One of the most pressing problems of sustainable spatial development in Latvia is the existence of degraded areas. To address the issues of revitalization of degraded territories and to ensure sustainable development of the territory, Latvian municipalities could apply for support under the Specific Support Objective 5.6.2 (SSO 5.6.2) ‘Revitalization of territories through regeneration of degraded territories in accordance with integrated development program of municipalities’ during the European Union (EU) Structural Funds programming period 2014–2020. According to the Ministry of Finance (MF) data on project costs, it was found that during the implementation of the projects for revitalization of degraded territories, the local governments have not ensured an effective project management process in accordance with the implementation requirements of SSO 5.6.2, resulting in irregularities detected in the audits carried out on the projects, which have led to the decision on inappropriately performed expenses (IPE). Considering that the deadline for the implementation of projects under the 2014–2020 EU funds programming period is 31.12.2023, it is necessary to carry out an analysis of IPE to identify the reasons for the occurrence of IPE and to plan timely preventive actions to eliminate mistakes in the new programming period 2021–2027. The relevance and importance of the study lies in the analysis of the factors holding projects back - mistakes and irregularities and their prevention to ensure an efficient project management process.