Various countries in Latin America have begun monitoring rural water supply service delivery, largely driven by two objectives: to establish rural water inventories for investment planning, and to better target post construction support For such monitoring systems not to face sustainability challenges, clear institutional and financial arrangements must be established. The International Water and Sanitation Centre (IRC), the Inter-American Development Bank (IDB), and the Spanish Cooperation Agency for International Development (AECID) have been supporting the design and implementation of such monitoring systems in El Salvador, Honduras and Paraguay. In coordination with local sector agencies, a methodology to define an institutional framework for monitoring was developed and tested. This paper provides an overview of the approach, including examples and cost estimates from the three countries.