Findings of a study on public school funding and accountability in Hawaii are presented in this report. Following a detailed executive summary, the introduction outlines the state legislative history that mandated the study and describes the study's design. Chapter 2 discusses the different methods used to analyze educational expenditures and their limitations, proposes alternatives, and identifies their assumptions. Chapter 3 examines the relationship between inflation and current operations expenditures and describes the changes in expenditures over time. It also discusses the theory and design of a school price index to measure the effects of inflation on elementary/secondary operations. The fourth chapter compares the amounts expended for such functions as administrative support and those expended directly for students, such as classroom teaching. The utility of the current accountability system and the equity of resource-allocation procedures used by the State Department of Education (DOE) are assessed in chapters 5 and 6. Chapter 7 analyzes the current program structure of the department of education and presents two new alternatives. Seventeen tables are included. Appendices contain lists of expenditures and comments by the DOE on the study findings. A summary and endnotes accompany each chapter. (LMI)