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Wikimedia Foundation Audit Committee/2016-08-15

< Wikimedia Foundation Audit Committee
Audit Committee Meeting
August 15, 2016
17:30 – 19:00 UTC
Participating in person:
Audit Committee Members: Kelly Battles, Audit Committee Chair
Wikimedia Foundation Staff: Jaime Villagomez, Tony Le, Katherine Maher, Amy Vossbrinck
Participating by phone:
Audit Committee Members: Maria Sefidari
Audit Committee Advisors: Michael Snow, Julian Singh

Presentation of the KPMG Audit

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  1. Jeremy gave an overview of the Client Service Team:
    • Mark Thomas - Engagement Quality Control Reviewing Partner (focus on Non-profits)
    • Packy Kelly - Client Service Partner
    • Jeremy Peters - Lead Engagement Audit Partner (has a technology background)
    • Sizhe Liu - Lead Audit Engagement Manager (was worked with WMF for 3 years)
    • Seth Philip - Audit Manager
    • Jessica Li - In-Charge Senior
    • Chad Franks - Tax Partner
    • Ana Akhtar - Tax Senior Manager
    • Karen Cordeiro - will be leaving KPMG for another position on Sept 2 but will be available to answer questions
  2. Audit Plan was presented by KPMG including areas of focus for the review, A discussion ensued between KPMG, the Audit Committee and WMF Staff.
    • The team will be performing an audit of the June 30, 2016 WMF financial statements consistent with U.S. GAAP and AICPA standards. The engagement was set up in July 2016 and the audit will be completed by September.
  3. Discussion of Internal Auditor - Julian Singh initiated a discussion regarding the value of a potential internal auditor. The Audit Committee, KPMG and WMF ensued in a discussion on the topic internal audit for Not For Profit organizations such as WMF, Jeremy Peters said he would consider the risks that KPMG is aware of and come back with any suggestions he has Item to be reintroduced at a future Audit Committee meeting.
  4. Audit fees for this year are estimated to be $85 K- which were approved by the Audit Committee
  5. KPMG also performs other non audit services for WMF- none are in conflict with the audit work:
    • Form 990 and 990 T
    • Global Grants process analysis - last year - not recurring
    • Possible gap analysis for budgeting and reporting process - KPMG has not yet been formally engaged to do this work.
  6. Responsibilities of WMF management, WMF Audit Committee and KPMG with respect to the audit were reviewed.
  7. A discussion ensued between the Audit Committee and KPMG and KPMG responded to questions:

Review of WMF Cash and Investments and the Investment Policy

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  1. WMF Staff including the CFO and controller presented to the Audit Committee the current cash and investments as of June 2016 - including banking account structure and purpose.
    • WMF currently has $89.6 million in cash and investments.
    • WMF Staff presented the cash expectations for Fiscal Year 2016 - 2017 based on the approved Annual Budget of $63 Million. This led to WMF Staff’s recommendation to excess funds currently deposited in operating accounts to WMF’s fiduciary, investment firm - US Trust.
  2. WMF Staff presented the previously Audit Committee approved investment guidance being applied to each of the reserve portfolios. The investment guidance resulted from the 2014 RFP conducted by the previous CFO.
    • Our reserve structure consists of:
    • 1 - 5 years Short Term Reserves
    • 10+ years Long Term Reserves
    • 1 - 3 Years CD Operating fund - which is donor restricted ($5 million in DCs that have a 1 year duration for 5 years). Once this requirement is fulfilled WMF can reinvest these funds as they see fit.
  3. On completion of the WMF staff presentation, a final discussion ensued regarding the reserve, the cash balance to be transferred to US Trust and any future actions to be taken by WMF Staff. The Audit Committee agreed with WMF Staff’s recommendations, and the following was resolved:
    • WMF Staff will prepare the Funds transfer agreement for Audit Committee Chair Review
    • WMF Staff will move ahead on the proposed actions discussed during the Audit Committee including re-evaluating the need for the Long Term Reserve especially in light of Board approved Endowment and utilization of WMF’s non-US denominated operating bank accounts.
    • WMF Staff will continue to monitor cash and investment balances and it is anticipated that a formal review will be conducted at least every 6 months.

Respectfully submitted: Amy Vossbrinck

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