Storm Lake Middle School is one of two schools in the state facing sanctions and a possible delay in federal money after failing to meet federal academic standards for a third straight year.
SLMS and an elementary in Perry are among dozens of schools across Iowa that failed to meet No Child Left Behind standards this season, though the other schools with first- and second-year offenses won't face the same sanctions.
The Storm Lake district must submit a plan to correct the problem or face major changes, such as reopening as a public charter school. Staff members could also be replaced, or a private management company or state educational agency could be appointed to run the schools.
State officials said they do not plan to take such severe action. Instead, they will order a more detailed plan for improvement and will likely withhold some federal money in the meantime.
That could affect more than $300,000 in Perry. It was not immediately clear how much funding would be withheld from Storm Lake, which is appealing its placement on the list.
Judy Jeffrey, director of the Iowa Department of Education, said the lightest penalty should be used because the schools have made "major efforts" to improve.
"It would be different if these schools aren't making any effort," she said.
Perry Superintendent Randy McCaulley said the district improved but did not meet goals for special education because of a new way the state calculates data.
"We made tremendous growth over last year," he said.
He added that the percentage of Hispanic fourth-graders who read at the level expected of their grade grew to 69.4 percent from 42.6. "We're extremely proud of our results."
State education officials on Thursday said 83 percent of Iowa's 1,494 schools met goals in reading, math, attendance and graduation rates last school year. They identified 96 public schools and 15 districts that failed to meet goals for two consecutive years and labeled them "in need of assistance." The number is up slightly from 94 schools and 14 districts the year before.
Under the 2002 No Child Left Behind law, all students must be proficient in reading and math by 2014. In Iowa, proficiency is determined by scores on the Iowa Tests of Basic Skills and Iowa Tests of Educational Development.
In Iowa, 12 of this year's 96 schools face federal sanctions because they receive money from Title I, the largest program for schools with high percentages of low-income students. About $2.1 million of the federal money was set aside to help these schools improve.
Among the 12 schools, four are included for the first time. Monroe and King Elementary schools in Des Moines, and Fulton and Prescott elementary schools in Dubuque must offer parents the option to transfer children to another school.
Six more urban schools on the list a second year and must offer the transfer option plus services such as tutors. Des Moines, Marshalltown, Waterloo and Cedar Rapids schools were listed, but one has since closed.