The state's Mental Hygiene Administration didn't have adequate procedures to ensure consumers given care were eligible, according to audit by the Department of Legislative Services during fiscal 2013.
The state funds in question totaled $16.4 million. The total budget that year was $788 million when federal funds were counted.
The audit also found reviews weren't done in a timely manner by an accounting firm hired to monitor some of the agency's fiscal functions, with some reviews taking up to an extra 21 months. And there wasn't proper security in place to protect consumer information.
Dr. Joshua M. Sharfstein, secretary of the state Department of Health and Mental Hygiene, said the department has made progress on all fronts, though he said in a letter to auditors that documentation was sometimes difficult to obtain from consumers in crisis.
The agency also has since merged with the state's substance abuse arm to create a behavior health unit.