Senior Projects Manager | Field & Marten AssociatesNew Westminster, British Columbia, Canada
Roberto
You manage it just like you manage any other item in your budget except that you don’t use the contingency unless you need it and we are talking here about contingency Reserve.
If it was used in response to a risk, then you record it accordingly and properly.
For future reference, you might want to post questions like this to the Project Management Central group as more folks would be looking there to help with such inquiries.
I'd suggest checking with your organization's PM policies & standards.
As Rami has indicated, the PMBOK would suggest that contingency reserves are within the authority of a PM to use to mitigate the financial impacts of realized risks (usually previously identified ones), but I've worked with some companies whose standards mandated that the PM would require additional approvals to access it. In effect, in those companies there was no difference between contingency and management reserves.
Another point I will make is that since contingency reserves are focused on risk impact reduction, over the life of a project it may be possible to return contingency reserves to funding sources based on the overall reduction in project risk profile. This ensures an efficient use of funding which would otherwise be tied up for the entire duration of the project even if most of the critical risks had expired much earlier.
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Komal MathurSenior Manager - Operation Excellence| Optum GlobalHyderabad, Ap, India
Coontingency reserves are released to implement mitigation plans to deal with identified risks.
They are released only on approval of corrective actions in the same way as budget for schedule activity Saving Changes...
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