State and local governments spend billions of dollars annually on the construction, renovation, and maintenance of public school facilities, yet concerns persist about the condition of some school facilities, particularly in school districts serving students residing on Indian lands. The Department of Education's (Education) Impact Aid Program provides funding to school districts that are adversely impacted by a lack of local revenue because of the presence of federal land, which is exempt from local property taxes. Impact Aid can be used for school expenses, such as facilities and teacher salaries. In response to concern about school facility conditions and concern that these conditions can affect student outcomes, GAO was asked to describe (1) the physical condition of schools in districts receiving Impact Aid because of students residing on Indian lands and (2) what is known about how school facilities affect student outcomes. GAO interviewed federal, state, and local officials; analyzed available independent school facility assessment data for three states; visited eight school districts that receive Impact Aid; and analyzed studies examining the relationship between school facilities and student outcomes. GAO is not making recommendations in this report. Education provided technical clarifications, which GAO incorporated as appropriate. Four appendices are included: (1) Objectives, Scope, and Methodology; (2) List of School Districts That Received Indian Impact Aid in Fiscal Year 2009; (3) Examples of Studies Examining School Facilities and Student Outcomes; and (4) GAO Contacts and Staff Acknowledgments. (Contains 6 tables, 3 figures and 36 footnotes.)