PRINCE2F PRINCE2 Processes Practice Question
A project is forecast to exceed its stage cost tolerance. What should the Project Manager do?
⚠ Common exam trap
Many candidates think the Project Manager can simply adjust the budget or continue reporting later, but PRINCE2 strictly requires immediate escalation via an Exception Report when tolerance is forecast to be exceeded, emphasizing the principle of management by exception.
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 and await their direction
PRINCE2 mandates that when a project manager forecasts a deviation beyond the stage tolerance, they must escalate the issue to the Project Board via an Exception Report. The Project Board then decides whether to approve an exception plan, adjust tolerance, or close the project. This ensures governance and control over the project's budget and scope.
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 with the current Stage Plan and report the overrun in the next Highlight Report
Why it's wrong here
Escalation must happen immediately, not wait for the next Highlight Report.
- ✗
Increase the project budget and continue with the current Stage Plan
Why it's wrong here
The Project Manager cannot increase the budget without authorization.
- ✗
Close the project as the Business Case is no longer viable
Why it's wrong here
A single stage tolerance breach does not necessarily invalidate the Business Case.
- ✓
Raise an Exception Report to the Project Board and await their direction
Why this is correct
Correct: management by exception requires escalation when tolerances are forecast to be exceeded.
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Written by Johnson Ajibi, MSc IT Security
Senior Network & Security Engineer · founder of Courseiva
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