The selection of Overdale as the site of Jersey's new hospital was "procedurally flawed", a scrutiny panel has found.
It said the process was "subjective rather than objective" and questioned why some sites were not pursued.
The panel added it would be "challenging" to keep within the proposed £550m budget.
The government's preferred site is due to be debated by the States Assembly on 17 November.
The Future Hospital Review Panel said it was "not clear" why nine sites had been deselected for Jersey's new hospital, despite meeting criteria.
The People's Park, which was shortlisted to the final two, "should not have been selected beyond the initial site selection process", the report found.
It said this was because the site would not have met the minimum size requirements set out in the preliminary stages.
The panel also suggested Five Oaks, which made it to the final five, would not have been considered "if technical advice been obtained prior to this process".
"Matrix methodology" was employed by a Citizens Panel to make further decisions on the most suitable site, the report said.
In addition, £254m of "non-site specific costs" was identified, which would bring the total cost of the hospital to about £800m.
The panel's head, Senator Kristina Moore, said it was therefore "unclear" if the hospital was "good value for money".
The report made 30 recommendations to the Council of Ministers, which included the hospital project team supplying "valid reasons" as to why site criteria was not always applied.
"Open and transparent communication" with residents affected by the Overdale plans was also noted as an area for improvement.