Wikimedia Foundation Audit Committee/2022-05-05

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Audit Committee Meeting Minutes

May 5, 2022

10:30 am PDT - 17:30 UTC

Remote

Participants

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

KPMG: McCain Highfill

Approval of the February Meeting Minutes

Tanya Capuano moved to approve

Raju Narisetti seconded

Nataliia Tymkiv approved

The vote was unanimous

Review and Approval of Form 990 FY 21 (2020)

The Foundation prepares annual tax filings Form 990 and 990T. With the exception of Schedule B, the filings are open to the public. The first 12 pages of the 990 represent the core of the document. There are supplemental pages that need to be completed - the Foundation is required to complete 9 of the 16 supplemental pages.

Form 990T covers unrelated business/taxable income. The Foundation has no tax liability here, as the Wikipedia Store has a net operating loss. Next year, it is estimated that there will be unrelated business income from Wikimedia Enterprise.

This year we spent 73% of expenses on Program Services - down from 75% spent last year. This small reduction in programmatic spending has been experienced across other organizations as well due to COVID.

Small adjustments will be made in the 990 and it will be sent out to the Audit Committee again for final approval. Approval of the revised version was confirmed via email on May 12 forwarded by Shelby Langan to Amy Vossbrinck.

FY23 Budget/Annual Plan

The Committee reviewed the budget growth intentions set in February and looked at sources of revenue and anticipated expenses. The proposal for the budget was presented. A 17% growth to $175M is projected. The budget supports the Foundation’s strategic direction with a 24% increase in direct funding to the movement.

● Total revenue of $175 M

● Programmatic Expense $134.5 M

● Fundraising $17.1 M

● General & Administration $23.4 M

The Foundation’s Finance Team Will continue working with teams on budgeting and will present the budget to the Board in June for final approval. The final budget table will be broken down by quarters before it is presented to the Board.

The Audit Committee was asked for preliminary approval of the Budget.

Tanya Capuano moved to approve

Raju Narisetti seconded

Nataliia Tymkiv approved

The vote was unanimous

Review and Approval of Reserve (Working Capital) Policy

The Audit Committee was presented with an assessment and recommendation for the Foundationʼs working capital reserve policy. At the Board of Trustees meeting in March 2022, it was determined that the Foundation would establish a working capital reserve policy.

Recommendation for policy is as follows:

● The Foundation set a board designated reserve target of 18 months and agreed that the working capital reserve ratio should not fall below a 12 month baseline.

● The reserve ratio to be reported to the Audit Committee annually.

● The Board will formally review the Reserve Ratio at least every three years.

The Foundation will continue to hold 4 - 6 months of liquid cash. The remaining funds to rest in short duration fixed income.

The Audit Committee was asked to approve the policy.

Raju Narisetti moved to approve

Nataliia Tymkiv seconded

Tanya Capuano approved

The vote was unanimous

Enterprise Risk Management (ERM)

We will look to have a more in depth discussion in a later meeting. For this meeting we addressed questions. Given the growth of the Foundation, we are looking at ERM capability building across the organization. We will first build the capabilities of our risk responders to address risks and look to mitigate risks before they occur. To facilitate this meetings are being held in all Foundation Departments. We are also building our capability to address unexpected crises which need immediate attention e.g. the Russia/Ukraine war.

Advisory Members Renewal

Both Julian Singh and Michael Snow were thanked for their service as Advisors to the Committee and agreed to serve for 12 more months.

Tanya Capuano moved to approve

Raju Narisetti seconded

Nataliia Tymkiv approved

The vote was unanimous

July Proposed Agenda

FY22 KPMG Audit Plan FY22 Preliminary Financial Results Business Operations and ITS Update FY23 Audit Committee Calendar It was suggested that an ERM progress summary be a standing topic for all meetings. Julian would be happy to assist with this.

The meeting adjourned at 11:40 am PDT

- Respectfully submitted, Amy Vossbrinck