The success of the Developing Institutions program in strengthening the nation's higher education resources is discussed by the Comptroller General of the United States. The program is authorized by Title III of the Higher Education Act of 1965, as amended. Uses of Title III funds and eligibility requirements are described, along with institutional characteristics influencing program eligibility. Statistical analysis of OE eligibility determinations and funds awarded is reported, and current eligibility determinations noted. Limitations on assessing program benefits are also discussed, as well as the need for improvements in program administration regarding grant award notification and program monitoring. Recommendations to HEW are included with agency comments. (LBH)