Based on a Federal audit released Tuesday, New York is directed to return $27.4 million received in reimbursement from Washington. The refund is sought for money paid to support the state's soon-to-be-closed network of residential treatment centers for mentally ill youths.

The audit found an "extremely high" incidence of error in billing for services for Medicaid recipients ages 5 to 19 who were in the state's family-based treatment rehabilitation services program. The program helps youths with serious emotional disturbances living in state-run homes supervised by surrogate parents at a monthly cost of $4,321 per recipient. The goal is to support their ability to become independent adults.

A total of 84 of the 100 sampled cases came back with improper billing problems, according to the findings of a first-ever audit of the program by the U.S. Department of health and human services office of inspector general.