Wikimedia chapters/Reports/Wikimedia District of Columbia/Annual financial report (2011–2012)

This is a copy of the Wikimedia DC Annual Financial Report for Fiscal Year 2011–12. The original can be found at http://wikimediadc.org/wiki/Annual_financial_report_(2011–2012).

Report from the Audit Committee

To:	Board of Directors
From:	Audit Committee
Re:	Report of the Annual Review Meeting

The Audit Committee met with the Treasurer of the Wiki Society of Washington, DC Inc. (“Corporation”), Mr. James Hare, on February 17, 2013. The Audit Committee is composed of Mr. Kirill Lokshin, Ms. Tiffany Smith, and Mr. Matthew Bisanz, all of whom were present.

Article VIII, Section 2 of the bylaws of the Corporation establishes an Audit Committee to perform an annual review of the financial records. Management is responsible for (a) the preparation, presentation, and integrity of the Corporation's financial statements; (b) accounting and financial reporting principles; and (c) the Corporation's internal controls and procedures designed to promote compliance with accounting standards and applicable laws and regulations. The Audit Committee reviews Management’s records as part of its oversight of the financial reporting and internal controls functions. The Audit Committee is not an independent auditing firm and does not perform an independent audit of the financial statements in accordance with generally accepted auditing standards or render an opinion thereupon. The Audit Committee members are not necessarily professional accountants or auditors and their functions are not intended to duplicate or to certify the activities of management.

Mr. Hare presented detailed financial records documenting the activities of the Corporation over the prior year. These included records of various transactions and contracts entered into by the Corporation, as well as draft copies of the annual financial statements and the Form 1120 tax return. The Committee questioned Mr. Hare regarding the materials and he answered the questions to the Committee’s satisfaction. Mr. Hare indicated that he had no other disclosures of information to make to the Committee beyond the materials he presented.

The Committee verified with Mr. Hare that the Corporation did not warrant to any individuals making donations that such donations would be tax deductible. The Committee, through its own review of the materials and in questioning Mr. Hare, did not find any transactions or disbursements made in violation of internal controls procedures or the Article III prohibited activities requirements of the bylaws.

The Committee noted that Mr. Hare should investigate the Corporation’s duty with regard to state tax liability and he indicated he will do so. The Committee also encouraged Mr. Hare to submit a copy of the draft tax return to the full Board for its information and to post a web-formatted copy of the annual financial statements to the Corporation’s website, both of which he indicated he will do. The Committee also suggested Mr. Hare include a description of the internal controls procedures of the Corporation in the financial statements to make clear that the Corporation followed proper segregation of duties in transactions with members of the Corporation, which he indicated he will add.

The Committee, having found no matters requiring further action besides those listed above, has concluded its annual review of the financial records of the Corporation and is submitting this report to the Board as evidence of its completion.

Income Statement

Revenue
	Wikimania 2012			$554,422.51
		Gross sponsorship	$505,970.00
		Refund	($27,474.04)		Refunds were paid to the Wikimedia Foundation due to invoice errors and due to an excess of funds at the end of the conference.
		Net sponsorship	$478,495.96
		Registration	$43,175.00
		Accommodations	$32,380.00		Less uncollectable account of $114.00.
		Other	$371.55
	Grants and sponsorships			$22,455.24
		Grants	$22,070.00
		Event sponsorships	$371.55		Referring to voluntary contributions made by registrants over EventBrite as well as a contribution from the Washington European Society for our Austrian Embassy event.
	Membership dues			$205.00
	Donations			$90.00
	Total revenue			$577,172.75
Expenses
	Wikimania 2012			$552,131.32	Note that this total refers strictly to operating expenses directly related to the Wikimania 2012 conference. This figure does not include $1,709.48 in transaction fees associated with the conference (included as part of the “transaction fees” line item), nor does it include $581.71 in capital expenditures made for the conference (as reflected in the Balance Sheet and Statement of Cash Flows). Factoring those in, a more comprehensive total cost for the conference is $554,422.51. This figure was used in calculating the amount to refund the Wikimedia Foundation.
		Conference catering	$133,829.30
		Venue costs	$104,651.70
		Transportation and events	$101,440.03
		Staffing	$61,430.00
		Video recording	$56,390.00
		Accommodations	$55,395.65
		Speaker costs	$6,133.94
		Volunteer costs	$3,416.88
		Promotional costs	$565.40
		Other Wikimania costs	$28,879.42
	Salaries, wages & stipends			$5,600.00
	Program			$2,982.06
	Rent			$2,982.06
	Transaction fees			$1,745.30
	Administrative expense			$1,453.88
	Technical expense			$575.11
	Travel			$91.20
	Total expenses			$566,853.87
Net income
	Net income			$10,318.88

Statement of Retained Earnings

	Beginning retained earnings	$5,130.22
	Net income	$10,318.18
	Total retained earnings	$15,449.10

