May 7, 2025 Budget Comm Minutes

Attendees:

Name	Attendance	Role	Voting Seat (Y/N)
Lloyd Duhon	Yes	Budget Secretary
Gemma Dakin		Intersect Staff
Kristijan Kowalsky		Voting Member, Tweag
Dave Dionisio		Observer
Adam Rusch		Intersect Board Member
Marc Gorman		Program Manager Budget Task Force
Joel Telpner		IOG Staff, Budget Task Force
Tayla Dix		Intersect Staff
Kriss Baird		Voting Member, IOG, Catalyst
Mercy		Voting Member, WADA

Transcript: https://docs.google.com/document/d/1D7eTEjb84HuNYe4bKfUKdIFnTv7eGCnJRZ79qagXB-g/edit?tab=t.i1ihtj9qbeb

Agenda 1.16.25

• defining Intersect's administrator role, particularly regarding audit responsibilities and financial management for funded proposals

• Discussions clarified the types of audits required, emphasizing the need for clear processes for technical and financial oversight, and dispute resolution

• A key action item was to establish the composition and responsibilities of an "Oversight Board" and to create a centralized system for tracking open issues.

Decisions/Actions

Topic	Discussion	Action Items
Administrator Role Definition	Intersect is refining its role as administrator, encompassing due diligence, contract management, financial processes, fund management, delivery assurance, communications, and audit coordination. Stumbling blocks remain in financial process/fund management and audit responsibilities/costs.	Continue refining Intersect's administrator role definitions.
Audit Responsibilities & Costs	Constitutionally, proposals must include provisions for periodic independent audits and oversight metrics. Clarification is needed on whether the vendor declares audit needs and costs, or if it's Intersect's responsibility. This applies to both technical and financial audits.	Clarify and document who (vendor vs. Intersect) is accountable for declaring audit needs and covering costs.
Technical Audit Classification	Technical audits can be split into "code review" (delivery assurance, less expensive) and "real audits" (more expensive, needed for standalone applications or mainnet actions). There are concerns about sufficient resources for committees to handle all technical delivery assurance.	Differentiate between code review/delivery assurance and formal technical audits; establish clear criteria for each.
Non-Financial/Non-Software Audits	The group identified a need to consider audits for commercial growth and marketing, which are technical but not software development related, and how these would be carried out.	Define processes for auditing non-financial/non-software technical aspects (e.g., marketing, commercial growth).
Intersect's Audit Definition	Intersect should define what it considers "audit" in its administrative capacity, setting best practices and levels of audit for different projects. The constitution is intentionally vague to allow for flexible standards.	Intersect to define its internal audit standards and best practices for various project types.
Oversight Committees for Audits	Concerns were raised about committees (e.g., TSC) being overwhelmed with audit requests and potential bias if connected to vendors. There's a need to ensure quality and fair compensation for committee members if they undertake extensive audit work.	Establish clear guidelines and support mechanisms for committees involved in technical oversight/audits, including potential compensation.
Financial Audit Scope	The current understanding is that a single large financial audit of Intersect and all its payments (to vendors and for internal operations) would cover the financial audit requirement. This leverages economies of scale.	Engage an external third-party auditor for Intersect's annual financial audit, covering all funds disbursed. Cost to be covered by Intersect's budget.
Vendor Financial Audits	Multiple vendors are expected to object to financial audits of their internal operations. The focus should be on auditing outputs/deliverables rather than internal money trails (e.g., did the space base get built, not how concrete was purchased).	Focus financial oversight on deliverables and outcomes rather than granular vendor spending details.
Dispute Resolution & Clawback Mechanisms	Contracts include dispute resolution mechanisms and clawback provisions for cases of non-delivery or fraudulent activity. There is a need for clearer processes, potentially involving third-party arbitration for technical disputes, before escalating to legal action.	Tayla Dix to check on third-party arbitration clauses for contracts. Develop clear internal processes for dispute resolution (quality assessment, non-delivery) before legal clawback.
Monitoring Events & Advance Payments	For events or similar projects requiring upfront payments, methods for monitoring progress are needed beyond milestone-based payments. This might involve observers at events.	Develop specific monitoring mechanisms for projects requiring advance payments, such as events.
Oversight Board Composition & Responsibilities	There is no clear definition of the "Oversight Board" responsible for blocking payments. Their composition, contractual responsibilities, and accountability (e.g., for denying a legitimate payment) need to be established, potentially requiring legal guidance.	Rapidly define the composition and contractual responsibilities of the Oversight Board.
Centralized Issue Tracking	A request was made for a shared document or platform to track open issues and their resolution, facilitating asynchronous collaboration and broader stakeholder input (e.g., CF, larger DREPs).	Gemma Dakin to share a document for tracking open questions. Lloyd Duhon to explore using ClickUp for committee-wide open issue tracking.
Back Office Deep Dive Session	Mark Gorman scheduled a dedicated session on Wednesday to deep dive into back office administration and contracting processes, as the team has many questions requiring feedback.	Wednesday session dedicated to back office administration and contracting processes.