THE OFFICE BASES ITS PROJECTIONS ON PAST TRENDS IN INMATE POPULATIONS, NOT HAVING SUFFICIENTLY ACCURATE INFORMATION ON OTHER VARIABLES SUCH AS ADMINISTRATIVE AND POLICY DECISIONS, THE ECONOMY, UNEMPLOYMENT, AND SCHOOL DROPOUT RATES. OVER TIME, THE OFFICE HAS FOUND THAT A LINEAR REGRESSION MODEL USING INMATE HEADCOUNT DATA GOING BACK TO 1975 HAS ACCURATELY IDENTIFIED TRENDS IN THE INMATE POPULATION AND PROJECTED THEM INTO THE FUTURE. IN 1976, THE INMATE POPULATION DECLINED STEADILY, BUT IN JANUARY 1977 THE TREND REVERSED ITSELF, AND THE POPULATION BEGAN TO INCREASE. BECAUSE OF THIS SUDDEN SHIFT, PROJECTIONS BASED ON THE INMATE POPULATION GOING BACK TO 1975 WERE FALLING SHORT. THEREFORE, THE OFFICE USED THE SAME FORMULA, BUT ONLY WITH HEADCOUNT DATA FOR THE MOST RECENT YEAR, TO PRODUCE ITS PROJECTIONS FOR THE FIRST QUARTER OF FISCAL 1978. THE OFFICE PROVIDED PLANNERS WITH PROJECTIONS BASED ON BOTH HISTORICAL AND RECENT HEADCOUNT DATA, RECOMMENDING THAT THE LATTER BE USED IN DECISIONMAKING. COPIES OF A RELATED MEMORANDUM AND THE REPORT CONTAINING THE LATEST PROJECTIONS ARE APPENDED.