Negative balances: which ones matter

A restricted resource below zero

Compute each fund and resource pair's ending balance: beginning balance plus revenues minus expenditures. A restricted resource that lands below zero is asserting that you spent restricted money you did not have, and the technical review flags exactly that. It is among the most common exceptions in real files because it is easy to create: spend on the grant in June, book the revenue or the covering contribution in September.

There are three legitimate ways out, and they are budget decisions, not clerical ones:

• Move expenditures. If costs were coded to the resource that should not have been, recode them to where they belong.
• Contribute. If the program genuinely overspent its funding, an 8980 contribution from an unrestricted resource covers the deficit, with its offsetting side booked.
• Fix the coding. Sometimes the deficit is an artifact: revenue posted to the wrong resource, or a beginning balance that rolled incorrectly.

Negative expenditures

A negative amount on an expenditure object (1000 through 5999) is most often an abatement: a reimbursement, refund, or correction properly netted against cost. Those are legitimate. The review interest is the exception where the negative is not an abatement but a miscoding, a credit that belongs on a revenue object, or one side of an entry whose other half went missing.

The efficient habit is a quick scan, not a purge: list the negative expenditure lines, confirm each has a story you could tell an auditor in one sentence, and move on. The ones without a sentence are the findings.

Negatives first, then balances

Deficit resources interact with the other balance checks: covering a resource deficit with a contribution changes your 8980 net, which must still tie to zero, and changes the fund's ending components. Fix resource deficits first, then re-check contributions and the fund balance identity, in that order, and the file converges instead of chasing itself.