounts committee hearing last week, during which provincial senior health officials claimed the province’s health authority is not to blame for issues and concerns raised in a recent Auditor General report on the contracting of private agency nurses.

On Monday PC leader Tony Wakeham said the inquiry raised more questions and highlighted the urgent need for a judicial inquiry. “Last week, my colleagues Pleaman Forsey and Joedy Wall asked tough but fair questions about how this scandal was allowed to happen, but they weren’t given full answers.”

On Aug. 12 the public accounts committee heard from four senior officials from Newfoundland and Labrador Health Services (NLHS). The committee, which reviews how public money is spent, held the hearing in response to a report from Auditor General Denise Hanrahan which found that the health authorities, which merged into NLHA in April 2023, did not follow proper procedures when hiring agency nurses and spent $241 million on private nursing services between 2022 and 2024. Hanrahan also found “strong indications of potential billing fraud,” she notes in the report.

“The cause of the problems occurred in the legacy organizations where there was a systemic failure to be able to administer these contracts,” NLHS CEO Pat Parfrey told the committee, referring to the four legacy regional health authorities: Eastern Health, Central Health, Western Health and Labrador-Grenfell Health.

When the province began hiring agency nurses to address post-pandemic staffing shortages, health officials lacked experience in “entering into the contracts, or how to administer the contracts,” Debbie Molloy, the health authority’s vice-president of human resources, told the committee.

Parfrey said the mass exodus of nurses during and after the pandemic was unprecedented, noting “it was impossible to plan for it, and it occurred quickly.”

Registered Nurses’ Union (RNU) Executive Director David Hammond is skeptical of the claims and found the argument that an employer was unprepared for the workload and lacked the necessary job knowledge to be problematic. “Why would we enter into a contract with a private agency, spend hundreds of millions of dollars, if we’re not even sure we can handle the specifics of the contract or the volume?”

Accountability and transparency

Parfrey told the committee he doesn’t support the idea of identifying and holding a few people responsible for what he says was a systematic failure. “‘No, you’re most incompetent, so we’re going to get rid of you,’” he said. “I don’t really agree with that. I think that a just culture means that we’ve got to rectify the problems that we’ve had.”

Hammond said this isn’t about assigning blame but a matter of the public’s right to complete transparency about which officials from the regional health authorities approved the contracts. He said the health sector must also clarify what due diligence was carried out to ensure the contracts were executed ethically and in line with established procedures. Hammond also emphasized the need for transparency around the steps taken by NLHS to ensure that the same mistakes are not repeated.

“Over a quarter of a billion dollars was spent on these contracts, and we still don’t know who agreed to them, how they were approved, or how questionable invoices were paid,” Hammond said in an Aug. 14 news release from the union. “The public deserves a full accounting. What we heard on [Aug. 12] did not provide that.”

In addition to PC MHA Pleaman Forsey—who serves as chair of the public accounts committee—and PC MHA Joedy Wall, the committee also includes Liberal MHAs Lucy Stoyles—who serves as vice-chair—and Perry Trimper.

After the hearing, the RNU accused Stoyles and Trimper of not doing enough to get answers, saying they “spent much of their time setting up answers for NLHS to affirm rather than pressing for accountability.” The union said “critical lines of inquiry were left untouched, including the Auditor General’s finding that some spending may have been fraudulent.”

Hammond said “there seemed to be a lot of wasted time with statements and self reflections from the panel,” instead of asking key questions about who signed contracts with what Hanrahan calls “Agency A” in her report.

Hanrahan found that, in 2022, NL Health Services awarded Agency A a $28.3 million contract despite the agency having less than two years’ experience. The report also raised “strong indications of potential billing fraud,” including over $90,000 paid for 81 weeks of electric vehicle rentals for nurses who were not in the province.

Hammond said the committee also missed out on asking questions about some of the measures NLHS is taking to ensure transparency, including when NLHS Vice-President of Corporate Services and Chief Financial Officer Scott Bishop mentioned the health authority had created a centralized agency office that “provides that rigour, and that verification process for approvals prior to payment, and it allows them to use a standardized terms and conditions.”

Hammond noted there was very little discussion about who was leading the office, what its specific functions are, and what changes have been made to ensure contracts are properly reviewed, approved, and monitored.

Changes coming to health system: Parfrey

Parfrey told the committee several actions have been taken to hire nurses and decrease the province’s dependence on agency nurses, including the hiring of more than 320 internationally-educated nurses and offering full-time positions to 93 per cent of locally-graduating nurses.

But Hammond says that claim doesn’t tell the whole story. He said most nursing graduates in the province are hired full-time only if they’re willing to work in very rural or remote areas. Other graduating students are offered temporary full-time positions. He said nursing students have told the union there were significant delays in getting job offers. 

“There was pockets of students who did not receive employment offers, and in most cases, the majority of offers that were offered were temporary, full time or summer relief positions,” he said, adding that temporary full-time positions do not provide the stability that nursing graduates need “to embed themselves into the community or to retain them over a significant period of time.”

Forensic audit results in September

Following the auditor general report’s release in June, the NDP called for a police investigation. “Being reimbursed for non-reimbursable expenses, renting electric vehicles for nurses who did not appear to have the vehicle, or for nurses who were not even in the province, this must be investigated,” party leader Jim Dinn said at the time. “This Liberal government is asleep at the wheel, and their solution of throwing money at private companies instead of supporting our public healthcare system has worsened the healthcare crisis for people in this province.”

During the committee hearing last week, Parfrey said a forensic report reviewing payments made to nursing agencies will be released by the end of September. Wall asked if NLHS has contacted authorities about the potential billing fraud. Parfrey said that is “contingent on the report from the forensic audit” due next month. “Depending on what that demonstrates, then we will make a decision about going forward with the law enforcement,” he said. “If there’s an indication of fraud, or potential fraud, we will do so.”

In her report, Hanrahan made 15 recommendations, 12 of which NLHS says have been actioned.

Hammond said he wants the committee to hold further hearings and “demand more answers to the outstanding questions.” The first hearing “was an opportunity to provide that clarity and solutions, and instead it just left critical questions unanswered and failed to address the systematic issues identified by the auditor general.”

The NDP has also used the scandal to highlight labour changes it says need to be made to avoid similar situations in the future, including ending unpaid work terms for nursing students, who work up to 1,300 hours without financial compensation. “These young people have to take out loans to pay tuition while they are performing vital work in the wards and other workplaces,” the party said in a July 28 news release.

If they form government in the fall election, the party would implement a “multi-year labour plan for our healthcare system, ending unpaid work terms and setting up NL Nursing Students to begin their careers as [licensed practical nurses and registered nurses] in the province.

Wakeham—a former CEO of Labrador-Grenfell Health—also says the government must go further. “The public has lost confidence that the Liberals can manage healthcare responsibly,” he said Monday. “A judicial inquiry is the only way to uncover the truth, ensure accountability, and prevent this from ever happening again.”