The Performance-Based Accountability Program was enacted by the North Carolina General Assembly in 1989 as part of the School Improvement and Accountability Act. This report addresses five components of the program and includes appendixes that provide detailed data for several of the components. The Flexible Funding Provision is made for the flexible use of state funds through transfers among various fund categories. The Differentiated Pay component allows for bonuses or other expenditures for staff development. The section on Waivers allows schools to request exemption from requirements that they believe inhibit them from achieving student performance goals. The staff development component, which comes into effect in 1994-95, will require each school system to submit a staff development plan. A final component is the performance indicators each system must adopt for 3-year periods. Five appendixes provide five pie charts, two graphs of data, one table for differentiated pay, and a table of program milestones. (SLD)