Minutes of Meeting, 29 Jun 2009
A meeting of the Audit Committee of the Internet Society (ISOC) was held on Monday, June 29, 2009 at 15:00 UTC. The meeting was held telephonically. In attendance were Ted Hardie, ISOC’s Treasurer and Chairman of the Audit Committee, Patrik Fältström and Raul Echeberria as members of the Audit Committee. Also in attendance were members of ISOC’s management team, Lynn St.Amour, President and Chief Executive Officer, Greg Kapfer, Chief Financial Officer, and Lynn DuVal, Director of Finance. Representing Grant Thornton were Lisa Lipsky, Partner, and Ron Weller, Engagement Manager.
Dr. Hardie called the meeting to order. As all the members of the Audit Committee were present, a quorum was present for the meeting.
Ms. Lipsky explained Grant Thornton’s responsibilities and the responsibilities of management. Ms. Lipsky noted that Grant Thornton’s report included an unqualified opinion. Ms. Lipsky also pointed out that as part of Grant Thornton’s review, all 2007 recommendations regarding internal control enhancements had been implemented, and no additional issues had been noted in their 2008 audit review.
Mr. Waller then outlined the scope of the audit and the timeline for the audit. Mr. Waller explained that there were no misstatements noted. Mr. Waller further stated that ISOC’s accounting policies were consistently applied and that there were no difficulties encountered during the audit.
Mr. Waller then delivered a high level overview of the audited statements.
Ms. Lipsky then asked the Committee to enter into Executive Session in accordance with accounting requirements. The Committee excused Mr. Kapfer and Ms. St.Amour for this session.
Acceptance of the Audited Statements for 2008, as presented by Grant Thornton
Dr. Hardie called for a motion for acceptance of the Audited Financial Statements for 2008, as presented by ISOC’s independent auditors. Mr. Fältström presented the following resolution:
Resolution: Acceptance of 2008 Audited Financial Statements.
RESOLVED: The Audit Committee hereby accepts the 2008 Audited Financial Statements, as presented by Grant Thornton, and
FURTHER RESOLVED: That the Audited Financial Statements be forwarded to the Board of Trustees with the Audit Committee’s recommendation for Board acceptance.
Mr. Echeberria seconded and carried the motion, and the resolution passed unanimously.
ISOC management representatives were invited to rejoin the meeting.
Report on Annual Conflict of Interest Submissions
Mr. Kapfer reported that all members of the Board of Trustees and senior management had submitted annual conflict of interest reports. The submissions were presented to the Audit Committee for review and no conflicts were noted. Ms. St.Amour noted that annual submissions historically had been reviewed by ISOC’s President/CEO and Board Chairman. Ms. St.Amour and Mr. Kapfer indicated that the submissions by Board members and executive team reflected no conflicts. Dr. Hardie asked that management seek confirmation at the next Board of Trustees meeting that the Audit Committee should assume the responsibility to review the submissions and report to the Board of Trustees.
Report on Whistle Blower Compliance
Mr. Kapfer reported that there have been no incidents of reporting under the Internet Society’s Whistle Blower Policy and independent reporting program. Ms. DuVal noted that any report under ISOC’s Whistle Blower policy was automatically reported to the Chairman of the Board of Trustees. Ms. Lipsky added that this process comported with best practices for whistle blower processes.
Review of the Audit Committee Charter and the Committee’s Annual Performance
The Charter of the Audit Committee requires that the Committee review its Charter, and the performance of the Committee under the Charter, at least annually. Ms. St.Amour asked Ms. Lipsky if it was clear in the Charter that the ISOC Audit Committee reviewed the combined financial reports of ISOC and PIR, but that the ISOC Audit Committee relied on the review of PIR’s independent audit by PIR’s Board of Directors, which serves in the capacity of PIR’s Audit Committee. Both ISOC and PIR use Grant Thornton as their independent audit firm; however ISOC’s financial statements are presented in a combined format with the results of PIR’s audit. Ms. Lipsky recommended that this reliance on PIR’s audit be added to the charter of the ISOC Audit Committee. Mr. Kapfer and Ms. St.Amour agreed to ensure that the relevant PIR documents reflect that PIR’s processes also acknowledge that ISOC’s Audit Committee relies upon PIR’s formal review of the PIR independent audit.
Based on this discussion, Mr. Kapfer informed the Audit Committee that he would submit a draft revision of the Audit Committee Charter for an e-vote of the Committee, to be ratification by the Committee in a subsequent meeting of the Committee in Stockholm.
Dr. Hardie then asked if there was any further business to be brought forward. There being no further business, Mr. Fältström moved that the meeting of the Audit Committee be adjourned. Mr. Echeberria seconded. The motion was carried, and the meeting was adjourned.