The Health Sector Services Fund (HSSF) is an innovative scheme established by the Government of Kenya (GOK) to disburse funds directly to health facilities to enable them to improve health service delivery to local communities. HSSF empowers local communities to take charge of their health by actively involving them through the Health Facility Management Committees (HFMCs) in the identification of their health priorities and in planning and implementation of initiatives responsive to the identified priorities. Following a successful pilot of a similar mechanism, the strategy was scaled up nationwide, starting in 2010. Following the recent general election in Kenya, dramatic changes to the health system are being considered and introduced, including devolution of government functions to 47 semi-autonomous counties, the merging of the two ministries of health, and the abolition of user fees at health centres and dispensaries. Given the experience of nearly 3 years of HSSF implementation, and the context of these important changes in the organisation of health service delivery, a review of experiences to date with HSSF and key issues to consider moving forward is timely. The overall goal of HSSF is to generate sufficient resources for providing adequate curative, preventive and promotive services at community, dispensary and health centre levels, and to account for the resources in an efficient and transparent manner. HSSF can cover items such as facility operations and maintenance, refurbishment, support staff, allowances, communications, utilities, non-drug supplies, fuel and community based activities. DANIDA and the World Bank are currently partnering with the MOPHS in supporting the HSSF’s phased implementation which began in October 2010 with public health centres, and public dispensaries in July 2012. Following a facility stakeholder’s forum, HFMCs should develop annual work plans (AWPs) and quarterly implementation plans (QIPs). HSSF resources are credited directly to each designated facility’s bank account every quarter and to the District Health Management Team (DHMT): KSH 112,000 (1,339 USD) for health centres, KSH 27,500 (327 USD) for dispensaries and 131,500 (1,565 USD) for DHMTs. Other funds available to the facility, such as user fee revenue, and grants and donations received locally, should be banked in the same account, and managed and accounted for together with HSSF funds from national level. All funds should be managed by the Health Facility Management Committee (HFMC) which includes community representatives, according to the financial guidelines approved by the Ministry of Health (MOH). Funds can only be spent on receipt of an Authority to Incur Expenditure (AIE) from national level. Facilities must then account for funds using monthly and quarterly financial reports, and expenditures are recorded in a specific software called Navision. Facility level supervision and support is provided by the DHMT and county based accountants (CBAs) hired specifically for HSSF; and at national level HSSF oversight is provided by the National Health Sector Committee. This review had the following objectives: 1. To describe the process of HSSF implementation to date, including facilities covered, funds disbursed, and activities undertaken. 2. To review evidence on the experience with HSSF implementation 3. To identify key issues including devolution for consideration in future planning around HSSF These objectives have been addressed through review of policy documents, administrative reports, and research studies related to HSSF; and interviews with key stakeholders in MOPHS, DANIDA and the World Bank, to obtain updates on HSSF implementation and experience.