PRINCE2F People: organizations, teams, and leadership Practice Question
A project is forecast to exceed its stage cost tolerance. What should the Project Manager do?
⚠ Common exam trap
A common misconception is that a Project Manager can autonomously adjust budgets or tolerances, but PRINCE2 strictly requires escalation to the Project Board for any forecast breach of stage tolerance.
Answer choices
Why each option matters
Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.
Correct answer & explanation
✓
Raise an Exception Report to the Project Board
In PRINCE2, when a project manager forecasts that a stage will exceed its cost tolerance, they must escalate the issue to the Project Board by raising an Exception Report. This report details the deviation, its impact on the Business Case, and proposes options for corrective action. The Project Board then decides whether to approve a revised plan, issue a stage boundary, or close the project. Option C is correct because it follows the PRINCE2 principle of management by exception, ensuring the board retains control over tolerance breaches.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
- ✗
Continue and report in the next Highlight Report
Why it's wrong here
Escalation must be immediate, not delayed.
- ✗
Close the project as the Business Case is no longer viable
Why it's wrong here
The Project Board must decide based on the Exception Report.
- ✓
Raise an Exception Report to the Project Board
Why this is correct
Management by exception requires immediate escalation.
- ✗
Increase the stage budget to absorb the overrun
Why it's wrong here
The Project Manager cannot change tolerances without Project Board approval.
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Written by Johnson Ajibi, MSc IT Security
Senior Network & Security Engineer · founder of Courseiva
This PRINCE2F practice question is part of Courseiva's free PeopleCert certification practice question bank. Courseiva provides original exam-style practice questions with explanations, topic-based practice, mock exams, readiness tracking, and study analytics to help learners prepare for the PRINCE2F exam.