You should test the value of the built-in function ioerror after every read operation to see if the operation was successful. The value returned by ioerror is a boolean value:  if the operation was successful (there was no failure), the value is false; if it failed, the value is true. For example:

response to Finished

    read file "REPORT.TXT" into Report

    if ioerror

        then change to program Reformat

    end if

When Finished is selected, the file REPORT.TXT is added to the textual region Report, and ioerror is tested. If the read operation was not successful, ESL changes to the program Reformat.