An introductory statement by the committee chairman emphasizes that the intent of the 1974 Juvenile Justice and Delinquency Prevention Act (JJDPA) was to institutionalize carefully chosen and successful private nonprofit juvenile programs by guaranteeing funding throughout the life of the legislation unless a project received a negative evaluation. The introduction also notes that the OJJDP has subverted the act's intent by terminating projects eligible for continuation under Section 228 and diverting funds to research and development projects and by transferring funds to other Federal agencies for so-called innovative purposes. Project Read has worked with troubled youths and has conducted teacher training workshops in 49 States and the District of Columbia to provide delinquent young people with the literacy skills necessary for survival in a literate society. First funded by the National Institute for Juvenile Justice and Delinquency Prevention (NIJJDP) in 1977, it received additional monies in 1978 but was abruptly notified in November 1979 that no further continuation funding would be forthcoming. Because Project Read had always received highly favorable evaluations from the NIJJDP and OJJDP, it challenged the legality of this decision. Following 2 days of hearings in January 1980, the administrative judge issued an opinion in March 1980 which concluded that OJJDP had violated the requirements of Section 228 by terminating Project Read's funding. The dispute was finally resolved when NIJJDP approved another 1 year grant to Project Read. This report presents the transcript of the hearings held before the adminstrative law judge and exhibits submitted by both parties, including OJJDP evaluations of Project Read, OJJDP grant guidelines, excerpts from 1976 congressional hearings on reauthorization of the JJDPA, background information on this legislation, and materials produced by Project Read. Prehearing briefs, the final decision, and responses to the decision are provided. The appendixes contain the text of Section 228, a 1975 LEAA report detailing changes in the financial management for planning and action grants, memoranda regarding OJJDP funding policies, and comments concerning revised policies on continuation of funding issued by OJJDP in August 1980.