THE FIRST PART OF THIS PROGRESS REPORT ON FEDERALLY FUNDED ADULT BASIC EDUCATION IN CALIFORNIA INDICATES PROGRAM OBJECTIVES, COMPONENTS, AND APPROPRIATIONS. NEXT, PROGRAM EFFECTIVENESS DATA ARE TABULATED ACCORDING TO CUMULATIVE AND ACTIVE ENROLLMENTS, DROPOUTS, AND COMPLETERS, PARTICIPANT CHARACTERISTICS (SEX, AGE, ETHNIC GROUPS, EDUCATIONAL BACKGROUND, AND INCOME), GRADE AND AGE PLACEMENT FOR THE SCHOOL MONTH ENDING JANUARY 27, 1967, AND EDUCATIONAL TESTING SERVICES. COST EFFECTIVENESS DATA, BASED ON COSTS FOR EACH ENROLLEEE, ACTIVE ENROLLEE, GRADUATE OR REFERRAL, DROPOUT, AND CLASS AND STUDENT HOUR OF INSTRUCTION, ARE GIVEN, TOGETHER WITH REASONS FOR THE RELATIVELY LOW COST OF THE STATE PROGRAM. FINALLY, RECOMMENDATIONS ARE MADE FOR CONTINUATION OF THE PROGRAM AT THE 1966-67 FUNDING LEVEL, FOR IMPROVEMENTS IN LOCAL AND STATE INSTRUCTIONAL AND RELATED SERVICES, AND FOR FUNDING OF SPECIAL PILOT PROJECTS AND ADVISORY COMMITTEES. THE DOCUMENT INCLUDES PROJECTS AND FEDERAL ALLOCATIONS IN 25 CALIFORNIA COUNTIES AND DISTRICTS, AND A LIST OF PROJECT ADMINISTRATORS. (LY)