Drug detection and control are of paramount importance, since evidence indicates that drug use is widespread and that drugs, particularly marijuana, are not difficult to obtain. Section 36B of the Penal Institutions Act provides that inmates may be tested for drugs if there are reasonable grounds to believe that they are under the influence of drugs. Test results, however, are not admissible as evidence in criminal or disciplinary proceedings. Because the range of drugs available to inmates is extensive, prison staff should have regular instruction on the subject. Inmates who are members of gangs represent a major disruptive force within prisons. Special training is needed to help prison staff evaluate and respond to gang behavior. Meanwhile, the dispersal of gang members among prisons and the segregation of troublesome gang members should continue. Isolation and strict control should only result from disruptive behavior, and inmates should return to the normal setting when behavior improves. Recommendations to deal with prison overcrowding focus on early release programs, changes in parole eligibility, the use of habilitation centers, and improved sentencing guidelines. Privatization of certain aspects of prisons may be feasible, but it is not recommended that New Zealand experiment with full-scale privatization or large-scale contracting out of basic facilities and services. Prison costs can be reduced with the use of habilitation centers, local prisons that minimize inmate movement from prison to prison, and improved staff working conditions that minimize turnover. 13 references.