Education Finance: Extent of Federal Funding in State Education Agencies
(Letter Report, 10/14/94, GAO/HEHS-95-3).

In fiscal year 1993, although the federal government provided only about
seven percent of elementary and secondary school funding, states relied
on federal support for about 41 percent of the funding and 41 percent of
the staff for their state education agencies. This may give the
impression that the federal government was providing more than what
might be considered its fair share of state education agency operating
funds. However, comparisons among state education agencies solely on the
basis of their total federal share of funding and staff can be
misleading. The ratio of federal-to-state support of each state
education agency depends on the individual combination of federal and
state programs run by that particular agency. Although 10 federal
programs are common to nearly all state education agencies, no two
states have the same mix of federal and state programs. Some state
education agencies keep funding to operate large programs, which can
greatly increase the federal or state share of funding and staff.
Despite the variety in the mix of programs and federal funds kept, state
education agency officials GAO interviewed gave similar descriptions of
the way that they use federal money and many said that federal programs
had more administrative and regulatory requirements than did state
programs.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  HEHS-95-3
     TITLE:  Education Finance: Extent of Federal Funding in State 
             Education Agencies
      DATE:  10/14/94
   SUBJECT:  State/local relations
             Federal/state relations
             Aid for education
             Educational grants
             State-administered programs
             Federal grants
             Funds management
             Grants to states
             Administrative costs
             Educational programs
IDENTIFIER:  Migrant Student Record Transfer System
             
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Cover
================================================================ COVER


Report to Congressional Requesters

October 1994

EDUCATION FINANCE - EXTENT OF
FEDERAL FUNDING IN STATE EDUCATION
AGENCIES

GAO/HEHS-95-3

State Education Agency Funding


Abbreviations
=============================================================== ABBREV

  AIDS - acquired immunodeficiency syndrome
  ESEA - Elementary and Secondary Education Act of 1965
  CCSSO - Council of Chief State School Officers
  FTEs - full-time-equivalent employees
  SEA - state education agency

Letter
=============================================================== LETTER


B-256474

October 14, 1994

The Honorable William D.  Ford
Chairman, Committee on
 Education and Labor
House of Representatives

The Honorable William F.  Goodling
Ranking Minority Member
Committee on Education and Labor
House of Representatives

The Honorable Dale E.  Kildee
Chairman, Subcommittee on Elementary,
 Secondary, and Vocational Education
Committee on Education and Labor
House of Representatives

The Honorable George Miller
House of Representatives

In your letter of October 19, 1993, you indicated that you were
disturbed that state offices of education have become increasingly
dependent on federal education dollars for their staffing.  You noted
that the federal government's share of the total cost of education is
well under 10 percent,\1 yet federal funding of state offices of
education is much higher than this percentage and out of all
proportion to general federal support of education.  Because no
comprehensive information was available on the federal funding of
state offices of education you asked us to find out (1) the amount of
federal dollars used by state education agencies (SEAs) to fund their
administrative and other operating costs\2 and (2) how SEAs are using
these funds to support their operating activities.  You also asked us
to report any information we could on anticipated changes in the
federal-versus-state funding balance from fiscal year 1993 to fiscal
year 1995. 


--------------------
\1 In 1990, state and local sources each contributed 47 percent of
revenues.  The remaining 6 percent was provided from federal sources. 

\2 Administrative costs refer to the costs associated with an SEA's
administration of a program that is frequently operated by a local
education agency.  In this study, our proxy measure for
administrative costs are full-time-equivalent employees (FTEs). 
Operating costs include administrative costs as well as the other
costs of conducting the program.  For example, if an SEA operates a
school for the blind, operating costs would include such things as
teacher salaries, overhead, or transportation. 


   RESULTS IN BRIEF
------------------------------------------------------------ Letter :1

In fiscal year 1993, although the federal government only provided
about 7 percent of elementary and secondary school funding, states
relied on federal support for about 41 percent of the funding and 41
percent of the staff for their state education agencies.  This may
give the impression that the federal government was providing more
than what might be thought to be its fair share of SEA operating
funds.  However, a closer look portrays a more complex picture. 

Most federal and state funding received by SEAs is passed through to
local education agencies.  However, some federal and some state
funding is kept at the SEA for state-level operations, primarily
oversight, technical assistance, and training related to specific
federal programs.  The level of federal support for SEAs varied
widely among states depending on the number and types of federal and
state programs the SEA operates, ranging from about 10 to about 80
percent, with the average level of support being 41 percent.  For the
10 federal programs found in nearly every state, however, the average
level of support drops to 29 percent. 

Overall, states reserved a greater share of federal than state funds
for state-level operations--by a ratio of 4 to 1.  This difference
may be due, state officials report, to the administrative and
regulatory requirements imposed by federal programs.  At the same
time, total state funding received by the SEAs ($113.8 billion) far
exceeded total federal funding received ($17.5 billion).  Most states
foresee little change in their federal funding share related to
operating SEAs from 1993 to 1995. 


   BACKGROUND
------------------------------------------------------------ Letter :2

States have always been responsible for the organization and
administration of education within their borders.  SEAs--often
referred to as state departments of education--began over 100 years
ago to help chief state school officers administer the education
policies set by state boards of education.  SEAs have grown and
changed over the years.  Originally, their mission was limited
primarily to gathering and reporting statistics.  Later their duties
expanded to include inspection and regulation.  Today, their role is
to establish and improve programs and develop policy, in addition to
maintaining their more traditional roles.\3

SEAs grew rapidly after the 1950s, initially as a response to federal
legislation, particularly the National Defense Education Act of 1958
and, later, under Title V of the Elementary and Secondary Education
Act of 1965.  The latter legislation greatly expanded federal funding
of education and, among other things, directed federal funds to
strengthen the capacity of state education agencies. 

SEAs oversee the distribution of large sums of state and federal
funds to schools.  All SEAs can and do keep a portion of the funding
they receive from both state and federal sources to support their
activities.\4 SEA officials generally describe these activities as
consisting of regulatory activities such as monitoring and reporting
on the use of the funds at the local level, technical assistance and
training for the local districts, and establishing innovative
programs.  However, according to a 1983 report, SEAs vary in the
specific activities for which they are responsible and the ways they
organize to carry out those responsibilities.  Prior studies\5 have
not described the content of this variation or explored why this
variation exists. 


--------------------
\3 Educational Governance in the States.  Washington, D.C.:  The
Council of Chief State School Officers (February 1983). 

\4 Funds kept to administer and operate programs are also referred to
as retained funds.  This is the term used in our appendices and
figures. 

\5 Educational Governance in the States; Education Block Grant Alters
State Role and Provides Greater Local Discretion (GAO/HRD-85-18, Nov. 
19, 1984); and Education Block Grant:  How Funds Reserved for State
Efforts in California and Washington Are Used (GAO/HRD-86-94, May 13,
1986). 


   SCOPE AND METHODOLOGY
------------------------------------------------------------ Letter :3

To determine the amount and sources of federal funding used by SEAs
to fund their administrative and other operating costs, we surveyed
SEAs in 49 states (see app.  IX).  We did not include Hawaii and the
District of Columbia because these jurisdictions do not differentiate
between state and local education agencies.  To obtain additional
details on federal funding sources, we conducted telephone interviews
with financial staff at each SEA.  State funding, as referred to in
the letter and appendices, may include small amounts of funding from
other nongovernmental sources, such as gifts from foundations. 
Staffing levels stated in the letter and appendices refer to FTE
employees. 

To determine how the SEAs used the federal funds, we asked each SEA
for information on the number of FTEs funded from federal and state
sources.  We defined operating funds as funds retained at the SEA
level for administrative and other purposes.  We used FTEs as a proxy
measure for administrative costs.  Committee staff and the Council of
Chief State School Officers\6 concurred with these definitions. 
Within nine selected SEAs, we also conducted telephone interviews
with financial and program staff to determine how those agencies used
federal funds for SEA operations for Chapter 1 (State Administration
funds, Migrant Children's funds, and any other funds),\7 Chapter 2,\8

Drug Free Schools,\9 and Eisenhower Math and Science programs.\10 We
selected the nine SEAs to provide diversity in geographic location,
population and budget size, and financial health. 

