(a) The commissioner shall cause to be made a complete study and diagnosis of each youthful offender, including a physical examination and, where possible and indicated, a mental examination. In the absence of exceptional circumstances, each study and diagnosis shall be completed within a period of 60 days from the date of commitment.

(b) Upon the receipt of all reports and recommendations required by subsection (a) of this Code section, the department shall:

(1) Allocate and direct a transfer of the youthful offender to an institution or facility for treatment; or

(2) Order the youthful offender confined and afforded treatment under such conditions as are necessary for the protection of the public.