BFC Attendees: Sébastien Bachollet, Cherine Chalaby (Chair), Chris Disspain, Bruno Lanvin, George Sadowsky and Mike Silber
Other Board member Attendees: Erika Mann and Bruce Tonkin
ICANN Executive and Staff Member Attendees: Megan Bishop (Board Support Coordinator), Xavier Calvez (Chief Financial Officer), John Jeffrey (General Counsel and Secretary), Jacks Khawaja (Enterprise Risk Management Director), Vinciane Koenigsfeld (Board Support Content Manager), Ashwin Rangan (Chief Innovation & Information Officer) Amy Stathos (Deputy General Counsel), Taryn Presley (Sr. Manager, FP&A) and Wendy Profit (Board Support Specialist)
The following is a summary of discussions, actions taken and actions identified:
BFC Schedule – The BFC discussed its schedule, which is on track as planned.
Budget – The BFC reviewed the FY14 Budget, which is showing a total revenue of approximately US$200 million for the year and total operating expenses of approximately US$150M. The projected revenue for FY15 is approximately US$173M. The committee also discussed budgeted costs.
Contingency Fund – The BFC reviewed the status of the FY14 Contingency Fund. The BFC was advised that US$4.8 million of expenditures have been applied against the US$3.7 million the contingency fund as a result of 1Net and NETmundial related expenses, leaving approximately US$1.1 million of expenditures not captured by the contingency fund. This additional amount has been covered by the reduction of scope of the Strategy Panels, which reduced that budget item by approximately US$2.0 million.
Operating Fund – The BFC discussed the status of the operating fund, noting that the operating cash on hand has increased by approximately US$6.1 million from December 2013 to March 2014 mainly as a result of: (i) reimbursement of historical development costs from the New gTLD Program; (ii) reimbursement of direct and allocated staff costs to the New gTLD Program; and other net variances.
Reserve Fund – The BFC reviewed the status of the reserve fund, which is currently set for a 12-month period. The BFC was advised that the fund balance is currently approximately US$82.3 million. There is still approximately another US$10M to be re-paid to the reserve fund from historical costs over the next 18 months on a quarterly basis.
New gTLD Cash/Investments – The BFC noted that the new gTLD investments had a larger return on investment than anticipated.
Variance Report – Staff briefed the BFC on variance analysis compared the budget of FY14 for entire organization to the forecasted amount for FY14 (including Operations and New gTLD Program), using ten months of actual activity through April 2014 and forecast for May and June 2014. Budget revenue of approximately US$200M and forecast revenue of approximately US$127M. The committee then looked at the Operations separately from the New gTLD Program, showing budget and forecast of approximately US$92M, with forecasted revenue being approximately US$84M, which is approximately US$4M deficit from budget to forecast, and investments forecasted to be approximately US$13M compared to budget of approximately US$11M, leading to a total net asset change of approximately US$2M less than budget. The BFC then also looked at the New gTLD Program operations. The committee also discussed the best manner in which to present the information to the public in order to allow them to compare forecasted amounts to budgeted amounts.