This study of the State psychiatric hospitals was mandated by the General Assembly in Section 12.35A of Chapter 213 of the 1998 Session Laws. The General Assembly outlined work to be performed in two broad phases: confirmation and update of previous work done by MGT of America, Inc. on the psychiatric hospitals, and examination and assessment of the overall mental health delivery system for the State. The Office of the State Auditor was asked to oversee this important study by retaining and managing the work of an outside consultant. In late February 1999, we contracted with Public Consulting Group, Inc. (PCG) to perform this work. This report represents PCGs interim findings and conclusions relative to Phase 1, confirming and updating the previous recommendations for the State psychiatric hospitals. While PCG was able to accomplish an amazing amount of work in a very short period, we should caution the reader that this report does not contain firm recommendations as to the number or type of beds needed, nor the proper location for the hospitals.