Wikimedia Foundation Audit Committee/2019-04-24

Wikimedia Foundation

Audit Committee Meeting

April 24, 2019

9:00 – 10:30 am PDT

Participating in person: Tony Le, Tony Sebro, Janeen Uzzell, Jaime Villagomez, Amy Vossbrinck. Valerie Ball from KPMG.

Participating remotely: Tanya Capuano, Christophe Henner, Katherine Maher, Raju Narisetti, Maria Sefidari, Julian Singh. Michael Snow joined at 9:50 am.

AGENDA

FY 17-18 Form 990

Financial Results and Projection

Cash & Investments Portfolio Update

Endowment Resolution (June 2019)

Audit Committee Advisor Term Renewal

Next Meeting

Recommendation on FY19-20 Annual Budget

MINUTES

FY 17-18 Form 990 Presentation of the Form 990. As part of our overall financial reporting, Staff described that The Foundation produces three primary financial reports each year: the Form 990, the Independent Auditor’s Report, and the Annual Plan. The Form 990 is an informational return that is required by the IRS and covers key areas of governance, financial activities, and program services.

Valerie Ball from KPMG presented the Form 990, noting the purpose is to report to the IRS that the Foundation is in compliance with federal laws to maintain its tax exempt status and to inform the public of its governance and financial health.

The Foundation completed the required information and 9 additional schedules in the Form 990 that cover the following:

Public Support Test

Lobbying

Additional financial and other information details

Grants, Program activities and investments outside the US

Professional fundraiser/fundraising events Grants within the US

Additional compensation questions and details

Noncash contributions

Supplemental information to the Form 990

Valerie covered parts of the Form 990:

Part III. Program services - This is where the Foundation has the opportunity to highlight what has been accomplished during the year and to provide insights to its programmatic activities.

Part IV - Excess benefit transactions - Engagement in excess benefit transactions with disqualified persons either directly or indirectly, such as voting board members, officers, and key employees, are defined as transactions in which the disqualified person receives more benefit than it gives. There is an excise tax of 25% on any disqualified person for the excess benefits received. The Foundation had no transactions with disqualified persons.

Part VI - Governance, Management & Disclosure procedures - The Foundation has a review process for the Form 990 and a complete copy of the Form 990 is provided to all voting members of the Board before it is filed with the IRS. The Foundation has a written conflict of interest policy and consistently monitors and enforces compliance. The Foundation is legally required to make available for public inspection their Form 1023, Form 990, and Form 990T. The Foundation is in compliance with this requirement.

Part VII - Compensation - The Foundation meets the compensation approval process for the Executive Director, in which, the compensation is reviewed and approved by independent board members based on compensations for similar positions in other organizations.

Part IX - Functional expenses - During the period covered by the Form 990, the Foundation spent 74% on program service expenses which is above the 65% that is considered a good practice. Additionally, according to largest evaluator of charities in the United States, Charity Navigator, the Foundation has a 96.15% over all rating with 94.56% rating for financial health and 100% for accountability and transparency.

Schedule C - Lobbying activities - The Foundation made a “Safe Harbor” election which provided guidance on the threshold of 5% for lobbying expenses of total expenses. Spending in excess of the 5% threshold will jeopardize the Foundation’s exempt status and the Foundation only spends $14K during the tax year.

The Audit Committee approved the Form 990 while suggesting that we monitor the lobbying expenses as the Foundation increases its work on Global Advocacy. The Foundation staff will share the Form 990 along with the Frequently Asked Questions with the full Board of Trustees prior to filing with the IRS and posting on the Foundation’s website.

Valerie left the meeting.

Financial results and projection Jaime Villagomez presented the FY18-19 Q3 financial results and Q4 projection. The categories discussed included Total revenues are tracking above budget. Total expenses are tracking slightly below budget principally due to a less than 5% underspent in personnel expenses. Projection for the full fiscal year is expected to remain slightly below budget resulting principally from the year to date personnel expenses underspent.

Cash and Investments Staff provided the Audit Committee a summary of the actions taken, as outlined during the February 2019 Audit Committee meeting. The Foundation staff executed the investment strategy approved at the February 2019 Audit Committee Meeting to invest excess operating cash.. The Foundation continues to be in compliance with its Investment Policy Statement (IPS) and maintains a 6 - 9 month operating cash balance.

Advisor Term Renewal The Audit Committee discussed their ongoing participation in the Audit Committee with the two committee observers, Michael Snow and Julian Singh. Both agreed to serve as volunteer advisors for the Audit Committee for another year.

Endowment Resolution The Staff informed the Audit Committee that the Board of Trustees should expect to be presented with the annual resolution to transfer funds to the Endowment at the next Board of Trustees meeting.

Next meeting The next meeting will be at beginning of June so that the Foundation staff will be prepared to present the budget at the Board of Trustee’s June meeting.

Respectfully submitted, Amy Vossbrinck