A study analyzed the role of adult and community education (ACE) in the Australian vocational education and training (VET) system. It considered the policy and funding contexts. Three premises formed the framework through which ACE's role was examined: ACE is a provider; ACE providers are community-based providers distinct from public and private providers; and the ACE sector is a network of community-based ACE providers. ACE providers had two fundamental roles in the national VET system. Their generic role was the same as other training providers in the formal VET system--to deliver outcomes congruent with the objectives of the national VET system and within nationally agreed frameworks for VET. Analysis indicated that community-based ACE providers were delivering the following outcomes: having nationally recognized ACE providers; delivering nationally recognized programs; meeting industry needs; providing learning opportunities for individuals and groups; and improving cross-sectoral links. ACE's value-adding role distinguished many ACE programs. ACE sector provision added value in four ways: training market, locality, community, and organizational orientation. Ten areas at the interface between the ACE sector and national VET system where closer cooperation would have mutual benefit were identified. (Half of the report consists of the following appendixes: four papers that map the current scope of ACE activity within the national VET system in these areas--general adult education, nationally recognized providers and programs, meeting the needs of industry, and providing learning opportunities for individuals and groups; policy context; statistical issues; consultancy brief; and 27 references.) (YLB)