In response to a 1978 mandate, this concluding volume of the School Finance Project's final report concentrates on the broader intergovernmental issues relating to the design and transmission of federal policies and programs, and on the effects of federal activities on state and local education agencies and on schools. The specific Department of Education activities on which the report focuses are the Education Consolidation and Improvement Act (ECIA) (Chapters 1 and 2); the Education for All Handicapped Children Act; the Bilingual Education Act (ESEA, Title VII); the Vocational Education Act of 1963 (as amended); and civil rights statutes. After a brief introduction, chapter 2 traces the development of federal education activities and the changed focus of federal involvement following passage of the Elementary and Secondary Education Act (ESEA). Chapter 3 examines design features of federal education policies and programs, specifically the transmission of federal intent to states and localities through the concept of "signals" (i.e., formal legal freamework, legislative history, administrative decisions, and congressional review). The combination of program signals is presented for each of the major federal policies and programs. Chapter 4 examines implementation, focusing on how state and local officials shape federally funded services. Chapter 5 identifies the effect of federal involvement on state education agency capacity and functions, local education agency organization and administration, and school staffing and instructional services. An executive summary of the findings is provided, along with four appendixes giving (1) a breakdown of participating states; (2) a history of individual programs; (3) a list of antecedent programs consolidated under ECIA Chapter 2; and (4) an explanation of legal provisions. (TE)