This guide defines a methodology for program monitoring and discusses positive results achieved in Pennsylvania by implementing Instrument-based Program Monitoring (IPM) in the field of child day care services. IPM uses checklists or special questionnaires to structure monitoring interviews and site visits. This method differs substantially from the more common approach to monitoring: narrative site visit reports. An introduction on the nature and purpose of the guide is followed by three substantive sections, beginning in section II with a discussion on how IPM improves day care monitoring. Specific comments under this heading include descriptions of how IPM is performed, objectives and characteristics of the IPM approach, and positive outcomes of using IPM in Pennsylvania. Section III examines the effectiveness of Pennsylvania's day care monitoring system, known as the Child Development Program Evaluation (CDPE). Particular comments are directed toward general characteristics of the CDPE system; CDPE system components; types and level of information generated (including provider, regional, and statewide information); and the implementation process. Concluding material in section IV provides guidelines for determining a state's need for an IPM system. Five steps in conducting an adequate assessment are described, and necessary elements of an effective implementation plan are briefly outlined. (RH)