The performance audit of the National Rural Health Mission in Karnataka noted gaps in community participation in preparation of village and block plans for project implementation, defeating the objectives of decentralised planning. The Arogya Raksha Samithis were not effective in management of healthcare centres. There was delay in taking up the upgradation and construction of healthcare centres resulting in huge amount of the funds remaining unspent even at the end of fourth year of project implementation. There was shortage of medical and paramedical staff and lack of essential equipment and buildings for the healthcare centres. Evaluation of health indicators indicated poor achievement in reducing maternal mortality and registering higher cure rate of endemic diseases. Computerisation of health centres up to block level and networking was yet to be achieved.