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The New Jersey board of education has approved a new monitoring system for school districts that is expected to drive up performance standards in the state.

The system, which was approved this month and will take effect beginning with the 1993-94 school year, requires districts to set student-achievement standards in major subject areas that will be measured at three benchmark times in a student's career--at the 4th-, 8th-, and 12th-grade levels.

Districts will also be held more accountable for spending and will have to enhance their professional-development programs for teachers.

The monitoring system is part of a larger state project intended to improve curriculum and assessment.

In a separate action, the state board this month also approved preliminary plans to bolster the accountability of the state's 30 poor, special-needs districts.

Under the proposal, the special-needs districts would be required to target the extra funding they receive to "demonstrably effective programs.''

A child-advocacy group recently criticized the state education department for failing to guide the districts in the best way to use the funds.

The Massachusetts Department of Mental Retardation this month announced a plan to streamline services for people with mental retardation.

The new plan is in part an outgrowth of the state's effort to serve more people with mental retardation who have disabilities in their communities rather than in state institutions. Over the last decade, the number of such people living in institutions has decreased from 6,500 to 2,700.

Previously, said Gerald Ryan, a department spokesman, separate service systems were set up for people living in communities and for those living in institutions.

Under the new plan, which will be phased in by Jan. 1, those systems will be unified and the department plans to strengthen community-based, case-management offices for clients in four areas of the state.

"Our commissioner believes services should be based on what services people need, and not on where they are located,'' Mr. Ryan said.

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