Administrative costs and efficiency have become public policy concerns over the past several years as significant amounts of new state and local tax revenue have been infused into Texas's education system. Current trends and state law favor fewer centralized administrative functions at the school district level and greater autonomy at the campus level. Resources saved from increased administrative efficiency should be available for instructional expenditures at the campus level. The Texas education code directs the commissioner of education to conduct a study to: (1) determine the most appropriate and efficient method for reporting and monitoring resource allocation by school districts; (2) identify the most effective means for calculating, reporting, and monitoring the proportion of resources allocated for administrative costs; (3) describe average efficient administrative expenditures by district; and (4) provide legislative recommendations. This report summarizes progress toward these goals. After establishing teacher/administrator definitions and ratios, steps were taken to define administrative and instructional costs, determine average efficient administrative costs, establish demographic and size adjustments, and establish a criterion. A standard annual reporting schedule is proposed, along with recommendations to the 73rd legislature. The report includes five references, two appendices detailing administrator-teacher ratios and administrative/instructional cost definitions, and an executive summary. (MLH)