The HEW Audit Agency has reviewed the progress being made by State educational agencies (SEAs) in assuring that local educational agencies (LEAs) are designing and implementing projects to meet the special educational needs of educationally deprived children, as called for under Title I of the Elementary and Secondary Education Act of 1965, as amended. Performance data for 14 states was studied for the 1972-73 school year and compared with similar data for the 1969-70 school year. All projects implemented by 112 LEAs during the 1969-70 school year and all projects implemented by the same LEAs during the school year 1972-73 were reviewed. Also all project applications for the school year 1972-73 submitted by 369 additional LEAs in the 14 states were examined. In reviewing the effectiveness of SEA practices, (1) the extent that LEAs were using Title I funds for meeting the high-priority educational needs of educationally deprived children, and (2) the extent of any improvements made by the LEAs in using funds for such purposes were determined. The LEAs in those states operating under a concept of firm central authority seemed to have made the best showing in using their Title I funds for high-priority activities. Several SEAs however, still have not been successful in convincing LEAs to use Title I funds to the greatest advantage in keeping with program objectives. (Author/JM)