The project, mandated by the California State Legislature, selected 61 children (7-14 years old) identified as mentally retarded, emotionally disturbed, or learnining disabled in five school districts to examine the process of identifying children with exceptional needs and the extent of misdiagnosis. Independent assessments were performed by evaluation teams composed of neurologists, pediatricians, opthalmologists, audiologists, optometrists, and educators. Among findings were that marked differences occurred in the evaluations of team members regarding the adequacy of existing assessments on the study children; team members identified relatively few instances of oversight in which perceptual difficulties had been overlooked in placement; the multidisciplinary assessment indicated considerable disagreement among specialties; and there was striking overall agreement regarding whether or not the individualized education programs were appropriate. Three recommendations were produced, including that testing for central auditory dysfunction become part of the auditory screening procedure for children in special education. (CL)