THE YOUTH AUTHORITY CONTRACTS WITH COMMUNITY AGENCIES TO PROVIDE TREATMENT/REHABILITATION SERVICES TO JUVENILE PAROLEES WHO, DURING SCREENING UPON ADMISSION TO A YOUTH AUTHORITY INSTITUTION, HAVE BEEN IDENTIFIED AS HARD-CORE DRUG ABUSERS. THE DRUG ABUSE SERVICE PROGRAM (DASP) IS A CONTINUATION, ON A SMALLER SCALE, OF THE STATE'S COMMUNITY-CENTERED DRUG PROGRAM (CCDP). THE EVALUATION COVERS DASP'S FIRST 8 MONTHS OF OPERATION. DURING THAT PERIOD, DASP WAS SUCCESSFUL IN MAINTAINING THE CCDP LEVEL OF TREATMENT SERVICE PROVISION TO IDENTIFIED DRUG-ABUSING PAROLEES, ALTHOUGH THE NUMBER OF IDENTIFIED ABUSERS WAS LESS THAN HALF THAT EXPECTED. IN A SAMPLE OF 138 DRUG-ABUSING PAROLEES, ONLY 1 OF 29 INVOLVED THROUGH DASP IN TREATMENT PROGRAMS FAILED (AS OF 6 MONTHS AFTER RELEASE ON PAROLE). OF THE 109 PAROLEES WHO WERE NOT INVOLVED IN A TREATMENT, 15 FAILED WITHIN THE SAME PERIOD. DUE TO THE SHORT FOLLOWUP PERIOD AND THE SMALL NUMBER OF FAILED PROGRAM-INVOLVED PAROLEES, A COST-EFFECTIVENESS COMPARISON BY TYPE OF TREATMENT PROGRAM WAS NOT POSSIBLE. HOWEVER, A METHOD FOR EVALUATING COST EFFECTIVENESS BY REVIEWING EXPENDITURES WITHIN A 'WARD/MONTH SAVED' FRAMEWORK WAS DEVELOPED. THERE WAS NO EVIDENCE TO SUGGEST THAT PARTICIPATION IN INSTITUTIONAL DRUG PROGRAMS MOTIVATES WARDS TO BECOME INVOLVED WITH COMMUNITY DRUG PROGRAMS UPON PAROLE. AN OVERVIEW OF THE YOUTH AUTHORITY'S EXPERIENCE WITH DRUG PROGRAMS OVER 6 YEARS (INCLUDING DASP AND ITS PREDECESSOR) LEADS TO THE CONCLUSION THAT THE CONCEPT OF CONTRACTING WITH COMMUNITY DRUG TREATMENT AGENCIES TO PROVIDE SERVICES TO YOUTH AUTHORITY WARDS HAS PROVED PRACTICAL AND SUCCESSFUL. THE GREATEST SUCCESS HAS BEEN WITH DIRECT DRUG-RELATED SERVICES--CHEMOTHERAPY, RESIDENTIAL TREATMENT, PSYCHOTHERAPY, DRUG COUNSELING--FOR OLDER, HARD-CORE USERS WITH LONGER DELINQUENT HISTORIES. WHEN PROGRAMS HAVE SHOWN SIGNIFICANT IMPACT ON THE PAROLE PERFORMANCE OF WARDS, THEY HAVE BEEN HIGHLY COST EFFECTIVE IN TERMS OF ACTUAL PURCHASE-OF-SERVICE EXPENDITURES. THE COST EFFECTIVENESS OF THE PROGRAMS DECLINES WHEN EXCESSIVE ADMINISTRATIVE EXPENDITURES ARE ADDED. SUPPORTING DATA ARE INCLUDED. (AUTHOR ABSTRACT MODIFIED--LKM)