This report was prepared in response to requests by Senators Specter and Kennedy for information regarding charter schools. It presents data on the following: the number of charter schools approved under state law; characteristics of charter-school instructional programs; factors for school autonomy; accountability mechanisms; and the challenges posed by charter schools for federal education programs. Methodology included: (1) a review of documents for most of the 83 approved or proposed charter schools as of May 1994 (in California, Colorado, Massachusetts, and Minnesota); (2) telephone interviews with the principals of 50 charter schools, district officials in 34 school districts with charter schools, and state officials in the 11 states with laws authorizing charter schools; (3) analysis of the laws of the 11 states; and (4) a review of oral updates provided by officials in the 11 states. Findings indicate that as of January 1995, 134 charter schools had been approved in 9 of the 11 states with charter-school laws. Great diversity existed among charter schools in terms of instructional programs, autonomy, and assessment plans. An important issue is whether charter schools can be considered as local education agencies (LEAs) and thus be eligible for Title I funds. It is recommended that the Secretary of Education determine whether states may consider charter schools LEAs for federal program administration. If such schools may be LEAs, the Secretary should provide guidance that specifies how states may allocate Title I funds to charter schools, particularly in states that use census data to count low-income children, and how states may determine charter schools' legal responsibility for providing special-education services. Eleven tables and one figure are included. Appendices contain lists of charter schools proposed or approved as of May 1994, a copy of a federal grant provision to support charter schools, comments from the Department of Education, acknowledgements, and a list of GAO contacts. (LMI)