The Hawkins Stafford Act of 1988 amended the Elementary and Secondary Education Act of 1965. Chapter 1 provides financial assistance through the state education agencies to local education agencies to meet the special needs of educationally disadvantaged children in areas with high concentrations of children from low-income families, as well as the needs of children in local institutions for neglected or delinquent children. This handbook is designed to accomplish the following: (1) assist districts in preparing applications, meeting program requirements, and improving Chapter 1 programs; (2) assist school districts in administering Chapter 1 programs; (3) assist in parental efforts to become involved in Chapter 1 programs; and (4) ensure that state administrators apply and enforce Chapter 1 requirements uniformly. The handbook includes an introduction and the following sections: (1) basic grant allocation; (2) fund carryover; (3) uses of funds; (4) assurances and applications; (5) eligible schools; (6) eligible children; (7) schoolwide projects; (8) parental involvement; (9) services for private school children; (10) fiscal requirements; (11) evaluation; (12) program improvement; and (13) assignment of personnel. Each section is cross-referenced with the United States policy manual. Numerous forms, tables, and figures are included. (SLD)