The National Advisory Council on Extension and Continuing Education was established under Title I of the Higher Education Act of 1965 for the purposes of giving advice to the Community Service and Continuing Education Program and reviewing the administration and effectiveness of all Federally supported extension and continuing education programs. This third annual report of the Council reviews the administration of the Community Service Program; summarizes the National Council's study of the total Federal effort in supporting adult education; and presents recommendations. It is reported that the Community Service Program has encouraged State and local officials to join with colleges, universities, and community leaders in making significant contributions to the solution of community problems. The lack of staff and funds, however, has delayed the accomplishment of the National Advisory Council's responsibility to evaluate all federally supported extension and continuing education programs. Among recommendations from the Council are: that it be provided with a full-time director and other personnel and funds needed to fulfill its responsibility and that Congress study the indirect cost rates for all federally supported extension and continuing education programs in order to establish a consistent fiscal policy. (se)