Answer: True. A management reserve is a discretionary account that is typically set aside in budgeting, but not included in the baseline for a variety of events that might occur to affect the project adversely. Management must approve its expenditure.
Key Takeaway: We want to emphasize that you should always have both a management and discretionary reserve approved early in the project planning process. It’s always easier to get this money when the checkbook is open then when management has already put it away. Especially since if you need to dip into reserves, there’s likely been some type of adversity.
