Wikimedia Foundation Audit Committee/2023-10-03

October 3, 2023

Audit Committee Meeting

9:30 am PDT - 16:30 UTC Remote

Trustees: Tanya Capuano, Lorenzo Losa, Raju Narisetti, Mike Peel(attended for only part of the meeting), Nataliia Tymkiv, Luis Bitencourt-Emilio

Visitor: Kathy Collins

Staff: Amy Vossbrinck, Jaime Villagomez, Dhaval Patel, Nadee Gunasena, Helen Pang, Courtney Bass Sherizen, Shelby Langan, Kira Sargatzke, Lisa Gruwell, Maryana Iskander, and Stephen LaPorte.

Advisors: Michael Snow, Julian Singh.

KPMG: Jeremy Peters, Liezl Malabanan, Victory Ijegbai

Kick off

Kathy Collins, a new trustee effective December 2023, was welcomed.

Approval of August 3, 2023 Minutes

Moved to approve - Raju Narisetti

Seconded - Tanya Capuano

Unanimously approved

Audit Observation Discussion

Journal entries, currently reviewed and approved by manual signatory, will be automated beginning FY24 using the approval functionality in the GL system, Intacct. This change will enhance the control environment and further facilitate a holistic review of month-end controls. The Foundation’s new HRIS system, DayForce, which will launch on January 1, 2024, will support further improvements.

KPMG FY23 Audit Results

Presented by Jeremy Peters, Liezl Malabanan KPMG presented the results from their audit of the Foundation’s financial statements in accordance with the auditing standards accepted in the United States.

The draft report to be issued will indicate a clean audit and no material weaknesses. KPMG communicated an observation related to evidencing approval of manual journal entries. The Foundation accounting team will address the observation by turning on the automated approval functionality in the GL system, Intacct.

KPMG management reviewed the Foundation’s investment portfolio and independently verified the market value of each single investment security. The investments were found to be reasonable and indicated no management bias.

There was no fraud, and there were no illegal actions or non compliance issues found when KPMG met individually with members of the Foundation’s management team. KPMG asked again if any one on the Audit Committee was aware of any fraud or illegal actions or non compliance. The answer was no.

Approval by the Audit Committee of the KPMG Audit

Moved to approve - Raju Narisetti

Seconded - Tanya Capuano

Unanimously approved

Financial Overview as of Aug FY 24

REVENUE: -12% variance to budget Fundraising Income: Despite under-running compared to the budget, fundraising revenue is in line with revised projections which were adjusted due to revised monthly timing. We are on track to meet our annual fundraising target. Investment Income is trending up: We are continuously achieving higher returns on both short and long term dividends.

EXPENSE: -2% variance to budget Overall, the Foundation is staying inline with our board approved budget with no significant line variances. Two budgetary items were highlighted: Personnel costs are trending marginally higher: Hiring of open budgeted positions is ahead of plan and attrition is lower than prior years. Third party services are under budget: In some teams, plans for engaging with these services have been pushed to later in the fiscal year and are expected to be completed on budget and within the fiscal year.

Update on the San Francisco Office Space

The lease for the San Francisco office expires September 2024. The Foundation has targeted the end of this calendar year to determine its approach to assessing and setting its post September 2024 plan.

Enterprise Risk Management Update

Progress to date: A high risk assessment and mitigating plans for those risks have been completed and endorsed by Foundation leadership and by the Board of Trustees. The Audit Committee can expect future updates on work in progress including: A revised update to the Audit Committee charter that integrates a risk charter and management’s policy for organization, establishing accountability and the responsibilities, and monitoring or measuring the effectiveness of mitigation plans A refreshed categorization of Medium and Low risks including those risks previously reported to the Audit Committee. ERM Coordinators will present an update on the highest risks and in-flight mitigations to the Audit Committee every six months.

Investment Update

The Foundation’s cash and investments balance has increased $5.7M since FY 2021-22. We are projecting higher investment income this fiscal year due to higher yields in the market. Within our IPS parameters, we are seeing yields in the 3 - 4% range.

The Foundation actively collaborates with its fiduciary to maximize its earning potential while maintaining full compliance with its Investment Policy and preserving capital/liquidity. IPS

Year to date (FY 23-24) as of August 31, 2023: Operating funds $75.5 M cash Short term reserve $119.7 M Long term $43.3 M

Respectfully submitted:  Amy Vossbrinck