We conducted our work between January 1994 and July 1994 in
accordance with generally accepted government auditing standards.  We
did not verify the data provided to us by SEA officials. 


--------------------
\6 The Council of Chief State School Officers (CCSSO) is a nationwide
nonprofit organization comprised of the 57 public officials who head
the departments of elementary and secondary education--and in some
states other aspects of education--in the 50 states, five U.S. 
extra-state jurisdictions, the District of Columbia, and the
Department of Defense Dependents Schools. 

\7 The Elementary and Secondary Education Act provides targeted
programs to improve educational opportunities for particular groups
of students who have been inadequately served, such as those who are
poor or who have disabilities or limited English proficiency. 
Chapter 1 of Title 1 of this act is the largest federal education
program for elementary and secondary school children and is for those
whose education attainment is below the level that is appropriate for
their age.  It serves over 5 million children through supplemental
instruction in reading, math, or language arts. 

\8 Chapter 2 of Title 1 of the Elementary and Secondary Education Act
provides funds to improve the quality of elementary and secondary
education for children at risk of failure in public and private
schools. 

\9 States receive grants, according to a statutory formula, to assist
in combating the abuse of drugs and alcohol by the nation's children
and youth.  This program also funds school personnel training,
national programs, and emergency grants to provide special assistance
to school systems with a high incidence of drug abuse. 

\10 Funds available for this activity under a formula grant are used
by state and local educational agencies to train teachers and improve
instruction in mathematics and science. 


   FEDERAL SHARE OF SEA SUPPORT
   VARIES WIDELY AMONG STATES
------------------------------------------------------------ Letter :4

In fiscal year 1993, the federal government provided about 7 percent
of total elementary and secondary education funding, with states and
local districts providing the remaining 93 percent.\11

SEAs received funding from both federal and state sources and
reserved some of the funding for SEA operating costs.  On the federal
side, various programs provided for different levels of support.  For
example, Chapter 1, by far the largest source of federal funding
($6.8 billion), provided 1 percent for state administrative costs. 
Chapter 2, however, a much smaller program ($450 million), provides
that SEAs may keep up to 20 percent for activities at the state
level.  Of this amount, 25 percent (5 percent of the total grant) may
be used for program administration, and the remainder for innovative
projects and other state programs. 

On average, in fiscal year 1993, the federal portion of SEA operating
funds constituted about 41 percent of SEA operating funds.  (See app. 
I.) Similarly, federally funded staff constituted, on average, about
41 percent of the total SEA staff.  (See app.  II.) However, the
federal share of funding and staff varied widely from state to state. 
For example, although more than half the SEAs reported their federal
share of dollars to be between 30 and 50 percent, the federal share
ranged from 6 percent in Maine to 77 percent in Michigan.  (See fig. 
1.) The federally funded staff portion reported by SEAs ranged from
10 percent in Connecticut to 81 percent in Iowa.  (See app.  II,
table II.2.)

   Figure 1:  Federal Share of SEA
   Operating Funds Varies Widely
   Among States

   (See figure in printed
   edition.)


--------------------
\11 Another perspective is achieved by eliminating local funding of
education, since, as we were told, no local funding is used to fund
SEAs.  If we look at just federal and state funding for education,
the federal share is about 13 percent.





   SEAS FORESEE LITTLE CHANGE IN
   FEDERAL FUNDING SHARE
------------------------------------------------------------ Letter :5

Most SEAs reported that they expect less than a 5 percentage points
change in the federal portion of their operating funds from fiscal
year 1993 to fiscal year 1995.  Twenty-four SEAs project an increase
of from .02 to 10 percentage points.  Three SEAs project no change
and 22 SEAs project a decrease.  (See fig.  2.) Louisiana expects the
largest increase--from 39 percent to 49 percent--and South Dakota
expects the greatest decrease--from 62 percent to 56 percent.  (See
app.  VII.)

   Figure 2:  Forty-three States
   Foresee Less Than a 5
   Percentage Points Change in
   Their Federal Share of
   Operating Funding From Fiscal
   Year 1993 To Fiscal Year 1995

   (See figure in printed
   edition.)


   SEA PROGRAM MIX AFFECTS FEDERAL
   SHARE OF FUNDING
------------------------------------------------------------ Letter :6

The federal portion of the funding SEAs used for operations varies
among states, in part, because of differences in the mix of programs
for which each has responsibility.  Some federal programs are not
found in all SEAs.  (See apps.  III and V.) For example, just one
SEA--Arkansas--operates the Migrant Student Record Transfer System. 
This constituted over 35 percent of Arkansas' federal funding
reserved by the SEA.  Similarly, 12 states reported their SEAs
operate vocational rehabilitation programs\12 and 8 SEAs reported
operating the Disability Determination Service for Social Security. 
The SEAs that operate these programs indicate that the programs
account for large amounts of operating funds.  For example: 

  Twelve states reported that their SEAs manage vocational
     rehabilitation with federal funding.  This accounted for from 23
     percent of the federal funding used for operations in Florida to
     58 percent of federal funding used for operations in Utah. 

  Eight states indicated that their SEAs operate the Disability
     Determination Service for Social Security in their state.  This
     accounted for from 12 percent of federal funding used for SEA
     operations in Utah to 42 percent of federal funding used for SEA
     operations in Michigan. 

The impact of these high dollar programs on an SEA's federal share of
funding can be substantial.  For example, Michigan reported 77
percent of its SEA operating funding was from federal sources in
1993.  However, Michigan's SEA operates three federal programs not
common to most SEAs--Vocational Rehabilitation, Disability
Determination Service, and Student Loans.  These programs alone
accounted for over $107 million of the $164 million the SEA used for
operations in fiscal year 1993.  If these three federal programs are
subtracted from the operating funding, the federal share of
Michigan's SEA operating funding is reduced to about 33 percent. 
(See fig.  3.)

   Figure 3:  How Michigan's
   Operation of the Vocational
   Rehabilitation, Disability
   Determination Service, and
   Student Loan Programs Affects
   State/Federal Share of SEA
   Funding

   (See figure in printed
   edition.)

Although the focus of our work was federal funding, we noted that the
state funding for SEA operations could also affect the reported
federal/state ratio.  For example, although all states have teacher
retirement programs, they are not usually operated by the SEA,
according to an official of the National Council on Teacher
Retirement.  However, the SEA in Maine administers the state's
teacher retirement fund.  In fiscal year 1993, funding for this
activity constituted nearly $139 million of the $162 million the SEA
kept.  Maine reported that about 6 percent of its SEA operations
funding was federal.  However, if state funding for the teacher
retirement is not included, the federal share increases to about 43
percent.  (See fig.  4.)

   Figure 4:  How Maine's
   Operation of the State Teacher
   Retirement Program Affects
   State/Federal Share of SEA
   Funding

   (See figure in printed
   edition.)


--------------------
\12 Three other states reported using some vocational rehabilitation
funds for special projects although the SEA did not operate the
vocational rehabilitation program for the state. 


   A COMMON CORE OF 10 PROGRAMS
   COMPRISES OVER HALF OF SEA
   FEDERAL FUNDING
------------------------------------------------------------ Letter :7

While each SEA reported a unique mix of federal program funding
sources, we found that in fiscal year 1993 most SEAs reserved funding
for state-level operations from 10 sources: 

  Chapter 1 programs under the Elementary and Secondary Education Act
     (ESEA);

  Chapter 2 programs under ESEA;

  other ESEA programs;

  special education;

  child nutrition;

  vocational education;

  adult education;

  acquired immunodeficiency syndrome (AIDS) education;

  the Civil Rights Act; and

  homeless education programs. 

(See app.  III for a summary of the federal support for these
programs provided in each state.) The first five programs listed
above provided funding to all 49 states we surveyed. 

The 10 core programs made up 54 percent of the federal dollars used
to fund SEAs' operations nationwide.  (See table 1.) Further, if the
vocational rehabilitation programs and the Disability Determination
Service--high dollar programs that are in few SEAs--are excluded from
this calculation, these 10 core programs account for about 84 percent
of all federal dollars used to operate SEAs. 



