PACR of a project (1980-89) to provide potable water and sanitation systems in rural Honduras. The targeted 430 water systems were completed, and 420 are working satisfactorily; watershed deterioration is to blame for those not functioning. However, the water delivered by these functioning systems is rarely subjected to water-quality analysis or treatment with chlorine due to problems in procuring laboratory equipment from the United States. This problem requires further attention by the National Autonomous Water and Sewer Authority (SANAA). An additional 162 water systems were designed and will be built under the Health Sector II Project (5220216). In other achievements, the project built the targeted 430 aqueducts, rehabilitated 68 aqueducts (vs. a target of 50); built 38,800 pit latrines vs. a target of 20,800; and met the targets of 6 sewer systems, 49 septic tanks, and 2,000 wells. On the negative side, the project failed to met targets for windmills (7 of 10) and water seal latrines (48,139 of 54,000) due, respectively, to (1) the Ministry of Health's (MOH) lack of time to carry out all of the necessary wind pattern studies for potential sites, and (2) the lack of SANAA promoters to guide the installation of water seal latrines. Additionally, the target for sewer systems had to be reduced from 21 to 6 because the communities refused to deliver the required labor and materials, which had accordingly to be supplied through the Employment Generation Program. The project was the first in rural Honduras to install water seal latrines -- which proved popular with users because of their ease in cleaning and their ability to seal off odors -- and to successfully integrate water, sanitation, and health education components. Over all, it achieved its purpose by reaching some 500,000 rural inhabitants with safer water and waste disposal systems, although 50% of the country's rural population still lacks such access. Also, in implementing the project SANAA and the MOH gained a good deal of experience that would not have been gained in a smaller project. Finally, CARE, the International Development Bank, and the European Economic Community have since replicated the project design and are currently implementing similarly integrated projects in Honduras. The following lessons were learned. (1) The lack of a single overall authority greatly impeded this project's integration, which in turn led to duplication of activities and overlapping areas of responsibility. (2) Projects should not burden communities with labor or financial responsibilities that are beyond their abilities, as was the case in this project. (3) Projects that call for community input should ensure it by beginning community education programs on project benefits well in advance of scheduled construction dates. (4) Communities should have the responsibility for and authority and control over the management of their water and sanitation systems. (5) The implementation delays result from the Government of Honduras' (GOH) requirement that revolving funds be liquidated annually is a generic problem affecting many USAID/H projects, showing the Mission's need to continue working with the GOH in search of an overall solution.