Intended for use by state and local education agencies in the development of written policy consistent with recent federal legislation on the education of handicapped children, the manual offers recommended policy statements in the areas of right to education, population, identification, evaluations, placement, service delivery, facilities and transportation, administration, personnel, fiscal management, and forms. It is explained that the manual was developed by fieldtesting an administrative policy questionnaire with 40 local education agencies and over 130 administrators. Definitions of 20 terms such as child-find, individualized education program, and mainstreaming are provided as is a chart of state statutory responsibilities for the education of handicapped children, and a summary of Public Law 94-142 (The Education for All Handicapped Children Act) right to education provisions. Each section contains coded policy statements with comments and cross references to related policies. Sample forms, a list of advisory committee members, and a manual evaluation form are appended. The looseleaf notebook format of the manual is intended to facilitate changes and allow inclusion of specific federal, state, and local policy information by the user. (DB)