Summary: Pursuant to a congressional request, GAO provided information on systemic education reform and three states' regulatory flexibility efforts, focusing on: (1) how schools use regulatory flexibility for their school improvement efforts; (2) whether states have adequate accountability systems; and (3) how regulatory flexibility will affect programs for students with special needs and national standards. GAO found that: (1) regulatory flexibility allows schools to implement innovative classroom structures and integrated instructional models; (2) schools have used regulatory flexibility to waive class structure regulations, provide teachers with subject flexibility, combine school funds, and include students in special programs based on their needs; (3) although the three states permit schools to waive state regulations on a case by case basis, many schools do not request waivers because their improvement plans are not fully developed, state technical assistance is often not available, and state programs often lack incentives to increase school participation; (4) the three states have not fully implemented accountability systems to measure school improvement programs; (5) all three states have used regulatory flexibility to varying degrees in their special needs programs; and (6) Congress needs to determine how long schools can waive federal education requirements, ensure that states provide schools with adequate support and develop sufficient accountability systems, and ensure that regulatory flexibility increases national education standards.