Audit Committee/2015-03-16

From the Wikimedia Foundation Governance Wiki
Jump to navigation Jump to search
Audit Committee Meeting
Monday, March 16, 2015
Wikimedia Foundation Office/San Francisco
10:00 - 11:30 PDT 17:00 - 18:30 UTC
Participating by  phone
Samuel Klein, Matt Bisanz, Florian Gerl, Michael Snow
Participating in person
Garfield Byrd, Ben Creasy, Tony Le, Lila Tretikov, Stu West, Amy Vossbrinck
Participating from KPMG
Valerie Ball

Review of minutes from September 18, 2014 Audit Committee Meeting

The minutes from the September 18, 2014 Audit Committee Meeting were approved.

Review of 2013-14 Draft of forms 990 and 990T

Valerie Ball of KPMG presented a review of the 990 and 990T.

990

Page one provides an overview of WMF's mission, activities, governance, voting members and the number of voting members who are independent. All 10 of WMF's voting members are independent. The information regarding voting members and the number of WMF volunteers (80,000) helps unrelated parties understand how the Foundation functions. It was pointed out that WMF has more than 8 projects and that the language in the mission statement should reflect that.

Page 2 Statement of Program Service Accomplishments – expanded explanations are found on Pages 55 and 56. They include the mission statement as approved by the governing body, service accomplishments, WMF's core function (supporting Wikipedia and other Wikimedia sites, providing servers and electricity to support those sites and providing dedicated technical resources.) Page 56 covers grant making and program development.

Page 3 Is a check-list of required schedules. WMF files 10 of the schedules: Schedule A – Public Charity Status and Public Support – WMF public support of 95.82% - is outstanding. Revenue is from individual donations and grants. Schedule B – Schedule of Contributors – those who have given over 2% of total contributions received during the reporting year. Schedule C – Political Campaign and Lobbying Activities – WMF has none in this fiscal year. WMF has elected to file under 501H which allows the Foundation to quantify any lobbying activities if needed in the future. Schedule D – Supplemental Financial Statements – regarding equipment and the reconciliation of revenue and expenses. Schedule F – Statement of Activities Outside the United States – lists WMF grant making and overseas assistance. Schedule G – Fundraising and Gaming Activities – covers internet and email solicitations. Schedule I – Granting in the United States - covers WMF grants made in the United States Schedule J – Compensation Information – lists the compensation paid to top 8 staff members. Schedule M – Noncash Contributions – includes non-cash, publicly traded, securities donated to the Foundation. Schedule O – Supplemental Information – If there are any changes in the governing body of the organization, this is the schedule that is used to notify the government of those change(s).

The return includes a statement of functional expenses and total program services. 68% of WMF's expenses fall into these two categories. Generally, 65% is considered the minimum best practice.

Questions

Assuming we move ahead with an endowment, where will that information be reported?

It depends on how it is set up. It could be reported on a separate 990 or on Schedule D.

990T

WMF files this form because of the Foundation's online sales of merchandise. Sales operate at a loss and WMF does not use these losses of offset any other profit. WMF continues to file the 990T because if the sales become profitable the Foundation will need to complete the 990T and because there is some discussion about using merchandise sales to assist with fundraising.

Questions

Are there any new regulations regarding tax filing on the horizon of which WMF should be aware?

Affordable Care Act may impact WMF with respect to reporting on health plans the Foundation has for its employees. Valerie will send information to Garfield.

There may be new guidelines coming regarding revenue recognition and a new financial statement format.

Valerie was thanked for her work and left the meeting.

The 990 and 990T are due May 15. This draft will be sent to the Board shortly. After the Board reviews both documents they will be filed with the IRS, and then a public inspection copy will be posted online.

Tony was thanked for all the work that he has done to complete the 990 and the 990T forms.

Risk Assessment Document Update

The time line for the Risk Assessment Document will coincide with the timeline for the Annual Plan and will be delivered to the Board by the end of June. Geoff Brigham, General Counsel, is working with all C-Level Team Members to gather their input regarding risk levels for their departments.

It was suggested that dividing the risks into categories would facilitate the review of the document by the Community.

Endowment Update

A contractor has been selected to continue the endowment process on behalf of WMF. The next step is to identify an administrator to host the endowment. Once someone is selected, the information will be presented to the board.

A question was raised regarding the status of the relationship with US Trust. WMF's assets have been transferred from Rockefeller to US Trust. Investment statements are reviewed by Sam Klein and Stu West. The intention is to post the statements beginning next quarter. To date, Garfield is pleased with the portfolio.

Site Visit Reports for Amical, Wikimedia Norway and Wikimedia France

The visits are going well. The review and associated observations or suggestions are shared with each Chapter or Thematic Organization in real time during the site visit. The follow up written report reflects the real time discussion. All site visit reports are shared with the Audit Committee. The sharing of the written report with the Community is at the discretion of each individual Affiliate. The information is shared with the FDC as it relates to specific topics.

If there are no material changes in operations or personnel, site visits are conducted once every 3 years. If there are material changes, one may be conducted after 2 years.

Upcoming site visits will include Argentina, Switzerland, Netherlands, Serbia and possibly Germany.

Open Discussion

A document retention policy is almost complete, the last piece is to sort out how the policy will apply to the Office Wiki. In practice, all documents are retained, WMF destroys nothing.

It was suggested that WMF internal controls should be reviewed by the Audit Committee. Garfield and Tony are looking into the possibility of a baseline internal control audit by an independent party. More on this during the Fall Audit Committee Meeting.

WMF is looking into a Purchase Order process for the entire organization.

A question was raised about the Finance Department's quarterly reviews. They will continue. If the Audit Committee would like a more detailed explanation about something specific in the review, that can be requested by mail.

Executive Session

There was a brief executive session.

Action Items

A salary and compensation review and associated documentation of the process will be needed for 2014-15.

Valerie Ball, KPMG, will send the regulations regarding the Affordable Care Act to Garfield.

Garfield will send members of the Audit Committee an overview of WMF internal controls by the next Audit Committee meeting.


Submitted by Amy Vossbrinck