This report is the result of an investigation by the New York State Commission on Quality of Care for the Mentally Disabled of the Bernard Fineson Developmental Center's policies and practices concerning sexual incidents among residents. It also raises broader issues about the meaning of consent when sexual activity involves persons with severe or profound mental retardation. The report concludes that the Center's lack of supervision has failed to protect residents and allowed numerous serious incidents to occur including those in which residents were forced into unwanted sexual activity by other residents and those in which one partner was too mentally impaired to be able to give consent. Deficiencies were found over all four mandated incident management functions--the reporting, investigation and review of incidents as well as the implementation of corrective actions. Individual sections of the report address: general background; state law and regulations of the Office of Mental Retardation and Developmental Disabilities; reporting and classification deficiencies (with three case reports); deficiencies in the investigation of incidents; Incident Review Committee proceedings; the questionable implementation of corrective action; recommendations; broader issues; and corrective actions. (DB)