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The nation's largest chain of assisted living facilities, including about 150 residences for people with Alzheimer's disease, has come under scrutiny in recent months by state regulators over the quality of care and safety conditions at some of its centers.

Over the last year, regulators in at least five states have reported that facilities operated by the company, the Alterra Healthcare Corporation, have inadequate or untrained staffs, failed to give elderly residents needed drugs and nutritional supplements, or failed to protect their safety.

Alterra executives say that the state reports, which come as the company's financial condition has weakened, reflect isolated instances and that its finances are not affecting daily operations.

Officials in Pennsylvania are investigating the events surrounding the death in September of a resident with Alzheimer's disease at an Alterra center in Bucks County. A resident at a Colorado center wandered away last winter; three hours later, he was found alive, face down in a field, according to a state report. In March, the company settled a lawsuit in which Minnesota officials accused it of misrepresenting the services it provided residents.

Regulators have found problems at assisted living centers run by other providers, and many Alterra residences have received high marks from regulators and advocates for patients.

But the company's problems may be emblematic of a broader industry issue -- how financial strains, managerial turmoil and labor problems can upset the operations of even those assisted living companies with good reputations.

Executives of Alterra, which is based in Milwaukee, said that they had disputed some of the state complaints but have moved promptly to resolve those that are justified.

''I am proud of the fact that all of our residences are licensed and that we have done that voluntarily,'' said Steven L. Vick, the chief operating officer. ''Our industry is regulated, and surveyors are writing these reports because of a process we have fostered.''

Unlike nursing homes, which are federally regulated and offer 24-hour nursing care, assisted living facilities are overseen by the states, and both regulations and the services offered vary sharply. Residents generally pay out of their own pockets for room, board and other care, and the centers cater to more affluent people than typical nursing homes.

Just two years ago, financial analysts predicted that companies like Alterra would be reaping record profits this year as elderly people eager to avoid nursing homes flocked to assisted living. Instead, the industry's expansion has far exceeded demand, leaving a number of companies with mounting debt and tumbling stock prices.

Some health care experts now say the industry's financial strains may deepen. The industry had hoped to serve a healthier population, but it now appears to be attracting older, sicker residents.

''It is a fundamental tension that when you have more impaired patients, you need more staff, and that cuts into your profit level,'' said Katherine Hawes, a professor of health policy at Texas A&M University in College Station, Tex., who has conducted national studies of assisted living.

Jan Sawyer, a former nursing home administrator in Winston-Salem, N.C., said that she was excited to take a job last year as the head of an Alterra center there because she believed that the company was committed to quality care for Alzheimer's patients.

''Philosophically and environmentally, it is top notch,'' she said.

But operating the center proved a problem, Ms. Sawyer said. With the company expanding, she had four supervisors over nine months, limiting her opportunities for training, she said. Also, intense competition in a market for low-paid, unskilled workers meant that the center's staff constantly turned over, said Ms. Sawyer, who resigned her post this year.

Since 1997, the number of centers operated by Alterra has nearly doubled, to about 475, with a capacity of 22,000 residents. The company operates in 28 states, including New York and New Jersey. With about 150 facilities specifically intended for people with Alzheimer's disease or dementia, it is the biggest company in that field, as well.

The company's growth has come through acquisitions, a building spree and a 1997 merger with the Sterling House Corporation, a company headquartered in Kansas that operated about 100 assisted living facilities nationwide. Alterra was previously known as Assisted Living Services.

Investors have pummeled the company's stock, which closed Friday on the American Stock Exchange at $2.75, down from its high in 1998 of $35.25 a share. Earlier this month, Alterra's longtime chief executive, William F. Lasky, resigned.

Mr. Vick, the chief operating officer, said the manner in which Alterra was repaying its debts was not affecting operations. Internal surveys, he said, show that 94 percent of residents are satisfied.

''We understand that if we compromise the care of our residents both we and the industry won't survive,'' Mr. Vick said.