The 1973 statewide (Maryland) educational accountability plan, for which this report was compiled, called for the development and establishment of statewide and local goals in reading, writing, and mathematics; a comprehensive and uniform statewide testing program; procedures for collecting data on student, home, community, and school characteristics; and a method whereby school systems would report test results and other information to the state. This report on functional reading test results for the school year 1977-1978 describes the statewide functional reading program; outlines the assessment of student reading competency; analyzes the state level test results according to grades seven, nine, and eleven; and concludes with general observations regarding test results and implications for the future (illustrated by numerous tables and charts). Three appendixes comprise the major portion of the report and include the statewide goals in reading, the Maryland Educational Accountability Act, and system and school-level results, presented by county. (MAI)