Wikimedia Foundation Audit Committee/2024-04-16

April 16, 2024

Audit Committee Meeting

9:30 am PDT - 16:30 UTC

Remote

Participants

WMF Chief Executive Officer: Maryana Iskander

Audit Committee Chair: Kathy Collins

Audit Committee Alternates: Mike Peel, Luis Bitencourt-Emilio *(alternate as of March 2024)

Audit Committee Advisors: Michael Snow, Tanya Capuano

Staff Liaison: Jaime Villagomez

Other Staff: James Baldwin, Nadee Gunasena, Helen Pang, Shelby Langan, Lisa Gruwell, Amy Vossbrinck, Jacob Rogers, Stephen LaPorte

KPMG: Chad Franks, McCain Highfill

Kick Off and Approval of February 27, 2024 Minutes

Move to approve minutes: Mike Peel

Seconded: Tanya Capuano

Unanimous approval by voting members.

Form 990 and Form 990T FY 22 - 23 Approval

Presented by KPMG and the Technical Accounting and Financial Reporting Principal

The Foundation described changes in this Form 990 compared to last year. The Committee was asked to tentatively approve the Form 990 and the Form 990T, pending notification of final adjustments that the Foundation may make based on the Audit Committee's review. The final Form 990 will be sent to the Committee Members via email and a final approval will be requested through email by the end of the week.

Report out by Chad Franks of KPMG The Foundation Staff and KPMG presented the purpose of the Form 990 and the Form 990T. As a 501(c)(3), the Wikimedia Foundation is required to report to the IRS each year its activities on the Form 990, and if appropriate the Form 990T. The Foundation completes 11 of 16 additional schedules within the Form 990.

KPMG provided highlights and a summary of this year’s forms, including: Governance - All WMF Board members are independent. Functional Expenses - For every $1.00 WMF spends .76 goes to programs. Compensation - Required to disclose compensation for current and former officers, directors, trustees, key employees, highest compensated employees and independent contractors. Lobbying Activity - Nonprofits are allowed to spend 5% of total expenses on educational lobbying. WMF spends less than 0.1%.

Form 990T - Reports unrelated business income and taxes due related to merchandise sales from the merchandise store and from Wikimedia Enterprise (for services only, royalties are not taxed). In recent years, WMF has offset taxable income with prior year net operating losses, but has used most of the NOL balance and owed $2K in taxes this year. Going forward, taxable income will be taxed at 21%.

The timeline was presented to the Audit Committee. After the Audit Committee’s final approval, the final Form 990 will be sent to the Board of Trustees. The Wikimedia Foundation Board has seven days to ask questions, and then the Form 990 will be filed with the IRS by KPMG. The Form 990 and related communications (FAQs, Diff post, and wiki-l announcement) are scheduled to be published on April 29, 2024.

There was discussion about whether to revisit the hours per week reported in the 990 for Trustees and the Chair. It was agreed that this should be revisited before the next 990 is filed. There was also discussion about a possible change in reporting related to the board’s role in approving C-level compensation. The Foundation is reviewing this.

Move to tentatively approve Form 990 and 990T FY 22 - 23: Tanya Capuano

Seconded:Luis Bitencourt-Emilio

Unanimous approval by voting members.

Subsequent email approvals: Raju Narisetti- approved on April 17 Kathy Collins - approved on April 17 Mike Peel - approved on April 17 Lorenzo Losa - approved on April 19 Tanya Capuano - approved on April 19

KPMG departed the meeting

Advisory Members Renewal

Presented by the CFO

Michael Snow and Julian Singh (via audio video message) shared their qualifications and interest in continuing to serve as Advisory Members to the Audit Committee.

Michael stepped out of the meeting for the vote

Move to approve Michael Snow and Julian Singh as Advisory Members: Kathy Collins

Seconded: Mike Peel

Unanimous approval by voting members.

Tanya will continue to serve as an Advisory Member as her term does not expire until December 2024.

Before the next renewal cycle, there will be a review regarding the criteria, term and process for selecting the Audit Committee Advisory Members.

