Determining the costs of special education in public and nonpublic settings is an important undertaking necessary for policy formulation and implementation. The Rehabilitation Act of 1973 (P.L. 93-112) and the Education for All Handicapped Children Act of 1975 (P.L. 94-142) require that all handicapped children receive a free, appropriate, publicly supported education. Further, P.L. 94-142 mandates: education in the least restrictive environment, a continuum of alternative placements, and that handicapped children in private schools be provided special education and related services at no cost to their parent(s) or guardian(s) provided that such children are referred or placed by the public agency.

In the context of fiscal accountability, the issue of providing comparable services for the least amount of expenditure in special education has become a critical one. Local education agencies (LEAs) are continually faced with decisions of whether to pay for nonpublic placements of handicapped pupils or provide public placements often at the expense of starting new programs and services for a small number of pupils. To date, most LEAs have been unable to accurately analyze and compare these costs.

This study developed a framework to be used for descriptive and comparative analysis of costs of public and nonpublic programs and services utilized for handicapped pupils. Borg's model of research and development procedures was used with modifications to include expert panel review at preliminary product development and product revision stages. The framework was tested in six LEAs within Virginia which represent county and city divisions in high, medium, and low population settings. Ten nonpublic day and residential programs utilized by the LEAs were selected for analysis. Analyzed public per-pupil costs by handicapping condition and environment were compared to the analyzed per-pupil costs to the LEA for nonpublic special education programs by handicapping condition and environment. The product of this study may assist LEAs in policy formulation and implementation concerning the placement of handicapped pupils.