This report contains findings of an evaluation of the first phase of Tayside Region's (Scotland) Devolved School Management (DSM) scheme. The evaluation sought to evaluate the first phase of implementation and to suggest ways in which the scheme and accompanying training might be improved. Sixty schools chose to participate in the first phase, initiated in April 1994. Data were obtained through document analysis, interviews with finance officers and headteachers, and focus group meetings with headteachers and school staff. Findings indicate that the overall response to the scheme was positive. Despite overall fears, headteachers did not report significant increases in their workloads or changes in their role. Additionally, expectations for DSM may have been unrealistically high. Focused training, additional support, and opportunities for role clarification will contribute to effective implementation and reduce feelings of uncertainty. Recommendations are made to develop intradepartmental relationships in order to support headteachers, integrate other initiatives such as school-development planning and staff development with the program, develop evaluation methods that consult schools, and disseminate examples of good practice among schools. Five tables and 3 figures are included. (Contains 22 references.) (LMI)