This report consolidates the information from a series of reports by the General Accounting Office (GAO) on states' fiscal, programmatic, and managerial responses to the Omnibus Budget Reconciliation Act of 1981. Section 1 describes the major issues related to block grant implementation: (1) fiscal strategies adopted by states in response to federal funding changes; (2) alteration of program priorities; (3) interest groups' assessments of state actions; (4) implementation of new management role; (5) management improvements; and (6) divergent views on desirability of block grants. Section 2 describes key block grant decisions that lie ahead: (a) issues related to funding levels and national allocation procedures; (b) the need for better data to assess program changes and services delivered; (c) state/local dynamics as they relate to public and administrative accountability; (d) the importance of prior involvement; and (e) future GAO efforts to focus on funding and oversight. Two appendixes list the series of GAO reports on the implementation of block grants created by the Omnibus Budget Reconciliation Act of 1981 and the categorical programs consolidated into block grants under this Act. (TE)