A continuum of services model exists which reflects the least and most restrictive special education environments available to provide services to all handicapping conditions. Associated costs increase significantly as the special education student requires more structure and intense services to benefit from individualized instruction. Per student cost to local education agencies (LEAs) and program variables in the areas of social skills curriculum and parental involvement for students identified as seriously emotionally disturbed (SED) and served in (1) self-contained classrooms operated by LEAs; and (2) regional (separate day school) programs operated cooperatively by the LEAs in Virginia are examined in this study. Costs to the LEAs for self-contained instruction were determined by using the Larson Model (1985), as revised by Kienas (1986). In Virginia, costs to the LEAs for placement of SED students in the regional programs were determined by the tuition rate approved by the Virginia Department of Education. State reimbursements for placement of SED students in both environments were considered in final cost calculations. The existence of certain program components in the areas of social skills curriculum and parental involvement were examined by a survey developed and distributed to Special Education Directors in the two described environments. A study of special education placements was conducted in Montgomery County, Maryland in 1982 to compare the costs and characteristics of programs used by that school division for school-aged handicapped students. Montgomery County was concerned over the cost of private placements and wanted to determine if alternative programming should be explored. It was concluded that the regional day program was cost effective when compared to other more restrictive environments, i.e., more costly residential treatment programs. Additionally, that special education program variables were similar in both environments. Other special education finance studies have also concluded that special education costs vary considerably within a given category of handicapping condition and that this cost may not reflect the service levels within programs. LEA expenditures for SED programs and selected program variables in LEA self-contained and regional programs in six LEAs located in the Hampton Roads area of Virginia are described in this. study. The research question to be considered was: Are program administrators’ perceptions of program quality, as measured by the existence of certain social skills curriculum and parental involvement program components, related to LEA costs for self-contained and regional (separate day school) programs for seriously emotionally disturbed students? While findings indicated a slight difference in net expenditures in favor of regional programs, this difference may not be significant based on quality of cost data and consideration for placement in the least restrictive environment. Net expenditures are based on reimbursements to LEAs from the Virginia Department of Education for SED students placed in these two environments. Survey results indicate that regional program administrators perceive higher incidences of quality descriptors in their social skills curriculums and parental involvement programs than the LEA self-contained program administrators perceived in their programs. / Ed. D.