A study examined the costs and benefits of Indiana adult basic education (ABE). Designers of the study sought to identify those programs that are cost effective/cost efficient and to establish a viable ABE local program accountability system. Included among the major study activities were the following: formation of a steering committee, site visits to 46 local program sites, pop quizzes of ABE staff during the site visits, completion of a registration form checklist, a computer analysis of individual program financial statistics, a literature search, completion of a program proposal review, presentations, fiscal interviews, and a document review. Using a per-program cost figure based upon identified sources of ABE direct expenditures, researchers showed that as the percent of level 1 student enrollment increases so does cost per contact hour. While increases in the percentage of full-time teachers increased the cost per enrollment, increases in the percent of teachers' aides had the opposite effect. Researchers recommended that the following factors be considered in developing program evaluation measures: the reasons students left a program, students' progress at the time of their exit from a program, and followup data on program completers. (MN)