This document, which highlights the efforts of the National Institute for Literacy to pilot the development of state literacy accountability systems in four states, outlines the components, operation, and importance of state accountability systems and discusses considerations in developing a systems approach to planning and implementing a quality accountability system. First, the institute's mission is explained. Next, four specific areas within state literacy systems in which literacy accountability systems build capacity are examined along with potential impacts of state literacy accountability systems. Discussed next is the role of state literacy accountability systems in measuring program results and demonstrating that literacy works for selected groups of individuals. Ten steps to establishing a state literacy accountability system are listed, and demonstration programs in Hawaii, Kentucky, New York, and Tennessee are profiled. Each profile includes the following: discussion of program's vision, list of program highlights to date, and contact person. Lessons learned from the demonstrations are summarized, and steps in moving forward from "patchwork quilt" accountability efforts to high quality accountability systems are outlined. (MN)