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The Division of Indian Education of the Arizona Department of Education distributes Federal funds under the Johnson-O'Malley Act. These funds are provided to public schools and counties in Arizona with 3% or more American Indian children to help pay the cost of educating Indian children living on tax-exempt reservation lands. The host school district receives the full per capita cost of education in the case of out-of-district Indian children living in Federal dormitories. During the school year 1971-72, funds were provided to 20 school districts, 1 accommodation school, and 9 counties for administrative and supervisory services, special programs, and inservice training for Indian teachers. This report contains the annual report by the Division of Indian Education for the fiscal year ending June 30, 1972, as submitted to the Bureau of Indian Affairs. Statistical data is reported on the following: (1) receipts and expenditures of contract funds; (2) peripheral contract payments; (3) expenditures for State administration; (4) allotment and expenditures by districts; (5) enrollment, average daily attendance, and graduates by school; and (6) tax rates and assessed valuation by districts. The report also includes summary reports on elementary and high school Indian enrollment of Johnson-O'Malley participants. (NQ)