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The Environmental Health (EH) program of Peace Corps (PC) Panama and a non-governmental organization (NGO) Waterlines have been assisting rural communities in Panama gain access to improved water sources through the practice of community management (CM) model and participatory development. Unfortunately, there is little information available on how a water system is functioning once the construction is complete and the volunteer leaves the community. This is a concern when the recent literature suggests that most communities are not able to indefinitely maintain a rural water system (RWS) without some form of external assistance (Sara and Katz, 1997; Newman et al, 2002; Lockwood, 2002, 2003, 2004; IRC, 2003; Schweitzer, 2009). Recognizing this concern, the EH program director encouraged the author to complete a postproject assessment of the past EH water projects. In order to carry out the investigation, an easy to use monitoring and evaluation tool was developed based on literature review and the author’s three years of field experience in rural Panama. The study methodology consists of benchmark scoring systems to rate the following ten indicators: watershed, source capture, transmission line, storage tank, distribution system, system reliability, willingness to pay, accounting/transparency, maintenance, and active water committee members. The assessment of 28 communities across the country revealed that the current state of physical infrastructure, as well as the financial, managerial and technical capabilities of water committees varied significantly depending on the community. While some communities are enjoying continued service and their water committee completing all of its responsibilities, others have seen their water systems fall apart and be abandoned. Overall, the higher score were more prevalent for all ten indicators. However, even the communities with the highest scores requested some form of additional assistance. The conclusion from the assessment suggests that the EH program should incorporate an institutional support mechanism (ISM) to its sector policy in order to systematically provide follow-up support to rural communities in Panama. A full-time circuit rider with flexible funding would be able to provide additional technical support, training and encouragement to those communities in need.