THIS REPORT BY THE COMMUNITY COORDINATED CHILD CARE COMMITTEE (THE ARIZONA 4C PROGRAM) FOUND THAT ABOUT A FOURTH OF THE SUBSTANTIATED CHILD ABUSE AND NEGLECT CASES IN ARIZONA OCCURRED IN FAMILIES RECEIVING AID TO FAMILIES WITH DEPENDENT CHILDREN (AFDC) FUNDS WHILE ABOUT 30 PERCENT OF ALL THE PEOPLE IN PENAL INSTITUTIONS WERE FORMER AFDC CHILDREN. THE AFDC PROGRAM IS EXAMINED. THE REPORT CHARGES THAT THE PROGRAM'S ADMINISTRATION INCREASES, RATHER THAN RELIEVES, FAMILY PROBLEMS. ARIZONA PAYS $1.40 PER DAY TO SUPPORT A POOR CHILD IN THE NATURAL HOME. HOWEVER, ONCE THE CHILD IS REMOVED TO FOSTER CARE, THE INCREASED SUPPORT COSTS BETWEEN $3.64 AND $5.00 PER DAY. IF THE CHILD BECOMES SEVERELY EMOTIONALLY DISTURBED, WHICH OFTEN HAPPENS AFTER A SERIES OF FOSTER HOMES, THE STATE MAY PAY UP TO $40.00 A DAY FOR THE SERVICES OF A CHILD CARE INSTITUTION. THE RULE WHICH REFUSES AFDC FUNDS TO FAMILIES WITH AN EMPLOYABLE MALE OFTEN FORCES UNEMPLOYED FATHERS TO DESERT THEIR FAMILIES SO THAT WIVES AND CHILDREN CAN BECOME ELIGIBLE FOR PAYMENTS. THIS ADDS EMOTIONAL DISRUPTION TO THE ALREADY PRESSING TENSIONS OF POVERTY. SUCH POLICIES RESULT IN AN INCREASE IN THE NUMBER OF DISRUPTED FAMILIES. THE LOW SUPPORT PAYMENTS CAUSE MALNUTRITION, SLOW MENTAL DEVELOPMENT, AND CHRONIC ILLNESS. REFORM OF THE AFDC SYSTEM IS URGED. RECOMMENDATIONS INCLUDE INCREASED AFDC PAYMENTS, SUPPORT SERVICES TO HELP THE CHILD REMAIN IN THE FAMILY, REALISTIC REGULATIONS TO HELP EMPLOYABLE ADULTS FIND WORK WHILE NOT PENALIZING THE CHILDREN, BETTER UTILIZATION OF FEDERAL FUNDS, AND IMPROVED HEALTH CARE SERVICES. EDUCATION FOR PARENTHOOD SHOULD BE REQUIRED IN EVERY JUNIOR AND SENIOR HIGH SCHOOL IN THE STATE. THESE COURSES SHOULD INCLUDE CHILD DEVELOPMENT, PARENTAL LEGAL RESPONSIBILITIES, AND CAUSES AND RESULTS OF CHILD ABUSE AND NEGLECT. PUBLIC AGENCIES SHOULD BE ENCOURAGED TO MEET THE NEEDS OF TEENAGE PARENTS. DAY CARE SERVICES AND INHOME AND FAMILY REHABILITATION SERVICES ARE NEEDED. POLICIES MUST BE CHANGED TO ALLOW RELATIVES TO ACT AS FOSTER PARENTS FOR CHILDREN WHOSE HOMES ARE NO LONGER SUITABLE. FOSTER HOMES NEED TO BE FOUND AND FOSTER PARENTS SHOULD BE ADEQUATELY TRAINED. IF A CHILD MUST BE PLACED IN A FOSTER HOME, EFFORTS SHOULD BE MADE TO ASSURE PERMANENT PLACEMENT. ADOPTIVE HOMES ARE ALSO NEEDED, ESPECIALLY FOR TEENAGERS AND CHILDREN WITH SPECIAL PROBLEMS. (GLR)