What term describes the difference between budgeted and actual funds?

• A. Currency variance.
• B. Funding variance.
• C. Schedule variance.
• D. Performance variance.

Answer: (B)

The main concept here is how we describe the gap between what we planned to have as funding and what we actually have. In budgeting and financial control, that gap is called a funding variance. It shows how much actual funding differs from what was budgeted, helping managers see whether there’s a shortfall or an excess and prompting actions like securing additional funds or reallocating resources. A positive funding variance means more funds than planned, while a negative one indicates less funding than planned. This term is specific to financing differences, and is distinct from schedule variance (which is about timing), currency variance (exchange-rate effects), or a general performance variance. For example, budgeting $120,000 but receiving $110,000 results in a negative funding variance of $10,000.