Use of the Public Law 94-142 Set-Aside Shows Both the Flexibility Intended by the Law and the Need for Improved Reporting

PEMD-85-5: Published: Jan 2, 1985. Publicly Released: Jan 9, 1985.

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Pursuant to a congressional request, GAO examined how states are currently using funds set aside under P.L. 94-142, the Education for All Handicapped Children Act of 1975, and analyzed the likely effect of a shift in the current set-aside proportion.

GAO found that most states have allocated the set-aside in a manner that meets the federal mandates and responds to state needs. However, GAO believes that the current process might be modified in several ways: (1) although most states do not use their full set-aside allotment, the proposed legislative reduction of funds might have a negative effect on the states that need their allotment; (2) more specific guidance is needed for states if financial support is forthcoming for activities, such as research and development, child programs, and infant programs; and (3) the argument for allowing small states the flexibility of allocating a larger percentage of funds should be considered. Although the set-aside seems to be effectively reaching the act's goals, better financial information on the program is needed. GAO believes that collecting and reporting this information would not add greatly to the states' or the Department of Education's data collection and reporting burden.

Matter for Congressional Consideration

  1. Status: Closed - Implemented

    Comments: The Subcommittee feels that this matter can be addressed by Education regulations, rather than congressional action. As of December 1986, Education had acted and received Office of Management and Budget (OMB) clearance. The information is now routinely collected and analyzed in the state plans.

    Matter: The Senate Committee on Labor and Human Resources, Handicapped Subcommittee, should consider the fact that no national data have been available for monitoring or evaluating the set-aside program. The current regulations do not require the states to report even minimal information, such as the proportion they retain from their grants and the proportions they use for administration and direct and support services each year. If this basic information were available, it would at least be possible to track trends in state and local allocations and to determine, among other things, whether the states are continuing to make voluntary reductions in the set-aside.


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