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Minutes | Meeting of the Audit Committee of the Board (BAC) | 26 September 2023

BAC Attendees: Alan Barrett, Christopher Chapman, Sarah Deutsch, Sajid Rahman (Chair), and Katrina Sataki

Other Board Member Attendees: Avri Doria, James Galvin, and Patricio Poblete

ICANN org Attendees: Bridget Bilyk (Accounting Manager), Xavier Calvez (SVP, Planning and Chief Financial Officer), Franco Carrasco (Board Operations Manager), Elizabeth Le (Associate General Counsel), Becky Nash (VP, Planning), Shani Quidwai (Sr. Director Finance), and Amy Stathos (Deputy General Counsel)

Invited Guests: Representatives from independent audit firm and BAC Independent Adviser

The following is a summary of discussions, actions taken and actions identified:

  1. Agenda review – The Chair reviewed the agenda for the meeting.

  2. ICANN FY23 Independent External Audit – The BAC received a briefing from ICANN's independent audit firm on the FY23 audited financial statements, which includes PTI's financial statements. The audit was performed in accordance with the audit plan. The audit firm reported on several aspects of its work as part of its required communications to the BAC. Among other things, the audit firm reported that: (i) ICANN's accounting practices and policies are appropriate, they comply with generally accepted accounting principles and industry practice, they were consistently applied and they are adequately described in the financial statements; (ii) that the revenue recognition of transaction fee revenue and new gTLD revenue were recorded appropriately and are reasonable; (iii) that expenses appear reasonable and classified; (iv) that accounts receivable and allowance for doubtful accounts appear reasonable; and (v) that investments, investment income and realized and unrealized gains and losses were properly stated and reasonably valued. As the firm previously informed the BAC, the audit included new accounting pronouncement (ASC 842) which requires companies to classify all leases as operating or financial leases. The firm noted that it was a "clean audit" with an unmodified opinion, indicating that no audit adjustments, significant deficiencies or material weaknesses were identified this year,

  3. Review of Financial Statements for FY23 – The Committee received a briefing on the draft FY23 Audited Financial Statements. Specifically, the Committee received a high-level overview of the financial results. The funding for FY23 totaled US$150 million, which resulted in a change in the net assets by an increase of US$10 million. The total funds under management at the end of FY23 totaled US$518 million, which includes the US$170 million in the Reserve Fund. The Committee also received an overview of the impact of the new accounting pronouncement (ASC 842) on the financial statement, which is explained in detail in Note 2 in the draft FY23 Audited Financial Statements. The Committee discussed adding a note to the FY23 Audited Financial Statement to reflect the amount that was transferred to the Reserve Fund for the year, and asked ICANN org to update the draft FY23 Audited Financial Statement accordingly. The Committee also reviewed the expenses associated with the New gTLD Program: Next Round for FY23.

    • Action – ICANN org to update the draft FY23 Audited Financial Statement to reflect the amount that was transferred to the Reserve Fund for the year.

Published on 15 November 2023