ICANN Org Ends FY18 Under Budget with Operations Expenses Contained
Now that an overview of our FY18 financials has been posted, I’d like to share a few highlights of our financial performance against the budget. All the figures I mention below are preliminary, unaudited figures.
At the beginning of FY18, we projected that funding for ICANN operations would be lower than anticipated by up to $8M; this was confirmed as the year passed by. Our FY18 funding was $133.6M, a decline of $1M compared with FY17 and $9.2M lower than budget. This is mainly due to a slower-than-anticipated growth of new TLD registrations.
However, collectively, the Board, community and organization were successful in managing FY18 expenses, which totaled $132.2M; a decrease of $1.7M compared with FY17 and $13.7M lower than budget. Given the stabilization of our funding, ICANN org reduced costs so that expenses would not exceed funding. I want to thank the ICANN org, Board and community for all your efforts throughout the year.
Here are highlights from expenses categories:
- Personnel expenses were $0.8M lower than budget. This was the result of ICANN org's careful resource management and strategy to control headcount growth. For example, some vacated positions have not been back-filled, with work reallocated or departments restructured to absorb the workload. Additionally, any hiring requests, for both new positions and replacements, are thoroughly evaluated by the Executive Team and approved by me. As a result, ICANN org has reduced the year-on-year growth of its personnel from 9 percent budgeted to an actual increase of only 2 percent. Headcount stood at 395 as of 30 June 2018.
- Travel and Meetings expenses were lower than budget by $2.3M due to greater control, planning and coordination, and reduced personnel travel to ICANN meetings and non-ICANN meetings.
- Professional Services expenses were lower than budget by $6.6M, despite spending an unbudgeted $2.2M on General Data Protection Regulation (GDPR) related advice. This was due to: (i) costs reduced or avoided on Work Stream 2 legal advice, lower legal fees (other than GDPR and new gTLD program related), lower contractual compliance audit costs, lower transcription and scribing costs; and (ii) slower-than-planned progress on community-driven projects (reviews, internationalized domain name programs, WHOIS, etc.)
- Administration and Capital expenses were lower than budget by $2M, primarily due to a change in the timeline of the Open Data Initiative, and less sponsorships paid.
In total, we generated an operational excess of nearly $2M. We are in the process of creating a recommendation to the ICANN Board on how these excess funds should be allocated, once the audit of the FY18 financial statements is completed.
I am pleased with ICANN’s fiscal responsibility, and I know it’s not always easy to do this. Thank you again for your efforts and contribution.