This document has been prepared by the department of education to assist school administrators in gaining a greater understanding of the needs assessment process in general and to examine the specific requirements for assessing needs contained in the South Carolina Education Finance Act and the state legislature joint resolution on the matter. The general discussion focuses on the three major steps in a needs assessment--determining what conditions actually exist, determining what conditions should exist, and analyzing the discrepancy between what is and what should be. Four pages of sample worksheets that can be used to assist administrators in organizing the data required by the act and the joint resolution are included. (Author/IRT)