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Minutes – Board Audit Committee (AC) Meeting

AC members present: Harald Alvestrand, Steve Crocker and Rita Rodin Johnston – chair.

Staff Members Present: Doug Brent, Samantha Eisner, John Jeffrey, Diane Schroeder, Amy Stathos, and Kevin Wilson


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

  • Unanimously approved minutes from previous meeting, and discussed use of online approval tool to allow for future minutes to be approved and posted to the public without waiting for the next meeting of the AC. Action: Staff to circulate notes to AC with proposed minutes regarding use of online tool.
  • Discussed public report of committee for presentation at the Sydney meeting. Action: Staff to revise report to address AC member comments and post.
  • Received Staff report on status of audit of financial statements for fiscal year ending 30 June 2009, with anticipated presentation of financial statements and management comments at Seoul meeting.
  • Received Staff update on and discussed process for investigating auditor rotation and engagement of auditor for FY10. Action: Staff to obtain proposals from potential auditors of varying sizes and provide analysis of proposals to AC for evaluation in Seoul.
  • Received Staff update on process for completing new Form 990, including the need for educating Board members on the changes and their obligation relating to the completed Form 990 before filing with the IRS. Discussed the need for staff to clearly identify director obligations, how Staff may assist directors in fulfilling those obligations, and how to instill the best practices for institutional confidence. Action: Staff to identify directors’ obligations in connection with the new Form 990.
  • Discussed ICANN’s public charity status pursuant to the Internal Revenue codes. Action: Prior to Seoul, Staff to provide AC with briefing on basis for public charity determination and potential outcomes if ICANN is not able to maintain this determination.
  • Discussed ability for not-for-profit organization to receive surplus funds.
  • Discussed addition of cost accounting principles to the financial policies and procedures, particularly in light of need to deliver on cost/revenue neutral programs, such as the new gTLD program, and the reality of increased revenue at ICANN. Action: Staff to draft an explanatory document by Seoul regarding the specifics of the process and principles.
  • Discussed AC best practices both for Boards and Management. Action: Staff to provide information on how to integrate suggested best practices into the AC work plan.
Domain Name System
Internationalized Domain Name ,IDN,"IDNs are domain names that include characters used in the local representation of languages that are not written with the twenty-six letters of the basic Latin alphabet ""a-z"". An IDN can contain Latin letters with diacritical marks, as required by many European languages, or may consist of characters from non-Latin scripts such as Arabic or Chinese. Many languages also use other types of digits than the European ""0-9"". The basic Latin alphabet together with the European-Arabic digits are, for the purpose of domain names, termed ""ASCII characters"" (ASCII = American Standard Code for Information Interchange). These are also included in the broader range of ""Unicode characters"" that provides the basis for IDNs. The ""hostname rule"" requires that all domain names of the type under consideration here are stored in the DNS using only the ASCII characters listed above, with the one further addition of the hyphen ""-"". The Unicode form of an IDN therefore requires special encoding before it is entered into the DNS. The following terminology is used when distinguishing between these forms: A domain name consists of a series of ""labels"" (separated by ""dots""). The ASCII form of an IDN label is termed an ""A-label"". All operations defined in the DNS protocol use A-labels exclusively. The Unicode form, which a user expects to be displayed, is termed a ""U-label"". The difference may be illustrated with the Hindi word for ""test"" — परीका — appearing here as a U-label would (in the Devanagari script). A special form of ""ASCII compatible encoding"" (abbreviated ACE) is applied to this to produce the corresponding A-label: xn--11b5bs1di. A domain name that only includes ASCII letters, digits, and hyphens is termed an ""LDH label"". Although the definitions of A-labels and LDH-labels overlap, a name consisting exclusively of LDH labels, such as""icann.org"" is not an IDN."