Adequate Yearly Progress (AYP) reports are required by the federal government for districts and schools that choose to participate in the Title 1 program of the No Child Left Behind Act (NCLB.) Title 1 is a federal program that provides funding to help educate low-income children.
By participating in the Title 1 program, states and districts commit themselves to the goal of bringing all students to proficiency in language arts and math by 2014. In order to tell whether schools and districts are on-track to meet that goal, each state sets goals to measure whether schools and districts are making "Adequate Yearly Progress" (AYP) toward teaching all students what they need to know.
Under NCLB, schools and districts that do not meet AYP in the first year face no consequences. However, the school and/or district should develop or an improvement plan. Schools that do not meet AYP in the same subject for two or more consecutive years are placed in Needs Improvement status with escalating consequences for each successive year.
For more information on AYP and NCLB see: www.ed.gov/nclb.