                                     Table 1
                     
                      Major Sources of SEA Federal Retained
                              Funds and Related FTEs

                    Number       Federal      Percent of              Percent of
                        of      retained   total federal  Federa   total federal
                    states         funds  retained funds  l FTEs            FTEs
----------------  --------  ------------  --------------  ------  --------------
Core SEA
 activities
Elementary and
 secondary
 education
Chapter 1               49   $74,727,872            7.65  1,040.            7.76
                                                              29
Chapter 2               49    67,587,784            6.92  951.77            7.10
Other                   49    38,935,606            3.98  462.70            3.45
Special                 49   153,185,346           15.67  1,954.           14.58
 education                                                    01
Child nutrition         49    77,831,640            7.96  1,168.            8.72
                                                              29
Vocational              43    69,478,336            7.11  964.03            7.20
 education
Adult education         41    16,843,477            1.72  230.93            1.72
AIDS education          42     9,578,134            0.98   79.74            0.60
Civil Rights Act        42    11,549,083            1.18  145.64            1.09
Homeless                41     7,129,532            0.73   57.03            0.43
 education
 programs
================================================================================
Total for core              $526,846,810           53.90  7,054.           52.65
 activities                                                   43
Other SEA
 activities
Vocational              15  $230,889,230           23.63  3,641.           27.18
 rehabilitation                                               02
Disability               8   115,197,876           11.79  1,517.           11.33
 determination                                                58
Various other           48   104,369,160           10.68  1,184.            8.84
 programs                                                     39
================================================================================
Total for other             $450,456,266           46.10  6,342.           47.35
 activities                                                   99
================================================================================
Total                       $977,303,076          100.00  13,397          100.00
                                                             .42
--------------------------------------------------------------------------------
Comparing the federal level of support among SEAs using only the 10
core programs, on average the federal share of operating funding was
about 29 percent in fiscal year 1993.  The percentages ranged from 3
percent to 56 percent, which was somewhat narrower than the 6 percent
to 77 percent range using all federal programs (see app.  VIII).  The
impact is greatest among SEAs that operate both the vocational
rehabilitation program and Disability Determination Service. 
Appendix IV shows the impact of excluding the noncore activities for
the 15 states with the highest federal shares of operating funds.  Of
the 15, the SEAs that operate vocational rehabilitation programs are
most affected.  (See app.  V.)


   SEAS KEPT SMALL PORTION OF
   TOTAL FUNDS RECEIVED
------------------------------------------------------------ Letter :8

Looking at the total funds received by the SEA from federal and state
sources, another picture emerges.  Most federal and state funding
received by SEAs is passed through to local education agencies, with
some federal and some state funding kept for state level operations. 
States keep a greater share of federal than state funds for SEA
operations--by a ratio of about 4 to 1 (see fig.  5).  However, in
total dollars received, state funding for education ($113.8 billion)
far exceeded federal funding for education ($17.5 billion). 

Of the total federal funding the SEAs received in 1993, they kept 5.8
percent for operating purposes and passed the remainder to local
education agencies and districts.  Officials we interviewed in nine
states said that SEAs use these funds primarily for oversight,
technical assistance, and training related to specific federal
programs.  Of the total state funding they received, SEAs kept 1.4
percent. 

   Figure 5:  SEAs Retain a Small
   Portion of Federal and State
   Funding and Pass the Remainder
   Through to Local Education
   Agencies

   (See figure in printed
   edition.)

In fiscal year 1993, the median portion of federal funding kept was
5.02 percent in Idaho and the median portion of state funding kept
was 1.21 percent in Louisiana.  (See app.  I.) While most SEAs kept
less than 10 percent of the federal funding they received and less
than 5 percent of their state funding, some SEAs reported that the
percent of federal funding they used for operations was substantially
higher than the percent of state money. 

Seventeen SEAs reported that the portion of federal funding they kept
was more than 5 percentage points higher than the portion of state
funding they kept.  Officials from 14 of these SEAs told us that this
was due, in part, to state funding requiring less administrative
activity and regulatory oversight than federal funding streams. 
Officials from Michigan and Alaska said it was, in part, because the
SEAs operated high dollar federal programs, such as vocational
rehabilitation.  Officials from one state did not provide an
explanation.  On the other hand, officials from one
state--Maine--reported that their portion of state funding for
operations was more than 5 percentage points higher than their
federal, due to their administration of the state teacher retirement
fund. 


   SEAS USE FEDERAL FUNDS FOR
   SIMILAR TYPES OF ACTIVITIES
------------------------------------------------------------ Letter :9

Concerning their use of federal funds for Chapter 1, Chapter 2, Drug
Free Schools, and Eisenhower Math and Science programs, SEA officials
we interviewed in nine states reported that the federal funding they
retain for those programs is used for activities in support of these
specific federal programs.  While activities vary based on the nature
of the program, the SEA officials generally described them as
consisting of regulatory activities such as monitoring and reporting
on the use of the funds at the local level, technical assistance and
training for the local districts, and establishing innovative
programs. 

In addition, the SEA officials typically described operational funds
as used either for administrative or other more discretionary
activities.  The budget for some federal funding sources--such as
State Administration grants for Chapter 1--provide funding only for
administration.  Others--like Drug Free Schools and Chapter
2--provide both.  We found no standard definition for administrative
and discretionary activities.  However, SEA officials that we
interviewed described the following types of administrative
activities: 

  Regulatory and compliance activities.  These included such
     activities as review and approval of school districts'
     applications for funds, monitoring school districts use of funds
     and adherence to federal regulations. 

  Regulatory technical assistance.  Technical assistance was given to
     districts in applying for funds, in federal requirements
     changes, in evaluation and reporting procedures, and for other
     activities associated with regulation and compliance. 

SEA officials that we interviewed described the following types of
discretionary activities: 

  Program development and improvement.  For example, for Drug Free
     Schools, one SEA worked with schools to set up after-school
     programs to keep youth safe.  Another provided training to
     police officers to teach drug abuse resistance in schools.  A
     third SEA contracted with a private agency to develop a
     substance abuse awareness curriculum. 

  Technical assistance.  For example, for Chapter 2, one SEA provided
     site based decision-making training and another provided
     training for local education agencies in suicide prevention. 

  Special projects and grants to develop or improve programs.  For
     example, for Eisenhower Math and Science, one SEA gave grants to
     develop or expand the science curricula and another contracted
     to develop courses to improve teacher training. 


   CONCLUSIONS
----------------------------------------------------------- Letter :10

Comparisons among SEAs based solely on their total federal share of
funding and staff can be misleading.  The ratio of federal-to-state
support at each SEA depends, in part, on the individual combination
of federal and state programs and activities operated by that
particular agency.  Although there is a core of 10 federal programs
common to nearly all SEAs, no two states have the same mix of federal
and state programs.  Some SEAs keep funding to operate large
programs.  This can greatly increase the federal or state share of
funding and staff. 

Despite the variety in the mix of programs and federal funds kept,
SEA officials that we interviewed gave us similar descriptions of the
way that they use federal funds and many expressed the view that
federal programs had greater administrative and regulatory
requirements than state programs. 


   AGENCY COMMENTS
----------------------------------------------------------- Letter :11

As agreed, we did not obtain agency comments on this report because
it does not discuss the Department of Education's administration of
its programs. 


--------------------------------------------------------- Letter :11.1

We are sending copies of the report to the Senate Committee on Labor
and Human Resources and to the Secretary of Education.  We will make
copies available to other interested parties on request. 

This report was prepared by Eleanor L.  Johnson, Assistant Director,
who may be reached at (202) 512-7209; Susan Lawless,
Evaluator-in-Charge; Richard Horte, Senior Evaluator; and Linda
McIver, Staff Evaluator. 

