The study was carried out in three selected development project sites i.e. Chilime Hydroelectric Project in Rasuwa and Nuwakot districts, East Rapti Irrigation Project in Chitwan district and Annapurna Quarry Private Limited in Dhading district. All of them lie in the Central Development Region of Nepal. The study focuses on carrying out comprehensive environmental audit of forest resources of selected three development projects and on assessing effectiveness of mitigation measures adopted, which are prescribed in EIA reports for improving social, economic and environmental conditions of the communities with reference to forests resources. It was observed during the field visits that the development projects have somehow negative impact on the forest resources during the project implementation phase. The account of these negative impacts on forest resources is must to restore the in-situ conservation. The documentation has been carried out yet, it is insufficient to clearly carry out mitigation and compensatory measures in future. Besides, it was observed that the proponents do not follow periodic reporting of mitigation measures prescribed in the EIA reports to the concerned government authorities i.e. District Forest Office, District Soil Conservation Office and National Parks. In addition, these government offices have also been less than serious in this regard. Consequently, the restoration of forest resources remains in dilemma. Every activity rendering the restoration of forest resources must be documented properly during the project implementation phase at field level. This will help environmental auditing more efficient and simple. In addition, available documents are also not properly organized. Therefore, the available documents need to be properly recorded for future consultation. Moreover, there is no regular coordination and communication between/among the concerned stakeholders of the project. Although compensatory plantations comply with the prescription of mitigation measures, it does fail at implementation stage. This could happen in other development projects as well. Therefore, before compensatory plantation, there should be proper technical assessment on where, how, and when the compensatory plantation to be carried out and what needs to be given the preference as per the site condition and local people's demand and/or desire. In this matter, concerned DFO should take initiation with healthy consultation with Proponent and local people. In addition, the proponent should not ignore the DFO. Any development project open up the market for employment opportunities. The three projects studied, employed the local people as per their knowledge and skills. This certainly enhances the socio-economic condition of the local people. It also helps to conserve the forest resources because; they are well aware of their local environment and forest resources. It is easy to convince them for conserving the local forest resources. Hence, the proponent should encourage employing the local people for the shake of conserving forest resources. Although this study does not aim at this topic, I realized that there is lack of professionalism in the EIA practices. Anyone, without proper academic background, has been doing EIA as a consultant. This will not be useful for conserving local as well as national environment in the long run. As I perceive, this would be serious dilemma in days to come..