Exception report

An exception report is typically an issue report that documents a situation where a project element has exceeded its agreed tolerance levels. The project manager produces this report when a stage plan or project plan is forecasted to surpass its predefined tolerances. The report is submitted to the project board, providing options and recommendations for proceeding so the board can make an informed decision.

Tolerances

PRINCE2 recognizes seven types of tolerances:

• Time
• Cost
• Quality
• Scope
• Benefits
• Risk
• Sustainability

From an issue management perspective, an exception report can be seen as a major issue report detailing a significant problem that requires escalation.

Timeline

An exception report is typically created during the controlling a stage process when the project manager reviews new or existing issues. If an issue or risk is forecasted to exceed tolerance and put the stage or project at risk, the project manager must escalate it by creating an exception report.

Sometimes, the project manager may relabel an issue report as an exception report when an issue grows beyond tolerance limits and requires project board intervention.

Source data

The exception report is compiled using the following key project documents and sources:

• Current plan & latest project data: Ensures accurate situation assessment.
• Project registers: Includes the issue register, risk register, and quality register information.
• Highlight reports & checkpoint reports: Provides project and work package performance insights.
• Project board input (if applicable): May include previous guidance or decisions influencing the report.

Format

The exception report can be communicated in various formats, depending on urgency and organizational preferences:

• Live discussion: Raised during a progress meeting (face-to-face or via conference call).
• Formal document: Submitted as a Word or PDF report for record-keeping.
• Email notification: A quick way to inform stakeholders of the issue.
• Project management tool update: Logged as a notification within the project management system.

If the situation is urgent, an oral exception report can be given first (stay calm and concise). Follow up with a written report if necessary.

Tips

The following tips help you have better exception reports:

• Confirm urgent notification preferences: Ask the project board how they want to be alerted if the issue is critical.
• Use familiar formats: Present the exception report in a format the project board is accustomed to (consult the executive if unsure).
• Follow up when needed: Politely remind the project executive to ensure timely decision-making if a response is delayed.

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Written by Frank Turley.

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