Summary

Pursuant to a legislative requirement, GAO reviewed the Chapter 1 Handicapped Program and its relationship to the Education of the Handicapped Act (EHA) Program, focusing on: (1) the extent to which the Department of Education provided guidance to the states to determine eligibility under Chapter 1; (2) whether states implemented programs consistent with congressional intent regarding the transfer of students from state-operated or -supported programs to local public schools; (3) the extent of education that handicapped children received in settings with nonhandicapped children; (4) whether Chapter 1 afforded all handicapped children and their parents the same rights and procedural guarantees as under EHA programs; (5) the specific services provided under Chapter 1 compared with those under EHA programs; and (6) efforts to ensure that all eligible handicapped students received services.

GAO found that: (1) although Congress created the Chapter 1 Handicapped Program to service mostly severely handicapped children in state institutions, neither the legislation nor its implementing regulations specifically limited services to the severely handicapped; (2) because the legislation based program funding on the number of children served, some states served many children with less than severe handicaps and received more than a proportional share of program funds than states that served only more severely handicapped children; (3) 45 states counted less-than-severely handicapped children in preschool programs under their Chapter 1 programs, and 48 percent of the children in the programs who were 5 years old or younger were not severely handicapped; (4) because states often transferred most of the preschool children counted in state-supported programs who had less than severe handicaps to regular schools and continued them in the program indefinitely, the states received higher funding levels than they would have under EHA; (5) two-thirds of the state officials did not consider funding transfer an incentive to deinstitutionalize severely handicapped children; (6) although handicapped children in both programs received the same procedural safeguards to ensure appropriate educational services, services provided to children under Chapter 1 were more frequent and intense than those provided under EHA; and (7) 69 percent of the state program coordinators had no objection to combining the programs because of their similarity, provided that the funding authority for both programs remained separate.