Sincerely yours,

Linda G.  Morra
Director, Education and
 Employment Issues


SEA RETAINED FUNDS IN ALL STATES
=========================================================== Appendix I



                                    Table I.1
                     
                        Percent of SEA Retained Funds From
                     Federal Sources (State Fiscal Year 1993
                                      Data)

                           Percent of                                 Percent of
                       retained funds                             retained funds
                         from federal                               from federal
Rank    State                 sources  Rank       State                  sources
------  -----------  ----------------  ---------  ------------  ----------------
1       Michigan                76.77  26         Minnesota                39.52

2       Iowa                    70.76  27         Louisiana                39.36

3       Alabama                 68.87  28         California               38.51

4       South                   62.24  29         New Mexico               36.92
        Dakota

5       Maryland                60.96  30         Vermont                  36.69

6       New                     60.03  31         Pennsylvania             36.58
        Hampshire

7       North                   59.42  32         Washington               35.61
        Dakota

8       Utah                    59.30  33         Rhode Island             35.19

9       Florida                 53.84  34         Delaware                 33.70

10      Kansas                  52.42  35         Texas                    33.01

11      Illinois                52.41  36         Colorado                 32.81

12      Nevada                  51.52  37         West                     31.64
                                                  Virginia

13      Missouri                49.85  38         Alaska                   30.00

14      Massachuset             49.27  39         Tennessee                28.92
        ts

15      Nebraska                49.18  40         Oklahoma                 26.50

16      Ohio                    46.96  41         Oregon                   25.66

17      Montana                 46.74  42         Indiana                  25.12

18      North                   46.45  43         Mississippi              19.14
        Carolina

19      New York                45.49  44         Georgia                  17.84

20      Wyoming                 44.71  45         Connecticut              13.08

21      Arkansas                43.78  46         Kentucky                 12.96

22      Virginia                43.38  47         Wisconsin                12.72

23      Idaho                   42.49  48         South                    10.91
                                                  Carolina

24      New Jersey              42.18  49         Maine                     6.06

25      Arizona                 41.40
--------------------------------------------------------------------------------


                                    Table I.2
                     
                     Percent of Total Funding Retained at SEA
                          (State Fiscal Year 1993 Data)

                     Percent of total                           Percent of total
                     funding retained                           funding retained
Rank    State                  at SEA  Rank       State                   at SEA
------  -----------  ----------------  ---------  ------------  ----------------
1       Maine                   20.81  26         Arkansas                  1.75

2       Connecticut              8.65  26         Georgia                   1.75

3       New                      8.64  28         West                      1.69
        Hampshire                                 Virginia

4       Alabama                  6.53  29         Louisiana                 1.61

5       Delaware                 6.02  30         Massachusett              1.60
                                                  s

6       Alaska                   5.37  30         North                     1.60
                                                  Carolina

7       Oregon                   5.03  32         Colorado                  1.48

8       South                    4.92  33         Wyoming                   1.47
        Carolina

9       Nebraska                 4.89  34         Pennsylvania              1.40

10      Utah                     4.26  35         New Jersey                1.32

11      South                    3.91  36         Virginia                  1.29
        Dakota

12      Michigan                 3.88  37         Idaho                     1.25

13      Wisconsin                3.83  38         Nevada                    1.19

14      Maryland                 3.56  39         Arizona                   1.16

15      Mississippi              3.41  40         Florida                   1.12

16      Rhode                    3.20  40         Kansas                    1.12
        Island

17      Vermont                  3.00  42         Indiana                   1.09

18      Missouri                 2.80  43         Illinois                  1.05

19      Iowa                     2.36  44         Minnesota                 0.94

20      Montana                  2.33  45         New Mexico                0.92

21      Oklahoma                 2.16  46         California                0.83

22      New York                 2.13  47         Ohio                      0.72

23      Kentucky                 2.12  48         Texas                     0.69

24      North                    2.11  49         Washington                0.47
        Dakota

25      Tennessee                1.94
--------------------------------------------------------------------------------


                                    Table I.3
                     
                      Percent of Federal Funding Retained at
                        SEA (State Fiscal Year 1993 Data)

                           Percent of                                 Percent of
                      federal funding                            federal funding
Rank    State         retained at SEA  Rank       State          retained at SEA
------  -----------  ----------------  ---------  ------------  ----------------
1       Alabama                 20.04  26         Colorado                  5.01

2       Utah                    18.64  27         Nevada                    4.90

3       Michigan                17.36  28         Kansas                    4.86

4       Maryland                16.11  29         Wisconsin                 4.74

5       Iowa                    15.40  30         Oklahoma                  4.15

6       Alaska                  14.99  31         Massachusett              3.96
                                                  s

7       New                     12.85  32         Pennsylvania              3.93
        Hampshire

8       Nebraska                12.81  32         West                      3.93
                                                  Virginia

9       Maine                   10.29  34         Florida                   3.83

10      Rhode                   10.00  35         Minnesota                 3.77
        Island

11      Missouri                 9.95  36         South                     3.43
                                                  Carolina

12      Oregon                   9.74  37         Georgia                   3.35

13      Connecticut              9.27  37         Louisiana                 3.35

14      South                    8.66  39         Tennessee                 3.24
        Dakota

15      Delaware                 8.09  40         New Mexico                3.12

16      Montana                  8.04  41         Illinois                  2.87

17      New York                 7.42  42         California                2.83

18      North                    7.24  43         Indiana                   2.75
        Dakota

19      Wyoming                  6.42  44         Arizona                   2.71

20      New Jersey               6.20  45         Mississippi               2.63

21      Vermont                  6.05  46         Washington                2.52

22      North                    5.80  47         Ohio                      2.47
        Carolina

23      Arkansas                 5.54  48         Kentucky                  2.22

24      Virginia                 5.26  49         Texas                     1.59

25      Idaho                    5.02
--------------------------------------------------------------------------------


                                    Table I.4
                     
                     Percent of State Funding Retained at SEA
                          (State Fiscal Year 1993 Data)

                     Percent of state                           Percent of state
                     funding retained                           funding retained
Rank    State                  at SEA  Rank       State                   at SEA
------  -----------  ----------------  ---------  ------------  ----------------
1       Maine                   22.27  26         Arkansas                  1.14

2       Connecticut              8.56  27         Colorado                  1.10

3       New                      5.80  28         Michigan                  1.09
        Hampshire

4       Delaware                 5.33  29         North Dakota              1.04

5       South                    5.19  30         Pennsylvania              1.02
        Carolina

6       Oregon                   4.31  31         Massachusett              1.01
                                                  s

7       Alaska                   4.21  32         North                     0.98
                                                  Carolina

8       Wisconsin                3.73  33         Wyoming                   0.91

9       Mississippi              3.67  34         Indiana                   0.90

10      Nebraska                 3.06  35         New Jersey                0.84

11      Alabama                  2.62  36         Arizona                   0.82

12      Rhode                    2.34  37         Virginia                  0.81
        Island

13      Vermont                  2.32  38         Idaho                     0.80

14      Kentucky                 2.10  39         Iowa                      0.78

15      South                    2.06  40         Nevada                    0.66
        Dakota

16      Utah                     2.01  41         New Mexico                0.65

17      Oklahoma                 1.84  42         Minnesota                 0.63

18      Tennessee                1.67  43         Illinois                  0.62

19      Missouri                 1.64  44         Florida                   0.61

20      Maryland                 1.60  44         Kansas                    0.61

21      Georgia                  1.58  46         California                0.58

22      Montana                  1.43  47         Texas                     0.54

23      New York                 1.34  48         Ohio                      0.44

23      West                     1.34  49         Washington                0.33
        Virginia

25      Louisiana                1.21
--------------------------------------------------------------------------------

ADMINISTRATIVE COSTS (FTES) IN ALL
STATES
========================================================== Appendix II



                                    Table II.1
                     
                      Comparison of State Rankings for Total
                     SEA Staff and Federally Funded SEA Staff
                          (State Fiscal Year 1993 Data)


