The 1992 reauthorization of the Juvenile Justice and Delinquency Prevention Act of 1974 added Part E, State Challenge Activities, to the programs funded by the Office of Juvenile Justice and Delinquency Prevention. The purpose of Part E is to provide initiatives for States participating in the Formula Grants Programs to develop, adopt, and improve policies and programs in one or more of 10 specified Challenge areas. In focusing on Challenge Activity J, this paper presents the principles for a State administrative structure to help at-risk children as well as a statewide care review system. The State administrative structure is to be designed to coordinate program and fiscal policies for children with emotional and behavioral problems as well as their families. The structure should involve the major child-serving systems, including schools, social services, health services, mental health services, and the juvenile justice system. The statewide case review system should have procedures to ensure that each youth has a case plan based on the use of objective criteria for determining a youth's danger to the community or himself/herself. The criteria would be designed to achieve appropriate placement in the least restrictive and most family-like setting available and in close proximity to the parents' home. The status of each youth is to be reviewed periodically, but not less than once every 3 months by a court or by administrative review to determine the continuing necessity for and appropriateness of the placement. Procedural safeguards are to be applied to each youth to ensure that a dispositional hearing is held to consider the future status of each youth under State supervision. This would be done in a juvenile or family or another court of competent jurisdiction, or by an administrative body appointed or approved by the court. This should be done not later than 12 months after the original placement and periodically thereafter. Further, a youth's health, mental health, and education record should be reviewed and updated periodically. Model programs described are being implemented in Virginia; Tennessee; Alabama; San Diego, Calif.; and New Jersey. A 9-item resource list and 4 notes