"Montgomery County has done this wonderful thing. It has created an opera company for its schools," said Michael Kaye, artistic director of Children's Opera Theater, Inc., which has been awarded $161,629 of the county's Comprehensive Employment and Training Act (CETA) funds to form the new company.

With the federal money, the largest CETA arts grant awarded to date in Montgomery County, Kaye has assembled a company of 16 persons, including the support staff. The group began touring the school system in January, concentrating on those schools that the county has designated as most in need of cultural enrichment. Kaye estimated that by the time the funds run out in the fall the company will have performed for 75,000 children.

Combining workshops and performances, the company introduces children to all aspects of opera, from how a singer must breathe to the relationship between story and music. Children are encouraged to participate, such as forming the chorus for "Don Pasquale" or the dancers for "Hansel and Gretel."

Children's Opera Theater started in Boston in 1973, when Kaye was a graduate student at the New England Conservatory of Music. For the next three years he worked at developing the opera program for the Boston schools and increasing his experience in staging operas with companies in this country and abroad.

In 1976 Kaye moved to Washington and formed a D.C. company of children's opera. Companies were later started in Virginia and Baltimore. Kaye saw the need for his kind of program in Montgomery County and through CETA found the means to influence it.

Kaye said that CETA arts programs can make a large contribution to what he calls "the cultural health of communities" by offering artists steady employment in their own home areas.

"It would be interesting to know, for example, how many Montgomery County singers are in New York, starving, waiting in line at the Metropolitan Opera," said Kaye. "Think what it would mean to be able to say to them, come home, the jobs are here."

"CETA is probably the best thing that's happened to the arts in this country since the founding of the National Endowment for the Arts," said Richard Hopkins, artistic director of Palisades Theater Company, which last summer became the first arts organization in Montgomery County to receive CETA money.

With a $33,330-CETA grant Hopkins established Palisades Theater Duo, a theater team that works with handicapped youth in the county.

The idea for the project was born in December 1975 when Palisades Theater Company performed for the first time at several centers for emotionally disturbed children.Hopkins said that as a result of the children's response to those programs he developed the idea of using theater arts as a tool for working with handicapped youth.

"We were ready by the time CETA became available," said Hopkins.

Before performing at any center or school for the handicapped, the company visits the facility, meets with the staff and learns about the particular problems of the children there."

We learn as much from them (the staff) as we can," said Meagan Brown, one of the members of the duo. "It's so important to meet them, to let them ask questions, to see what they're already doing."

For their programs the actors prepare their own scripts, which are based upon such traditional sources as Grimm's fairy tales and African folk tales. Presentation of the plays calls upon a wide range of techniques, including mime, juggling, masks and puppets made by the actors themselves, singing and movement.

During the workshops that follow performances, the actors and the staff work on using theater techniques with the children. Actress Brown described a puppetry workshop in which a little boy who seldom talked picked up a puppet.

"He started making the puppet talk for him, using a different voice," said Brown. "The puppet gave him that safety. It was enough separated from himself."

Follow-up materials are left with the teachers, who are encouraged to call the company for help if they need it. After some initial doubts, teachers are finding that theater techniques are very compatible with their work, said director Hopkins.