PRINCE2 7 Foundation · Quick refresher
Know when to escalate
Use tolerances to give teams room to act.
7 minute study lesson · Principles · Original learning material
What you will understand
- Explain how tolerances support delegated authority.
- Recognise a forecast tolerance breach.
- Distinguish routine control from escalation.
The idea
A project board cannot make every everyday decision. Manage by exception creates agreed boundaries so each management level can act with confidence and know when a decision belongs to the level above.
Tolerance is an agreed permitted variation around a plan. It gives a management level a defined amount of discretion. PRINCE2 7 considers time, cost, quality, scope, benefits, risk and sustainability when managing project performance.
An exception is about a forecast that a delegated tolerance will be exceeded. The project manager should not wait for the money to be spent or the deadline to be missed before escalating a forecast stage breach to the board.
For a stage forecast outside the project manager’s delegated authority, communicate the exception and its implications to the project board. The board decides the response within its own authority. Escalation does not mean the project automatically stops or that an exception plan is automatically authorised.
An original fictional example
The forecast matters
A stage has a £100,000 cost plan and an upper cost tolerance of £5,000. Current spending is £70,000, but the latest forecast for the full stage is £108,000.
The decision
The project manager raises the forecast stage exception with the project board now.
Why it makes sense
The forecast is £3,000 beyond the permitted upper limit. Current spending being below the original budget does not restore delegated authority.
A common confusion
The mistaken idea: Escalate only after actual spending exceeds the tolerance.
The distinction: Use the forecast. Waiting for an actual breach removes time in which the board could make a useful decision.
Forecast → compare with tolerance → act at the right level.
Points to remember
- State which management level and plan the tolerance applies to.
- A variance within tolerance normally remains under delegated control.
- An exception report and an exception plan serve different purposes.
Your takeaway
Tolerances make delegation clear. Escalate a forecast breach to the appropriate authority while there is still time to choose a response.
This independently written explanation is supplementary study material. It is not official examination content. Read about our content and its limitations.