GAO prepared this report under the Comptroller General's authority as part of an effort to assist policy makers in determining how federal disability programs could more effectively meet the needs of individuals with disabilities and addressed it to each committee of jurisdiction. In this report, GAO assesses: (1) the extent to which state Vocational Rehabilitation (VR) agencies assist individuals in achieving employment; and (2) performance measures and monitoring practices Education uses to manage this decentralized program and achieve legislative goals. Of the more than 650,000 individuals exiting the state VR programs in FY '03, one-third (217,557) obtained a new job or maintained their existing job for at least 90 days after receiving customized services. Education's data showed that the remaining two-thirds exited the VR program without employment most often because the individual refused services or failed to cooperate with the VR counselor. Among recommendations to improve Education's performance measures and its monitoring of state VR agencies, are: (1) Reevaluate Education's performance measures values and ensure that sufficient data are collected to measure the performance of this program; and (2) Take steps to continue improving the timeliness of the performance data Education collects and analyzes. Appended materials include: Scope and Methodology; State VR Agency Exit and Employment Rates, FY '03; State VR Agency Population Proportions by Primary Impairment, FY '03; Social Security Beneficiaries' Employment Rates by State VR Agency, FY '03; State VR Agency Percentages of Total Agency Service Budget Spent on Each Service Category, FY '03; State VR Agency Total Administrative Costs as a Percentage of Total Expenditures, FY '03; State VR Agency Average Total Expenditures in FY '03 Per Person Exiting with Employment in FY '03; Comments from the Department of Education; and GAO Contacts and Staff Acknowledgments.