diff --git a/test/QuestBudget.t.sol b/test/QuestBudget.t.sol
index b52ae703..0710f317 100644
--- a/test/QuestBudget.t.sol
+++ b/test/QuestBudget.t.sol
@@ -1296,6 +1296,65 @@ contract QuestBudgetTest is Test, TestUtils, IERC1155Receiver {
         questBudget.payManagementFee(questId_);
     }
 
+    function testPayManagementFee_InsufficientFunds() public {
+        // Set management fee
+        vm.prank(questBudget.owner());
+        questBudget.setManagementFee(500); // 5%
+
+        // Set quest data
+        uint32 txHashChainId_ = 1;
+        address rewardTokenAddress_ = address(mockERC20);
+        uint256 endTime_ = block.timestamp + 1 days;
+        uint256 startTime_ = block.timestamp;
+        uint256 totalParticipants_ = 10;
+        uint256 rewardAmount_ = 1 ether;
+        string memory questId_ = "testQuest";
+        string memory actionType_ = "testAction";
+        string memory questName_ = "Test Quest";
+        string memory projectName_ = "Test Project";
+        uint256 referralRewardFee_ = 250;
+        uint256 numberMinted_ = 10;
+        uint256 maxTotalRewards = totalParticipants_ * rewardAmount_;
+        uint256 questFee = uint256(mockQuestFactory.questFee());
+        uint256 referralRewardFee = uint256(mockQuestFactory.referralRewardFee());
+        uint256 maxProtocolReward = (maxTotalRewards * questFee) / 10_000;
+        uint256 maxReferralReward = (maxTotalRewards * referralRewardFee) / 10_000;
+        uint256 maxManagementFee = (maxTotalRewards * questBudget.managementFee()) / 10_000;
+        uint256 requiredApprovalAmount = maxTotalRewards + maxProtocolReward + maxReferralReward + maxManagementFee;
+
+        // Allocate tokens to questBudget, but less than required
+        mockERC20.mint(address(questBudget), requiredApprovalAmount);
+
+        // Create quest
+        address questAddress = questBudget.createERC20Quest(
+            txHashChainId_, rewardTokenAddress_, endTime_, startTime_,
+            totalParticipants_, rewardAmount_, questId_, actionType_, questName_, projectName_, referralRewardFee_
+        );
+
+        // Mock quest data
+        mockQuestFactory.setQuestData(questId_, IQuestFactory.QuestData({
+            questAddress: questAddress,
+            rewardToken: address(mockERC20),
+            queued: false,
+            questFee: 250, // 2.5%
+            startTime: startTime_,
+            endTime: endTime_,
+            totalParticipants: totalParticipants_,
+            numberMinted: numberMinted_,
+            redeemedTokens: numberMinted_ * rewardAmount_,
+            rewardAmountOrTokenId: rewardAmount_,
+            hasWithdrawn: true
+        }));
+
+        // Transfer 1 wei out of the budget
+        vm.prank(address(questBudget));
+        mockERC20.transfer(address(this), 1);
+
+        // Attempt to pay management fee with insufficient funds
+        vm.expectRevert("Insufficient funds to pay management fee");
+        questBudget.payManagementFee(questId_);
+    }
+
     function testPayManagementFee_NotAuthorized() public {        
         vm.prank(address(0xc0ffee));