Budget reallocations in a project are changes in which funds are redistributed between individual items or groups of expenditure. They arise in almost every project, since actual prices after procurement differ from the plan. The rules are strict, however, and vary depending on the size of the reallocation. Smaller reallocations within a set percentage of a group's budget generally only need to be reported, larger ones require prior consent, and substantial changes require an amendment to the contract. It is likewise true that savings on one item do not automatically mean the possibility of spending it elsewhere – some schemes simply reduce the contribution by the amount saved. Always deal with a reallocation before the expense arises, not retroactively at the payment request stage, when it is already too late.
See also: Amendment to the Non-repayable Financial Contribution Agreement (NFP), Project budget, Project change.
