diff --git a/README.md b/README.md
index 6ec48ac..e115c08 100644
--- a/README.md
+++ b/README.md
@@ -42,7 +42,7 @@ This repository functions as my personal "AI home directory" that gets mounted i
 │  │  - Codebase     │    │  - Personal Info                │ │
 │  │  - Requirements │    │  - Workflow Guides              │ │
 │  └─────────────────┘    │  - Business Context             │ │
-│                         │  - Audit Logs                   │ │
+│                         │  - (Audit Logs in Project)      │ │
 │                         └─────────────────────────────────┘ │
 └─────────────────────────────────────────────────────────────┘
 ```
@@ -66,10 +66,10 @@ This repository functions as my personal "AI home directory" that gets mounted i
 | [**AgentRules.md**](./AgentRules.md) | Operational guidelines for AI agents | Dynamic |
 | [**StartHere.md**](./StartHere.md) | Onboarding guide for this directory | Dynamic |
 | [**TSYS.md**](./TSYS.md) | Business information and organizational structure | Dynamic |
-| [**AUDIT1.md**](./AUDIT1.md) | Analysis and improvement suggestions | Dynamic |
+| [**AUDIT1.md**](./AUDIT1.md) | Analysis and improvement suggestions (template/example) | Static |
 | [**AGENTS.md**](./AGENTS.md) | Guidelines for AI agents working with this repo | Dynamic |
 
-*Note: All files are actively evolving as the knowledge base expands*
+*Note: All files are actively evolving as the knowledge base expands (except audit templates which belong in projects)*
 
 ---
 
@@ -78,14 +78,15 @@ This repository functions as my personal "AI home directory" that gets mounted i
 ### Primary Flow
 1. **Mount** → This directory is mounted into all development containers
 2. **Combine** → Merged with project-specific context and prompts
-3. **Access** → AI agents have consistent knowledge across projects
-4. **Update** → Centralized changes propagate to all projects automatically
+3. **Access** → AI agents have consistent readonly knowledge across projects
+4. **Update PMO Only** → Agents update only the PMO in this repository (milestones, progress)
 
 ### Integration Pattern
-- 🌐 **Universal Context**: Available to all AI agents
+- 🌐 **Universal Context**: Available to all AI agents as readonly reference
 - 📦 **Containerized**: Works with Docker-based development
 - ⚡ **Efficient**: Eliminates repetitive context explanation
 - 🔄 **Synchronized**: Single source of truth for core knowledge
+- 📊 **PMO Updates**: Agents update PMO with project milestones and status only
 
 ---
 
@@ -140,6 +141,8 @@ Since this serves as a living knowledge base:
 - Files follow **structured formats** for easy processing
 - Regular updates ensure **current and relevant** information
 - **Version control** maintains history and evolution
+- **AI agents treat this as readonly** - only PMO updates allowed
+- **Audit logs belong in projects**, not this repository
 
 ---