                 Federa          Federa                   Federa          Federa
           Tota       l               l             Tota       l               l
State         l   share   Total   share  State         l   share   Total   share
---------  ----  ------  ------  ------  ---------  ----  ------  ------  ------
New York      1       1  3,609.  1,611.  Tennessee    26      36  457.00  101.00
                             00      00
Michigan      2       2  2,184.  1,596.  West         27      28  425.60  136.22
                             64      57   Virginia
Missouri      3       4  2,047.  730.35  Minnesota    28      29  423.00  135.60
                             00
Connectic     4      18  2,010.  200.86  Oregon       29      42  420.15   60.16
 ut                          00
Californi     5       8  1,928.  448.80  Virginia     30      33  384.00  114.50
 a                           00
Alabama       6       5  1,524.  645.25  Arizona      31      19  383.82  197.12
                             50
Maryland      7       3  1,309.  879.40  Massachus    32      23  380.00  185.00
                             60           etts
Pennsylva     8      12  1,197.  300.00  Arkansas     33      26  363.00  147.00
 nia                         00
Texas         9       9  1,057.  402.73  Maine        34      17  336.00  219.00
                             00
New          10      10  1,050.  375.00  Indiana      35      30  309.00  132.00
 Jersey                      00
Florida      11       6  961.94  596.44  New          36      20  294.00  197.00
                                          Hampshire
Georgia      12      25  956.00  168.00  Washingto    37      38  255.00   89.80
                                          n
South        13      35  950.63  109.83  Colorado     38      34  244.50  111.90
 Carolina
Kentucky     14      32  869.00  115.00  Kansas       39      31  237.00  121.16
North        15      21  843.00  190.87  New          40      39  217.00   68.00
 Carolina                                 Mexico
Mississip    16      24  754.00  174.50  Rhode        41      40  160.45   67.85
 pi                                       Island
Illinois     17      11  750.00  321.00  Montana      42      43  145.00   60.00
Wisconsin    18      22  702.50  190.26  Vermont      43      41  144.00   66.00
Louisiana    19      13  617.00  297.50  Delaware     44      45  134.25   50.25
Iowa         20       7  616.29  496.67  Idaho        45      46  108.50   49.48
Nebraska     21      14  613.00  290.00  South        46      47  107.90   48.30
                                          Dakota
Alaska       22      27  600.00  140.50  Wyoming      47      49  100.50   25.65
Utah         23      15  569.00  266.90  North        48      44   98.00   57.25
                                          Dakota
Ohio         24      16  531.00  262.00  Nevada       49      48   90.50   48.25
Oklahoma     25      37  500.80   99.50
--------------------------------------------------------------------------------


                     Table II.2 Comparison of State Rankings
                      by Percent of SEA Retained Funds From
                     Federal Sources and SEA Staff Supported
                      By Federal Sources (State Fiscal Year
                                    1993 Data)


                      Percent   Percent                        Percent   Percent
                       of SEA        of                         of SEA        of
                        staff  retained                          staff  retained
                     supporte     funds                       supporte     funds
        SEA  Retain      d by      from          SEA  Retain      d by      from
       staf      ed   federal   federal         staf      ed   federal   federal
State     f   funds   sources   sources  State     f   funds   sources   sources
-----  ----  ------  --------  --------  -----  ----  ------  --------  --------
Iowa      1       2     80.59     70.76  Arkan    26      21     40.50     43.78
                                          sas
Michi     2       1     73.08     76.77  Texas    27      35     38.10     33.01
 gan
Maryl     3       5     67.15     60.96  Delaw    28      34     37.43     33.70
 and                                      are
New       4       6     67.01     60.03  New      29      24     35.71     42.18
 Hamp                                     Jers
 shir                                     ey
 e
Maine     5      49     65.18      6.06  Misso    30      13     35.68     49.85
                                          uri
Flori     6       9     62.00     53.84  Washi    31      32     35.22     35.61
 da                                       ngton
North     7       7     58.42     59.42  Minne    32      26     32.06     39.52
 Dako                                     sota
 ta
Nevad     8      12     53.31     51.52  West     33      37     32.01     31.64
 a                                        Virg
                                          inia
Arizo     9      25     51.36     41.40  New      34      29     31.34     36.92
 na                                       Mexi
                                          co
Kansa    10      10     51.12     52.42  Virgi    35      22     29.82     43.38
 s                                        nia
Ohio     11      16     49.34     46.96  Wisco    36      47     27.08     12.72
                                          nsin
Massa    12      14     48.68     49.27  Wyomi    37      20     25.52     44.71
 chus                                     ng
 etts
Louis    13      27     48.22     39.36  Penns    38      31     25.06     36.58
 iana                                     ylva
                                          nia
Nebra    14      15     47.31     49.18  Alask    39      38     23.42     30.00
 ska                                      a
Utah     15       8     46.91     59.30  Calif    40      28     23.28     38.51
                                          ornia
Vermo    16      30     45.83     36.69  Missi    41      43     23.14     19.14
 nt                                       ssip
                                          pi
Color    17      36     45.77     32.81  North    42      18     22.64     46.45
 ado                                      Caro
                                          lina
Idaho    18      23     45.60     42.49  Tenne    43      39     22.10     28.92
                                          ssee
South    19       4     44.76     62.24  Oklah    44      40     19.87     26.50
 Dako                                     oma
 ta
New      20      19     44.64     45.49  Georg    45      44     17.57     17.84
 York                                     ia
Illin    21      11     42.80     52.41  Orego    46      41     14.32     25.66
 ois                                      n
India    22      42     42.72     25.12  Kentu    47      46     13.23     12.96
 na                                       cky
Alaba    23       3     42.33     68.87  South    48      48     11.55     10.91
 ma                                       Caro
                                          lina
Rhode    24      33     42.29     35.19  Conne    49      45      9.99     13.08
 Isla                                     ctic
 nd                                       ut
Monta    25      17     41.38     46.74
 na
--------------------------------------------------------------------------------

MAJOR FEDERAL PROGRAMS:  RANKING
OF STATES BY FEDERAL FTES (STATE
FISCAL YEAR 1993 DATA)
========================================================= Appendix III

   Figure III.1:  Chapter 1

   (See figure in printed
   edition.)

   Figure III.2:  Chapter 2

   (See figure in printed
   edition.)

   Figure III.3:  Other ESEA

   (See figure in printed
   edition.)

   Figure III.4:  Special
   Education

   (See figure in printed
   edition.)

   Figure III.5:  Child Nutrition

   (See figure in printed
   edition.)

   Figure III.6:  Vocational
   Education

   (See figure in printed
   edition.)

   Figure III.7:  Adult Education

   (See figure in printed
   edition.)

   Figure III.8:  AIDS Education

   (See figure in printed
   edition.)

   Figure III.9:  Civil Rights Act

   (See figure in printed
   edition.)

   Figure III.10:  Homeless
   Education Programs

   (See figure in printed
   edition.)


IMPACT OF INCLUDING/EXCLUDING
NONCORE ACTIVITIES (STATE FISCAL
YEAR 1993 DATA)
========================================================== Appendix IV

   Figure IV.1:  Michigan

   (See figure in printed
   edition.)

   Figure IV.2:  Iowa

   (See figure in printed
   edition.)

   Figure IV.3:  Alabama

   (See figure in printed
   edition.)

   Figure IV.4:  South Dakota

   (See figure in printed
   edition.)

   Figure IV.5:  Maryland

   (See figure in printed
   edition.)

   Figure IV.6:  New Hampshire

   (See figure in printed
   edition.)

   Figure IV.7:  North Dakota

   (See figure in printed
   edition.)

   Figure IV.8:  Utah

   (See figure in printed
   edition.)

   Figure IV.9:  Florida

   (See figure in printed
   edition.)

   Figure IV.10:  Kansas

   (See figure in printed
   edition.)

   Figure IV.11:  Illinois

   (See figure in printed
   edition.)

   Figure IV.12:  Nevada

   (See figure in printed
   edition.)

   Figure IV.13:  Missouri

   (See figure in printed
   edition.)

   Figure IV.14:  Massachusetts

   (See figure in printed
   edition.)

   Figure IV.15:  Nebraska

   (See figure in printed
   edition.)


STATE PROFILES (STATE FISCAL YEAR
1993)
=========================================================== Appendix V

Appendix V contains profiles for each of the 49 states included in
our survey.  The information in the profiles is taken from the
questionnaires and follow-up telephone interviews with each of the
SEAs.  Each of the profiles provides information on (1) the overall
state budget context, (2) a summary of the SEA activity, and (3) a
detailed listing of the various federally funded activities including
the federal funds retained and the federal FTEs.  All data presented
are for the state fiscal year ending in 1993. 


   BUDGET CONTEXT
--------------------------------------------------------- Appendix V:1

The upper right corner of each state profile contains selected
background data to provide a frame of reference for understanding the
significance of the SEA activity (see fig.  V.1).  Each of the three
dollar amounts was provided by the SEAs in their questionnaire
responses.  The separate amounts are not related to each other. 

