PRINCE2F PRINCE2 Processes 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 the Project Manager can handle tolerance breaches informally or by simply requesting more budget, but PRINCE2 mandates formal escalation via an Exception Report to maintain governance and board accountability.
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 direction
In PRINCE2, when a project manager forecasts that stage cost tolerance will be exceeded, they must escalate the issue to the Project Board by raising an Exception Report. This is because the Project Manager operates within delegated tolerances; exceeding them requires board-level decision-making to assess the impact on the Business Case and authorize corrective action. The Exception Report triggers an Exception Plan, ensuring governance is maintained.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
- ✓
Raise an Exception Report to the Project Board and await direction
Why this is correct
This is the correct action per PRINCE2's management by exception.
- ✗
Close the project immediately as the Business Case is no longer viable
Why it's wrong here
A stage tolerance breach does not automatically invalidate the Business Case.
- ✗
Continue with the current plan and report the overrun in the next Highlight Report
Why it's wrong here
Tolerance breaches must be escalated immediately.
- ✗
Request more budget from the Project Board
Why it's wrong here
The PM should escalate via an Exception Report, not just request budget.
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Written by Johnson Ajibi, MSc IT Security
Senior Network & Security Engineer · founder of Courseiva
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