Project Management Central

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Topics: Change Management
When the Project Manager uses his contingency budget for a single item which is above his signing authority, does he have to seek approval?
Network:876



The Project Manager often is allocated contingency budget which is above his signing rights for any single expense item. Usually the PM will spend this budget over a period of time, hopefully over the lifespan of the project. This spending occurs in small amounts which are within his signing powers.
Should there be one single item which is above the PM's signing power but below his approved contingency budget, should the PM still seek approval from the approval committee?
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Network:2195



I would not recommend assuming it's OK to proceed without approval. I would make sure the sponsor is consulted before proceeding. And while you're talking with her, you might want to get your signing level increased. :)
Network:46



If the PM knows the item is above their signing power, they should seek approval. Whether they have the budget allocated for it is irrelevant.
Network:95



I agree with @Marie. You should seek approval if it is above your signing limit.
Network:2072



I agree with the recommendations so far. Though the budget has been allocated, the release of any funds requires approval. If the PM approval threshold is below the funds that need to be released, the next level of management will be the ones to approve (provided that they have the authority for that amount, if not then keep going up the chain).
Network:2222



May be good to go through project charter .

The project manager has fully right to use, if it is a contingency budget but if the committee approval is mandatory , it may be good to wait for committee approval. However, If there is a risk emerged and budgeted , He can spend without approval from committee to protect the interest of the company , but need to request same time for approval .
Network:1819



In theory you have not to ask for approval. In practice is better to get an approval. Mainly if you are audited. In my personal experience, while I have the opportunity to use a great dollar amount of contingency funds with no problem according to organizational policies, I ever, ever avoid to use them and just in case I get all the documentation to justify it.
Network:587



I couldnt agree more with Sergio. You have all the rights for the approval in theory since as per theory you are managing the budget/contingency. But you need to be careful about audits since single-high value expense item approvals will make the auditor raise his/her eyebrows. There is also a tendency of other people casting doubt on your ethics if you manage such approvals on your own. Better to consult with committee

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