The purpose of this report is to analyze how the administrative and paperwork requirements with which local school districts must comply have been affected by the consolidation of 28 federal education programs into the Chapter 2, Education Consolidation and Improvement Act (ECIA) block grant. The information reported is based on interviews with Chapter 2 administrators in nine local school districts and three state departments of education in Montana, North Carolina, and Ohio. The key findings of this investigation, highlighted in the first section, are that Chapter 2 has reduced the administrative burden on local school officials due to simplified application procedures, and that it has given them greater discretion. Liabilities include the loss of funds for innovative research, weakening of control over use of the funds, and the loss of incentives for careful planning. The second section explains the rationale and methodology of the analysis, including criteria for selection of samples and data collection methods. The third section provides an overview of the three states and nine local education agencies selected for examination, and the fourth section summarizes the specific changes in administration and paperwork reported by those interviewed. The fifth section describes Chapter 2 administrators' assessments and recommendations, while the final section provides conclusions and policy implications. (TE)