The case study examines the review used by the then Bureau of Education for the Handicapped (BEH) to evaluate the compliance of special education programs in Massachusetts with P.L. 94-142, the Education for All Handicapped Children Act. Procedures to develop and implement the waiver review over the period October 1977 to June 1978 are reported. The waiver involves restrictions on supplanting state and local funds with federal funds. Four procedural components are identified and discussed in detail: initiation, design and specification, site selection, and on-site review. Interplay between BEH and the state education agency is described. It is explained that the review covered such aspects as child find, due process procedures and results, personnel, adequacy and comprehensiveness of state monitoring system, and the waiting list of children for services. Quantitative reports are specified for the state to prepare, and a timetable is proposed. Procedures used to select those local education agencies and state operated programs for program review are detailed, and the resulting 12 local educational agency sites are considered. On-site review procedures, including administrator review and public hearings, are described. (CL)