Title III of the No Child Left Behind Act of 2001 (NCLBA) designates federal funds to support the education of students with limited English proficiency and provides for formula-based grants to states. This report describes the data the Education Department used to distribute Title III funds and the implications of data measurement issues for the two allowable sources of data--American Community Survey (ACS) and state assessment data--for allocating funds across states. In addition, the report describes changes in federal funding to support these students under NCLBA and how states and school districts used these funds as well as Education's Title III oversight and support to states. To address these objectives, the Government Accountability Office (GAO) reviewed documentation on ACS and state data, interviewed federal and state officials, and collected data from 12 states, 11 districts, and 6 schools. GAO recommends that Education provide clear instructions to states on how and where to provide data specified in NCLBA on the number of students with limited English proficiency, develop and implement a methodology for determining which is the more accurate of the two allowable sources of data, and seek authority to use statistical methodologies to reduce the volatility associated with ACS data. Education generally agreed with GAO's recommendations. Appended are: (1) Descriptions of Educational Programs for Language Instruction; (2) Language Instruction Educational Programs Used by States in School Years 2002-03 and 2003-04; (3) Comments from the Department of Education; and (4) GAO Contacts and Acknowledgments. (Contains 7 tables, 7 figures, and 30 footnotes.) [This document was published by the Government Accountability Office.]