THE REPORT INCLUDES SECTIONS ON INMATE CLASSIFICATION, OVERCROWDING, NEW PRISON CONSTRUCTION, CONDITIONS OF CONFINEMENT, TREATMENT, INMATE PROGRAMS AND SERVICES, JAILS, PROBATION AND PAROLE, COMMUNITY CORRECTIONS, LEGISLATIVE DEVELOPMENTS AND OTHER EXTERNAL FACTORS AFFECTING CORRECTIONS, AND THE DEPARTMENTAL OPERATIONS. PROFILES ARE PRESENTED OF TWO MEDIUM-SECURITY INSTITUTIONS OPENED DURING THE REPORTING PERIOD. PARTICULAR ATTENTION IS DRAWN TO THE DEPARTMENT'S NEW RISK PREDICTION SYSTEMS FOR OFFENDERS CONVICTED OF PERSONAL AND PROPERTY CRIMES. FLOWCHARTS DEPICT THE SYSTEMS. A BRIEF OVERVIEW OF THE DEPARTMENT'S RESPONSIBILITIES AND STRUCTURE IS PROVIDED. TABLES AND GRAPHS PRESENT STATISTICS ON THE DISPOSITION (PRISON PROBATION, OR JAIL) OF ALL OFFENSES SUBJECT TO IMPRISONMENT HANDLED BY THE MICHIGAN COURTS IN 1977, PRISON COMMITMENTS, INMATES, USE OF PRISON MEDICAL AND DENTAL SERVICES, PAROLES AND CONTINUANCES, FIELD SUPERVISION (PROBATION AND PAROLE), COMMUNITY PROGRAMS, PERSONNEL, BUDGET, AND OTHER ASPECTS OF THE DEPARTMENT'S OPERATIONS. ARTWORK BY PRISONERS ILLUSTRATES THE TEXT. (LKM)