Four nurses at Shellharbour Hospital's mental health unit have been stood down indefinitely after a female patient was left unchecked and fled the unit in the middle of the night.
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Illawarra Shoalhaven Local Health District management has confirmed it is investigating the incident which occurred on Wednesday last week.
The woman was reported missing by staff on duty at the Eloura mental health unit at 2am. She was later returned to the unit by police.
"The patient was located safe and well and returned to Eloura to resume treatment," ISLHD chief executive Margot Mains said.
"Four staff members were stood down indefinitely on Monday, pending the investigation.
"The investigation will focus on whether staff properly carried out half-hourly patient care level observations and followed strict protocols around the monitoring and documentation of inpatients," she said.
The incident comes less than 12 months after the alleged murder of 47-year-old Joseph Gumley by his roommate at the hospital's Eloura Westunit.
Police allege Paul Hindmarsh, 31, fatally assaulted Mr Gumley with the dead man's own electric guitar some time between 6.30am and 7.50am on July 31, 2014.
A damning NSW Health report into that incident found the two men were not checked for hours, with investigators told staff regularly signed observation sheets without actually seeing patients.
In light of that report, Ms Mains said last November that systematic changes would be introduced at the unit, which would include better management of observation practices.
On Thursday she said the local health district had made significant changes to the acute and high-level care delivered to mental health inpatients at Shellharbour hospital in the past 10 months.
The former Eloura West and Eloura East units had been combined into a single inpatient facility that provided a short-stay, high care area with nine beds as well as a general, acute care area for longer term inpatients.
Both areas were staffed in strict accordance with the NSW nurses and midwives state award.
Ms Mains said mental health inpatient nursing staff had also received further education and training to ensure the "absolute need for strict compliance with the requirements".
"Patient observation care levels are reviewed daily by the treating team and assigned according to a number of factors including clinical need, mental state, behaviour and risks," she said. "Monthly random audits of medical files are carried out to ensure compliance."
Ms Mains said the local health district had clearly outlined the policy requirements and expectations of all staff working in mental health units.
"I cannot emphasise strongly enough that [the district] takes very seriously its duty of care to all patients and that any behaviour which may compromise this will not be tolerated," she said.
Hindmarsh is now facing a murder charge over the July 2014 death and will reappear in Port Kembla Local Court on July 29.