The Bureau of Indian Affairs (B.I.A.) estimates that as of January, 1978, about $300 million would be needed to renovate or construct school facilities for Indian children. The B.I.A. could save millions of Federal dollars by enforcing its policy of having Indian children attend nearby public schools when adequate facilities exist and by establishing and enforcing the policy of requiring attendance at nearby B.I.A. schools with available space, instead of renovating old schools or constructing new ones. Also, there exists no formal policy regarding the size of B.I.A. schools. Prior to construction, the B.I.A. should compare the cost (and cultural and academic benefits) of building more, smaller, scattered schools, as desired by the tribes and the B.I.A. Director of Education, against building fewer, more economically operated, centrally located larger schools. Finally, the 1979 B.I.A. school construction priority list is unreliable because it was developed without necessary planning data; B.I.A. did not verify data submitted on school construction applications, and policy concerning attendance boundaries is unclear. The B.I.A. should require comprehensive planning data, verify application data, and clarify attendance boundary policies before establishing a priority list of facilities needed to meet educational needs of Indian children. (SB)