PRINCE2F People: organizations, teams, and leadership Practice Question
During the Controlling a Stage process, the Project Manager identifies that the project is forecast to exceed the agreed cost tolerance for the current stage. What should the Project Manager do?
⚠ Common exam trap
PeopleCert often tests the misconception that the Project Manager can handle tolerance breaches by continuing and reporting later, but PRINCE2 mandates immediate escalation when tolerance is forecast to be exceeded.
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 before proceeding
PRINCE2's Controlling a Stage process requires the Project Manager to escalate any forecast deviation beyond the agreed stage tolerance to the Project Board via an Exception Report. The Project Manager cannot proceed without the Board's direction, as the tolerance is a delegated authority limit set by the Board.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
- ✗
Increase the project budget to absorb the additional cost and continue with the current Stage Plan
Why it's wrong here
The Project Manager cannot unilaterally increase the budget.
- ✗
Close the project immediately as the Business Case is no longer viable
Why it's wrong here
A cost tolerance breach does not automatically mean the Business Case is unviable.
- ✗
Continue with the current Stage Plan and report the cost overrun in the next Highlight Report
Why it's wrong here
Continuing without escalation violates management by exception.
- ✓
Raise an Exception Report to the Project Board and await their direction before proceeding
Why this is correct
This is the correct escalation procedure per management by exception.
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Same concept, more angles
1 more way this is tested on PRINCE2F
These questions test the same concept from different angles. Work through them to make sure you can recognise it however the exam phrases it.
Variation 1. A project is forecast to exceed its cost tolerance for the current stage. What should the Project Manager do?
medium- A.Increase the project budget to absorb the additional cost and continue with the current Stage Plan
- B.Continue with the current Stage Plan and report the cost overrun in the next Highlight Report
- C.Close the project immediately as the Business Case is no longer viable
- ✓ D.Raise an Exception Report to the Project Board and await their direction before proceeding
Why D: In PRINCE2, when a stage is forecast to exceed its cost tolerance, the Project Manager must escalate the issue to the Project Board by raising an Exception Report. This is because the Project Manager does not have authority to exceed the agreed tolerance; the Project Board must decide whether to approve a revised plan or take other corrective action. Option D correctly follows the PRINCE2 exception management process.
JA
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.