Month End Glossary

Underbudgeted

Underbudgeted means having allocated insufficient funds to a task or project to meet its financial requirements.

Being underbudgeted refers to a situation where a budget allocation is not sufficient to adequately cover the costs associated with a task, project, or operation. This occurs when financial resources planned during budgeting do not match the actual or expected expenditure. For example, if a department allocates $10,000 for an activity but the costs escalate to $15,000, we say the activity was underbudgeted. Underbudgeting can lead to challenges such as underperformance, unmet deadlines, or compromises in quality. Addressing underbudgeting often requires reallocating funds or re-prioritizing tasks, which may affect other areas of the organization.

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