The IPS program was instituted in Arizona in 1985 as a cost-saving measure, aiming to supervise, under house arrest, adult offenders who normally would have been incarcerated. The program provided a more intensive level of probation than was found in standard probation through multiple contacts with the offender, contacts with the offender's employer, and weekly arrest checks. Results of the cost analysis showed that IPS did reduce corrections costs except when the offender was convicted of the least serious felony in the larger county. While revocations doubled the projected cost of an IPS sentence, the extent of cost-savings realized from supervising more serious offenders remained substantial (up to $4,000 per capita). The cost per sentence for a given offense was calculated based on the daily per capita cost, the length of the sentence, and change in the mode of supervision. GAO concluded that maximum cost savings can be realized by targeting particular offenders and by having a short-term program with selected program components. Programs that supervise offenders for a shorter duration, then transfer them to standard probation, can also realize increased cost- savings. 6 tables and 8 appendixes