The Chapter 1 program of the Educational Consolidation and Improvement Act would be made more efficient and effective by implementing the following recommendations: (1) improve the targeting of funds; (2) let good educational practice rather than accounting practice shape Chapter 1 programs; (3) establish systems of output accountability for Chapter 1 schools; and (4) encourage Chapter 1 funding of middle and secondary schools. There should be two major changes in the selection of students and in the way that services are delivered in the Chapter 1 program. The first change would target Chapter 1 funds only to schools with very high proportions of children whose families live in poverty. The second change would encourage the use of Chapter 1 funds in schoolwide programs to augment and improve the quality of the regular school program in these high poverty schools. Each of these changes can be generated through alterations in the Chapter 1 legislation. A list of references is included. (BJV)