The report describes first year accomplishments of the Career and Life Skills Project, an approach using the arts to enhance basic skills development of moderately and severely handicapped youth. Among major accomplishments reviewed are staff selection, experimental site selection, conduct of writing seminars for staff, and development and documentation of initial field test materials. Problems and deviations in activities are noted, including modifications in project implementation procedures. Among products described is the Specialized Instructional Program (SIP) guidebook which focuses on seven instructional goals and 24 related objectives in three areas (personal-social skills, daily living skills, and occupational guidance and preparation skills). The guidebook, which is appended, also includes a teacher's manual, instructions and forms for carrying out the evaluation of arts activities, activity worksheets, and lists of resources and suggestions for implementing arts activities. (CL)