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, 21 July, 2010 at 17:00 UTC. In attendance were Eva Frölich, ISOC’s Treasurer and Chair of the Audit Committee, Bert Wijnen and Eric Burger as members of the Audit Committee.

Also in attendance were Lynn St.Amour, ISOC’s President and Chief Executive Officer, Greg Kapfer, Chief Financial Officer, and Sandy Spector, Director of Finance. Representing Grant Thornton were Lisa Lipsky and David Green.

Call to Order

Eva 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. Mr. Green 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. He then delivered a high level overview of the audited statements.

Greg 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 was made on 18 June.

As required by the Audit Committee Charter and accounting principles, Eva asked the Committee to enter into Executive Session. 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 2010, as presented by Grant Thornton

Eva called for a motion for acceptance of the 2010 Audited Financial Statement presented by ISOC’s independent auditors. Eric presented the following resolution:

Resolution: Acceptance of 2010 Audited Financial Statements.

RESOLVED: The Audit Committee hereby accepts the report from ISOC’s independent auditors and the resultant 2010 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 2010 Consolidated Audited Financial Statements of the Internet Society be forwarded to the Board of Trustees with the Audit Committee’s recommendation for Board acceptance.

Bert seconded the motion, and the resolution passed unanimously.

Report on Annual Conflict of Interest Submissions

Eva reported that the Charter of the Audit Committee tasked the Audit Committee with the periodic review of Annual Disclosure forms under ISOC’s Conflict of Interest Policy. Greg reported that all forms had been received from Trustees, Trustees-Elect, Officers, and members of ISOC’s executive management team. All responses were posted on the Board Intranet for inspection by other Trustees. Greg pointed out that under the new Conflict of Interest rules for executive staff, the CEO would be responsible for review of those disclosures. However, Lynn agreed to summarize her annual review with the Audit Committee.

Eva asked for any discussion of the disclosure forms. Greg noted that one Trustee acted on behalf of ISOC on a short-term project of small scope, which was disclosed by the Trustee. The Committee agreed that this did not constitute a conflict of interest. There being no further comments, Eva reported that she would summarize the reported disclosures to the Board.

Report on Whistle Blower Compliance

Greg reported that there have been no incidents of reporting under the Internet Society’s Whistle Blower Policy and independent reporting program. All such reports are made by a third party to the Board Chair and to the Chair of the Audit Committee. Bert asked that Greg confirm that Raul had received no such reports for the record, and Eva reported that she had received no reports.

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. Greg noted that the Charter of the Audit Committee might be amended at the upcoming meeting of the Board, with the additional creation of a Finance Committee. Ms. Frölich asked the other members of the Committee if they noted any points in the proposed Audit Committee or Finance Committee charters that required clarification. There were no instances noted.

AOB

Eva expressed her sincere appreciation to Bert and Eric for their service on the Audit Committee. Lynn and Greg expressed their appreciation for the dedication and effort of the members of the Audit Committee.

Adjournment

Eva then asked if there was any further business to be brought forward. There being no further business, Bert moved that the meeting of the Audit Committee be adjourned. Eric seconded and carried the motion, and the meeting was adjourned.