Wikimedia Foundation Audit Committee/2022-07-25

Audit Committee Meeting

July 25, 2022

12:00 PDT - 19:00 UTC

Participants: WMF: Amy Vossbrinck, Helen Pang, Jaime Villagomez, James Baldwin, Julian Singh, Linda Lenrow Lopez, Lisa Gruwell, Michael Snow, Nataliia Tymkiv, Raju Narisetti, Shelby Langan, and Tanya Capuano.

Alternates: Lorenzo Losa, Rosie Stephnson-Goodknight, and Victoria Doronina.

KPMG: Jeremy Peters, Victory Ijegbai

Agenda

Kick Off and Approval of May Minutes Tanya Capuano moved to approve Raju Narisetti seconded Nataliia Tymkiv approved The vote was unanimous

KPMG FY2022 Audit Plan and other related items

Jeremy Peters - Audit Partner Victory Ijegbai - Audit Manager KPMG confirmed its’ commitment to provide a quality audit for the Foundation. KPMG will perform an audit of the Foundation’s financial statements in accordance with auditing standards generally accepted in the United States of America. Those standards require that KPMG plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement. This will include consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Foundation’s internal controls over financial reporting.

Audit timeline

March - July 2022 - Planning and risk assessment September - October - Complete control testing, complete substantive audit procedures, evaluate results or audit procedures, review financial statement disclosures, present audit results. The Audit Committee also made a request, as part of the audit, to recommend any opportunities for accounting operations improvements especially for complex accounting treatment such as software capitalization. Required communications As a component of required communications, KPMG made an inquiry of the Audit Committee regarding any known potential exposures or irregularities. None were raised.

Report out by KPMG of Newly Effective Accounting Standards

2022 -Contributed non financial assets/in kind services: presentation and disclosure requirements. WMF is already in compliance with the presentation requirement. 2023 - Lease standard: puts operating leases onto the balance sheet as asset/liability.

Presentation of preliminary fiscal year 21-22

Revenue exceeded budget by +12% - $18M. The functional expense ratio for programmatic spending met the annual target of 76%, and grew by +2% over FY20-21. Functional expenses underran the annual budget by -8%. Budgetary results for Grants and community oriented investments grew by 52% - $5M vs last year. The largest proportional growth was in Africa, which increased from ~6% to 16%. Underruns in 2 regions, due to changing government regulations in those areas, were repurposed to allow increases elsewhere. Incremental investments were made, including Wikidata and a cache - a high-speed data storage layer which stores a subset of data so that future requests for that data are served up faster. Cash and investments increased by 4% - ~$9.1M YOY.

Condensed Balance Sheet Review

Assets

Current Assets* $204.0

Fixed Assets, Net $ 10.4

Investments, Long Term $ 39.9

Other Assets $ 1.2

Total Assets $255.5

Liabilities and Net Assets

Current & Other Liabilities** $ 11.4

Net Assets $244.1

Total Liabilities & Net Assets $255.5

• Represents cash and short term investments (3 months or less).
  • Represent accounts payable to vendors & grants with conditions.

Business Operations Update - FY 21-22

Staff presented to the Audit Committee its progress to date for cross-functional improvements in scalability, automation, usability and controls. During the last year, there have been several areas of improvement, including Making further investment and optimization of key organizational workflows and internal systems Designing and implementing back office support for Wikimedia Enterprise Launching the Supplier Diversity Program. This program aims to increase the number of diverse vendors in the Foundation’s list of suppliers. Experimenting with new ways of sharing knowledge + providing Staff user support to increase Staff’s knowledge and effectiveness with the foundation’s internal process such as Staff expense reimbursement and procuring services

Next meeting

End of Sept/beginning of Oct which will include the results of Audit. Please reach out to Jaime and Tanya if there are other topics you would like to cover.

Respectfully submitted, Amy Vossbrinck