PRINCE2F Overview of PRINCE2 and Principles Practice Question
A project manager is leading a project to upgrade a hospital's patient records system. The project board has set tolerances for time, cost, and scope. During a stage, the project manager discovers that the actual costs are exceeding the stage tolerance. According to PRINCE2, which action should the project manager take first?
⚠ Common exam trap
The trap here is assuming that the project manager can take unilateral action to resolve the overspend or that updating the business case is within their remit.
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
✓
Escalate the issue to the project board by producing an exception report.
The correct action is to escalate by producing an exception report. The 'manage by exception' principle delegates authority to the project manager within defined tolerances. When a tolerance is forecast to be exceeded, the project manager must escalate to the project board, which then decides on corrective action. This ensures that the board retains control and that decisions are made at the appropriate level.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
- ✗
Update the business case to reflect the increased costs and continue with the stage.
Why it's wrong here
Updating the business case is typically the project board's responsibility, not the project manager's. Moreover, if costs exceed stage tolerances, the project manager cannot simply update the business case and continue; they must escalate the exception. The business case may need revision, but that is a decision for the board after reviewing the exception report.
- ✗
Take corrective action to bring the stage back within tolerance without informing the project board.
Why it's wrong here
This is incorrect because the project manager only has authority to take corrective action within the limits of the stage tolerances. If the tolerance is exceeded, the project manager must escalate. Taking action without informing the board would violate the 'manage by exception' principle, as the board has not authorized such action beyond the agreed tolerances.
- ✗
Request additional funding from the finance department to cover the overspend.
Why it's wrong here
Requesting additional funding directly from the finance department bypasses the project board's authority. In PRINCE2, the project board is accountable for the project's budget and tolerances. The project manager should escalate the exception to the board, not seek funding independently. This maintains proper governance and control.
- ✓
Escalate the issue to the project board by producing an exception report.
Why this is correct
This is correct because the 'manage by exception' principle requires that if a stage tolerance is forecast to be exceeded, the project manager must escalate the issue to the project board by creating an exception report. The project board then decides how to proceed. This ensures that the project board maintains control and can make informed decisions about the project's direction.
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Last reviewed September 2026 · checked against the official PeopleCert exam blueprint
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