The state Department of Health and Human Services wasn't prepared for changes that came with handing most public mental health treatment over to private businesses, a legislative analyst said Wednesday.

When businesses are offered money through government programs and learn that there's little oversight, they will seek to capitalize, John Turcotte, head of a legislative office that evaluates state programs, told a legislative oversight committee.

"When you turn off front-end controls, word gets out," he said.

Legislators on an oversight committee reviewed a report by Turcotte's office that was critical of the way the department introduced a variety of new mental health service in March 2006.

The report focused on the out-of-control spending on a basic mental health service called community support. Much of the information in the legislative report echoed findings published in The News & Observer in February and in a recent state auditor's report. The N&O reported the state wasted at least $400 million on community support. The state paid companies about $61 an hour for services often provided by workers without college degrees, and companies offered community support to people who did not need it.

The legislative report said the high spending on community support "caught the department by surprise." But the report did not draw any conclusions about the amount of overspending.

Rep. Paul Luebke, a Durham Democrat, said the Department of Health and Human Services was slow to tell legislators about the problem 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 services.

"There were no controls," Luebke said during the meeting. "Nobody knew what it was for. Who is responsible for that?"

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, and with so many people working on them, that no single person was responsible for the 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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