What is "budgetary slack"? It is the amount that actual results vary from budgeted projections as reported at the end of the budget period. It is the tolerance that is built into budgets to recognize that actual results will not match budgeted projections exactly. It is the process whereby upper management underestimates budgeted revenues or overestimates budgeted expenses in order to motivate lower management. It is the process where managers intentionally underestimate budgeted revenues or overestimate budgeted expenses in order to make it easier to achieve budgetary goals