   Figure V.1:  Budget Context

   (See figure in printed
   edition.)


   SEA ACTIVITY SUMMARY
--------------------------------------------------------- Appendix V:2

In the upper left portion of the profile, we have included summary
information on the funding and staffing of each SEA (see fig.  V.2). 
Unlike the budget context items, the items in each row of the SEA
activity summary are related.  The summary shows the federal and
state funding received by each SEA, the amount of those funds
retained by each SEA, and the related staffing levels in FTEs.  Note
that the percentages add across, left to right, for each item.  For
example, the percent of total in Federal/Funding Retained by SEA is a
portion of Total/Funding Retained by SEA.  The state rankings
represent how the SEAs compare for each particular item shown. 
Rankings are based on the actual numbers (rather than percentages)
and are from high to low.  For example, a "(1)" in the
Federal/Funding Retained cell means the SEA retains the highest
amount of federal dollars among the 49 states in our study. 

   Figure V.2:  SEA Activity
   Summary

   (See figure in printed
   edition.)


   FEDERALLY FUNDED ACTIVITIES
--------------------------------------------------------- Appendix V:3

The lower portion of the profile includes information on the 10 core
SEA activities that are common to most or all states followed by a
listing of other SEA activities reported by each state.  For other
activities, we used program names as provided by the SEAs that may
not necessarily be the specific name of the federal program for which
they received funding. 

Unlike the other two parts of the state profile, the columns for
dollar amounts and FTEs total vertically.  In several states, the
total dollar amount may not agree with the federal funding retained
shown in the SEA activity summary.  This is due to various data
reporting idiosyncracies we encountered; for example, one set of
numbers may be estimated and the other actual; the activity summary
may contain budgetary data while the detailed listing is actual
expenditures; or one set of numbers may be rounded.  We followed up
with further discussions wherever the discrepancies between the two
sets of data exceeded 5 percent.  Also, some states could not readily
provide us with the FTEs related to some of their smaller programs
but, instead, provided an aggregate total. 


   NOTES
--------------------------------------------------------- Appendix V:4


      GENERAL NOTES
------------------------------------------------------- Appendix V:4.1

N/A = not available. 

Numbers in parentheses indicate the state ranking on the particular
item across all states. 

Percentages for funding and FTEs may not add due to rounding. 


      NOTES
------------------------------------------------------- Appendix V:4.2

Note a.  Totals for federally funded activities may not agree with
the data in the SEA activity summary for federal funding retained due
to data reporting idiosyncracies:  one set of numbers may be
estimated and the other actual; the activity summary may contain
budgetary data while the detailed listing is actual expenditures; or
one set of numbers may be rounded.  We followed up with further
discussions wherever the discrepancies between the two sets of data
exceeded 5 percent. 

Note b.  State could not readily provide us with the FTEs related to
some of their smaller programs but, instead, provided an aggregate
total.  The applicable programs are identified with N/A in the FTE
column. 

Note c.  In fiscal year 1993, according to an official, the Rhode
Island SEA directly operated child nutrition programs, but beginning
in fiscal year 1995 it plans to delegate operations to local
districts.  The funding here represents the SEA costs for
administration of those programs and does not include the $10 million
in federal funds for program operation. 

   Figure V.3:  Alabama

   (See figure in printed
   edition.)

   Figure V.4:  Alaska

   (See figure in printed
   edition.)

   Figure V.5:  Arizona

   (See figure in printed
   edition.)

   Figure V.6:  Arkansas

   (See figure in printed
   edition.)

   Figure V.7:  California

   (See figure in printed
   edition.)

   Figure V.8:  Colorado

   (See figure in printed
   edition.)

   Figure V.9:  Connecticut

   (See figure in printed
   edition.)

   Figure V.10:  Delaware

   (See figure in printed
   edition.)

   Figure V.11:  Florida

   (See figure in printed
   edition.)

   Figure V.12:  Georgia

   (See figure in printed
   edition.)

   Figure V.13:  Idaho

   (See figure in printed
   edition.)

   Figure V.14:  Illinois

   (See figure in printed
   edition.)

   Figure V.15:  Indiana

   (See figure in printed
   edition.)

   Figure V.16:  Iowa

   (See figure in printed
   edition.)

   Figure V.17:  Kansas

   (See figure in printed
   edition.)

   Figure V.18:  Kentucky

   (See figure in printed
   edition.)

   Figure V.19:  Louisiana

   (See figure in printed
   edition.)

   Figure V.20:  Maine

   (See figure in printed
   edition.)

   Figure V.21:  Maryland

   (See figure in printed
   edition.)

   Figure V.22:  Massachusetts

   (See figure in printed
   edition.)

   Figure V.23:  Michigan

   (See figure in printed
   edition.)

   Figure V.24:  Minnesota

   (See figure in printed
   edition.)

   Figure V.25:  Mississippi

   (See figure in printed
   edition.)

   Figure V.26:  Missouri

   (See figure in printed
   edition.)

   Figure V.27:  Montana

   (See figure in printed
   edition.)

   Figure V.28:  Nebraska

   (See figure in printed
   edition.)

   Figure V.29:  Nevada

   (See figure in printed
   edition.)

   Figure V.30:  New Hampshire

   (See figure in printed
   edition.)

   Figure V.31:  New Jersey

   (See figure in printed
   edition.)

   Figure V.32:  New Mexico

   (See figure in printed
   edition.)

   Figure V.33:  New York

   (See figure in printed
   edition.)

   Figure V.34:  North Carolina

   (See figure in printed
   edition.)

   Figure V.35:  North Dakota

   (See figure in printed
   edition.)

   Figure V.36:  Ohio

   (See figure in printed
   edition.)

   Figure V.37:  Oklahoma

   (See figure in printed
   edition.)

   Figure V.38:  Oregon

   (See figure in printed
   edition.)

   Figure V.39:  Pennsylvania

   (See figure in printed
   edition.)

   Figure V.40:  Rhode Island

   (See figure in printed
   edition.)

   Figure V.41:  South Carolina

   (See figure in printed
   edition.)

   Figure V.42:  South Dakota

   (See figure in printed
   edition.)

   Figure V.43:  Tennessee

   (See figure in printed
   edition.)

   Figure V.44:  Texas

   (See figure in printed
   edition.)

   Figure V.45:  Utah

   (See figure in printed
   edition.)

   Figure V.46:  Vermont

   (See figure in printed
   edition.)

   Figure V.47:  Virginia

   (See figure in printed
   edition.)

   Figure V.48:  Washington

   (See figure in printed
   edition.)

   Figure V.49:  West Virginia

   (See figure in printed
   edition.)

   Figure V.50:  Wisconsin

   (See figure in printed
   edition.)

   Figure V.51:  Wyoming

   (See figure in printed
   edition.)


DATA SUPPORTING FIGURES IN REPORT
========================================================== Appendix VI



                          Table VI.1
           
             Federal Share of SEA Operating Funds
             Varies Widely Among States (Data for
                           Fig. 1)

                      Federal                        Federal
                 share of SEA                   share of SEA
                     retained                       retained
State                   funds  State                   funds
---------------  ------------  ---------------  ------------
Alabama                 68.87  Nebraska                49.18
Alaska                  30.00  Nevada                  51.52
Arizona                 41.40  New Hampshire           60.03
Arkansas                43.78  New Jersey              42.18
California              38.51  New Mexico              36.92
Colorado                32.81  New York                45.49
Connecticut             13.08  North Carolina          46.45
Delaware                33.70  North Dakota            59.42
Florida                 53.84  Ohio                    46.96
Georgia                 17.84  Oklahoma                26.50
Idaho                   42.49  Oregon                  25.66
Illinois                52.41  Pennsylvania            36.58
Indiana                 25.12  Rhode Island            35.19
Iowa                    70.76  South Carolina          10.91
Kansas                  52.42  South Dakota            62.24
Kentucky                12.96  Tennessee               28.92
Louisiana               39.36  Texas                   33.01
Maine                    6.06  Utah                    59.30
Maryland                60.96  Vermont                 36.69
Massachusetts           49.27  Virginia                43.38
Michigan                76.77  Washington              35.61
Minnesota               39.52  West Virginia           31.64
Mississippi             19.14  Wisconsin               12.72
Missouri                49.85  Wyoming                 44.71
Montana                 46.74
------------------------------------------------------------


