Board Finance Committee (BFC) Minutes 10 March 2012

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

Other Board attendees: Steve Crocker, Bruce Tonkin, Judith Vazquez, and Suzanne Woolf (for the security update only)

Staff Members Present: Akram Atallah – Chief Operating Officer, Xavier Calvez – Chief Financial Officer, Jeff Moss – Chief Security officer (for the security update only), Kurt Pritz – Senior Vice President, Stakeholder Relations; John Crain (for the security portion of meeting), Patrick Jones (for the security update only), Amy Stathos and Diane Schroeder

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

1. Minutes. The BFC approved the minutes of the prior meetings from January 2012.
2. BFC Schedule. Discussed BFC schedule for the fiscal year, and planning for upcoming meetings.
3. Contingency Fund Update. Staff provide the committee with a brief update on the contingency fund, including the items and amounts that have already been identified as those for which the contingency fund needs to be applied.
   • Action:
     • Staff to provide committee members with some details on the particular line items.
4. Contracting and Disbursement Policy. Discussed proposed revisions to the ICANN Disbursement Policy, including a change in title to make the scope of the policy clearer and to clarify that once a particular budget item is approved, management need not seek further approvals to contract for or make disbursements for those budgetary items, even if in excess of the contracting and disbursement authority under the policy.
   • Action:
     • Staff to prepare a draft Board resolution and distribute to the BFC for review and then to the Board for approval.
5. Budget Framework Update. The committee discussed the comments that have been received on the Budget Framework. The committee further discussed how those comments will be addressed. The committee discussed how the strategic objectives were determined and how community input went into the development. There was also a discussion of matching the three-year strategic plan and a three year budget, including a discussion that some fiscal years will have two Public Meetings, while others might have four depending on dates of meeting (the discussion on second and third year plans were at a high level).
   • Action:
     • Staff to provide a road map on how to develop a financial projection over three years in two forms, one with and one without the impact of the new gTLD.
6. SO/AC/BC requests. Staff briefed the committee on the various budget requests and the process model to be used to evaluate the requests. This process will be vetted with the community in Costa Rica. Once the process is vetted with the community members, the requests will be evaluated pursuant to that process/model. Then, after running the model on the requests, the results will be presented to the community for further discussion. The committee also discussed possible alternative process methods.
   • Action:
     • Staff to present process to community during Costa Rica meeting.
7. Financial System Replacement (FSR) Implementation update. Staff provided a brief update on the status of the FSR and how staff manages the implementation of the project. Staff explained that the testing phase took longer than anticipated and was more complicated than expected.
   • Action:
     • Staff to provide further update and responses to questions about scalability, controllability and reporting.
8. Security Update. The security team provided an update on plans for addressing the threat against the DNS root servers and the budgetary impact those plans may involve.
   • Action:
     • Staff to present report to the Risk Committee and then come back to the BFC with a recommendation from the Risk Committee.
9. Reserve Fund Update. Staff provided the committee with a status report on the Reserve fund contribution and income on those contributions.
   • Action:
     • Staff to provide the committee with information on the cash position of the operating fund and make that, as well as the update on the reserve fund, as part of the regular reporting at each BFC meeting.
10. Form 990 Update. Staff provided the committee a status report on the development of the form 990.
    • Action:
      • Staff to ensure this is on the May agenda before the form is delivered to the full Board.
11. A/P status. Staff provided the committee with a status report on the A/P process improvements.