FDM was contracted by DFID Nepal for an assessment to provide inputs on whether flexible district health funding in the health sector of Ministry of Health and Population (MoHP) is feasible, appropriate and effective to promote decentralized planning and execution of health programme as part of Nepal Health Sector Programme (NHSP-3). DFID Nepal is working with the MoHP and donors to develop a new 5-year health sector strategy and M&E framework. NHSP-3 will clearly articulate both Ministry’s and donors' priorities: how they will be monitored and the total resource envelope needed to implement the joint programme. DFID aims for two main reforms for NHSP-3; one around professionalize health procurement practices and to reduce corruption risks and the other to promote more flexibility in planning and financing at district levels, with the possibility of expanding the small amount of flexible funding that exists at districts to a more formal block grants arrangement. The team visited four districts i.e. Kavre, Dang, Rupandehi and Kaski to gather information from different stakeholders.