An evaluation system for measuring the cost effectiveness of protective services for abused and neglected children was developed and field tested. The system permits the collection and analysis of definitive, quantifiable data to determine: (1) which service agencies, individually, or as aggregated by states or regions, are most effective in reducing recidivism and severity of abuse for the dollars spent, (2) trends in the cost effectiveness of service agencies, (3) the comparative cost effectiveness of serving specific groups, such as urban children, rural youngsters, etc., and (4) the cost of providing services to clients who achieve protective services objectives as compared with clients who do not achieve agency objectives. The system was installed as a demonstration project at two sites that annually provide a full range of services for at least 400 cases of abuse or neglect and serve a varied client group. Extensive data is reported on the utility of the cost effectiveness evaluation system based on its use at the demonstration sites. (EVH)