An alarm costing just €10,000 would have detected high levels of chlorine in a Meath water supply which left 1,200 people unable to drink from their taps.
Last week, people in south Meath were advised to avoid drinking or washing following reports that young children had been breaking out in rashes.
Irish Water later said up to five-times 'normal' levels of chlorine were added to drinking water due to a mechanical failure.
The utility's managing director, Jerry Grant, said the chlorine monitor and alarm would cost around €10,000.
He said an audit of all small booster systems - which pump chlorine into the water network - was currently under way.
"We've had an issue at Kilcloon in Meath where there was a mechanical failure in terms of the dosing equipment.
"It resulted in higher than normal dosing levels gradually increasing in the system," he said.
"It was a small booster system and it didn't have a chlorine monitor alarm."
Mr Rant added: "We have been going through a national programme of all our sites to put in these monitors, and this site hadn't been got to."
Mr Grant said that following complaints early last week, water samples were taken from the network.
"Levels were significantly above normal, five or six times what we would normally consider sufficient, so we put on a restriction and flushed the system," he added.
"The Environmental Protection Agency has asked us to immediately address the monitoring situation, and we will undertake an audit to catch others that don't have this equipment."
He said a national programme to install alarms and improve disinfection was "nearly finished".
Mr Grant also advised that anyone with health concerns should contact their doctor or HSE for advice.
Homes and businesses in the several areas were affected by the high levels of chlorine released into the supply: Kilcloon, Moygaddy, Killeany, Kilgraigue, Harristown, Brownstown, Ballynare, Butlerstown, Staffordstown, Brownrath, Blackhall Little, Waynestown, Harlockstown and Ballymacoll.