Lake Kasumigaura is located in the southern part of Ibaraki prefecture and is an important water source of the basin. However, water quality of the lake has been worse than the environmental standards for water sources since the period of high economic growth. Today, some kinds of technology to reduce environmental loads on Lake Kasumigaura are being developed. In addition, some public projects are also being implemented. In order to utilize public finances efficiently for environmental improvement, it is necessary to evaluate technologies and public projects properly. Therefore, we set up a frame of evaluation and actually evaluated some alternatives. Based on the result of evaluation, we discussed problems of present fiscal management. Distribution of actual financial expenditure for water quality improvement in Lake Kasumigaura Basin is different from the order of efficiency. This may be because of sectionalism among public sectors. Integrative organization for water quality improvement is essential to realize proper evaluation. JEL classification: Q52, Q53, Q58