I always recommend that when a parent has concerns over the implementation of their child's IEP that they send a written letter to the school IEP team addressing the details of their concerns. Also, you have the right to ask for a meeting of the team, if that is what is desired.
However, we cannot address specific IEP questions on this general forum.
Sometimes children are taught work that is on a different grade level if their own grade level work is too difficult. So, if a child is in third grade, but is reading on a 1st grade level, the child would likely be given first grade-level work, because that is what is likely to help him the most.
If you feel that the work he is being given is too low, and that he can do higher level work, I'd speak to the special education teacher who created the IEP, and ask how they came up with your son's IEP goals and "present levels," or the academic levels they determined your son to be on. They may be able to explain specifically why he was given the work he was.
If you feel like their assessments aren't accurate, I would gather information that supports your observations. So, if you see him do 3rd grade level work at home, I'd bring in samples of that work to show the teacher. Any kind of information you have would probably be helpful to the teacher in his/her assessment.
It's great that you are interested in this issue and asking questions - keep staying involved!
Are the academics included on his IEP? If so, he should be getting the appropriate work presented to him in the classroom.
I'm very intimate with students who are in a special program for behavioural issues and ALL of my students are on IEPs for both the behavioural issues and for their academics.
The academics have to be modified (it's not enough to provide just accomodations for the kids) because of the severity of their behavioural issues. Even with the modifications to the academic content of their programs, it is VERY difficult to teach the curriculum.
So much teaching time is lost to dealing with the 'issues' that are constantly being presented by the kids.
Is you child able to do regular Grade 3 work? Where I live and work, an IEP is prepared based on current test levels, latest report card results, and parental input. I currently do not have a single student who is able to perform at grade level although almost all the parents think and believe that their child is able to do so.
For example, my students are able to converse and carry on conversations that make it seem that they are very able and 'understand' the work. However, almost every single one of them has one of those invisible LDs that changes/lowers their functioning level.
The ones who have no diagnosed LD are held back by their ODD issues. They absolutely refuse to do any grade level work on many, many occasions despite all the accomodations in place for them. It's not that they can't. They just won't. Until all those issues are cleared up, showing interest in doing work and doing so with independence is the only solution to be had.
I'd suggest you talk with the teacher of your child's class. He/She could probably shed some light on exactly what is happening in your child's case.
Believe me, I understand your frustrations. I've spent years working in a regular classroom, went to a behaviour classroom for some years and then went back into the regular stream of students. This year I decided to once again go back to the challenge of the behaviour kids. Even with my past experience with the kids, I'm still reeling from the shock of seeing how little they can successfully and INDEPENDENTLY produce as compared to 'regular' stream of kids. (I'm known for pushing my kids to give their very best at all times.)
Talk to the teacher. I know a lot of my parents believe their child is performing at the regular grade level but they are well below the standards. (I do realize that there are gifted behaviour kids out there but even they don't produce what similarily gifted children produce in academics. The behaviour is usually the culprit getting in the way of the kids' success. That's why we spend a big part of our day working on the behaviour or the issues that are behind or creating the behaviour issues.
Where I teach, the IEP is considered a 'working' document. That means it can be changed at any time throughout the year if need be. If the student is progressing through the curriculum quickly, the IEP can be changed to incorporate the student's growth.
Good luck! (I think I'd better get back to writing that IEP for my newest student!)