Budget Adjustments - Overview

A project budget establishes a locked financial baseline, but the reality of construction often requires funds to shift as work progresses. Linarc’s Budget Adjustment feature allows you to instantly rebalance financial resources to cover localized deficits using surplus funds from other areas. This provides crucial flexibility, allowing you to manage internal fund movements without altering the overall contract amount or initiating a complex change order.

Use this feature to seamlessly:

• Reallocate funds to address unexpected site conditions or localized price fluctuations.
• Transfer surplus money from one budget line to another.
• Add a new budget line items and fund them by transferring money from other eligible lines. 
• Adjust amounts across different cost types within the same budget line, keeping the line's total unchanged.

Methods of Adjustment

Linarc supports two primary ways to adjust a budget within a single contract:

• Adjust Cost Breakdown Within a Budget Line: Shift funds between different cost types—such as labor, material, equipment, or overheads—inside the exact same line item. Example: If labor costs come in under budget but material prices spike, you can move funds to cover the material deficit without changing the line item's total value.
• Transfer Funds Across Budget Lines: Move surplus funds from one distinct budget line item to a completely different line item that requires additional funding for its associated tasks.

Manage Reserved Amounts in the Budget

When making adjustments across budget lines, you can draw from two types of reserved funds:

• Remaining Balance: This indicates any surplus amount within a specific budget line item. It is the amount left over after funds from that line have been allocated to its associated scheduled tasks.
• Unallocated Funds: You can set aside reserve funds by adding a separate line item labeled Unallocated (Task Code: 99-999). 

Important Restrictions on Budget Adjustments

Please note that you cannot transfer funds to or from certain locked budget line items. Specifically, adjustments are disabled for:

• Budget line items that already have funds allocated to scheduled work items (whether partially or fully).
• Budget line items that were manually added to any of your previous pay apps for upfront billing.

Background Note on Manual Addition to Pay Apps:
You can also use available project funds (including your unallocated reserve) to include extra charges on your Pay App for out-of-sequence expenses. This gives you the flexibility to bill for unforeseen work or claim upfront costs for early-stage tasks like mobilization and material procurement. See Create Payment Application for more details.

See the following pages for more details:

• Modify Locked Budget
• View Budget Adjustment History