This document reports the findings of the National Study of Local Operations under Chapter 2 of the Education Consolidation and Improvement Act of 1981, the federal education block grant, regarding the involvement of parents and other citizens in the making of local district decisions concerning the use of the block grant funds. Data for the study came from a national mail and telephone survey and from site visits to 24 school districts in 8 states. The report's introductory chapter describes the history and intentions of Chapter 2, reviews previous research, lists the research questions underlying the parent and citizen involvement aspect of the larger study, and briefly describes the study methodology. The second chapter presents general findings about district Chapter 2 decision-making processes. The third chapter covers district efforts to involve parents and other citizens, the mechanisms created to facilitate involvement, and the relationships between district efforts and actual citizen involvement patterns. The fourth chapter looks at the degree of involvement citizens have in decision-making, the influence they exert, and the reasons for the involvement patterns found. The fifth chapter summarizes highlights of the findings and interprets their significance. Appendixes present error values for the tables accompanying the text and list the antecedent programs consolidated into the Chapter 2 block grants. (PGD)