"We are shattered at the extent of the bungling and poor systems, as we know that the prime opportunity to find Nicky alive was lost because of this," Mr Stevens' mother, Jane Stevens, said.
"It was a black comedy of errors from both the DHB and the police, one that we wouldn't wish on any other family."
Mr Stevens was missing for more than two days in March last year.
Mr Stevens' father, Dave Macpherson, said during that time, their son drowned in the river after being let out on March 9, unsupervised, from the centre for a "15-minute smoko break".
"He was a high suicide risk, something the police and DHB knew about and something Nicky's family warned both about.
"Nicky's family contacted police on numerous occasions during the two days seeking information about the search, and were never told that no search had commenced."
Mr Macpherson says he also emailed the Minister of Police, urgently seeking information during that time -- with the Minister's office "refusing to do more than to pass the email on to the Police Commissioner; from whom no response was ever received".
"Two witnesses have stated to police that they saw Nicky alive in central Hamilton one day after he went missing."
Yesterday, Mr Stevens' family met with Waikato police commander Superintendent Bruce Bird who apologised for the failings and discussed ways they were now improving their systems.
The authority also found that the responding officer's response to the missing person report "fell well short of the standard expected for the missing persons' co-ordinator for the Waikato District, and did not comply with Police policy and good practice".
The police media release sent out at the time was also inaccurate in respect of Mr Stevens' description and police failed in their obligation to liaise with his family until they were contacted by Mr Macpherson on March 11.
However, the authority found that once police were aware of the file on that day, they took appropriate steps to investigate and carry out a search.
Police have since updated the communication centres' standard operating procedures for "missing persons" and the "missing persons" chapter of the police manual to include steps to be taken "when a mental health patient is reported missing".
They have also reviewed their processes for creating missing person files.
Mr Bird accepted that police "missed opportunities to search for Nicholas Stevens".
"I'm very disappointed with how we responded to this missing person report. Our service fell well below our standards.
"Over time police has developed good systems and operating processes for missing persons, but I fully acknowledge that on this occasion key staff did not apply good judgement."
Mr Bird said while police have a good working relationship with Waikato DHB, he is now holding six monthly reviews of recommendations from any debriefs of missing mental health patients with chief executive Dr Nigel Murray.
Waikato police also now operated 24/7 and put more senior staff in charge of its operations.
"The increase in supervision means missing person reports will be channelled through senior officers."
The improvement is augmented by the creation of a case risk assessment team at Hamilton Central Police Station.
