The article concerns a characteristics of the institution of a financial adjustment imposed on local government units for irregularities related with the realisation of projects co-financed by EU funds. The work includes the classification of the institution of a financial adjustment, analysing applicable legal provisions relating beneficiaries and institutions granting the financing, as well as binding legislation included in the Community and national law. The conclusion states an opinion that a financial adjustment is a specific administrative sanction for not meeting the obligations imposed by the EU, due to the fact that it is the source of the funds for the realisation of particular projects. The EU requires a special care over the way of the disbursement and settlement of these resources, what is reflected in national legislation. This legislation requires a high diligence of beneficiaries, imposing penalties for not obeying obligations resulting from a concluded agreement. The aim of penalties is not merely to compensate the damage but to discipline beneficiaries to perform obligations of the agreement with due diligence.