This report examines how well minority students are achieving in North Carolina schools. It is intended to inform parents, education leaders, policymakers, and the public about the crisis in North Carolina's public education system. Data show that too many minority students continue to be unprepared for high stakes testing. Scholastic Assessment Test results show a gap in achievement between minority children and their white counterparts. Minority students continue to have disproportionately high discipline and dropout rates. They are underrepresented in honors and advanced courses and overrepresented in special education. There has been a dramatic and steady decline in the number of minority teachers in the past 2 decades, so minority children are unlikely to be taught by instructors who share their own racial/ethnic heritage. Teachers need professional development in order for all students to be taught by competent, caring, qualified instructors. Additional funding is needed, though it must be targeted. This report presents Judge Manning's findings from the fourth ruling in the Leandro lawsuit that defines the state's responsibility to provide equal access to a sound basic education for all North Carolina children. Previous recommendations for improving the achievement gap, and progress made toward those recommendations, are included. (Contains 17 references.) (SM)