This study examined efforts at the local level to reduce the fragmentation of services to students with and without disabilities through the consolidation or blending of federal and state categorical educational programs. Twenty-two state and local program administrators in California, Maryland, and Massachusetts were interviewed. Findings include examples of collaborative programs and of administrative mechanisms such as school improvement plans, consolidated staffing plans, and schoolwide Title I programs. Specific challenges to program consolidation are identified, including multifunded students, bilingual teacher shortages, Title I program audits, and nonsupplanting requirements. Finally, the human factor in change is addressed, noting the roles of program leadership, lack of knowledge, advocacy for students and programs, teacher attitudes and qualifications, and the "power" of special education. Findings suggest that there is a clear trend to foster greater collaboration at the school building level, with the focus on inclusion of students with disabilities having a significant influence. Additionally, changing demographics and increasing fiscal concerns are creating pressures on local school districts to use resources more efficiently and find more flexible ways to educate increasingly diverse student populations. A list of interviewees and interview questions is appended. (DB)