Hawai'i has until the end of the next school year to prove its academic standards are up to par under the federal No Child Left Behind Act or face a loss of federal funds.

A report by the U.S. Department of Education released yesterday lists Hawai'i in a group of 36 jurisdictions — 34 states, the District of Columbia and Puerto Rico — that must rectify the situation to avoid financial penalties.

Only 14 states are at or near compliance under the law, the report shows.

Since its approval is still pending, Hawai'i technically could lose 10 percent of its $460,000 in Title I education funds. However, because of its unique statewide school district, the money will stay within the state Department of Education.

In other states, the Title I funds will transfer to local school districts. Title I is a federal program that sends money to schools based on the number of students in the free and reduced-price lunch program.

"I think of it as take it out of one hand and putting it in the other, but it's a message that they're serious and I understand that," said Robert McClelland, director of the DOE's Planning and Evaluation Office.

ISLE TIMING PROBLEM

President Bush's education law orders states to hold math and reading tests in the third to eighth grade, and once in high school. The deadline was the end of the 2005-06 school year.

Every state did have testing in the required grades. But many states still have significant problems, such as developing exams for disabled or limited-English students, or ensuring that tests are technically sound.

In Hawai'i, the problems were related to documentation and timing, rather than specific problems with the Hawai'i State Assessment, which is used to test how well students are learning the standards.

"They're not saying change your standards. They aren't saying the test is bad. As far as I can remember, it all revolves around documentation," McClelland said.

For example, the "cut scores" used to determine proficiency on the alternate assessment used for Hawaiian language immersion students were adopted last month, too late for the federal review.

TESTING SECURITY

The state also will have to prove its test security measures pass muster. For example, the DOE has tightened testing security to prevent problems such as the one that happened last year, when officials stopped testing at Wai'anae Intermediate because test items on review sheets were very close to items on the actual test.

"They're just trying to say, 'We're serious. We want states to do everything possible' " to meet the goals of No Child Left Behind, McClelland said.

Texas, the home state of the president and Education Secretary Margaret Spellings, fell short because of a number of federal concerns, including whether the tests match up to the content that students are supposed to learn.

Only 10 states won full approval. Four others are expected to get there soon.

Deputy Education Secretary Ray Simon said the states' overall performances were positive. Even the 36 jurisdictions whose approval remains pending probably will get the federal OK within a year, he said.

"I think maybe the scope of the work was just more broad, difficult and time-consuming than many of them thought," Simon said yesterday. "I don't think there was any attempt for them to sit back, do nothing and say, 'Let's see how much we can get away with.' "

APPEAL WEIGHED

States that have fallen short must submit a plan and a timeline for improvements. They also may appeal their status. Those with continued problems could lose 10 percent to 25 percent of their federal administrative money.

McClelland said he and Schools Superintendent Pat Hamamoto are discussing whether to appeal the federal DOE's decision.

Nebraska and Maine, the states most at odds with the department, face the maximum fine — a one-fourth cut.

Jack Jennings, president of the independent Center on Education Policy, said withholding administrative money from states could be counterproductive. State education departments rely heavily on federal money to hire the staff that oversee testing.

"They will be weakening the very agencies they expect to carry out the law," Jennings said.

Congress awards more than $400 million a year to states to help them develop tests, and billions more in aid to schools. The department also has the option to withhold that money.

But do not expect that to happen, Jennings said.

"It's easier to beat up on the state bureaucrats than it is to tell school districts they're going to lose millions of dollars," he said.

Reach Treena Shapiro at tshapiro@honoluluadvertiser.com.