- A
Raise an Exception Report to the Project Board and await their direction before proceeding
This is the correct escalation procedure.
- B
Close the project immediately as the Business Case is no longer viable
Why wrong: The Project Board decides on viability, not the Project Manager.
- C
Continue with the current Stage Plan and report the cost overrun in the next Highlight Report
Why wrong: Continuing without escalation violates management by exception.
- D
Increase the project budget to absorb the additional cost and continue with the current Stage Plan
Why wrong: The Project Manager cannot unilaterally increase the budget.
Question 88 of 1,731
During Controlling a Stage, the Project Manager Identifies That the Project Is Forecast to Exceed the Agreed Cost Tolerance. What Should the Project Manager Do?
This PRINCE2F practice question tests your understanding of prince2 practices. The scenario asks you to isolate a root cause — eliminate options that address a different problem before choosing. After answering, compare your reasoning against the explanation and wrong-answer breakdown below. Once you have made your selection, read the full explanation to reinforce the concept and understand why each distractor is designed to mislead on exam day.
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?
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
In PRINCE2, when a Project Manager forecasts that stage tolerances will be exceeded, they must escalate the issue to the Project Board via an Exception Report. This triggers an Exception Plan process, allowing the Board to decide whether to approve revised tolerances or take corrective action. The Project Manager cannot proceed without direction, as tolerances are a delegated authority limit.
Key principle: Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option.
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 their direction before proceeding
Why this is correct
This is the correct escalation procedure.
Related concept
Read the scenario before looking for a memorised answer.
- ✗
Close the project immediately as the Business Case is no longer viable
Why it's wrong here
The Project Board decides on viability, not the Project Manager.
- ✗
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.
- ✗
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.
Common exam traps
Common exam trap: answer the scenario, not the keyword
The trap here is that candidates often assume the Project Manager can absorb small cost overruns within their delegated authority, but PRINCE2 strictly requires escalation whenever forecast costs exceed the agreed stage tolerance, regardless of the amount.
Detailed technical explanation
How to think about this question
The Exception Report is a formal PRINCE2 management product that details the deviation, its impact on the Business Case, and options for recovery. The Project Board then reviews the report and may request an Exception Plan, which replaces the current Stage Plan. This mechanism ensures that cost overruns are controlled at the governance level, preventing unauthorized budget changes and maintaining alignment with the project's tolerances.
KKey Concepts to Remember
- Read the scenario before looking for a memorised answer.
- Find the constraint that changes the correct option.
- Eliminate answers that are true in general but not in this case.
TExam Day Tips
- Watch for words such as best, first, most likely and least administrative effort.
- Review why wrong options are wrong, not only why the correct option is correct.
Key takeaway
Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option.
Real-world example
How this comes up in practice
A practitioner preparing for the PRINCE2F exam encounters this exact type of scenario on the job. The correct answer here is not the most general option — it is the best answer for the specific constraint described. Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option. Real exam questions reward reading the full scenario before eliminating options, because the constraint defines which answer fits.
What to study next
Got this wrong? Here's your next step.
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FAQ
Questions learners often ask
What does this PRINCE2F question test?
PRINCE2 Practices — This question tests PRINCE2 Practices — Read the scenario before looking for a memorised answer..
What is the correct answer to this question?
The correct answer is: Raise an Exception Report to the Project Board and await their direction before proceeding — In PRINCE2, when a Project Manager forecasts that stage tolerances will be exceeded, they must escalate the issue to the Project Board via an Exception Report. This triggers an Exception Plan process, allowing the Board to decide whether to approve revised tolerances or take corrective action. The Project Manager cannot proceed without direction, as tolerances are a delegated authority limit.
What should I do if I get this PRINCE2F question wrong?
Identify which exam domain this question belongs to, review the core concept, then practise similar questions from the same domain.
What is the key concept behind this question?
Read the scenario before looking for a memorised answer.
About these practice questions
Courseiva creates original exam-style practice questions with explanations and wrong-answer analysis. It does not publish real exam questions, exam dumps, or protected exam content. Learn why practice questions differ from exam dumps →
Same concept, more angles
3 more ways 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. 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?
medium- A.Continue with the current Stage Plan and report the cost overrun in the next Highlight Report
- B.Close the project immediately as the Business Case is no longer viable
- ✓ C.Raise an Exception Report to the Project Board and await their direction before proceeding
- D.Increase the project budget to absorb the additional cost and continue with the current Stage Plan
Why C: When a stage tolerance is forecast to be exceeded, the Project Manager must escalate to the Project Board via an Exception Report. This is management by exception.
Variation 2. 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?
medium- A.Increase the project budget to absorb the additional cost and continue with the current Stage Plan
- ✓ B.Raise an Exception Report to the Project Board and await their direction before proceeding
- C.Close the project immediately as the Business Case is no longer viable
- D.Continue with the current Stage Plan and report the cost overrun in the next Highlight Report
Why B: Option B is correct. When a stage is forecast to exceed its cost tolerance, the Project Manager must escalate the issue to the Project Board via an Exception Report. This is the embodiment of PRINCE2's management by exception principle. The Project Board then decides whether to approve a revised Stage Plan or take other action. Option A is incorrect because the Project Manager cannot increase the budget without Project Board approval. Option C is incorrect because viability of the Business Case is assessed by the Project Board, not unilaterally by the Project Manager. Option D is incorrect because escalating via a Highlight Report only reports progress, not exceptions; exceptions require an Exception Report.
Variation 3. 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?
medium- A.Continue with the current Stage Plan and report the cost overrun in the next Highlight Report
- B.Close the project immediately as the Business Case is no longer viable
- ✓ C.Raise an Exception Report to the Project Board and await their direction before proceeding
- D.Increase the project budget to absorb the additional cost and continue with the current Stage Plan
Why C: According to the management by exception principle, when a stage tolerance is forecast to be exceeded, the Project Manager must escalate to the Project Board via an Exception Report. The Project Manager cannot unilaterally increase the budget or ignore the breach.
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Last reviewed: Jul 4, 2026
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