This paper describes the response of the Chicago school district to an Illinois State board of education directive that local school districts have an ongoing program of assessing student achievement and educational programs. The minimum competency testing program in place before the directive is discussed. The testing program and the nongraded school structure are outlined as part of an instructional management program that provides both teacher and student with immediate feedback. Also described is an administrative management system that gives school principals information regarding student achievement and school climate. Finally, the process of balancing state and federal funds to support the testing system is considered. (APM)