Final answer:
True, management reserves are included in the budget for unexpected events in a project. They serve as a financial buffer for unanticipated issues and are a critical aspect of risk management strategy in project budgeting.
Step-by-step explanation:
True, management reserves are indeed costs included in the budget specifically to cover unexpected scenarios that might occur during the course of a project. The use of management reserves is an important part of risk management and contingency planning within a project's budgeting process. They offer a financial cushion that enables project managers to address unforeseen issues without the need to immediately seek additional funding or approval.
Management reserves should not be confused with contingency reserves, which are also part of risk management. While contingency reserves are estimated costs for identified potential risks, management reserves are for risks that have not been identified or anticipated. Therefore, while both are mechanisms to handle uncertainty, management reserves are used for unknown unknowns within a project's lifecycle.