The purpose of the paper is to show ways of strengthening civil society’s capacities and contribute to improvement of transparency of implementation of sectoral economic strategies at the level of Lviv Region of Ukraine and its 20 districts by supporting local authorities in their interaction. Specifically, it addresses itself on the following scientific objectives, namely, to show increase of public awareness at district, regional and national levels on the process of district and regional budget approval and spending; to demonstrate ways of assuring better involvement of civil society actors (NSA) in policy dialogue with public authorities (LA) on implementation of sector strategies in the following areas: regional development, rural development; and, finally, to comment on methods of strengthening CSO capacities to promote reform and increase public accountability in monitoring the management of public finance. The article presents findings from the research that covered 500 representatives of district level NSA and LA of the region, 100 region-level NSA-LA activists, and was intended to develop the abovementioned model, to benefit over 5000 people (NGOs, LAs, government) as a result, with information coverage to reach at least 15000 people. Results of the research showed that the efforts of this initiative will likely lead to the achievement of the following results in 2–3 years, including the transparency of budgeting is improved and lead to allocating district strategy funds in a better way; the dialogue between NSA and LA at regional and district level in the target region on particular Issues of implementation of sectoral strategies is existing; and, finally, effective and transparent strategies/ instruments of monitoring the management of public funds are researched and developed, CSOs in Lviv region and ist districts are using those strategies/instruments. Apart from being purely educational, the abovementioned model has a dimension allowing to provide small grants and organize exchange programs in order to strengthen institutional potential of local governments and ensure revitalization of human capital, especially on conflict-affected territories. Activities in the framework of this dimension or cluster should be provided in several stages. All the activities should be focused on improving policy making process of local governments in target regions. A pilot research of community attitudes has been held in 2014–2015 where, by means of Participatory Action Research, the authors have identified issues to be addressed and gaps in existing interaction mechanisms between NSA and LA at district level, and recommendations identifying the problem to be addressed by the current proposal have been drafted in direct consultation with the target groups and final beneficiaries. The research has allowed to structure cause-effect interconnections and activity clusters in this educational development project.