The state's troubled mental hospital in Goldsboro is not safe for patients and should lose its federal funding, regulators have recommended to the federal government.

If federal administrators take the likely step of agreeing with the investigators' recommendation, the hospital would lose an average of $798,000 a month in federal insurance payments for indigent patients.

The recommendation to decertify the hospital surprised few who followed news of the hospital's problems over the past month.

Cherry drew national attention after a patient was left sitting in a chair for more than 22 hours without food while staff members in the room played cards and watched television. Nursing staff members did not follow a doctor's orders to regularly check Steven Sabock's vital signs and give him fluids. At least two hospital workers were caught falsifying Sabock's medical records. Sabock, 50, died of a heart condition April 29.

After being warned that it was in danger of losing its money, Cherry started a staff re-education program on proper patient care to show investigators that it was trying to solve its problems. While those classes were under way, two staff members were accused of beating a patient.

Cherry's problems have hurt its reputation with accrediting agencies and will likely cost the state money that could be going to community mental health programs, said Debra G. Dihoff, executive director of the National Alliance on Mental Illness in North Carolina. "I think that's appalling," she said.

The state would cover the shortfall rather than turn those patients away.

The Department of Health and Human Services runs the state mental hospitals. Tom Lawrence, an agency spokesman, said no one would talk about the recommendation until DHHS receives official notice from the federal government.

The state has faced an avalanche of problems with its entire mental health system and with its psychiatric hospitals in particular.

As part of mental health reforms adopted in 2001, the state began requiring local governments to shift most of the responsibility for community mental health services to private companies. But that change created another debacle. People with severe mental illnesses were left without proper treatment when private providers rushed to offer a lucrative but basic service called community support. Severely ill patients who could not find proper community treatment crowded into state mental hospital wards. Hospital admissions for short-term stays exploded.

This the second time Cherry has been threatened with the loss of federal money, and the sixth time for the state's mental hospitals, all within the past 13 months. Broughton Hospital, the state's psychiatric hospital in Morganton, lost its money for nearly a year.

Dihoff said hospital crowding is partly to blame for Cherry's troubles. "It's the failure of the whole system that caused this," she said.

The state has already taken steps that could mean major changes at Cherry.

The state plans to hire a hospital management company in a few weeks to perform a top-to-bottom review of hospital operations and management. The management company will run the hospital during the review.

The hospital is closing wards to increase staff supervision. An internal hospital investigation into Sabock's care found that lower level nursing staff members -- health-care technicians and licensed practical nurses -- were left without proper supervision from registered nurses. The ward where Sabock died was closed about 11 days ago, and Cherry's medical unit closed late last week. Patients were transferred to Dorothea Dix Hospital in Raleigh and to Central Regional Hospital in Butner.

Cherry will no longer accept more patients than it has room for.

Once a hospital loses its federal money, it can be difficult to get the money back.

In the 11 months that Broughton Hospital was without its federal insurance payments, the hospital closed a ward so psychiatrists would have fewer patients to treat, demoted the director and brought in an experienced administrator to fix problems.

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