This report summarizes the findings of an audit designed to diagnose needs to improve the efficiency of two selected water and wastewater districts, the West Slova, Transmission Line District, and the Prievidza Water and Wastewater District. The immediate purpose of the assignment was to develop a basis of information in technical, financial, and management areas that will help make short-term improvements in efficiencies. The larger purpose of the assignment defines issues that might affect an overall decentralization and sectoral restructuring program.