This report is based on a 1988 site visit to the Northeast Educational Services Cooperative (NESC) in South Dakota. The visit's purpose was to provide consultation and recommendations regarding residential options to support children with severe disabilities who typically have been placed in out-of-district residential placements. Background information on the NESC, the South Dakota Department of Education and Cultural Affairs, and other relevant agencies is provided. National trends in supporting children with severe disabilities in families (birth families or adoptive or foster families) are cited. Essential program components for supporting children with severe disabilities are discussed, including family supports and permanency planning. The status of best practices in South Dakota is reviewed. Strengths of this rural area are also noted, such as strong family ties, local community values, broad community commitment, potential leadership, and some support services. Problems and concerns identified include the issue of economic priorities versus children's priorities, facility size, lack of information on funding, lack of information on best practices, lack of family involvement in planning, and role confusion in interagency collaboration. Recommendations are offered to the NESC and to the Section of Special Education of the Department of Education and Cultural Affairs. (Includes a list of 13 additional resources.) (JDD)