Intended for use by adult basic education (ABE) instructors who are organizing or reorganizing their reading programs for individualized instruction, this guide outlines the ABE Reading Sequential Competency System (SCS). The main benefits of this particular system for reading are that it delineates a sequence of reading skills, allows the illiterate or functionally illiterate adult the flexibility of having instruction on an individualized basis with open-entry open-exit options, and provides for accountability in reading instruction. Described in the guide are the following aspects of the SCS system: (1) the assessment process (initial assessment, continuous assessment, assessment of growth) (2) program components (Checklist of reading skills, student competencies, pretests, the prescription form, cross references of materials, mastery checks); and (3) organizational and recordkeeping features. Commercial student materials used in the program and addresses of publishers of these materials are listed. Appended to the report are a complete collection of the student competencies, pretests, and mastery checks as well as all the components for two selected skills (long and short vowels) and worksheets designed for SCS. (MN)