Results indicate that most such placements are made through agencies other than the State mental health authority (i.e., child welfare, education, and juvenile justice agencies). Most placed youth were white, adolescent males with serious behavior problems rather than psychosis or thought process disturbance. State agencies often did not know the exact number of children placed or how much was spent on their treatment. In most States, the appropriateness of the placement was not assured, since no interagency coordination was mandated. There is a current reliance on expensive and often unnecessary and inappropriate residential treatments, despite the consensus of childcare experts that a comprehensive system of community mental health and support services can better meet the needs of emotionally disturbed children. These findings suggest that the needs of emotionally disturbed children are not being met within public systems and provide a foundation for advocacy and reform. There is a need to improve State gatekeeping and monitoring, mandate interagency planning, and provide case management from the child's perspective. Most importantly there is a need to create child-centered and family-focused, community-based services providing a continuum of care that includes mental health, vocational, educational, social, health, recreational, and operational services. Supplemental survey data are appended. 43 references.