Although the Department of Veterans' Affairs has taken steps to improve its accountability system as we previously recommended, further actions are needed to provide the Legislature with better information for assessing the department's performance. The department has partially implemented our recommendation to outsource certain nursing home functions. It has outsourced functions at three nursing homes, and estimates a cost avoidance of $982,745 as a result of this initiative. The department plans to extend outsourcing to its two remaining nursing homes by Fiscal Year 2005-06.