The Committee approved renewing both Julian and Michael for another year for the period ending June 1, 2025.

Approve KPMG FY 23-24 For the FY 2024 Audit Cycle

Presented by the Technical Accounting and Financial Reporting Principal

Pursuant to the Audit Committee charter, the Committee has the responsibility to “Appoint, replace, negotiate compensation terms, and oversee the work of the independent auditor, who shall report directly to the Committee.” The Foundation recommended reappointing KPMG for the FY 23-24 audit due to their technical experience and their experience working with WMF. The KPMG audit team is consistent with last year. Unlike the EU, the US does not have a mandatory rotation requirement of the audit firm. The KPMG audit partner rotates every few years. Since 2008, there have been three KPMG audit partners rotated.

There was discussion about whether and when to rebid the external audit work in the future.

Move to approve KPMG for the FY 23-24 Audit: Kathy Collins

Seconded:Luis Bitencourt-Emilio

Unanimous approval by voting members.

ERM FY 25 Update

Presented by the Controller

The ERM FY25 Risk Narrative work is underway by the Annual Plan Process delegates and risk owners. The Foundation has made progress identifying high risks and raising its mitigation strategies in the risk narrative.The FY25 risk narrative will be presented to the board for approval and to the audit committee at the next meeting for feedback prior to presentation to the board.. Early insights into what is planned for FY25 is to improve identifying metrics and measurements which evidence risk trends and whether adjustments to the mitigants are needed.

It was noted that Financial sustainability risk level was reduced because the mitigants are a mature process in place that aligns closely to the organization’s strategic decision-making and financial performance.

Q&A: Pre-Read Topics - presented by the CFO and the Senior Director of Finance Strategy and Planning

Projection for the year: The Foundation is on track to meet all projections and there are no specific concerns regarding Q4. Recurring revenue has been reliable. Q4 (as with Q2) are the quarters with the largest grant disbursements.

Suggested Topics for the next few meetings Send to Kathy Collins or Jaime Villagomez

Legal and Fraud Update

Presented by the General Counsel and the Associate General Counsel

Confidential presentation by Stephen LaPorte and Jacob Rogers The advisors dropped off the meeting due to confidentiality

Meeting Adjourned for an Executive Session of trustees with the CEO and CFO

Respectfully submitted by Amy Vossbrinck

APPENDIX: PASSED RESOLUTIONS

Resolution: Minutes Approval, February 2024

This resolution was approved on April 16, 2024.

RESOLVED, that the Audit Committee hereby approves the minutes from the February 27, 2024 Audit Committee meeting.

Move to approve: Mike Peel Seconded: Tanya Capuano Unanimous approval by voting members.

Resolution: Form 990 and 990-T Approval for FY 22-23

This resolution was approved on April 17, 2024.

Whereas, the Foundation has prepared with KPMG the Form 990 and 990-T for submission to the Internal Revenue Service for fiscal year 2022-2023.

RESOLVED, that the Audit Committee hereby approves the Form 990 and 990-T for fiscal year 2022-2023.

Approve - Committee Members Kathy Collins (Chair), Mike Peel, Raju Narisetti, Lorenzo Losa

Approve - Advisory Members Tanya Capuano

Resolution: Advisory Member Renewal Approval, April 2024

This resolution was approved on April 16, 2024.

RESOLVED, that the Audit Committee hereby appoints the following Volunteer Advisory Members through May 31, 2025 pursuant to the Audit Committee Charter:

Julian Singh (continuing from June 2023 appointment) Michael Snow (continuing from June 2023 appointment)

Move to approve: Kathy Collins Seconded: Mike Peel Unanimous approval by voting members.

Resolution: KPMG Auditor Approval for FY 23-24

This resolution was approved on April 16, 2024.

RESOLVED, that the Audit Committee hereby approves KPMG as the external auditor for the fiscal year 2023-2024 audit of financial statements.

Move to approve KPMG FY 23-24 Fees: Kathy Collins Seconded:Luis Bitencourt-Emilio Unanimous approval by voting members.