A budget sets the limit of what may be spent. It is easily confused with a cost plan, but the two are entirely different things.
Plan compared with budget
| Aspect | Cost plan | Budget |
|---|---|---|
| Nature | An estimate of what it will cost | An approved ceiling on spend |
| Set by | The project team | Management or budget holders |
| Changing it | Revised freely | Requires a formal process |
| Control | None; exceeding it stops nothing | Real; overruns can be blocked |
| Transaction | CJ40 / CJR2 | CJ30 |
Distributing budget
| Kind | Content |
|---|---|
| Original budget | What was first approved |
| Supplement | Additional approved budget |
| Return | Budget given back to the level above |
| Transfer | Budget moved between WBS elements |
| Current budget | Original plus supplements less returns, adjusted by transfers |
Availability control
Availability control compares the assigned value against the budget and reacts at configured thresholds. Assigned value includes commitments, not just actual cost.
| Usage | Action |
|---|---|
| 80% | Warning message |
| 90% | Warning plus email to the person responsible |
| 100% | Error; the transaction is stopped |