Wikimedia Foundation Audit Committee/2019-09-23

Wikimedia Foundation

Audit Committee Meeting

September 23, 2019

10:00 - 11:30 am PDT

Participating in Person: Tony Le, Tony Sebro, Janeen Uzzell, Jaime Villagomez,

Amy Vossbrinck, and Jeremy Peters, James Womboldt, Fan Yeung all three from KPMG.

Participating Remotely: Tanya Capuano, Shani Evenstein Sigalov, Ryan Merkley, Maria Sefidari, Julian Singh, and Michael Snow.

Agenda:

Welcome Shani Evenstein Sigalov

Approval of the June 4, 2019 minutes.

Tanya moved to approve and it was unanimously approved.

FY 18-19 Audit Results

The Foundation external auditors, KPMG, presented the results based on their testing of the Foundation’s significant activity for the following:

Donation Revenue
Payroll
Cash, cash equivalents, and restricted cash
Investments
Net Assets
Expenses such as donation processing fees, awards and grants, professional and outside contract services

KPMG reported that there were no material weaknesses or significant deficiencies in the foundation’s financial operations and reporting. Also the Foundation complied with all new accounting standards updates that were effective for the reporting period. Additionally, KPMG reported that there were no issues with the Foundation’s design and implementation of the journal entry control and that management cannot override the controls.

The Foundation Audit Committee Chair, Tanya, moved to approve the Independent Auditors’ Report and it was unanimously approved.

Depreciation Policy Revision Recommendation

The Foundation Controller presented to the Audit Committee the proposed revision to the Foundation’s depreciation policy. Under US Generally Accepted Accounting Principles, an equipment asset is depreciated based on the estimated useful life to determine each year's depreciation expense. The staff completed a periodic assessment of the useful life of its assets and determined that it had sufficient data to revise the useful lives of certain assets. The recommendation, effective July 1, 2019, is to revise the useful lives for data center assets to a period of 5 years and Office Information Technology assets to a period of 4 years. The recommended changes had been reviewed with our auditors who concurred with the reasonableness of the proposed changes. Tanya proposed Audit Committee approval and it was unanimously approved.

Investment Update

The Foundation Controller provided the Audit Committee with an investment update and proposed asset reallocations as directed under the investment policy guidelines. Under the guidelines, it is recommended that the operating funds should be reallocated to the short term portfolio when the operating fund exceeds 9 months of operating working capital. The proposal is to reallocate excess operating cash funds to the short term fixed income fund to maintain approximately 6 months. We will reevaluate our fund distribution after the English fundraiser. The Foundation staff may also evaluate other financial strategies such as foreign exchange.

Form 990 Timeline

The Foundation Controller provided a proposed timeline for the preparation and filing of the annual Form 990 - Tax Return, for the fiscal year July 1, 2018 - June 30, 2019 as a regulatory compliance requirement by the United States Internal Revenue Service (“IRS”)for tax exempt charitable organizations - 501(c)(3). Per the IRS guidelines and as a standard practice, the Foundation is requesting an automatic 6-month extension to extend the due date from November 30, 2019 to May 15, 2020. The extension provides the foundation staff and its tax accountants, KPMG, sufficient time to accurately complete the Form 990 to avoid errors to prevent potentially lead to an audit by the IRS. The plan is to complete the Form 990 and obtain the Audit Committee’s approval for filing prior to the May 15, 2020.

Enterprise Risk Management Update

The Audit Committee was presented a status report on the operational activities associated with further implementation of the foundation’s ERM program. The ERM program aligns with one of the specific recommendations developed under the recent Board governance review. The goals, structure and reporting protocols for the ERM were approved at the February 14, 2019 Audit Committee meeting. During the first quarter of FY 19-20, the Foundation steering committee solidified the program objectives and the specific risks identified from the enterprise risk assessment have been converted into a risk register for ongoing monitoring and reporting.

Proposed FY 19-20 Audit Committee Calendar

The Audit Committee discussed with the CFO and Controller their meeting calendar for the remainder of the fiscal year. It was proposed and agreed that there will be 3 meetings generally organized for the months of February, March and June. The potential meeting topics will be:

Quarterly & Mid-Year Financial Updates
Annual Planning Timeline and the Annual Plan and budget
Investment Updates
Business Operations Progress
Enterprise Risk Management Updates
Form 990 - presented by KPMG
Audit Committee Volunteer Renewal

Respectfully submitted, Amy Vossbrinck