diff --git a/annualgrantbudgets.php b/annualgrantbudgets.php
index 7d7c1a1..d543b77 100644
--- a/annualgrantbudgets.php
+++ b/annualgrantbudgets.php
@@ -213,3 +213,42 @@ function annualgrantbudgets_civicrm_apiWrappers(&$wrappers, $apiRequest) {
     $wrappers[] = new CRM_AnnualGrantBudgets_APIWrapper();
   }
 }
+
+/**
+ * Implements hook_civicrm_validateForm().
+ *
+ * @link http://wiki.civicrm.org/confluence/display/CRMDOC/hook_civicrm_validateForm
+ *
+ */
+function annualgrantbudgets_civicrm_validateForm($formName, &$fields, &$files, &$form, &$errors) {
+  if ($formName == 'CRM_Grant_Form_Grant' && !($form->_action & CRM_Core_Action::DELETE)) {
+    if (empty($fields['financial_type_id'])
+      || empty($fields['status_id'])
+      || empty($fields['decision_date'])
+      || empty($fields['amount_granted'])
+    ) {
+      return;
+    }
+    $paidStatusID = CRM_Core_PseudoConstant::getKey(
+      'CRM_Grant_DAO_Grant',
+      'status_id',
+      'Paid'
+    );
+    if ($paidStatusID != $fields['status_id']) {
+      return;
+    }
+    $year = date('Y', strtotime($fields['decision_date']));
+    $grantBudget = civicrm_api3('GrantBudget', 'getbudget', [
+      'financial_type_id' => $fields['financial_type_id'],
+      'fiscal_year' => $year,
+    ]);
+    $grantBudget = reset($grantBudget['values']);
+    if ($grantBudget && !empty($grantBudget['id'])) {
+      $balanceAmount = CRM_Utils_Rule::cleanMoney($grantBudget['balance_amount']);
+      $amountGranted = CRM_Utils_Rule::cleanMoney($fields['amount_granted']);
+      if ($balanceAmount < $amountGranted) {
+        $errors['amount_granted'] = ts("The annual budget for this grant is {$grantBudget['budget']}. Grants totaling {$grantBudget['total_amount_granted']} have been made. {$grantBudget['balance_amount']} remains.");
+      }
+    }
+  }
+}