This study examined Title I funding allocations for school years 1999-2002 and actual allocations received by school districts, interviewing state Title I directors, surveying school district administrators nationwide, and interviewing representatives from relevant federal and national organizations. Title I funds were generally targeted based on numbers and percentages of poor children, though the complex allocation process resulted in differences in actual funding per child among states, districts, and schools. When numbers of poor children shifted among states, Title I allocations adjusted, but not completely. This unresponsiveness was due to lack of current poverty data and various hold-harmless provisions. Allocation of Title I funds did not encourage states to target their own funds to poor children. Various policy choices could increase the extent to which Title I funds are allocated to states and districts with high percentages of poor children (changing the appropriations hold-harmless provisions, funding targeted grants, using an alternative cost factor, and raising the basic grant eligibility threshold). Six appendices provide research methodology; supporting data; provisions of the "No Child Left Behind Act" and related appropriations; comments from the Department of Education and the Department of Agriculture; and GAO contracts and staff acknowledgements. (Contains 7 figures and 21 tables.) (SM)