EU funds assistance can be evaluated as an important contribution to the development of Latvian economics. Successful EU funds utilization is one of the pre – requisites to the development of the country. One of the main steps to effective EU funds utilisation is effective project selection and evaluation mechanism. In previous EU funds programming period 2004 – 2006 ineffective project appraisal scheme that led to various problems was in force. It consisted of two separate consecutive parts – administrative appraisal and quality and specific appraisal. Analysing this scheme and its operation it can be concluded that it was ineffective and resource taking. Therefore an author developed a new appraisal scheme. The sense of this system is that projects are first of all evaluated according specific criteria – their content, effectiveness and their correspondence to the aims of the programme. After that only those projects best in the project contest are put in order according administrative requirements. This scheme was later approved by Managing authority of EU funds in Latvia and introduced in regulations determining the operation of the EU funds in Latvia.