diff --git a/src/scheduler/src/scheduler.c b/src/scheduler/src/scheduler.c
index 59d30aeb..269a4159 100644
--- a/src/scheduler/src/scheduler.c
+++ b/src/scheduler/src/scheduler.c
@@ -315,8 +315,17 @@ static int sched_make_compound_alloc_(xce_sched_core_t*      core,
         }
     }
 
+    /* bug-1766: a compound is allocated only if EVERY primary is -- when a
+     * later primary fails, drop the earlier primaries' allocation instead
+     * of leaving a partial one on obj. Their uncommitted debits live in
+     * ctx.uncomitted, per-attempt scratch freed by sched_ctx_fini(), so
+     * nothing else needs undoing. */
     if (merged != NULL) {
-        MOVE_PTR(obj->alloc, merged);
+        if (rc > 0) {
+            MOVE_PTR(obj->alloc, merged);
+        } else {
+            free_JobAlloc_ptr(&merged);
+        }
     }
 
     if (ctx.reason != NULL) {
@@ -356,12 +365,6 @@ static int sched_make_alter_allocation(xce_sched_core_t* core,
         if (rc > 0) {
             return rc;
         }
-
-        /* a failed alternative may leave a partial allocation (no
-         * rollback yet, bug-1766) -- drop it before trying the next one */
-        if (obj->alloc != NULL) {
-            free_JobAlloc_ptr(&(obj->alloc));
-        }
     }
 
     /* FIXME: merge pend reason from all children */
diff --git a/src/scheduler/testsuite/test_parjob_e2e_multislot.c b/src/scheduler/testsuite/test_parjob_e2e_multislot.c
index 62dac25a..d438d84b 100644
--- a/src/scheduler/testsuite/test_parjob_e2e_multislot.c
+++ b/src/scheduler/testsuite/test_parjob_e2e_multislot.c
@@ -847,6 +847,34 @@ static void test_compound_primaries_on_same_host_merge(void)
         "entry");
 }
 
+/*
+ * bug-1766: when a later primary of a COMPOUND fails, the earlier
+ * primaries' (merged) allocation was still moved onto the schedobj, so a
+ * job reported PEND carried a partial allocation that the next successful
+ * round overwrote and leaked. A failed compound must leave no allocation
+ * (its uncommitted debits are per-attempt scratch, freed with the ctx).
+ */
+static void test_failed_compound_leaves_no_partial_allocation(void)
+{
+    xce_scheduler_t* sched = start_sched();
+    xce_decision_t*  decision;
+    xce_sched_job_t* sjob;
+
+    e2e_push_queue_and_workers(sched, "cmp4_queue");
+    decision = e2e_dispatch_resreq(sched, JOB_ID + 7, "cmp4_queue",
+                                   "1*{rusage[mem=1]} + 5*{rusage[mem=1]}");
+    TEST_ASSERT_NOT_NULL(decision);
+    TEST_ASSERT_EQUAL_INT_MESSAGE(XCE_DECISION_PEND, decision->op,
+        "the 5-task primary cannot fit on 4 slots");
+
+    sjob = sched_get_job(&(sched->core), JOB_ID + 7);
+    TEST_ASSERT_NOT_NULL(sjob);
+    TEST_ASSERT_NULL_MESSAGE(sjob->schedobj->alloc,
+        "a failed compound must not keep the first primary's partial "
+        "allocation");
+    TEST_ASSERT_NULL(sjob->allocs);
+}
+
 int main(void)
 {
     UNITY_BEGIN();
@@ -858,5 +886,6 @@ int main(void)
     RUN_TEST(test_alter_falls_back_to_alternative_that_fits);
     RUN_TEST(test_compound_allocation_includes_every_primary);
     RUN_TEST(test_compound_primaries_on_same_host_merge);
+    RUN_TEST(test_failed_compound_leaves_no_partial_allocation);
     return UNITY_END();
 }