This chapter describes the operations of local governments in Albania following the 2015 territorial reform. It details the legal framework and decentralization drive. It shows how municipalities are financed through three pillars: unconditional and sectoral transfers, shared taxes, and own revenues from local taxes and fees. Expenditure trends are shown in terms of personnel, operations, and capital expenditure. The topic of the chapter is the 2019 launch of sectoral non-conditional transfers and the redistribution formula to balance fiscal capacity. Two brief case studies outline the key risks. First, a vertical fiscal imbalance: most municipalities lack the capacity to cost, and fund assigned functions, particularly small ones. Second, central transfers, arrears clearance, the Regional Development Fund, and earthquake reconstruction political and transparency issues, the latter normally sensitive to electoral cycles. Albania has made progress on local autonomy, but still there are present the gaps. Better cost accounting, more predictable transfer rules, and safeguards against politicized allocation are needed to strengthen local democracy and service delivery.