Ways to encourage saving money from being spent at end of contract or end of fiscal year:
1. Allow for contract extensions based on funds remaining. This will encourage the funds to be used as intended rather than wasted uselessly.
2. Financial incentives for funds saved at end of contract. Similar to bonus policies in some private corporations: pay out a percentage of the money saved (with a reasonable cap) to all employees and contractors involved as incentive to not waste money during or at end of contract.