This study examines potential consequences of the discrepancies between national and state performance standards for school funding in Kentucky and Maine. Applying the successful schools observation method and cost function analysis method to integrated data-sets that match schools' eight-grade mathematics test performance measures to district funding, this study conducts empirical searches for adequate instructional expenditures per pupil to meet desired proficiency targets on national versus state assessments. While Kentucky (high-stakes testing state) had a lower performance standard than Maine (low-stakes testing state), this study reveals a relatively lower level of school funding adequacy and a weaker relationship between school expenditures and performance for Kentucky than for Maine. The study suggests that state educational accountability systems and policies may influence the level of state performance standards and the proficiency gaps between national and state assessments, which in turn lead to potential gaps in school funding. Implications for policy and research are discussed to address problems with dual standards of school performance and to improve school funding adequacy and efficiency. (Contains 7 notes, 5 tables, and 3 figures.)