This document presents findings of a review of the Mississippi Department of Education's internal management and operations and oversight of district and student performance, conducted by the Joint Legislative Committee on Performance Evaluation and Expenditure Review (PEER). Methodology included document analysis, interviews with state Department of Education personnel, analysis of student achievement data, and focus group meetings with local school teachers and administrators. Following an executive summary and an introduction, information is provided on the following: the background of the state Department of Education (DOE) and the state Board of Education, statewide evaluation and planning, spending priorities and control, school and district evaluation, structural problems, and recommendations for each area. The review found flaws in Mississippi's education funding law and in the department's administration of some aspects of the funding program. Shortcomings were also noted on the part of the state Board of Education and the DOE that limit their accountability in each major program area. Certain features of the public school finance program prevent the state legislature from effectively targeting funds toward the regular, special, and vocational education program areas. Other inadequacies included deficiencies in the DOE's budgeting system, a lack of measurable goals for student performance, and several major structural problems. Thirty-three exhibits, a glossary, and an executive summary are provided. Appendixes include budgetary data, procedures for using the vocational program rating system, description of Mississippi's literacy programs, and proposed state legislation regarding vocational education. (LMI)