This quarterly report, covering February 1 through June 30, 1989, summarizes problems with Project Creating a New Approach to Learning (CANAL), part of a court-mandated desegregation plan to reduce inequities in predominantly Black and Hispanic American schools in Chicago (Illinois). CANAL's goal is to train the constituent representatives of the public schools to engage in shared decision-making and to develop organizational structures that incorporate the community in the organizational and educational processes of the schools. The CANAL Audit Ledger, a task and time accounting ledger, is used to determine the extent to which and the timeliness with which the following project elements are achieved: (1) student achievement; (2) shared governance; (3) school-based management; (4) staff development; (5) parent training; and (6) general program evaluation. The following problems with training, identified during site visits, are outlined: (1) unclear purpose of training activities; (2) unrepresentative composition of the core planning teams; (3) poor staff and program organization; (4) ineffective afternoon group workshops; (5) poor quality and use of presenters, consultants, and outside experts; (6) poor quality of training materials; and (7) inefficient training environment. A community case study approach has been developed to measure the contributions of CANAL to the goals of the desegregation plan. The following materials are appended: (1) the CANAL Audit Ledger and two accompanying analyses; (2) the observational analysis of CANAL training; (3) a discussion of the community case study; and (4) a review of the CANAL evaluation design. (FMW)