Police found that overcrowding pressures and flawed information sharing between mental health clinicians and prison staff were factors in the suicide of an inmate in 2013.
The unsentenced prisoner, 30, took his life one month after he had been remanded in custody on breaches of bail.
He had a history of mental health issues and suicidal thoughts, prompting the courts to mark him as a "prisoner at-risk", and prison authorities to enact a close observation and assessment regime.
The death in custody, currently being examined in the ACT Coroner's Court, has highlighted a number of issues with his care.
Just before his death, he was moved from the more intensive support of the prison's Crisis Support Unit to a ward in the health wing of the Alexander Maconochie Centre.
He was left alone in the isolated ward, which had design elements that were dangerous for suicidal inmates.
The prison was experiencing serious overcrowding problems at the time, and was near capacity.
A police investigation into the death found the inmate would not have been moved if the 10-bed Crisis Support Unit was not full, the inquest heard on Wednesday.
Criminal Investigations detectives, who launched a comprehensive probe, also found that information sharing between mental health workers and prison authorities was poor.
The decision to move the inmate was done without correctional authorities knowing that he had been talking of suicide on the day of his death, the inquest heard.
The prisoner, although saying he was not feeling suicidal at that point in time, had talked openly of his own death and of wanting to take his own life in the longer term.
On the day of his death, a psychiatrist had found him to be a moderate to high risk of suicide in the longer term, but a lower risk in the short term.
Police said the lack of communication between mental health and corrections hampered the prison's ability to make "informed decisions" about his care and accommodation.
Significant reforms have since been made in that area since the death in 2013, the inquest heard.
The police search of the ward also uncovered unused medication from a fellow prisoner who had been moved out on the day of the death.
Police say it appeared to show that medication was being administered by prisoners without supervision.
The inquest continues before Coroner Bernadette Boss on Thursday.
Lifeline: 13 11 14; beyondblue: 1300 224 636; Kids Helpline: 1800 551 800