The United States District Court for the Northern District of Texas mandated that the report to the Court by the Dallas Independent School District describing its progress toward desegregation be reviewed by an external auditor. This report presents the auditor's findings for 1977-78. The auditor reviewed the accountability report submitted by the district and conducted on-site visits to a sample of 50 schools. Findings of the audit verified district statements that progress was being made toward compliance; transportation of students was generally accepted by pupils and parents and the utilization of special resources through the creation of magnet schools was receiving the support of school administrators and teachers. Problem areas identified by the audit included the district's failure to include evidence in its report that confirmed compliance, continuing difficulties with pupil performance in reading, and a need for more community and parent involvement in some aspects of the school program. Recommendations for continuing progress toward full compliance were made. Evaluative instruments are appended. (MK)