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Board Finance Committee (BFC) Minutes

BFC Attendees: Sébastien Bachollet, Cherine Chalaby (Chair), Chris Disspain, and George Sadowsky

Other Board attendees: Akram Atallah and Steve Crocker

Invited Attendees: Olga Madruga-Forti

Staff Members Present: Xavier Calvez – Chief Financial Officer, Michelle Bright, Samantha Eisner, Amy Stathos and Alina Syunkova.


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

  1. Welcome and Introduction: The Chair welcomed Olga Madruga-Forti to the Board and called for a moment of silence in commemoration of the 9/11 attacks.

  2. FY13 BFC Schedule: The BFC reviewed its upcoming work schedule, particularly the timing in which the strategic plan is posted in draft and is approved, as well as the posting of the budget framework. The BFC also discussed the proposed ability to receive quarterly financial reports, and agreed to receive the first report at a BFC meeting.

    • Action:

      • Staff to identify and document standard procedures for the annual operating plan/budget process, including timeframe for responding to community comments.

      • BFC will review budget development cycle at next meeting.

  3. FY13 Budget Recap: The BFC reviewed the FY13 budget, noting the budgets associated with ICANN operations and the New gTLD Program.

  4. Contingency Fund Update: The BFC reviewed the status of the contingency fund, set at US$3.7 million. The BFC discussed the modifications to the contingency fund to remove items from the operating budget that are of a contingent nature, such as legal fees.

  5. Operating Fund Update: The BFC reviewed the status of the operating fund, at approximately US$30.5 million. The BFC noted that in Toronto, the BFC will begin a discussion of how to address a surplus in the Operating Fund, if there is one, and where those funds should be applied.

  6. Reserve Fund Update: The BFC reviewed the status of the reserve fund, which is currently at approximately US$53.4 million.

  7. New gTLD Fund Update: The BFC reviewed the status of the New gTLD Fund, currently at approximately US$353.8 million. The funds are currently held in fully insured accounts.

  8. Reserve Fund Target Setting: The BFC discussed the identification of limits for the reserve fund, including a review of regulatory requirements for reserve funds. A position paper will be developed for BFC discussion in Toronto, including benchmarking against other organizations, to identify a target and a process for reaching a target. The BFC noted the possibility for community comment on further direction in this area.

    • Action:

      • Staff to provide position paper on reserve fund limit.

  9. ccNSO Finance Working Group/Prague Follow-up: The BFC received a report from the CFO regarding the issue raised in Prague that the Expense Area Grouping (EAG) reporting does not support the ccNSO Finance WG process, and the work performed since Prague. Meetings have occurred with the leadership of the ccNSO to work on identifying a proposed path forward, which requires presentation to the ccNSO Finance Working Group. These discussions are expected to occur in Toronto.

  10. FY14 Budget Process Improvements: The BFC discussed the work towards addressing the community comments on how the budget process can be improved including improving the linkages between the strategic plan and the operating plan; improving the budget timing/calendar; and improving the data structure included in the budget. There are three working groups underway addressing these items, and there will be further discussions to identify improvements that can be implemented prior to Toronto. In Toronto, there will be BFC review and community sessions, and further improvements may be incorporated after Toronto. The BFC discussed the need to decouple the strategic planning cycle from the budget framework cycle to allow for more efficient planning.

    • Action:

      • Staff to provide BFC proposal on plan to operate strategic planning cycle in parallel with the operating plan/budget cycle and a timeline for the future operation of the cycles.

  11. Quarterly Financial Reporting: The BFC discussed the anticipated receipt of quarterly financial reports. The first set will be provided to the BFC in a meeting, and subsequently by email. The reporting will also be distributed to the Board once refined with the BFC. The contents will include comparison to budget and other relevant items of comparison.

  12. Any Other Business: The BFC had a brief discussion on performing a risk assessment update on the New gTLD Program financial risk analysis, including the possibility of obtaining additional external inputs on the financial risk component. A BFC member raised the budget component of three-year planning for ICANN meeting locations, in coordination with the Public Participation Committee.

    • Action:

      • Staff will come back with a recommendation on how to pursue an update on the financial assessment of the risks in the New gTLD Program.

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."