The United States District Court for the Northern District of Texas mandated that the report to the Court by the Dallas Independent School District describing its progress toward desegregation be reviewed by an external auditor. This report presents the auditor's findings for 1976-77. The auditor reviewed the accountability report submitted by the district and conducted on-site visits to a sample of approximately 60 schools. Findings of the audit verified district statements that progress was being made toward compliance: transportation of students was generally accepted by the community; efforts were made to provide comprehensive educational programs to meet individual student needs; magnet schools were generally supported by school staffs, parents, pupils, and the community; the freedom of choice to attend any school in the district was favorably received by parents and students; community involvement was positive; and efforts were made to achieve ethnic balance in the student population. Problem areas identified by the audit included inadequate physical facilities in some schools and a need for additional community involvement. Recommendations for continuing progress toward full compliance were made. Evaluative instruments are appended. (MK)