                          Table VI.2
           
               How Michigan's Operation of the
            Vocational Rehabilitation, Disability
           Determination Service, and Student Loan
            Program Affects State/Federal Share of
                SEA Funding (Data for Fig. 3)

                                    Federa
                                         l             State
                           Federal  percen     State  percen
                           funding       t   funding       t
----------------------  ----------  ------  --------  ------
With administration of  $125,863,3   76.77  $38,087,   23.23
 programs                       04               627
Without administration  18,739,141   32.98  38,087,6   67.02
 of programs                                      27
------------------------------------------------------------


                          Table VI.3
           
              How Maine's Operation of the State
              Teacher Retirement Program Affects
           State/Federal Share of SEA Funding (Data
                         for Fig. 4)

                                  Federa
                                       l               State
                         Federal  percen       State  percen
                         funding       t     funding       t
----------------------  --------  ------  ----------  ------
With administration of  $9,816,1    6.06  $152,293,3   93.94
 program                      75                  46
Without administration  9,816,17   42.82  13,108,915   57.18
 of program                    5
------------------------------------------------------------


                          Table VI.4
           
            SEAs Retain a Small Portion of Federal
           and State Funding and Pass the Remainder
             Through to Local Education Agencies
                      (Data for Fig. 5)

                                                        Pass
                                Retain                throug
                                    ed                     h
                      Retained  percen  Pass through  percen
Funding source         funding       t       funding       t
----------------  ------------  ------  ------------  ------
Federal           $1,008,165,0    5.77  $16,468,984,   94.23
                            19                   097
State             1,578,790,78    1.39  112,253,376,   98.61
                             0                   963
------------------------------------------------------------


                          Table VI.5
           
            Impact of Including/Excluding Noncore
             Activities, Michigan (Data for Fig.
                            IV.1)

                         Federal               State
                        retained  Percen    retained  Percen
                           funds       t       funds       t
--------------------  ----------  ------  ----------  ------
Including noncore     $125,863,3   76.77  $38,087,62   23.23
 activities                   04                   7
Excluding noncore     15,655,629   29.13  38,087,627   70.87
 activities
------------------------------------------------------------


                          Table VI.6
           
            Impact of Including/Excluding Noncore
            Activities, Iowa (Data for Fig. IV.2)

                         Federal               State
                        retained  Percen    retained  Percen
                           funds       t       funds       t
--------------------  ----------  ------  ----------  ------
Including noncore     $26,631,70   70.76  $11,007,41   29.24
 activities                    5                   7
Excluding noncore      9,581,840   46.54  11,007,417   53.46
 activities
------------------------------------------------------------


                          Table VI.7
           
            Impact of Including/Excluding Noncore
           Activities, Alabama (Data for Fig. IV.3)

                         Federal               State
                        retained  Percen    retained  Percen
                           funds       t       funds       t
--------------------  ----------  ------  ----------  ------
Including noncore     $86,494,55   68.87  $39,103,44   31.13
 activities                    5                   1
Excluding noncore     13,007,294   24.96  39,103,441   75.04
 activities
------------------------------------------------------------


                          Table VI.8
           
            Impact of Including/Excluding Noncore
           Activities, South Dakota (Data for Fig.
                            IV.4)

                         Federal               State
                        retained  Percen    retained  Percen
                           funds       t       funds       t
--------------------  ----------  ------  ----------  ------
Including noncore     $5,655,159   62.24  $3,430,488   37.76
 activities
Excluding noncore      3,988,214   53.76   3,430,488   46.24
 activities
------------------------------------------------------------


                          Table VI.9
           
            Impact of Including/Excluding Noncore
             Activities, Maryland (Data for Fig.
                            IV.5)

                         Federal               State
                        retained  Percen    retained  Percen
                           funds       t       funds       t
--------------------  ----------  ------  ----------  ------
Including noncore     $52,469,02   60.96  $33,606,04   39.04
 activities                    6                   5
Excluding noncore      8,736,907   20.63  33,606,045   79.37
 activities
------------------------------------------------------------


                         Table VI.10
           
            Impact of Including/Excluding Noncore
           Activities, New Hampshire (Data for Fig.
                            IV.6)

                         Federal               State
                        retained  Percen    retained  Percen
                           funds       t       funds       t
--------------------  ----------  ------  ----------  ------
Including noncore     $7,849,365   60.03  $5,226,442   39.97
 activities
Excluding noncore      2,662,453   33.75   5,226,442   66.25
 activities
------------------------------------------------------------


                         Table VI.11
           
            Impact of Including/Excluding Noncore
           Activities, North Dakota (Data for Fig.
                            IV.7)

                         Federal               State
                        retained  Percen    retained  Percen
                           funds       t       funds       t
--------------------  ----------  ------  ----------  ------
Including noncore     $3,655,428   59.42  $2,496,093   40.58
 activities
Excluding noncore      3,187,404   56.08   2,496,093   43.92
 activities
------------------------------------------------------------


                         Table VI.12
           
            Impact of Including/Excluding Noncore
            Activities, Utah (Data for Fig. IV.8)

                         Federal               State
                        retained  Percen    retained  Percen
                           funds       t       funds       t
--------------------  ----------  ------  ----------  ------
Including noncore     $28,657,40   59.30  $19,671,00   40.70
 activities                    0                   0
Excluding noncore      6,092,400   23.65  19,671,000   76.35
 activities
------------------------------------------------------------


                         Table VI.13
           
            Impact of Including/Excluding Noncore
           Activities, Florida (Data for Fig. IV.9)

                         Federal               State
                        retained  Percen    retained  Percen
                           funds       t       funds       t
--------------------  ----------  ------  ----------  ------
Including noncore     $35,972,33   53.84  $30,840,45   46.16
 activities                    9                   8
Excluding noncore     25,469,695   45.23  30,840,458   54.77
 activities
------------------------------------------------------------


                         Table VI.14
           
            Impact of Including/Excluding Noncore
           Activities, Kansas (Data for Fig. IV.10)

                         Federal               State
                        retained  Percen    retained  Percen
                           funds       t       funds       t
--------------------  ----------  ------  ----------  ------
Including noncore     $8,020,563   52.42  $7,278,571   47.58
 activities
Excluding noncore      5,422,142   42.69   7,278,571   57.31
 activities
------------------------------------------------------------


                         Table VI.15
           
            Impact of Including/Excluding Noncore
             Activities, Illinois (Data for Fig.
                            IV.11)

                         Federal               State
                        retained  Percen    retained  Percen
                           funds       t       funds       t
--------------------  ----------  ------  ----------  ------
Including noncore     $22,861,07   52.41  $20,761,50   47.59
 activities                    1                   0
Excluding noncore     22,092,162   51.55  20,761,500   48.45
 activities
------------------------------------------------------------


                         Table VI.16
           
            Impact of Including/Excluding Noncore
           Activities, Nevada (Data for Fig. IV.12)

                         Federal               State
                        retained  Percen    retained  Percen
                           funds       t       funds       t
--------------------  ----------  ------  ----------  ------
Including noncore     $2,829,724   51.52  $2,662,333   48.48
 activities
Excluding noncore      2,642,530   49.81   2,662,333   50.19
 activities
------------------------------------------------------------


                         Table VI.17
           
            Impact of Including/Excluding Noncore
             Activities, Missouri (Data for Fig.
                            IV.13)

                         Federal               State
                        retained  Percen    retained  Percen
                           funds       t       funds       t
--------------------  ----------  ------  ----------  ------
Including noncore     $33,949,71   49.85  $34,152,21   50.15
 activities                    1                   7
Excluding noncore      8,707,819   20.32  34,152,217   79.68
 activities
------------------------------------------------------------


                         Table VI.18
           
            Impact of Including/Excluding Noncore
           Activities, Massachusetts (Data for Fig.
                            IV.14)

                         Federal               State
                        retained  Percen    retained  Percen
                           funds       t       funds       t
--------------------  ----------  ------  ----------  ------
Including noncore     $16,156,50   49.27  $16,633,49   50.73
 activities                    7                   3
Excluding noncore     13,557,438   44.91  16,633,493   55.09
 activities
------------------------------------------------------------


