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A grant or contract is in deficit when the total expenditures exceed the amount awarded for the project. Budgets in deficit cannot be closed to status 4. 

To resolve a deficit, the department will need an allowable non-federal, non-grant budget to cover the overexpenditure amount. If possible, the department should complete the transfer via the GrantTracker Deficit Transfer tool. If this option is not available for your budget, please provide the deficit coverage budget via a GrantTracker request in the Closing topic.

GIM 15 specifically outlines policies and procedures for the transfer of expenditures between budgets.

Deficit transfers and Expense Transfers both pose audit risks to the University of Washington.

  • Deficit transfers can indicate that an award may have been mis-managed when overspending occurs.
  • Expense transfers can represent an audit risk for the university
    • Multiple transfers indicate continuous errors
    • Transfers of expenses after 90 days from posting indicate reconciliation issues and potential internal control weaknesses.

A deficit transfer is appropriate when all expenses are allowable, but the total exceeds the amount of the award. E.g. if a budget is $1000 in deficit because travel charges for a conference described in the scope of work turned out to be higher than anticipated, all individual expenditures should remain on the budget, with a lump sum deficit transfer covering the overage.

An expense transfer must be used if an expense posted to the budget is unallowable per the terms of the award agreement. E.g. if an award does not allow travel, all travel charges must be transferred off the budget.