GITBOOK-1003: No subject

Author: GemmaDakin

legal/policies-and-conditions/intersect-administration-policies/administration-financial-audit-policy.md

@@ -78,7 +78,7 @@ The Beneficiary holds a critical role in maintaining financial integrity and tra
 
 This section outlines the step-by-step processes for planning, conducting, and finalizing financial audits of treasury-funded entities. These procedures ensure that all beneficiaries are held to appropriate standards of financial transparency. There are tiered audit expectations scaled by organizational size, funding level and/or economic risk.
 
-<table data-header-hidden><thead><tr><th width="125"></th><th></th><th></th><th></th></tr></thead><tbody><tr><td><strong>Audit tier</strong></td><td><strong>Tier criteria</strong></td><td><strong>Audit requirement level</strong> </td><td><strong>Examples</strong></td></tr><tr><td><strong>Tier 1 - Basic Assurance</strong></td><td><ul><li>Organization Size: Small.</li></ul><ul><li>Treasury Exposure: Low Proportion of Cardano Treasury Funding.</li></ul><ul><li>Economic Risk: Minimal or low-risk profile.</li></ul></td><td><p><strong>Basic Assurance</strong><br></p><ul><li>Provide basic, independently verifiable documentation or on-chain evidence showing that funds reached the intended recipients.</li><li>Self-attestation permitted (eg showing total funds received per individual via on-chain transactions).</li></ul></td><td><ul><li>Small development teams or individual contributors.</li></ul><ul><li>Low ecosystem risk: non-core functionality with minimal sustainability or market impact.</li></ul><ul><li>Treasury funds are small, easily refundable or recoverable.</li></ul><p><br></p></td></tr><tr><td><strong>Tier 2 - Intermediate Assurance</strong> </td><td><ul><li>Organization Size: Medium</li></ul><p><br></p><ul><li>Treasury Exposure: Moderate Proportion of Cardano Treasury Funding. </li></ul><ul><li>Economic Risk: Acceptable or moderate risk profile.</li></ul></td><td><p><strong>Intermediate Assurance</strong></p><p></p><ul><li>Supply clear, independently verifiable evidence that funds were used in line with the approved proposal.</li><li>Verification by a capable third-party auditor or detailed on-chain records that enable community-led audit (eg milestone-based transactions).</li><li>Maintain complete financial records and participate in milestone reviews.</li><li>Implement corrective action plans for any audit findings.</li></ul></td><td><ul><li>Mid-sized entities or multiple teams within established organisations.</li></ul><ul><li>Moderate ecosystem risk: projects delivering broadly useful functionality or serving specific user groups, with some potential market impact.</li></ul><ul><li>Treasury funds are moderate and may be harder to recover.</li></ul><p><br><br></p></td></tr><tr><td><strong>Tier 3 - Full Assurance</strong></td><td><ul><li>Organisation Size: Large</li></ul><ul><li>Treasury Exposure: High or significant proportion of Cardano Treasury Funding. </li></ul><ul><li>Economic Risk: Elevated or significant risk profile. </li></ul></td><td><p><strong>Full Assurance</strong></p><p></p><ul><li>Formal third-party audit engagement is mandatory.</li></ul><ul><li>An independent audit conducted by a qualified external auditor to verify proper use of treasury funds.</li><li>Auditors must provide formal assurance that funds were used strictly as approved in the proposal.</li></ul></td><td><ul><li>Large institutions or organisations responsible for critical ecosystem deliverables.</li></ul><ul><li>High ecosystem risk: single points of failure or unique solutions, with significant potential market impact.</li></ul><ul><li>Treasury funds are large and difficult to recover or reimburse.</li></ul><p><br></p></td></tr></tbody></table>
+<table data-header-hidden><thead><tr><th width="125"></th><th></th><th></th><th></th></tr></thead><tbody><tr><td><strong>Audit tier</strong></td><td><strong>Tier criteria</strong></td><td><strong>Audit requirement level</strong> </td><td><strong>Examples</strong></td></tr><tr><td><strong>Tier 1 - Basic Assurance</strong></td><td><ul><li>Organization Size: Small.</li></ul><ul><li>Treasury Exposure: Low Proportion of Cardano Treasury Funding.</li></ul><ul><li>Economic Risk: Minimal or low-risk profile.</li></ul></td><td><p><strong>Basic Assurance</strong><br></p><ul><li>Provide basic, independently verifiable documentation or on-chain evidence showing that funds reached the intended recipients.</li><li>Self-attestation permitted (eg showing total funds received per individual via on-chain transactions).</li></ul></td><td><ul><li>Small development teams or individual contributors.</li></ul><ul><li>Low ecosystem risk: non-core functionality with minimal sustainability or market impact.</li></ul><ul><li>Treasury funds are small, easily refundable or recoverable.</li></ul><p><br></p></td></tr><tr><td><strong>Tier 2 - Intermediate Assurance</strong> </td><td><ul><li>Organization Size: Medium</li></ul><ul><li>Treasury Exposure: Moderate Proportion of Cardano Treasury Funding. </li></ul><ul><li>Economic Risk: Acceptable or moderate risk profile.</li></ul></td><td><p><strong>Intermediate Assurance</strong></p><p></p><ul><li>Supply clear, independently verifiable evidence that funds were used in line with the approved proposal.</li><li>Verification by a capable third-party auditor or detailed on-chain records that enable community-led audit (eg milestone-based transactions).</li><li>Maintain complete financial records and participate in milestone reviews.</li><li>Implement corrective action plans for any audit findings.</li></ul></td><td><ul><li>Mid-sized entities or multiple teams within established organisations.</li></ul><ul><li>Moderate ecosystem risk: projects delivering broadly useful functionality or serving specific user groups, with some potential market impact.</li></ul><ul><li>Treasury funds are moderate and may be harder to recover.</li></ul><p><br><br></p></td></tr><tr><td><strong>Tier 3 - Full Assurance</strong></td><td><ul><li>Organisation Size: Large</li></ul><ul><li>Treasury Exposure: High or significant proportion of Cardano Treasury Funding. </li></ul><ul><li>Economic Risk: Elevated or significant risk profile. </li></ul></td><td><p><strong>Full Assurance</strong></p><p></p><ul><li>Formal third-party audit engagement is mandatory.</li></ul><ul><li>An independent audit conducted by a qualified external auditor to verify proper use of treasury funds.</li><li>Auditors must provide formal assurance that funds were used strictly as approved in the proposal.</li></ul></td><td><ul><li>Large institutions or organisations responsible for critical ecosystem deliverables.</li></ul><ul><li>High ecosystem risk: single points of failure or unique solutions, with significant potential market impact.</li></ul><ul><li>Treasury funds are large and difficult to recover or reimburse.</li></ul><p><br></p></td></tr></tbody></table>
 
 **Note:** As outlined in the Constitution, financial auditing is not intended to assess value, profit, or margin. Its sole purpose is to verify that treasury funds were used as approved, specifically for the intended proposal and its stated benefits.