                         Table VI.19
           
            Impact of Including/Excluding Noncore
             Activities, Nebraska (Data for Fig.
                            IV.15)

                         Federal               State
                        retained  Percen    retained  Percen
                           funds       t       funds       t
--------------------  ----------  ------  ----------  ------
Including noncore     $15,101,22   49.18  $15,606,61   50.82
 activities                    5                   6
Excluding noncore      5,017,682   24.33  15,606,616   75.67
 activities
------------------------------------------------------------

EXPECTED CHANGE IN FEDERAL SHARE
OF RETAINED FUNDS FY 1993-95
========================================================= Appendix VII


               Expected                                 Expected
              change in                                change in
             percent of                               percent of
         retained funds                           retained funds
           from federal                             from federal
          sources FY93-      FY      FY            sources FY93-      FY      FY
State                95    1993    1995  State                95    1993    1995
-------  --------------  ------  ------  -------  --------------  ------  ------
Louisia           10.02   39.36   49.38  Montana            0.00   46.74   46.74
 na
Arizona            9.18   41.40   50.58  Utah               0.00   59.30   59.30
North              6.21   59.42   65.63  West              -0.07   31.64   31.57
 Dakota                                   Virgin
                                          ia
Oklahom            6.03   26.50   32.53  Wiscons           -0.19   12.72   12.53
 a                                        in
Pennsyl            5.76   36.58   42.34  Delawar           -0.25   33.70   33.45
 vania                                    e
Mississ            4.78   19.14   23.92  Idaho             -0.27   42.49   42.22
 ippi
Tenness            4.45   28.92   33.37  Rhode             -0.31   35.19   34.88
 ee                                       Island
New                4.20   42.18   46.38  Alaska            -0.33   30.00   29.67
 Jersey
Wyoming            4.04   44.71   48.75  Florida           -0.45   53.84   53.39
Texas              3.80   33.01   36.81  Washing           -0.59   35.61   35.02
                                          ton
Maine              3.52    6.06    9.58  Oregon            -0.60   25.66   25.06
Nevada             3.19   51.52   54.71  Califor           -0.92   38.51   37.59
                                          nia
Connect            2.61   13.08   15.69  New               -1.02   45.49   44.47
 icut                                     York
New                2.31   60.03   62.34  Colorad           -1.33   32.81   31.48
 Hampsh                                   o
 ire
Vermont            2.08   36.69   38.77  Indiana           -1.44   25.12   23.68
Virgini            2.07   43.38   45.45  New               -1.75   36.92   35.17
 a                                        Mexico
North              1.76   46.45   48.21  Massach           -2.20   49.27   47.07
 Caroli                                   usetts
 na
Nebrask            1.72   49.18   50.90  Marylan           -2.29   60.96   58.67
 a                                        d
Minneso            1.28   39.52   40.80  Arkansa           -2.37   43.78   41.41
 ta                                       s
Ohio               1.10   46.96   48.06  Missour           -2.69   49.85   47.16
                                          i
South              0.83   10.91   11.74  Iowa              -3.74   70.76   67.02
 Caroli
 na
Illinoi            0.31   52.41   52.72  Alabama           -4.17   68.87   64.70
 s
Kentuck            0.04   12.96   13.00  Georgia           -4.37   17.84   13.47
 y
Kansas             0.02   52.42   52.44  South             -6.28   62.24   55.96
                                          Dakota
Michiga            0.00   76.77   76.77
 n
--------------------------------------------------------------------------------

FEDERAL SHARE USING CORE PROGRAMS
IN ALL STATES
======================================================== Appendix VIII



                     Table VIII.1 Percent of Retained Funding
                      From Core Programs (State Fiscal Year
                                    1993 Data)

                             Percent of                               Percent of
                         retained funds                           retained funds
                              from core                                from core
Rank  State                    programs  Rank  State                    programs
----  -----------------  --------------  ----  -----------------  --------------
1     Indiana                    100.00    26  California                  86.70

2     North Carolina              99.60    27  Virginia                    85.96

3     Oregon                      98.66    28  Massachusetts               84.66

4     Tennessee                   98.54    29  Montana                     84.27

5     Washington                  97.97    30  Colorado                    79.82

6     Oklahoma                    96.94    31  Rhode Island                78.92

7     Illinois                    96.72    32  South Dakota                76.35

8     Vermont                     96.66    33  Florida\a                   70.80

9     New Mexico                  96.51    34  West Virginia               67.94

10    Connecticut                 96.00    35  Kansas\a                    67.29

11    Kentucky                    95.67    36  Mississippi                 67.08

12    South Carolina              95.65    37  Pennsylvania                66.27

13    Minnesota\a                 94.94    38  Maine\a                     43.47

14    Georgia                     93.78    39  New York\a                  42.90

15    Nevada                      93.38    40  Alaska\a                    42.63

16    Ohio                        91.79    41  Arkansas\c                  40.42

17    New Jersey                  90.30    42  Iowa\a,b                    35.98

18    Wisconsin                   90.26    43  New Hampshire\a,b           33.86

19    Idaho                       90.21    44  Nebraska\a,b                33.64

20    Wyoming                     89.61    45  Missouri\a,b                25.35

21    Texas\a                     89.31    46  Utah\a,b                    21.25

22    Arizona                     89.06    47  Maryland\a,b                16.65

23    Delaware                    88.69    48  Alabama\a,b                 15.04

24    Louisiana                   87.30    49  Michigan\a,b                12.49

25    North Dakota                87.20
--------------------------------------------------------------------------------
\a SEA retains funds for Vocational Rehabilitation. 

\b SEA retains funds for Disability Determination Services. 

\c SEA retains funds for National Migrant Student Record Transfer
System. 



                                   Table VIII.2
                     
                       Federal Share of SEA Retained Funds
                       Using Only the Core Federal Programs
                          (State Fiscal Year 1993 Data)

                          Federal share                            Federal share
                            of retained                              of retained
                                  funds                                    funds
Rank  State                   (percent)  Rank  State                   (percent)
----  -----------------  --------------  ----  -----------------  --------------
1     North Dakota                 56.1    26  Tennessee                    28.6

2     South Dakota                 53.8    27  North Carolina\a             28.4

3     Illinois                     51.6    28  Colorado                     28.0

4     Nevada                       49.8    29  Pennsylvania                 27.1

5     Iowa                         46.5    30  New York                     26.4

6     Florida                      45.2    31  Oklahoma                     25.9

7     Massachusetts                44.9    32  Oregon                       25.9

8     Ohio                         44.8    33  Indiana                      25.1

9     Montana                      43.2    34  Alabama                      25.0

10    Kansas                       42.7    35  Nebraska                     24.3

11    Idaho                        40.0    36  Arkansas                     23.9

12    New Jersey                   39.7    36  West Virginia                23.9

13    Arizona                      38.6    38  Utah                         23.6

14    Wyoming\a                    38.4    39  Delaware\a                   21.7

15    Minnesota                    38.2    40  Maryland                     20.6

16    Vermont                      36.4    41  Missouri                     20.3

17    Louisiana                    36.2    42  Georgia                      16.9

18    New Mexico                   36.1    43  Mississippi                  13.9

19    Washington                   35.1    44  Alaska\a                     13.1

19    California                   35.1    45  Wisconsin\a                  12.9

21    New Hampshire                33.7    46  Kentucky                     12.5

22    Virginia\a                   33.6    47  South Carolina               10.5

23    Rhode Island                 31.7    48  Connecticut\a                 8.2

24    Texas                        30.8    49  Maine                         2.7

25    Michigan                     29.1
--------------------------------------------------------------------------------
\a In some states, reporting idiosyncracies resulted in differences
of greater than 10 percent between aggregate federal retained funds
and individual program data.  As a result, percentages for these
states may not accurately depict the relationship of federal funding
for core programs to total SEA funding.  (See note a in app.  V.)




(See figure in printed edition.)Appendix IX
GAO QUESTIONNAIRE OF STATE
EDUCATION AGENCIES
======================================================== Appendix VIII



(See figure in printed edition.)



(See figure in printed edition.)



(See figure in printed edition.)



(See figure in printed edition.)



(See figure in printed edition.)

