Innovation in public administration has become a critical factor in enhancing service efficiency, promoting citizen engagement, and addressing contemporary governance challenges. While private sector innovation has been extensively studied, innovation within the public sector remains underexplored, necessitating structured evaluation tools. The INNLocal project aims to bridge this gap by adapting and expanding the Local Innovation Culture Self-Assessment Tool (FACIL) to assess and strengthen innovation within municipalities. This study examines the application of the FACIL tool across Portuguese, German, and Czech municipalities, providing insights into their innovation cultures. The research highlights the diversity of innovation maturity among municipalities, with some demonstrating strong capabilities while others face challenges in areas such as leadership, risk management, and financing. The tool's expansion to include diversity and inclusion, environmental sustainability, and citizen participation reflects the need for a more comprehensive approach to assessing municipal innovation. Findings from the SurveyMonkey questionnaire illustrate municipalities’ self-perception of their innovation culture and key areas for improvement. The study emphasises the importance of leadership in fostering innovation, integrating innovation into strategic planning, and aligning financial resources with innovation objectives. The results demonstrate that structured innovation assessment tools like FACIL provide a clear roadmap for municipalities to enhance their innovation capacity. By leveraging these insights, local governments can optimise service delivery, encourage inclusive governance, and drive sustainable development. Innovation in local governance extends beyond technological advancements—it is about building resilient, adaptive, and forward-thinking communities prepared to meet future challenges.