Meeting (19 May 2015)

A meeting of the Audit Committee of the Internet Society (ISOC) was held on Tuesday, 19 May 2015 at 11:30 UTC. In attendance were Eric Burger, Chair of the Audit Committee, Rudi Vansnick, Gihan Dias and Narelle Clark as members of the Audit Committee. Kathy Brown sent her regrets.

Also in attendance were Greg Kapfer, Chief Financial Officer; and Sandy Spector, Director of Finance. Representing McGladrey were Janette Burke and Nikki Bagwell.

Call to Order

Eric called the meeting to order, as a quorum was present.

Review of the Annual Independent Audit

Ms. Burke explained McGladrey’s responsibilities and the responsibilities of ISOC’s management. Ms. Burke noted that McGladrey’s report included an unmodified opinion, representing the highest level of clean opinion.

Ms. Bagwell then gave an overview of the audit process. Ms. Bagwell then reviewed the results of McGladrey’s audit and noted that ISOC’s accounting policies were consistently applied. She noted that no audit adjustments or control deficiencies were found. Ms. Bagwell then walked through the 2014 financial statement highlights.

Ms. Burke reviewed McGladrey’s recommendation that ISOC establish a formal corporate risk assessment policy.  Ms. Burke offered to introduce the company to McGladrey representatives who can give ISOC more direction on risk assessments.

Ms. Bagwell noted that ISOC’s Audited Financial Statements incorporated the statements of Public Interest Registry (accepted by the PIR Board at a meeting on May 11^th).  The Committee discussed the risk to PIR of the amount shown on the consolidated financial statements as deferred payments to PIR’s registry operator. McGladrey noted that they had reviewed the statements of the provider and although PIR activity represented about 40% of the operator’s revenue, McGladrey felt that little risk of financial instability was present.

As required by the Audit Committee Charter and accounting principles, Eric asked the Committee to enter into Executive Session. The Committee excused the members of ISOC’s management for this session. In executive session, the auditors reiterated that the processes and procedures of ISOC met current accepted standards, the auditors had the full cooperation of management, and that ISOC was doing much better work than many comparable nonprofit organizations.

Following the Executive Session, the management participants returned.

Narelle suggested that ISOC and PIR managements seek opportunities to coordinate internal control activities and overall processes.

Eric and the Committee thanked the Accounting staff for exemplary work.

Adjournment

With no other business, the meeting was adjourned at 12:30 UTC.

All Board Audit Committee Meeting Minutes