Wikimedia Foundation Audit Committee/2022-02-09

Wikimedia Foundation

Audit Committee Meeting

February 9, 2022

11:00 am PST - 19:00 UTC

Participants: Amy Vossbrinck, Helen Pang, Jaime Villagomez, James Baldwin, Julian Singh, Linda Lopez, Lisa Gruwell, Lorenzo Losa, Maryana Iskander, Michael Snow, Nataliia Tymkiv, Raju Narisetti, Rosie Stephenson-Goodknight, Shelby Langan, Tanya Capuano, Victoria Doronina

Welcome

Audit Committee Chair, Tanya Capuano welcomed new WMF staff: Helen Pang, Controller - Shelby Langan, Lead Technical Accountant - Linda Lenrow Lopez, ERM Principal, and new Audit Committee Alternates: Lorenzo Losa, Rosie Stephenson-Goodknight, Victoria Doronina

Approval of the October 2021 Audit Committee Meeting Minutes

Moved to approve- Tanya Seconded - Raju Approval - Unanimous

Mid-Year Financial Update

Revenue

Fundraising: The Foundation’s revenue results are exceeding the budget by +15%. We expect to reach our fundraising goal by early to mid Q4. Investment Income: The Foundation has earned a total of $1.5M in interest income year to date. Total Revenue: As of December 2021, the Foundation’s total revenue is $131.5M. This includes the investment income, thus exceeding budget by +13%.

Expenses

As of December 2021, the Foundation’s operating expenses are $61.7M. This is -15% below the budget year to date, due to 1) the postponement of grant awards to Q3 FY 21-22, and 2) an increase in software development resulting in a larger than budgeted capitalization of software development costs. Without the postponement of the grants and the software capitalization, the variance would be -8%.

Wikimedia Enterprise

Revenue generated by Wikimedia Enterprise will begin in January. The expenses include a 15% overhead charge for WMF administrative management. Wikimedia Enterprise will be bringing more clients on board.

FY 20-21 Form 990 Timeline

The form 990 will be filed with the IRS in May 2022 and posted on the Foundation’s website along with an FAQ. It is based on the Foundation's fiscal year July - June. This filing is an important obligation for a non-profit, as it explains the governing body and management policies, as well as how the organization promotes transparency and accountability. Charity Navigator uses the information from the Form 990 to rate charities. The Foundation continues to receive the highest rating of 4 stars.

The Audit Committee reviews and approves the form 990 before it is presented to the Board for their review and approval.

Operationalizing Wikimedia Enterprise

We continue to improve our accounting and finance operations for Enterprise. The following actions have been taken to operationalize Wikimedia Enterprise:

Policies and procedures for revenue recognition, software development cost capitalization, invoicing, and accounts receivable are in place. Scalable and repeatable practices, workflows and tools from sales order to receipt have been integrated into our existing financial systems. A monthly process to determine/allocate costs from WMF to Wikimedia Enterprise has been designed and implemented. Actions in process: Complete future statutory tax reporting requirements and design a scalable process for assessing the state and local tax implications for future client contracts.

FY 22-23 Annual Planning, Timeline, Intentions and Expectation Setting

The Foundation is 5 months into the 9 month Annual Planning Process. February-March - Iterations of planning processes, organizational priorities, and budgeting principles with input from Foundation teams and Board. Identify key resource planning and budgeting milestones for the rest of the year. April - Conversations with communities to receive further input on organizational priorities. Identify dependencies and cross-departmental collaboration. May - Begin experimentation with new ways of planning together. Confirm key budgeting decisions and build team budgets. June - Get formal approvals from the Board of Trustees.

The Staff has begun to consider Fiscal Year 2023 as a year of focused retooling, consolidation, and a confirmation of our current work to refine how to allocate internal resources.

The Finance team has also set preliminary budgetary guidelines for the Foundation that will inform our planning activities, be refined over the planning period and presented to the Audit Committee and Board of Trustees per our stated timeline.

Next Audit Committee Meeting

Early May Topics to be covered:

Form 990 - KPMG

Volunteer Advisory Members Renewal

FY 22 - 23 Annual Plan

Year to Date Financials

Enterprise Risk Management

Business Operations and Internal Systems Update

Respectfully submitted, Amy Vossbrinck