Click here to access the Budget Deviation and Revisions section of the Post-Award Sponsored Projects Guide on page 33.
A budget deviation is a process whereby funds available for spending on a particular project are permitted to be spent in a manner that differs from the original budget as approved by the agency. Since it is important for the original budget, as approved by the funding agency, to remain intact in the finance system—so that actual expenditures can be compared accurately with the approved budget—a budget deviation does not result in any change to the budget for the project, nor does it result in any change to the budget as recorded in PeopleSoft.
Most funding agencies believe that the PI is in the best position to determine how to conduct the work, spend the funds, and identify adaptations that may become necessary during the course of the project. Thus, the primary concern on the part of the Federal government relative to the budget deviation is that there is no change in the scope of work associated with the project. Consequently, it is imperative that the files contain adequate information documenting that no change in the scope of work resulted from the budget deviation. In this manner, whenever a budget deviation might cause someone, such as an auditor, to question whether or not the budget deviation actually changed the scope of work for the project, the documentation is already in place.
The most important issue to address when explaining a budget deviation is that the budget deviation will cause no change in the scope of work for the project.
Re-budgeting may or may not require sponsor prior approval. You will need to review the award terms carefully to determine whether or not prior approval needs to be sought. Grants awarded under the Federal Demonstration Partnership or those with Research Terms & Conditions incorporated have more flexible re-budgeting terms. Consult the award document to identify agency-specific rules regarding re-budgeting.
Some awards have restrictions on the percentage of the budget that may be re-budgeted without sponsor approval. This percentage must be monitored closely since it is a cumulative percentage (e.g. 10%) over which sponsor approval must be sought.
In those instances where re-budgeting requests can be submitted through a Sponsor’s post-award management system (e.g. FastLane), no additional paperwork is necessary. In all other instances, a letter will need to be drafted by the department that explains the re-budget request and the effect it will have on the project. A revised budget will need to accompany the letter. This letter should be signed by the principal investigator and counter-signed by an authorized University signature (OSP), who will forward the request to the sponsor for action.
If you are unsure whether or not re-budgeting is allowed under a sponsored project, please contact your OSP Contract Administrator for guidance.