What we use are three things: middle school grades, previous standardized testing and our own placement test (standardized, as well).
A student (we'll call him Copernicus) shows testing that puts him in the twentieth percentile (very low). His teacher rates him as "low." His grades? As and Bs, even from that very teacher.
Now, if I take the evidence of the testing and place Copernicus in the regular level classes, Copernicus's dad (we'll call him Ptolemy -- just because I like silent Ps) calls me up and says he wants Copernicus in honors classes because the kid has all As in middle school. I mention the testing. Ptolemy tells me Copernicus is just a bad test-taker. He has anxiety issues. His performance in class is a clearly successful track record.