Audit Committee/2013-09-19


 * Audit Committee Meeting


 * Thursday, September 19, 2013


 * Wikimedia Foundation Office/San Francisco


 * 3:00 - 4:30 PDT - 22:00 - 23:30 UTC

Meeting was convened by: Sam Klein


 * Attendees: Stu West. Chair (in person), Sam Klein, member (joined via conference call), Michael Snow, community member (joined via conference call), Jimmy Wales, founder (joined via conference call)


 * Also present: Garfield Byrd, Sue Gardner, Tony Le, Amy Vossbrinck


 * Present from KPMG: Nancy Rose and Karen Cordera

Approval of Minutes
Minutes for the July 23, 2013 Audit Committee Meeting were reviewed. The Committee will review the minutes for 72 hours and then they will be publicly posted.

KPMG Presentation of Audit Results
Audit Report: Nancy Rose and Karen Cordera from KPMG presented the Wikimedia Foundation Audit Results June 30, 2013 and the Wikimedia Foundation Financial Statements June 30, 2013 and 2012. The Audit for 2012-13 is complete. Nothing of material impact was noted and no deficiencies were found.

KPMG extended their thanks for the work of the Foundation staff and stated that they felt the audit went smoothly; records are complete and the requested documents for the audit were made available promptly. The Audit Committee approved the report. FAQ regarding the Audit Report will be written by Garfield Byrd and sent to Stu West and Sue Gardner for review. Once the FAQ is complete, it and the Audit Report will be sent to the Board.

The Foundation has initiated a discussion with KPMG regarding the Wikimedia Foundation grant process. A second meeting is planned for mid December when the KPMG grants team (not the same as the audit team) will review the entire granting process from beginning to end.

The Committee thanked KPMG. Nancy and Karen departed the meeting at: 3:35 pm

Discussion Regarding Wikimedia Foundation Strategy
Lisa Gruwell, Chief Revenue Officer, Wikimedia Foundation, joined the meeting at 3:40 pm to discuss the Wikimedia Foundation Endowment Strategy: A recommended approach Report. The Audit Committee agreed that discussions regarding both the possibility of an endowment strategy and long term reserves for the Wikimedia Foundation need to continue. The focus of the discussions will be centered around these primary questions:

Should the Wikimedia Foundation increase the amount of its financial reserves through further fundraising? If so, should the Wikimedia Foundation consider a endowment program as a vehicle for that additional fundraising? If the Wikimedia Foundation has an endowment program, should restrictions on those funds be considered? If “yes” to any of the above, should the Wikimedia Foundation Board be the group that authorizes the spending of these funds?

Discussion Regarding Proposed Investment Policy
The Audit Committee reviewed the Discussion Document – Proposed Investment Policy. The document is designed to give the Audit Committee flexibility with regard to the investment of funds. The Foundation currently has operating funds, and short term and medium term investments. The Audit Committee agreed that it is important to consider a long term reserve. This may or may not be the same as an endowment policy - the two can be separate pieces. It was decided that more research will be done with both legal and investment advisors to consider next steps.

Discussion Regarding Chapter Site Visit Reports
The Audit Committee discussed the Chapter Site Visit Reports: Wikimedia Argentina, Wikimedia The Netherlands, Wikimedia Austria, Wikimedia Sweden.

Garfield Byrd and Anasuya Sengupta visited the Chapters together. Anasuya’s program report will be issued separately; this report, written by Garfield Byrd, covers the financial aspects of the grant and the administration of the grants by the Chapters. A joint report regarding both program and finance will be made public as a way for Chapters to share learnings and constructive suggestions.

The meeting adjourned at 4:35pm and was followed by a brief Executive Session.

Action Items
Garfield Byrd:
 * Draft an Audit FAQ to be reviewed by Sue Gardner and Stu West. (Due date October 8, 2013)
 * Upon approval by Sue and Stu, Garfield will forward the FAQ and the Audit Report to the Board. (Due date October 31, 2013)
 * Post the FAQ and the Audit Committee Report for public review. (Due date October 31, 2013)
 * Publicly publish: Grants Compliance Team – Protocol for International Grants and On Site Financial Review Protocol. (Due date October 2, 2013)
 * Publicly publish “On Site Financial Review Protocol - Summary of Results” chart form used for reviewing Chapter grant administration. (Due date October 2, 2013)
 * Send cover memo (to be drafted by Lisa Gruwell) and Wikimedia Foundation Endowment Strategy: A recommended approach Report to the Board for their review. (Due date October 10, 2013)
 * Manage research with both legal and investment advisors to consider next steps regarding a long term investment strategy for the Wikimedia Foundation. Create a report regarding this research for the Audit Committee and the Board. (Due date December 31, 2013)

Lisa Gruwell:
 * Update her report on further fundraising and an endowment alternative for pursuing it for distribution to the Board. Define terms to explain the difference between an endowment and long term reserves. Break out Section E in the report to explain what is needed from the Board should an endowment be considered. Clarify that, at the moment, this is an overview discussion to consider whether or not the Foundation wants to raise additional funds? If “yes”, in what kind of structure do we raise those funds - i.e. long term reserve or endowment?

Amy Vossbrinck:
 * Facilitate posting of minutes from July 23 and September 19, 2013 Audit Committee Meetings

Respectfully submitted by Amy Vossbrinck