The state Department of Health and Human Services wasn't prepared for changes in the state mental health system that were introduced when the state threw open the doors to private businesses who wanted to treat patients.

When businesses are offered money through government programs and learn that there's little oversight, they will seek to capitalize, John Turcotte, head of the legislature's program evaluation division, said Wednesday.

"The department didn't anticipate that dynamic," Turcotte said. "When you turn off front-end controls, word gets out. If there is money to be made, people are going to find out."

Legislators on the program oversight committee reviewed a report critical of the way the department introduced an array of new mental health services in March 2006.

The report focused on the out-of-control spending on a basic mental health service called community support, and included information that has been published in The News & Observer in February and in a recent state auditor's report.

The News & Observer reported that the state wasted at least $400 million on community support, but the report did not draw any conclusions on the level of overspending.

State Rep. Paul Luebke, a Durham Democrat, said DHHS was slow to tell legislators about the problems and to make corrections.

He pointed to a chart that showed community support cost more than $90 million in February 2007, and far outpaced spending on more intensive mental health services.

"There were no controls," Luebke said. "Nobody knew what it was for. Who is responsible for that? How did that happen?"

Leza Wainwright, a co-director of the state Division of Mental Health, did not answer Luebke. But she said later that there were so many changes happening so quickly, with so many people working on them, that no one individual was responsible for mistakes.

Rep. Drew Saunders, a Mecklenburg Democrat, called the report "gory."

"It appears to me that some of these decisions almost rise to the level of being criminal," he said. "And looking at this report is almost like looking at crime scene photos."

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