When you know of a big problem or a goof up, let the bosses know immediately. The delay is only going to worsen things. At least, if you shout early, you can get help.
Turn the problem into opportunity. Give them a potential estimate of loss. Give possible scenarios. Give solutions to come out of the situation. Ask for help, resources, management support. At least they can strengthen your hands. It is also important that you position yourself of independent reporter in control. Describe the problem as if you were not previously involved.
Watergate to Vietnam, bankruptcies to Iraq, all elephants that ere hidden and mismanaged.They grew bigger and bigger and beyond control., When they could no more be hidden, the hiders lost everything.