I will scan the benchmarking sheet that DS had to do and also the Johnsons word list that DD1 did - both while in year 1. It will give you an idea of how they assess them. What the teacher talking about the reading recovery program said was that no parent should feel bad if their child gets selected for it because they get more 1 on 1 time with the teacher to help them with their problems as opposed to staying in a group of children all needing help from the 1 teacher kwim? I don't know about the specifics of the funding arrangement though. I had a google and found this info (bearing in mind it is for NSW) Reading Recovery