This Working Note documents the first year's events and outcomes in developing the budgeting system and resource allocation rules to support the Education Voucher Demonstration. The district now has systems for per pupil resource allocation and school/minischool cost center accounting. The basic voucher of $1,041 for grades 7-8, and $788 for grades K-6 covers the general instructional cost at the school site and a share of central district support. A compensatory voucher ($301 for grades 7-8, and $237 for grades K-6) provides additional funds for students eligible for federal free lunch and represents "discretionary" income at the minischool level. The budgets of minischools depend on enrollment and differ mostly in use of discretionary funds, thus planned expenditure patterns of compensatory voucher income were constructed, and comparable minischool instructional cost per classroom indexes were developed. The actual cost per student varied from $577 to $744. The voucher demonstration increased the speed with which the district achieved the management capability to operate in a decentralized mode. One important impact is the creation of the minischool alternatives--alternatives that used resources in different combinations--to provide elementary education. (Author/DW)