Minutes | Board Audit Committee (AC) Meeting
AC Attendees: Steve Crocker, Ron da Silva, Chris Disspain, Mike Silber (Chair), and Lousewies van der Laan
Other Board Member Attendees: Akinori Maemura
Invited Observer: Sarah Deutsch
ICANN Organization Attendees: Michelle Bright (Board Operations Content Manager), Xavier Calvez (Chief Financial Officer), Samantha Eisner (Deputy General Counsel), Becky Nash (VP, Finance), Lisa Saulino (Board Operations Senior Coordinator), Amy Stathos (Deputy General Counsel) and Cherrie Teves (Controller)
Invited Guests: Representatives from independent audit firm BDO
The following is a summary of discussions, actions taken and actions identified:
Auditor's Presentation on FY17 Audit Status – Independent auditors BDO presented a status update of the FY17 audit process. BDO advised that the audit has been substantially completed with a few final areas being reviewed for completeness and quality controls. BDO expects to issue its audit report before the end of the month. BDO discussed its findings as of the date of this meeting. As of the date of this meeting, BDO has found no indications of fraud, no material weaknesses, no concerns with revenue recognition, no material misstatements, and no material issues that need to be separately reported to the audit committee. BDO also conducted a separate audit of Public Technical Identifiers (PTI) operations. For the PTI audit, BDO assessed the entity structure, the different agreements associated with the accounting, and PTI's analysis over control and consolidation. BDO also evaluated and tested the overall expenses to make sure that they were properly classified and supported. BDO found that PTI appeared to be properly analyzed and consolidated into ICANN organization's financial statements and expenses appear proper. BDO noted that it will be conducting a separate audit for PTI on a stand-alone basis at a different level to issue separate financial statements. The AC reviewed the draft Auditor's report.
Review of Draft Audited Consolidated Financial Statements for FY16 and FY17 – The AC reviewed and discussed the draft audited Consolidated Financial Statements for FY16 and FY17, which comprise the consolidated statements of financial position as of 30 June 2017 and 2016 and the related consolidated statements of activities and cash flows for the years then ended. The Consolidated Financial Statements for FY16 and FY17 have been audited by independent auditors BDO. BDO's conclusions are set forth in the independent auditor's report section of the Consolidated Financial Statements for FY16 and FY17. BDO concluded that the consolidated financial statements for FY16 and FY17 present fairly the consolidated financial position of ICANN organization and its affiliate PTI, and the changes in its net assets and its cash flows for the years then ended. The AC noted that the draft Consolidated Financial Statements for FY16 and FY17 provide the breakdown of ICANN organization's financial statements into the segments for ICANN organization and its affiliate, PTI. The operations for PTI started on 1 October 2016 and, as a result, nine months of operations are reported. The AC engaged in a discussion regarding whether the language in relevant portions of the Consolidated Financial Statements for FY16 and FY17 sufficiently capture the status of the auction proceeds. The AC asked ICANN organization to evaluate the Consolidated Financial Statements for FY16 and FY17 for this purpose and revert to the AC by the end of the week.
Action: ICANN organization staff to evaluate whether the language relevant portions of the Consolidated Financial Statements for FY16 and FY17 sufficiently capture the status of the auction proceeds and revert to the AC via email by the end of the week.
Published on 31 October 2017