THIS REPORT (THE BUNDY REPORT) PROPOSES A PLAN FOR THE DECENTRALIZATION OF THE NEW YORK CITY SCHOOL SYSTEM WHICH WOULD ALLOW FOR GREATER COMMUNITY INVOLVEMENT IN SCHOOL POLICY-MAKING AND FOR EDUCATIONAL INNOVATION AND ADMINISTRATIVE FLEXIBILITY. TO ACHIEVE THESE GOALS THE REPORT RECOMMENDS THAT THE SCHOOL SYSTEM BE REORGANIZED INTO A FEDERATION OF 30 TO 60 LARGELY AUTONOMOUS COMMUNITY SCHOOL DISTRICTS AND A CENTRAL EDUCATIONAL AGENCY. THE LOCAL DISTRICTS, WHICH WOULD SERVE BETWEEN 12,000 AND 40,000 PUPILS, WOULD BE RESPONSIBLE FOR ALL "REGULAR" EDUCATION WITHIN THEIR BOUNDARIES AND WOULD BE GOVERNED BY LOCAL BOARDS COMPOSED OF DISTRICT RESIDENTS CHOSEN BY PARENTS AND THE MAYOR. THE BOARDS WOULD RECEIVE ANNUAL ALLOCATIONS OF OPERATING FUNDS TO BE USED AT THEIR DISCRETION, PROVIDED THAT STATE EDUCATIONAL STANDARDS AND UNION CONTRACT TERMS WERE MET. THE LOCAL BOARDS WOULD DETERMINE THEIR OWN PERSONNEL POLICIES BUT WOULD PRESERVE ALL TENURE RIGHTS OF EXISTING PERSONNEL. THE CENTRAL AGENCY, COMPOSED OF EITHER THREE FULL-TIME MAYORAL APPOINTEES OR A BOARD MADE UP OF MEMBERS NOMINATED BY THE COMMUNITY SCHOOL DISTRICTS, WOULD HAVE AUTHORITY OVER SPECIAL EDUCATIONAL FUNCTIONS AND CITYWIDE POLICIES, WOULD PROVIDE SPECIFIED CENTRALIZED SERVICES, AND WOULD BE RESPONSIBLE FOR ADVANCING RACIAL INTEGRATION. THE STATE EDUCATION COMMISSIONER WOULD RETAIN HIS RESPONSIBILITY FOR MAINTAINING EDUCATIONAL STANDARDS AND ASSURING THAT INTEGRATION IS BEING FOSTERED AND FOR OVERSEEING THE TRANSITION TO THE COMMUNITY SCHOOL SYSTEM, WHICH WOULD TAKE EFFECT IN 1969. A DRAFT OF THE LEGISLATIVE ACT TO CREATE THE COMMUNITY SCHOOL SYSTEM IS INCLUDED. (NH)