Chapter 3 of the State School Aid Act was enacted to improve achievement in the basic cognitive skills of low-achieving puPils in Michigan. The program provided funds and considerable program discretion for local school districts with high concentration of low achieving children in the grades K-6. These districts received funds for a three-year program; 1973-74 was the third year, to improve achievement in reading and mathematics for these pupils. This report contains information regarding district expenditures and pupil achievement during 1973-74, discusses pupil achievement over a two-year period, and contains data on the expected growth for pupils evaluated with norm-referenced tests. The report addresses the question of success in terms of the level of accomplishment attained in Chapter 3 programs. An analysis of test results indicated that the actual achievement for Chapter 3 pupils exceeded the expected achievement gains if the pupils had been in regular school programs. This analysis also indicated that the 1973-74 achievement was higher than in 1972-73. It is recommended that local school districts further analyze the needs of the 8.016 students (7.1 percent of the 112,500 stuoents) in Chapter 3 who showed no achievement during 1973-74, and modify the delivery system to provide better assistance for these pupils. (Author/JM)