Examples
Worked examples
- Is an instance
A project ends year 2 with 15 percent underspend due to a delayed equipment delivery; funds carry forward to year 3.
- Is an instance
An institution flags a 30 percent underspend across a portfolio of awards for management review.
Counter-examples
Looks similar, but isn't
- Not an instance
An overspend exceeding the budget is the opposite condition.
- Not an instance
An on-budget close is neither overspend nor underspend.
Editorial commentary
Underspend may arise from delays (staff vacancies, supply chain), cost savings, or scope adjustments. Modest underspends (typically below 10 percent) are routine and absorbed through carry-forward. Persistent or large underspends signal planning or execution issues and may trigger sponsor concern. Some funders reduce future-year budgets in response. Underspend is one of the two ends of the budget-execution spectrum (the other being overspend, which is generally not allowed without prior approval).
References
- US NIH Grants Policy Statement; UKRI Terms and Conditions of grants.
Also known as
Unspent funds · Budget underspend · Unobligated balance
Machine-readable encodings
Use in your systems
<role vocab="credit"
vocab-identifier="https://casrai.org/dictionary/"
vocab-term="Underspend"
vocab-term-identifier="https://casrai.org/dictionary/term/underspend" />{
"@context": "https://schema.org",
"@type": "DefinedTerm",
"name": "Underspend",
"identifier": "https://casrai.org/dictionary/term/underspend",
"description": "The condition in which a grant budget period ends with unspent funds, indicating actual expenditure was lower than planned and requiring action (carry-forward, reduction of next-year award, or return to sponsor).",
"inDefinedTermSet": "https://casrai.org/dictionary/domain/funding-lifecycle-and-financial-vocabulary/",
"url": "https://casrai.org/dictionary/term/underspend",
"sameAs": [
"Unspent funds",
"Budget underspend",
"Unobligated balance"
],
"license": "https://creativecommons.org/licenses/by/4.0/"
}
