Minutes of the Meetings of the Audit Committee of the Internet Society

A meeting of the Audit Committee of the Internet Society (ISOC) was held on Thursday, June 10, 2010 at 16:45 EST. In attendance were Ted Hardie, ISOC’s Treasurer and Chair of the Audit Committee, Bert Wijnen and Hiroshi Esaki as members of the Audit Committee.

Also in attendance were Eric Burger, ISOC Trustee, and Eva Frölich, ISOC Trustee-elect, Lynn St.Amour, ISOC’s President and Chief Executive Officer, Greg Kapfer, Chief Financial Officer, and Dana Matthews, Senior Accounting Manager. Representing Grant Thornton was Lisa Lipsky, Audit Partner.

Call to Order

Dr. Hardie called the meeting to order. As all the members of the Audit Committee were present, a quorum was present for the meeting.

Review of the Annual Independent Audit

Ms. Lipsky explained Grant Thornton’s responsibilities and the responsibilities of ISOC’s management. Ms. Lipsky noted that Grant Thornton’s report included an unqualified opinion.

Ms. Lipsky then outlined the scope of the audit and the timeline for the audit. She reviewed the results of Grant Thornton’s review and noted that ISOC’s accounting policies were consistently applied and that there were no difficulties encountered during the audit. She then delivered a high level overview of the audited statements.

Mr. Kapfer noted that ISOC’s Audited Financial Statements incorporated the statements of Public Interest Registry (PIR). Therefore, as provided in the Charter of the ISOC Audit Committee, the Audit Committee relies upon the review of PIR’s audited statements by PIR’s Board of Directors. That review and acceptance is scheduled for 17 June.

Ms. Lipsky then asked the Committee to enter into Executive Session in accordance with accounting requirements. The Committee excused the members of ISOC’s management for this session.

Following the Executive Session, the excused participants returned.

Acceptance of the Audited Statements for 2009, as presented by Grant Thornton

Dr. Hardie called for a motion for acceptance of the 2009 Audited Financial Statement presented by ISOC’s independent auditors. Mr. Wijnen presented the following resolution:

Resolution: Acceptance of 2009 Audited Financial Statements.

RESOLVED: The Audit Committee hereby accepts the report from ISOC’s independent auditors and the resultant 2009 Consolidated Audited Financial Statements of the Internet Society, as presented by Grant Thornton, in reliance upon the concurrent review of PIR’s independent audit by its Board of Directors; and

FURTHER RESOLVED: That the 2009 Consolidated Audited Financial Statements of the Internet Society be forwarded to the Board of Trustees with the Audit Committee’s recommendation for Board acceptance.

Professor Esaki seconded the motion, and the resolution passed unanimously.

Report on Annual Conflict of Interest Submissions

Mr. Kapfer reported that the Charter of the Audit Committee had been amended in July 2009 to task the Audit Committee with the periodic review of Annual Disclosure forms under ISOC’s Conflict of Interest Policy. Mr. Kapfer reported that Management would send Disclosure forms for completion prior to the June 19-20 meeting of the Board of Trustees, and report to the Audit Committee prior to its scheduled report to the Board.

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. Mr. Kapfer noted that any report under ISOC’s Whistle Blower policy was automatically reported to the Chair of the Board of Trustees and ISOC’s President. Dr. Hardie asked Mr. Kapfer to obtain confirmation as to the absence of any reported incidents from the Chair, sent to the Audit Committee for the record.

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. Dr. Hardie asked the other members of the Committee if they noted any points in the Charter that required amendment, or any items that the Committee could not perform during the previous year. There were no instances noted.

AOB

Dr. Hardie expressed his sincere appreciation to Mr. Wijnen and Professor Esaki for their service on the Audit Committee. Ms. St.Amour and Mr. Kapfer expressed their appreciation for the dedication and effort of the members of the Audit Committee, including the two members who will depart at the end of their term as Trustee of the Internet Society: Dr. Hardie, who has served as ISOC Treasurer for two years, and Professor Esaki, who has served on the Audit Committee for the past year.

Adjournment

Dr. Hardie then asked if there was any further business to be brought forward. There being no further business, Mr. Wijnen moved that the meeting of the Audit Committee be adjourned. Professor Esaki seconded. The motion was carried, and the meeting was adjourned.