This report on Local Budget Management Performance (KIPAD) in 2010 is a continuation of research undertaken last year on the same broad issues. The study examines four broad areas of sub-national (regional, local) government budgetary processes: planning when local governments undertake a range of activities to plan what needs to be done and to prepare draft budgets; discussion when governments discuss and make determinations about provisions of draft budgets; implementation during which governments carry out programs contained in endorsed budgets with funding appropriations contained therein; and, finally, accountability at which point governments have to account for implementation of budget programs and expenditure. This KIPAD research project was the brainchild of a network of NGOs which also developed and implemented it as a means of monitoring and evaluating local government budget performance. With support from The Asia Foundation, the National Secretariat of the Indonesian Forum for Budget Transparency (Seknas FITRA) organized the various research stages in collaboration with 28 like-minded groups in regional areas, including NGOs, other community groups and university research units. The research's overall aim was to assess the extent to which principles of good governance (transparency, participation, accountability and gender equality) were being integrated into local budgetary processes in areas studied. More specifically, it aimed to provide feedback to local governments to help them to lift their performance in budgetary cycles from start to finish. By looking at this report, local governments will be able to tell to what extent their budgetary processes are in accord with requirements outlined and to benchmark innovative practices put in place by other governments. The central government will hopefully also use the study as a chance to have a fresh look at national policies for improved sub-national budget performance throughout Indonesia. NGOs too should be able to use it as a resource for their advocacy work, particularly on budgetary issues—especially pro-poor advocacy on budgets in areas studied. This report is based on the premise that decentralization can be relied upon to give local governments space to develop innovative policies in regions. Since decentralization was introduced in Indonesia, several innovative policies have been developed in regions aimed at enhancing people‘s welfare. Such innovations do not just benefit areas which introduce them, but also encourage other regions to adopt similar or even more progressive policy approaches. So, at the very least, this report seeks to engender a spirit of competition among local governments to help them become more efficient and effective managers—especially of their budgets.