Index Coop - October 21 - Budget vs Actuals

Finance
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Index Coop - October 21 - Budget vs Actuals

Authors: @ElliottWatts, @prairiefi, @Ahuja, @Matthew_Graham, @Hammad1412

The F.Nest is pleased to present the first iteration of its regular review of the DAO’s Budget Vs Actual Report. We will be posting a fresh report each month highlighting areas of spend vs budget.

Index Coop - Budget vs Actual - October 2021.pdf (617.4 KB)

The above report is split over two pages as follows:

  1. First page - Overview and specific insights into spending activities
  2. Second page - Summary table of operating expenses by working group

TLDR

At the end of October, the Index Coop’s actual total spend for the month was $550,581, with the forecast total spend being $789,998. However, when compared to September there has been a +14.69% increase in operational costs overall.

Key takeaways

  • September saw a variance of -30.31% between forecast spend and actual spend
  • Contributor rewards accounted for 86% of overall costs
  • When reviewing at a working groups level all were within their total allocated budget
  • In isolation when just reviewing contributor spend, Asia Pacific, Metagov committee, and ‘Other’ category were over budget
  • Other spending (all else bar contributor rewards) in relation to working groups was significantly under budget. A large proportion of this was a result of limited event activity within the month. Institutional Business, Business Development, Growth & Marketing have an events budget of $137,000 combined however only spent $58,451. Representing a 57.3% underspend. As more crypto events appear on the calendars, this cost is expected to rise in the coming months
  • Impression mining also saw a significant underspend as a direct result of lower impression mining submissions for October. The payments in relation to IM have also moved to a 2 week cadence to try and cut down on gas costs. So it is likely some of the Octobers submissions will be paid in November
  • Overall there has been a general upward trend in $ spend which has been largely offset in $ terms by the depreciating $INDEX price causing a 24.49% reduction in fixed contributor rewards

We plan next month to do a deeper analysis on a WG by WG basis. But please do drop a comment below and let us know what you think.

6 Likes
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Hey guys, thanks for providing these insights. I have one question on this:

The spending for MGC has not changed since July, it’s $1.5k per member = $7.5k/month. How can it be over budget? Or was it not budgeted and came in late with IIP-92 going live?

Thanks

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Hey Lavi,

Yes It was just a delay in adding PennBlockchain into the budgeted amount for MetaGov. This will be added in for next time so then as you say the budgeted amount would be $7.5k. Hope that clarifies your question!

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These insights are fantastic. Great job on the first report.

On the IB front, we’re under budget by a decent amount for two main reasons: 1) we have contributor stipends based on fixed INDEX (and INDEX went down a lot during the month - oh well), but also 2) the legal work for the security opinion is not paid neatly on a monthly basis. Rather, the bill will likely come in January. From an accounting standpoint, that amount would of course be amortized across the actual time during the quarter when the work was done. In other words, after accounting for the legal work, we’re much closer to budget.

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Great stuff Mike - thanks for providing details. Once the bill comes in we can account for it and spread this out over the months covered, aligning the spend on a monthly basis.

Would you be able to provide a rough estimate of the cost so that I can account for this in next month’s budget vs actual post. We can then do a true-up for any discrepancies. Feel free to drop me a DM

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DM dropped, but for everyone’s benefit, we budgeted $75k for the quarter for this effort. We are aiming to come in under that figure, so we can assume $25k monthly for now, but we’ll likely adjust it down further as we learn more in the next 1-2 weeks.

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Thank you for sharing. This is super detailed and transparent. It really helps me understand more about INDEX.

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