The assistance from the EU funds is a contribution to Lithuanian economic development, upturn in the economy, better quality of life and it plays the significant role for the environmental protection. The project is the main measure for using the EU support. The EU financed projects management has a very complicated management mechanism, which involves a number of national and other interested authorities, as well as fulfils a number of necessary procedures. The management system efficiency of the water sector projects financed by the EU Cohesion fund is the research object in this work. The aim of this work consists of the project cycle analysis through the management system. There were identified significant problems in the each stage of the project cycle as well as evaluated administration capabilities of the EU support managed institutions and project final beneficiaries. There were presented proposals for the EU Cohesion fund water sector projects management system efficiency increasement.