Hawaii is falling short of its responsibilities under the Individuals with Disabilities Education Act — the federal law requiring that all special-needs children be given a free appropriate public education — according to a new evaluation of how well states serve students with disabilities.

In its annual review of states released last week, the U.S. Department of Education announced a revised accountability system that now measures how students with disabilities are performing in school, including test scores. Hawaii’s data show students requiring special education services lag far behind their peers on local and national standardized tests.

Previously, the federal government looked only at so-called compliance data, such as meeting deadlines for filing paperwork and timely resolving of complaints.

Under the old rules, Hawaii last year was deemed to be "meeting requirements" along with 40 other states and territories. This year, Hawaii’s Department of Education dropped a spot into the "needs assistance" category with 35 other states and territories. Fewer than a third of states and territories are in compliance; six will require intervention.

The Individuals with Disabilities Education Act, or IDEA, governs how states and public agencies provide early intervention, special education and related services to more than 6.5 million eligible infants, toddlers, children and youth with disabilities.

Hawaii’s downgrade is noteworthy because under the disability law, if a state "needs assistance" for two consecutive years, the federal government said it will have to take one or more enforcement actions — including flagging the state as high risk for federal funding or requiring it to direct funds toward areas needing improvement.

The state last year received $39.8 million in federal IDEA funds to support the additional educational needs of students between the ages of 3 and 21 with disabilities.

Special education students account for about 10 percent of Hawaii’s public school population. For the 2012-13 school year, nearly 19,700 students with disabilities were enrolled in public schools. About one-fifth of the department’s operation budget, or $362 million, was spent on special education that year, including employing 4,000 special education teachers and educational assistants.

ADVOCATES FOR special-needs children hope any increased federal oversight will spur meaningful changes to better serve students.

"We think (the state Department of Education) is doing a pretty miserable job of special education, so I’m not surprised that we need assistance," said Louis Erteschik, executive director of the Hawaii Disability Rights Center. "Maybe this will get their attention."

He said frustrated families often turn to the center for assistance in getting what he considers basic services, such as additional speech therapy. The complaints sometimes lead to lawsuits.

"We see a lot of complaints. The department fights tooth and nail a lot of these cases," Erteschik said. "They’ve done a horrible job of carrying out IDEA and done it in bad faith, too."

Federal education officials say the redesigned IDEA accountability system aims to more directly support states in improving results for children with disabilities. Using only compliance data isn’t enough "if children are not attaining the knowledge and skills necessary to accomplish the ideals of IDEA: equality of opportunity, full participation, independent living and economic self-sufficiency," the U.S. Department of Education said in a statement.

Some special education teachers say they’re wary of the move to track their students’ test scores to gauge compliance with the law.

"Any assessment should be based on a model of growth, not just a test target, to be more effective," said Malcolm Hee, who has been teaching special education preschool students for 20 years, most recently at Aliiolani School in Kaimuki. "It seems like No Child Left Behind by another name."

Justin Hughey, a third-grade special education teacher at King Kamehameha III Elementary, contends the state should abandon high-stakes standardized testing for all students in favor of performance-based assessments.

"I don’t belive a standardized test is a true measure of student achievement," he said.

Hughey and others say special education programs are sorely underfunded and short-staffed, which can lead to noncompliance issues.

"I’m glad the state was given this rating because it’s pretty obvious to me that we don’t have adequate staffing to comply with IEPs,"or Individualized Education Program meetings, he said. Schools are required to provide IEPs for every special-needs student to outline the services each student gets, their progress and benchmarks they should meet over a school year.

ERTESCHIK AND others are quick to point out Hawaii has had compliance problems before, which ultimately led to federal intervention.

"There’s been a lot of backsliding since the Felix decree," he said.

The Felix consent decree, which the state entered into in 1994 after a class-action lawsuit on behalf of Maui special-needs student Jennifer Felix, shed light on inadequate services for special-needs students, led the state to spend an estimated $1 billion for special education services and prompted the biggest reforms in education for special-needs children in state history.

In a letter last week to schools Superintendent Kathryn Matayoshi, the federal Education Department said the student achievement data it used to rate Hawaii’s compliance included the number of children with disabilities who took the state’s regular standardized assessment; the proficiency gap between children with disabilities and all children on statewide assessments; and the performance of children with disabilities on the National Assessment of Educational Progress.

Hawaii’s test-taking participation rate is high, but test scores in reading and math have been dismal, the data from the 2012-13 school year show.

For example, 87 percent of special-needs high school students took the Hawaii State Assessment that year, but just 7 percent tested proficient in math. Overall, 46 percent of Hawaii high-schoolers performed at grade level in math that year.

On the reading portion of the test, 22 percent of special-needs students in high school grades tested proficient. By comparison, the reading proficiency rate was 70 percent for all high school students.

In elementary schools, more than 90 percent of special-needs fourth-graders took the Hawaii State Assessment, and 22 percent tested proficient in reading, while 19 percent performed at grade level in math. That compares to a 73 percent proficiency rate in reading for all fourth-graders, and an overall 65 percent proficiency rate in math for fourth-graders.

On the National Assessment of Educational Progress, dubbed the "Nation’s Report Card," just 2 percent of isle special-needs students performed at or above proficient in both eighth-grade math and eighth-grade reading. Seven percent of special-needs fourth-graders tested proficient or better in math, while 4 percent were at or above the target for reading.

UNLIKE THE aggressive testing benchmarks used for general education students under No Child Left Behind — which all but two states have since been granted relief from — the federal Education Department said it has not set test score targets for special-needs students as part of its new evaluation system, but will monitor growth in student achievement.

Hawaii education officials say the state’s newly launched Strive HI Performance System for schools was designed to meet the needs of all students and better aligns with the U.S. DOE’s heavier emphasis on student achievement.

"Strive HI shifted the focus on accountability beyond compliance," said DOE spokeswoman Donalyn Dela Cruz. "That shift in accountability was intentional when planning for Strive HI."

The state last year received a waiver from parts of the federal No Child Left Behind law in exchange for a state-developed accountability system with its own set of reforms, including new curriculum standards, updated assessments, more rigorous graduation requirements, and improved teacher and principal evaluation systems.

"Our priority strategies … directly address the issue of student achievement and graduation rate for all students, including special-needs students," Dela Cruz said.

For example, she said, the state has set a goal of closing the achievement gap between high-needs students — English-language learners, those economically disadvantaged or with disabilities — and their peers.

Strive HI results for the previous school year, released last summer, show over the past two years, the state as a whole narrowed by 12 percent the achievement gap between high-needs students and their less-needy peers.