Underspend

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Underspend

To spend less than one was allotted in a budget. Underspending in personal finance is almost always a good thing as it allows one to save more or to pay down debts. In corporations, however, underspending can be negative; for example, if a department does not spend its entire budget, the executives may conclude that it does not need such a high budget and cut that department's allotment. This creates a perverse incentive for departments and other subdivisions to spend their entire budget whether or not they need to.
References in periodicals archive ?
3 million net underspend on various support services, many arising from vacancies.
9m underspend, mostly due to reduced borrowing costs.
Mr Brown told The Journal it was his understanding that the underspend from this year would not be at risk.
However, the NH scheme underspend is a concern and this will be a part of a wider review undertaken by the TBA National Hunt Committee during 2007.
Plaid Cymru Shadow Finance Minister Dafydd Wigley highlighted more than pounds 50m underspends in health and education and a further pounds 70m in economic development.
THE Scottish Executive were accused of "incompetence and mis-management" last night after it emerged that they were heading for a pounds 600million Budget underspend.
She dismissed Plaid criticism over underspends, saying the need to tackle the problem was the key theme of her budget.
This is good news to be able to use reserves and underspends in government priority areas, " she added.
The projection is flawed as most of the big underspends are during the period 1991-98.
Parliament does not approve of large NHS underspends as it commits those resources for health spending, not to just sit there.
But it is more important to use the money wisely and ensure that accounting procedures are put in place so that such underspends do not happen again.
THE Scottish Executive have been accused of "mismanagement and incompetence" after revealing a massive pounds 718million underspend.