The principle of economy is the requirement that public funds be spent in an amount appropriate to the purpose being achieved. It is supplemented by the principles of efficiency, meaning achieving the best ratio between inputs and outputs, and effectiveness, meaning actually achieving the objective. For the beneficiary, it is essential that following the procurement procedure alone is not enough – checks also assess whether the price was in line with the market and whether the expenditure was actually necessary for the project. That is why, even for small purchases, a documented market survey and a justification for the choice are recommended if the lowest price was not selected. Disproportionately expensive or superfluous equipment is among the recurring audit findings and leads to a reduction of the expenditure even when the procedure was formally flawless.
See also: Market research, Eligible expenditure, Financial correction.
