The Federal Workforce Investment Act (WIA) Title II, Adult Education and Family Literacy Act provides funding for states and territories to provide instruction in English as a Second Language (ESL), Adult Basic Education (ABE), and Adult Secondary Education (ASE) to adults in need of these literacy services. California State Budget Act language for fiscal year 2007-08 (Item 6110-156-0890 provision 3) requires the California Department of Education (CDE) to report on the implementation of the WIA Title II. The 2008 Budget Act requires the California Department of Education to report on specific aspects of the implementation of the Federal Workforce Investment Act (WIA) Title II. This report responds to these requirements. Report highlights includes: (1) WIA Title II funded agencies served 855,021 students, a 2 percent increase; (2) Federal funding decreased by 1.75% in 2007-08; (3) Adult schools comprised 65 percent of WIA Title II funded agencies. The remaining consisted of community colleges (6.4 percent), community and faith based organizations (14.3 percent), jails (6.8 percent), State agencies (1.1 percent), County Office of Education (2.6 percent), and libraries (3.8 percent). (4) The state increased its performance for seven of the 12 literacy levels and increased performance levels for three of the four core outcome measures. Recommendations to improve the accountability-based funding system include: (1) Develop a data match system to capture core outcomes, reflect student and program success, and demonstrate return on investment; (2) Provide resources to increase and strengthen the collaborations of local literacy providers and employment-related agencies; (3) Provide authority and resources to collect and report data on all apportionment-funded adult education programs; and (4) Support agencies experiencing the impact of the implementation of the California High School Exit Exam (CAHSEE), addressing the needs of program management. The report divides into two sections: (1) Implementation of the Workforce Investment Act Title II; and (2) Legislative Intent Considerations. Appended are: (A) Progress Measures; (B) Summary of California Core Performance Results from 2001-08; (C) Agency Tables by the CDE Geographic Region; (D) CASAS Skill Level Descriptors for ABE and ASE; and (E) CASAS Skill Level Descriptors for ESL. (Contains 16 tables.)