The main objectives of this report are to analyze the Nepalese experience in educational finance between 1965-66 and 1969-70 while a major educational reform was being implemented; to assess the general effects of the decentralization of educational finance on the levels and sources of finance; to assess the effects of this decentralization on first- and second-level school enrollments in areas where universal, free, compulsory education was introduced and to compare them with other areas; and to evaluate the differences in achievement between the areas. (Author/IRT)