This report on Compensatory Education (CE) provides a description of instructional services in basic skills and assesses educational development through the presentation of extensive data. Findings are based on data collected on 81,450 elementary school students enrolled in fifty representative schools during 1976-77 school year, and questionnaire responses of 219 district superintendents and business managers, 242 school principals, and over 3,000 teachers. The report is in four parts: (1) technical considerations (includes a description of the sample, data-collection instruments, and achievement and poverty measures); (2) services provided by regular and CE programs; (3) fund allocations and selection process from CE programs; and (4) district, school, and parent/community participation in CE programs. Student data consist of demographic and background characterisitcs, CE selection status, basic skills achievement, attitude toward school, summer activities, and attendance records for reading and math instruction. Questionnaire responses provide information on allocation of CE funds, selection policy for CE services, educational expenditures, characteristics of districts, and teachers' instructional techniques. Data analyses are presented in two sets: the first set obtained national projections of district, school, and student characteristics by applying appropriate weights to the observed sample data; the second set used the unweighted observed data to help answer thirty-three policy questions addressed in this report. A list of policy questions and supplementary tables are appended. (Author/JCD)