Following an analysis of Vermont's present system of allocating state and federal vocational education funds, alternative formulas and methods for allocation are presented. The first chapter focuses on concerns raised with the present system, particularly the data used to allocate money and the focus on concern for distribution across institutions as opposed to specific programs and populations. Implications of changes in federal law (Title II of the Education Amendments of 1976--P.L. 94-482), which required Vermont to modify its formula for dispensing federal monies are examined in the second chapter. Focus in the third chapter is on data quality. Current allocation formulas and possible alternatives are examined in light of clerical accuracy, data definition, data measurement, and data timing. After analyzing a variety of formula alternatives, the fourth chapter recommends a new formula consistent with new federal regulations. The final chapter covers additional revenue and expenditure issues, e.g., methods of counting district or institutional expenditures and the effect on allocation. Recommendations made include change to a variable matching grant-type formula. It is concluded that the use of expenditures (as opposed to pupils) as a base for a variable matching grant would generate a distribution more closely approximating the current one. Factors recommended for inclusion in the new formula include unemployment, number of low-income families relative to the total population of the area, and number of disadvantaged students in relationship to the total enrollment. (JT)