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|This vote adopted a revised charter for the Audit Committee, a permanent Board committee. It was passed 9-0 in-person, on October 26, 2012.|
RESOLVED, that the Board of Trustees of the Wikimedia Foundation hereby adopts the revised and amended Audit Committee Charter, as set forth here. This Charter further clarifies the role and structure of the Audit Committee.
Purpose of the Audit Committee
The purpose of the Audit Committee (the “Committee”) is to assist the Board of Trustees ("Board") in its general oversight of the Foundation's accounting and financial reporting processes, audits of the financial statements, and internal control, and audit functions.
The Committee oversees the relationship with the independent auditor, as set forth in this charter, and provides advice, counsel, and general direction, as it deems appropriate, to management and the auditors on the basis of the information it receives, discussions with the auditor, and the experience of the Committee’s members in business, financial and accounting matters.
Membership and selection
The Board shall appoint at least two trustees to serve as Committee members (the “regular Committee members”). The Board may also appoint one or more additional trustees to serve as alternate Committee members to act in the place and stead of any absent regular Committee members. The Board shall appoint one trustee to serve as Committee Chair. The Board shall appoint as a regular Committee member at least one trustee who is both independent and is financially literate. Committee appointments are for a term of one year, however they shall automatically renew for additional one year terms unless replaced or terminated by majority of the Board.
Volunteer and advisory members
The Committee Chair may select volunteer advisory members to participate in the Committee on an annual basis based upon their qualifications and expertise, as determined by the Committee Chair in his/her sole discretion. All volunteer advisory members must comply with the same disclosure and certification requirements required by the Board under the Foundation’s Conflict of Interest Policy.
The Committee Chair may invite Foundation staff to attend the meetings as necessary, including but not limited to the Chief Finance and Administration Officer (“CFO”) and Executive Director. No staff attendees shall be voting Committee members.
- Is directly responsible for the appointment, replacement, negotiation of compensation terms, and oversight of the work of the independent auditor. The independent auditor shall report directly to the Committee.
- Reviews and discusses the statement from the independent auditor concerning any relationship between the auditor and the Foundation or any other relationships that may adversely affect the independence of the auditor, and, based on such review, assesses the independence of the auditor.
- Establishes policies and procedures for the review and preapproval by the Committee of all auditing services and permissible non-audit services (including the fees and terms thereof) to be performed by the independent auditor.
- Reviews and discusses with the independent auditor: (a) its audit plans, and audit procedures, including the scope, fees and timing of the audit; and (b) the results of the annual audit examination and accompanying management letters.
- Reviews and discusses reports from the independent auditors on (a) all critical accounting policies and practices used by, (b) alternative accounting treatments within GAAP related to material items that have been discussed with management, including the ramifications of the use of the alternative treatments and the treatment preferred by the independent auditor, and (c) other material written communications between the independent auditor and management.
- Reviews with the independent auditor its judgments as to the quality, not just the acceptability, of the Foundation's accounting principles and such matters as are required to be discussed with the Committee under generally accepted auditing standards.
- Reviews and discusses with management and the independent auditor various topics and events that may have significant financial impact on the Foundation or that are the subject of discussions between Management and the independent auditors.
- Reviews and discusses with management the Foundation's major financial risk exposures and the steps management has taken to monitor and control such exposures.
- Establishes policies and procedures that ensure full transparency into the use of all donor funds raised under the Wikimedia name or on its sites, including those raised by the Foundation, the Chapters and other affiliated organization.
- Reviews the information to be reported to the Internal Revenue Service on the Foundation's annual Form 990.
- Reviews and discusses with management and the independent auditor (a) the adequacy and effectiveness of the Foundation's internal controls (including any significant deficiencies and significant changes in internal controls reported to the Committee by the independent auditor or management; (b) the Foundation's internal audit procedures; and (c) the adequacy and effectiveness of the Foundation's disclosures controls and procedures, and management reports thereon.
- Reviews matters related to the corporate compliance activities of the Foundation.
- Ensures procedures exist for the receipt, retention and treatment of complaints received by the Foundation regarding questionable accounting, internal accounting controls, or auditing matters; and the confidential submission by employees of concerns regarding waste, fraud, abuse, and other wrongdoing.
- Establishes policies for the hiring of employees and former employees of the independent auditor.
- Presents a report of the Committee’s activities to be included in Board minutes.
- When appropriate, designates one or more of its members to perform certain of its duties on its behalf, subject to such reporting to or ratification by the Committee as the Committee directs.
Procedures and process
The Committee shall meet at least two times per year, and otherwise as deemed necessary by the Committee Chair. The Committee Chair may call a meeting with two-days’ email notice to the other required attendees. The required attendees are the regular Committee members. The alternate Committee members (if any), and the CFO and Executive Director, and volunteer members are not required attendees. A quorum is one-third of the regular Committee members. A meeting may be in person or by telephone or videoconference so long as all participants are able to simultaneously hear one another. The Committee Chair may call for an executive session at any time. An executive session comprises the regular Committee members only, but the regular Committee members may, at their discretion, include any additional person in the executive session.
At each regular Board meeting, the Committee Chair shall report to the full Board on the Committee’s activities since the last regular Board meeting.
On an annual basis, the Committee will perform a self-assessment. The results will be reported to the full Board and include any recommended changes to the Committee activities or its charter.
Independent auditors and management
The Committee has the authority to engage independent legal, accounting, and other advisers, as it determines necessary to carry out its duties. The Committee has sole authority to approve related fees and retention terms.
The Committee Chair and the Board Chair must be contacted directly by the independent auditor (1) to review items of a sensitive nature that can impact the accuracy of financial reporting, or (2) to discuss significant issues relative to the overall Board responsibility that have been communicated to management but, in their judgment, may warrant follow-up by the Committee.
The Foundation's independent auditing firm is responsible for performing an independent audit of the consolidated financial statements in accordance with generally accepted auditing standards and rendering an opinion thereupon.
Management is responsible for (a) the preparation, presentation, and integrity of the Foundation's financial statements; (b) accounting and financial reporting principles; and (c) the Foundation's internal controls and procedures designed to promote compliance with accounting standards and applicable laws and regulations.
Ting Chen, Bishakha Datta, Matt Halprin, Samuel Klein, Patricio Lorente, Jan-Bart de Vreede, Kat Walsh, Stu West, Alice Wiegand