In March 1995, the Mississippi State Department of Education implemented the Home Ties program as a 5-year pilot program at five sites, using federal funds made available through a sub-grant from the Mississippi Department of Human Services (MDHS) and matching funds appropriated by the Mississippi legislature. The program provided intensive, short-term, home-based treatment and services to families with children at imminent risk of placement outside of the home due to problems within the home. Mississippi's Home Ties program was based on a well-defined and extensively researched treatment model. Prior to its implementation in Mississippi, the program had shown positive results in numerous states. In July 1996, MDHS elected to reduce by $149,177 the level of annual federal funding to Mississippi's Home Ties program, which resulted in the closing of two pilot sites. This report by the Mississippi legislature's PEER Committee (Joint Legislative Committee on Performance Evaluation and Expenditure Review) finds that while MDHS's decision to reduce funding did not violate either the federal or state acts under which the program was funded, MDHS's decision was not prudent because the program was only 15 months into a 5-year test period, the legally required evaluation of the program's effectiveness was not complete, and early program data showed that the program was exceeding its goal of preventing out-placement of children in 70 percent of the cases served. The report further finds that MDHS used federal funds taken from the Home Ties program to pay the salaries of MDHS adoption specialist social workers, a use which the federal department of Health and Human Services ruled inappropriate. (Author/EV)