It is not known how and to what extent local nongovernmental organizations practicing projectrnmonitoring and evaluation and the challenges they encountered in Addis Ababa. Fragmentedrnevaluations, progress reports and studies by previous authors on the functioning of local NGOsrnproject implementation monitoring and evaluation show that short term project objectives ofrnlocal NGOs have been achieved with positive, but often scattered micro-results. Yet, these studiesrnhave repeatedly said little beyond the more immediate effects of the projects, particularly theyrndid not address monitoring and evaluation practices and challenges of local NGOs executedrneducation projects in Addis Ababa. The purpose of this research is to fill this gap. Following arnreview of the literatures related to the problem understudy, a survey questioner was developed,rnpilot tested, modified and distributed to 88 local NGOs. Finally, 56 respondents filled in andrnreturned the questioner properly. This research employed simple random sampling techniquernfor acquisition of quantitative data and to substantiate quantitative data six local NGOrndirectors included using availability sampling technique. The data were analyzed using SPSSrnand interpreted in percentage, mean and standard deviations. The findings of this studyrnrevealed that: a large majority of subjects (63 %) confirm encountered challenges such asrnscarce finance, inadequate baseline data, and deficiency of expertise to monitor and evaluaternprojects effectively, They adopt mechanisms such as introducing participatory M&E, relocatingrnbudget for M&E and abstain from working in areas located far away from their head offices tornmitigate the challenge. This study in general shows local NGOs were ineffective in practicingrnmonitoring and evaluation though expected outcomes of their projects articulated clearlyrnmainly due to inadequate planning for monitoring and evaluation. The implication of thesernfindings is that there is a critical need to enhance the capacity of both local NGOs and pertinentrnstakeholders in areas of monitoring and evaluation. The suggested approach requires clearrnunderstanding on importance of M&E, commitment to monitoring & evaluation for learningrnand ensuring beneficiaryâ€™s involvement.