Support the establishment of a fully-fledged and effective local government system in Timor-Leste, (i) by providing policy-relevant lessons from pilot activities, (ii) assisting the Government in formulating a comprehensive legal and regulatory framework for local government, and (iii) by supporting implementation of local government reforms.

In the area of support to Local Governance and Decentralization, the UNDP-UNCDF joint Programme of support to the Government of Timor-Leste through Local Governance Supports Programme (LGSP) has been contributed to:
1. Following the conduction of studies and assessments of options for Local Governance system and Decentralization, supported the government in developing policy, legal and regulatory frameworks for decentralization including development of the Decentralization Strategic Framework in 2008.
2. A Local Development Programme (LDP) was conceived and implemented in order to test different models for decentralization including the establishment of bottom-up planning processes, and of a new framework  for Public Expenditure Management and Public Finance Management (PEM/PFM)

The results during 2012 has been: Suppoprted the approval of the District Integrated Development Plan (PDID in Tetum) to harmonize local development initiatives (PDD1, PDD2, LDP and PNDS)  in January this year. Assisted the socialization of the decree law to line ministries and to the districts as a mechanism for community development. the efforst after the socialization of the decree law has been on the evelopment of the subsidiary leagislations: Efforts have also been put into the development, and approval of 1) Ministry Decree on PDID organs and how they are functioning; 2) Ministry Decree on PDID planning steps; and 3) amendment to Local Development Programme Procurement regulations to upgrade the threshold of the District Assembly, to give exclusive applicability of community contracting modalities, and provide one year extension of Local Tender Board’s members mandate.                                                                                 As the impact of the support to the implementation of the PDID Decree Law (planning), 425 project proposals were proposed into the State Budget for 2013 of which 389 (85%) project proposals with total cost of US$53,996,327.00 are from 13 districts and 36 (15%) project proposals with total cost of US$5,411,273.00 are from line ministries.                                                                                                        Supported the implementation of a total of 195 LDP projects for 2012  in 13 districts costed $6,296,000.00 (capital) and $134,391.30 (recurent cost).Of this total, 175 projects are to be implemented by private contractors following tendering processes, while the remaining 20 (amounting to USD 310,000, i.e. less that 5% of the total grants) will be implemented through community contracts (CC).                                                                                                                                                                                                          Three Missions deployed to assess and design new initiatives for decentralization: A Preformance-based Block Grant assessment conducted and designed to be implemented in the context of PDID implementation; Assessment conducted to implement District Strategic Development Plans. The implementation of the DSDP is ongoing in Liquica ditsrict as a pilot; An assessment and design of a Monitoring and evaluation system for PDID is in place and further development is required.