An independent review is being conducted into how St Vincent's University Hospital in Dublin funded the building of its new €190m private hospital, which opened last November.
The Health Service Executive has asked the Comptroller and Auditor General (CA&G) to examine whether the public hospital facilities were mortgaged to help fund the private hospital and if the State's interest has been protected.
In a statement to RTÉ News, the HSE said it referred the matter to the CA&G last September due to 'serious concerns in relation to the use of a lien on a publicly funded voluntary hospital in the development of its private hospital.'
St Vincent's is one of the biggest public voluntary teaching hospitals in the country and last year it received around €217m in funding from the HSE.
A spokesperson for St Vincent's said that the private facility was built without HSE funds and insisted that the State's interest in the public facility has been fully protected.
It also said that the land on which St Vincent's operates is not public land.
The hospital says that the State will benefit from the fact that the former building occupied by the old private hospital will be used to benefit public patients.
The new 236-bed private hospital is now the biggest private facility in Dublin.
St Vincent's University Hospital is owned by the Religious Sisters of Charity, who also own the private hospital.
The HSE raised the issue with the C&AG, after the executive introduced a stipulation in recent years, that public voluntary hospitals give the State a charge over their facilities, in return for public funding.
As St Vincent's is a voluntary hospital, the HSE had no powers to audit it and so referred the matter to the C&AG.
A spokesperson for the Comptroller and Auditor General said it was also looking at the broader picture to see if the State has proper security in the buildings it has an interest in.