PREVIOUS STUDIES HAD CITED PROBLEMS IN NEW YORK CITY'S SCHOOL CONSTRUCTION PROGRAM AND IN 1958, IN RESPONSE TO CHARGES OF WASTE AND EXTRAVAGANCE BY THE CITY COMPTROLLER, A STATE INVESTIGATIVE COMMISSION EXAMINED RECENTLY COMPLETED SCHOOLS. PHYSICAL INSPECTIONS AND REVIEWS OF CUSTODIANS' RECORDS UNCOVERED DEFECTS IN ALMOST EVERY SCHOOL BUILDING. MANY DEFICIENCIES HAD BEEN IGNORED BY THE BOARD OF EDUCATION, AND DEFECTS THAT WERE THE FAULT OF THE CONTRACTOR OR ARCHITECT HAD GONE UNCORRECTED OR BEEN CORRECTED AT CITY EXPENSE. THE REPORT SUMMARIZES 6 DAYS OF TESTIMONY DURING WHICH THE COMMITTEE QUESTIONED 250 WITNESSES ON DESIGN AND CONSTRUCTION DEFECTS, ADMINISTRATIVE INEFFICIENCY, VIOLATIONS OF LAW, AND IMPROPER PRACTICES. THE HEARINGS ALSO COVERED THE BOARD OF EDUCATION'S CUMBERSOME ADMINISTRATION, INEFFICIENT OPERATING PROCEDURES, AND CONSIDERABLE STAFF EXPENSES. PRIOR TO THE HEARING, THE COMMISSION'S INVESTIGATIONS HAD RESULTED IN CONSTRUCTIVE CHANGES, SUCH AS AN OBJECTIVE EVALUATION OF ARCHITECTS AND REORGANIZED INSPECTION METHODS. AFTER THE HEARING, THE SCHOOL BOARD CONDUCTED DEPARTMENTAL TRIALS FOR UNETHICAL EMPLOYEE CONDUCT, AND THE STATE LEGISLATIVE MET IN EXTRAORDINARY SESSION TO RESTRUCTURE THE SCHOOL BOARD. THE FINAL RECOMMENDATIONS OF THE COMMISSION ARE DETAILED, INCLUDING ESTABLISHING AN INDEPENDENT AGENCY FOR SCHOOL CONSTRUCTION, COMPULSORY ARBITRATION TO RESOLVE DISPUTES BETWEEN CONTRACTORS AND THE BOARD, AND ANNUAL DISCLOSURE STATEMENTS FROM ALL PERSONS DOING BUSINESS WITH THE BOARD. THE APPENDIXES CONTAIN A CHART COMPARING THE FINDINGS OF THREE PREVIOUS STUDIES ON SCHOOL CONSTRUCTION, JOB REQUIREMENTS FOR SCHOOL CUSTODIANS AND ENGINEERS, AND INDEPENDENT REPORTS ON TWO SCHOOLS. TEXTS OF THE GOVERNOR'S MESSAGE AND LEGISLATION ENACTED DURING THE 1961 EXTRAORDINARY SESSION ARE PROVIDED. A BIBLIOGRAPHY AND PHOTOGRAPHS OF SCHOOL BUILDING DEFECTS ARE INCLUDED. (MJM)