This document discusses the importance of monitoring and evaluation (M&E) for decentralization. M&E generates transparency and accountability through reports, allows stakeholders to learn from each other, and finds mistakes to enable improvements. Monitoring involves systematically collecting project data, while evaluation assesses completed projects. M&E should be integrated into all project design and use previous monitoring data to understand how projects develop. The document also provides examples of how one organization conducts cost-effective M&E through integrated staff work and a dedicated team.