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* Set a $61-an-hour rate for services performed by workers with only a high school diploma.

* Allowed providers to recruit clients and determine what services they needed, which permitted providers to refer clients to themselves.

* Allowed people to receive 30 days of service without government authorization.

* Allowed companies to start work immediately and qualify later.

The latter two actions came because the state was concerned that people who had been served under an old community program would be denied or that there wouldn't be enough companies to provide service.

"I think, with the benefit of hindsight, we made those initial entrance criteria more liberal and loose than they needed to be," said Leza Wainwright, deputy director of the Division of Mental Health, Developmental Disabilities and Substance Abuse Services.

Taxpayers would pay dearly for each of those decisions.

In the summer and early fall of 2006, officials at Health and Human Services apparently paid little or no attention to the bills pouring in. They saw that more people were being served, but they had expected it, Wainwright said. They had hoped for it.

If officials had been alert, they would have been stunned. About 90 percent of the money was going to the two community support services.

In June 2006, the bill for community support was $27.5 million, half as much as the state had expected to pay in a year. By August, the bill had almost doubled, to $50.7 million. It continued to grow.

By February 2007, when the Health and Human Services accountability team started an audit, the monthly bill was $93.5 million.

"I've heard the analogy used here that this sort of lined up to be the perfect storm," said Jim Slate, the director of budget and analysis at Health and Human Services. "Did we know it was going to do what it's done? No. Nobody had a clue."

Health and Human Services had expected that the child and adult community support programs would be delivered, in part, by people with college educations and even advanced degrees. The department had agreed to pay a "blended" rate for that mix.

"The initial rate of $61 per hour assumed that the higher skilled staff would be involved in about one-quarter of the services rendered," Hooker Odom, the former secretary of health and human services, told Easley in a letter last April. She said her department's auditors had discovered that 98 percent of the service was being provided by high school graduates.

What Hooker Odom did not say in her letter was pivotal: Her department had agreed to pay high-skill wages without requiring high-skill workers.

By November, when Health and Human Services declared a moratorium on new providers, 784 were being paid for community support -- but only 137 for more critical services.

The numbers tell the story: From March 2006 through January 2008, community support for children and adults cost nearly $1.4 billion, 90 percent of new community spending. During that same period, the government spent $78 million -- 4.9 percent -- on the seven services more likely to reduce the need for hospitalization.

Officials had intended to spend more on those more intensive services than on community support.

The department concedes that it set the rate too high for the two community support programs and too low for most of the other services for more seriously ill people. It cut the rate for child and adult community support last April but still has not raised the rates paid for the other services.

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