This paper discusses program evaluation as a condition for the receipt of federal funds under Part B of the Individuals with Disabilities Education Act. It focuses on some actual and potential linkages between effectiveness or outcome evaluation, implementation evaluation, compliance monitoring, and the concepts of program improvement and accountability. A brief discussion of the utilization of evaluation results for accountability and other purposes is presented. The paper proposes an evaluation system that includes both compliance monitoring and program evaluation. Recommendations for reevaluation of the annual evaluation requirement include: (1) state education agencies need to determine the relative value of both information that permits a judgement of effectiveness and information that suggests improvements in implementation, particularly with respect to evaluating individualized education programs (IEPs); (2) decisions at the federal and state levels need to be made regarding the overall purpose of program evaluation in special education; (3) the marked imbalance between the resources devoted to compliance monitoring and program evaluation needs to be reconsidered; and (4) states without an effectiveness and implementation evaluation system might look to approaches in which local education agencies provide annual evaluative information on a few priority questions each year, including the IEPs. (Contains 14 references.) (JDD)