Verification of the cost-effectiveness of expenditure is an assessment of whether the proposed price is reasonable in relation to the usual market price. It is carried out already when the application is evaluated, and repeatedly when public procurement is checked and when payment requests are reviewed. In doing so, the provider uses its own reference values, comparison with similar projects, price lists, and the submitted market survey. If the price is higher than usual and the applicant cannot justify it, the expenditure is reduced to a reasonable level, even where it is otherwise fully eligible and properly procured. A practical measure is to attach several comparable offers to the budget and, for non-standard items, explain in writing how the solution differs from the usual one and why the higher price is justified.
See also: Principle of economy, Market research, Project budget.
