Wikimedia Foundation Audit Committee/2024-07-29
Wikimedia Foundation Audit Committee Meeting
July 29, 2024
Remote
11:00 - 12:30 am PDT
18:00 - 19:30 UTC
Participants
Committee Members Audit Committee Chair: Kathy Collins* Audit Committee Board Members: Raju Narisetti*, Lorenzo Losa* Audit Committee Alternates: Mike Peel* Audit Committee Advisors: Michael Snow
Non Committee Members Board Chair: Nataliia Tymkiv* WMF Chief Executive Officer: Maryana Iskander* Staff Liaison: Jaime Villagomez Other Staff: Andy Cooper, James Baldwin, Nadee Gunasena, Helen Pang, Dhaval Patel, Shelby Langan, Lisa Gruwell, Amy Vossbrinck, Jacob Rogers, Courtney Bass-Sherizen
Guests KPMG: Jeremy Peters*, Victory Ijegbai*, Spencer Endicott*
Kick Off and Approval of May 22 Minutes Moved to approve the May 22, 2024 Audit Committee Minutes: Raju Narisetti Seconded: Kathy Collins Approved by voting members: Raju Narisetti, Kathy Collins, Lorenzo Losa, Mike Peel
KPMG Audit Plan FY 24 - Presented by: Jeremy Peters, Victory Ijegbai, Spencer Endicott of KPMG
KPMG explained that the audit of the consolidated financial statements of the Wikimedia Foundation, Inc and its subsidiaries as of and for the year ended June 30, 2024, will be performed in accordance with auditing standards generally accepted in the United States of America. Materiality will be applied in the context of the preparation and fair presentation of the consolidated financial statements.
Broad timeline for the Audit is as follows: March - July 2024 - Planning and Risk Assessment July - August 2024 - Ongoing Risk Assessment, IT Applications and Environments, Walk throughs, Inquiries, Evaluation of Controls September - October 2024 - Complete Control Testing, Evaluate results of Audit Procedures, Review financial Statement Disclosures Results to be delivered to the Audit Committee in the meeting on October 8, 2024
The estimated audit fees are $123K (increase of 5.4% from prior year).
YTD FY 24 Preliminary Financial Results - Presented by Senior Director of Finance Strategy and Planning, Accounting Principal, and Principal Investment Manager
As projected, the Foundation has ended the year within the annual planning targets of 17.3 months for its working capital reserve and a functional expense ratio of 77% programmatic. In line with our recent projections, the Foundation is within +5% of its revenue budget and on budget (+0%) with its expense budget.
Revenue: $185.8M, +5% for full year FY24: Overall revenue matches previous projections as fundraising continues to perform in line with the recent trends. Expense: $178.2M +0% for full year FY24 Cash and Investment Growth: The Foundation’s overall year-over-year balance increased by $15M (+6%) to $266.2 million. This increase stems principally from investment income.
Audit Committee Charter Approval - Presented by Audit Committee Chair
There will be a recommendation from the Talent and Culture Committee to terminate the committee and transfer its responsibilities to the Audit Committee and the Executive Committee. The Audit Committee Chair described the proposed additions to the Audit Committee Charter responsibilities, which tentatively includes budgetary impact related to the Foundation’s compensation policies and practices: Review the annual staff cost of living and merit planning assumptions in the context of relevant market data for comparative organizations and job categories; Review changes related to the Foundationʼs compensation policies that have material budgetary impact, including executive compensation, benefits, severance, and retention.
The overall Audit Committee Charter was previously reviewed by The Foundation’s General Counsel.
Moved to approve the Audit Committee Charter to the Board of Trustees: Raju Narisetti Seconded: Kathy Collins Approved by voting members: Raju Narisetti, Kathy Collins, Lorenzo Losa, Mike Peel, Nataliia Tymkiv
Enterprise Risk Management - Presented by Accounting Principal, Head of Product Security and VP/Controller
The presenters provided an update on two high risks (financial sustainability and solvency, and technology vulnerabilities) as well as a brief update related to internal oversight and improvement of the enterprise risk management process.
Financial Sustainability and Solvency The Foundation’s financial sustainability and solvency high risk has identified several metrics that capture how well the organization is performing financially. The metrics are in-line with targets and reflect strong financial health.
ITS and Product Security Technology vulnerabilities have been identified as a high risk to the organization, and this risk is shared among ITS and Product Security teams. The director of product security attended the meeting to provide an update on measures and risks pertaining to the Foundation’s open source platform.
Product & Technology The Open Source Environment presents unique challenges that require many risk efforts including conducting code reviews, performing vulnerability assessments on products, collaborating with development teams to address security issues, designing and implementing security features in products, monitoring for and responding to security incidents in wikis.
Overall Monitoring with Senior Leaders Once a month, the Senior Leadership Team (SLT) Meeting focuses on discussing risk-related topics, including updates on the Foundation’s key risks and their mitigation strategies. To boost engagement and enrich the discussions, recent communications in an SLT meeting proposed anchoring agenda topics to the five key risk categories: Legal/Compliance, Financial Sustainability, Branding, Strategy, and Technology Vulnerabilities. The goal is to shift the meetings towards more interactive discussions, rather than just informational updates.
Business Operations Update - Presented by Senior Director of Finance Strategy and Planning and VP/Controller
In 2020, the Finance and Administration Department envisaged a team dedicated to digital transformation of our financial workflows and continuous process improvement. Three years later, the Department is assessing its progress on the set of recommendations, and beginning to think about the next phase of transformation work.
Looking Ahead to FY 24-25, we will be working on the following projects: Key controls over financial reporting accounting Expense reimbursement workflow improvements Replace fixed asset management system and optimize workflow Review the business operations improvement roadmap
Transformational work was possible as a result of: Creating a managed project lifecycle Facilitating support for planning, project management, analysis and configuration Standardizing tools and templates for all phases of work
- An Executive Session was held with KPMG, the CEO and the Trustees.
Respectfully submitted Amy Vossbrinck
APPENDIX: PASSED RESOLUTIONS
Resolution: Minutes Approval, July 29, 2024
This resolution was approved on July 29, 2024.
RESOLVED, that the Audit Committee hereby approves the minutes from the May 22, 2024 Audit Committee meeting.
Moved to approve: Raju Narisetti Seconded: Kathy Collins Approved by voting members: Raju Narisetti, Kathy Collins, and Lorenzo Losa Approved by non-voting members: Michael Snow, Mike Peel
Resolution: Recommendation to send the Revised Audit Committee Charter to the Board of Trustees for their review and approval
This resolution was approved on July 29, 2024
Whereas, the WMF Foundation Finance Department has prepared a revised version of the Audit Committee Charter and it has been reviewed by the Audit Committee
RESOLVED, that the Audit Committee hereby approves the revised Audit Committee Charter for transmission to the Foundation’s Board of Trustees
Moved: Raju Narisetti Seconded: Kathy Collins Approved by voting members: Raju Narisetti, Kathy Collins, and Lorenzo Approved by non-voting members: Michael Snow, Mike Peel and Nataliia Tymkiv