The document reviews the New York State Education Department's management of state aid for remedial education in the program for serving Pupils with Special Educational Needs (PSEN), the intent of which is to help low-achieving students overcome their disadvantage in learning. Four separate aspects are examined: (1) program intent, evolution, and magnitude (the PSEN program has not been administered in accord with legislative intent since 1979-80; (2) program administration (problems include confusion over guidelines and lack of enforceable standards); (3) program accountability (available data were deficient for basic management purposes and district information was deficient for program accountability, largely due to inadequacies in guidelines for district reporting); and (4) fiscal accountability (district expenditure reporting is not in compliance). Among appendixes are the State Education Department's response and the rebuttal of the Legislative Commission on Expenditure Review. (CL)