A project was conducted in Pennsylvania to determine what changes might improve the effectiveness of the State's adult basic education (ABE) program. Northcutt's construct of functional competency adult performance level (APL) and Mezirow's program evaluation model provided the basis for the project's two components: APL assessment and program analysis. Data was collected through (1) surveys of staff and students from a sample of sixty ABE programs, (2) student performance on the APL, and (3) workshops attended by eighty-eight practitioners from local ABE programs. The APL assessment resulted in several findings including the following: APL levels discriminate effectively among student abilities; and there was general staff agreement that the APL construct could be used in establishing statewide criteria for different grade levels and that the APL test could serve as a diagnostic-placement tool. The program analysis findings included the following: A major problem in goal-setting is the discrepancy that often exists between program goals and those of individual students; the primary consideration for selecting ABE staff should be ability; and formal daily staff discussions are regarded as the most effective format for inservice sessions. (The report concludes with eighteen recommendations for improving program effectiveness or administrative efficiency of ABE programs at the Federal, State, and local levels.) (EM)