Accountability is high on the education reform agenda as taxpayers, business leaders, and elected officials demand proof of results. Although several states show promising improvements in their accountability arrangements, none has in place a comprehensive system. Such a system includes three fundamental accountability elements: (1) clear and measurable goals that describe intended outcomes; (2) assessment tools that measure progress toward these goals; and (3) incentives that reward goal-achievement and ensure adjustment in case of failure. Vermont, California, Kentucky, and other states have adopted explicit educational outcome goals for their states. South Carolina will focus efforts on two outcome goals: (1) reducing dropouts by one-half; and (2) enhancing students' higher order thinking skills. This handbook profiles South Carolina, Vermont, California, and Kentucky as they experiment with more authentic measures of student ability than traditional multiple-choice tests. Assessment approaches should measure all relevant levels of the educational system. Reforms that shift authority to a particular level increase the importance of assessment at that level. Measures for individual students are important also. South Carolina and Kentucky are implementing an incentive structure based on the performance of individual schools. Any good accountability system is tailored to the education system to which it is applied. One table is included. There are 19 references. (SLD)