Balance Sheet

Assets
	Current assets
		Unrestricted cash	$12,082.29	Shortly following the beginning of the new fiscal year, $11,812.94 was refunded to the Wikimedia Foundation due to an excess of cash from Wikimania 2012. Since the corresponding cash outlay did not occur until after the end of the fiscal year, this report documents the refund as an account payable.
		Temporarily restricted cash	$13,254.35
	Non-current assets
		Pre-paid expenses	$81.45
		Accumulated depreciation	($0.00)
		Accounts receivable	$0.00
		Equipment	$1,923.94
	Total assets		$27,342.03
Liabilities and Equities
	Liabilities
		Account payable	$11,812.94
	Equities
		Retained earnings	$15,449.10
		Donated capital	$79.99
	Total liabilities and equities		$27,342.03

Statement of Cash Flows

For the purpose of this statement, "cash" refers to funds held in depositories, petty cash funds, payment processing accounts, and purchase cards.

Operating activities
	Decrease in accounts receivable	$76,379.55
	Decrease in liabilities	$9,107.28
	Decrease in pre-paid expenses	($40,101.30)
	Decrease from operations	($23,624.77)
	Total operating activities	$21,760.76
Investing activities
	Capital expenditures	($1,554.34)
	Total investing activities	($1,554.34)
Financing activities
	Total financing activities	$0.00
Net cash flow
	Net increase in cash	$20,206.42

Notes

About Wikimedia District of Columbia:

Wikimedia District of Columbia is the official chapter of the Wikimedia movement in the Washington, D.C. area. The chapter serves the District of Columbia, Maryland, Virginia, Delaware, and West Virginia. We are incorporated in, and our principal place of business is in, the District of Columbia. We conduct outreach activities in our chapter’s region in order to further the cause of the Wikimedia movement, including free access to the world’s information. While structured as a not-for-profit membership organization, we have failed to receive a determination of tax-exempt status from the Internal Revenue Service. As such, we have tax liabilities on our income from this year as well as Fiscal Year 2011. This expense has been recorded for Fiscal Year 2013.

Internal controls:

The Board of Directors has adopted internal controls to ensure that expenditures are made from the Corporation’s treasury in accordance with the Corporation’s exempt purpose, as well as with the restrictions established by the Bylaws. The President and the Treasurer are the only officers authorized to incur expenses on behalf of the Corporation. Further, the only expenditures authorized by the Corporation are those (1) expressly authorized by the Board of Directors or the Membership, (2) authorized by the President for the purposes of conducting day-to-day business, or (3) authorized by the Treasurer in his capacity as Wikimania 2012 Coordinator. Our internal controls have been successfully implemented, and we will continue to ensure that responsible fiscal controls are in place.

Wikimania 2012:

Wikimania 2012 is, by far, the largest project we have pursued. Because of its special nature as a one-time project for Wikimedia District of Columbia, financial activity associated with it has been blocked out as its own series of line items so that year-to-year comparisons of financial data need not include Wikimania data.

Note that the amount of the refund in the income statement and in the balance sheet is different. The Wikimedia Foundation’s donation for Wikimania consisted of a fund from which occasional cash disbursements were made. The outstanding refund as of the end of the fiscal year was the amount of leftover cash that we needed to send back to the Foundation; the rest of the Wikimania fund was written off.

Also note that while Wikimedia District of Columbia maintained a segregated fund for Wikimania 2012, we did not consider registration fees and other such fees for service to be restricted gifts to be deposited into the segregated fund. As such, this revenue was recognized as unrestricted cash. This was ultimately a technical matter, since such revenue was treated as restricted for Wikimania purposes anyway.

Depreciation:

Depreciation has not been calculated for any of our assets for two reasons. First, most of our assets are less than a year old, with many of them unopened, so no measurable depreciation could have taken place. We have one asset that is a year old—our router—but it has largely spent time in storage. Wikimedia District of Columbia, as a general policy, uses the straight-line method to calculate depreciation.

Accounts payable:

Wikimedia District of Columbia has no lines of credit, so any recognized accounts payable are from accounts where an expense is recognized but payment is deferred for whatever reason. Expenses are recognized upon receipt of documentation noting an expense such as an invoice or receipt.

Asset accounts maintained:

Wikimedia District of Columbia maintains a checking account at Wells Fargo Bank, N.A. While there is only one account, our internal schedule of accounts designates various restricted funds as subaccounts of the main checking account. In addition to each subaccount designated for each of the Wikimedia Foundation grants we have been awarded, we maintain a Wikimania 2012 fund and an EventBrite event sponsorship fund, both of which are now closed.

Membership dues vs. donations:

Wikimedia District of Columbia has set membership dues at $10.00. Recently, we allowed for individuals signing up to be members to pay a higher fee as a donation. However, we make clear that only $10.00 pays for membership while the remainder is to be treated as a donation. Our records reflect this: the first $10.00 of a payment is recognized as dues, with the remainder posted under the donation account.