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 Friday, October 29, 2010 at 12:00 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, Linda Klieforth and Sandra Spector from ISOC’s accounting office. Representing Grant Thornton were Jocelyne Miller and Mary Torretta.

Call to Order

Ms. Frölich called the meeting to order. As all the members of the Audit Committee were present, a quorum was present for the meeting. Ms. Frölich introduced the attendees.

Approval of Minutes

Mr. Kapfer presented the minutes of the September 2nd meeting of the Audit Committee for approval. Ms. Frolich moved to approve the minutes as written.

Resolution: Approval of the Minutes.

RESOLVED: The Audit Committee hereby approves the minutes of the September 2, 2010 meeting of the Audit Committee.

Mr. Wijnen seconded the motion, which was approved unanimously.

Review of ISOC’s Annual Form 990 Tax Return Filing

Mr. Kapfer summarized that the role of the Audit Committee was to review ISOC’s 2009 U.S. income tax return (Form 990) in accordance with U.S. Internal Revenue Service guidelines and according to the direction given by ISOC’s Board of Trustees.

Ms. Miller summarized the purpose of the Form 990. She outlined the different parts of the return and the supporting Schedules that pertained to ISOC. Ms. Miller reviewed each part of the 990 and the supporting Schedules. The Committee asked a number of questions which were answered by either Ms. Miller or by management.

Mr. Kapfer explained that the process for filing the tax return included noting in these minutes that the Audit Committee had performed a detailed review of the tax return, whereupon the full tax return in its final form would be supplied to each of the members of ISOC’s Board of Trustees. The return will then be signed by both Mr. Kapfer and Grant Thornton, and filed with the Internal Revenue Service. No motion is necessary, but the Chair will make a report to the Board of Trustees.

Acceptance of Proposals for Audit and Tax Services for 2010 by Grant Thornton

Mr. Kapfer presented engagement proposals from Grant Thornton to perform ISOC’s independent audit for 2010, and prepare ISOC’s Form 990 tax return for 2010. Mr. Kapfer recommended acceptance of these proposals, and noted that the proposed fees for these services increased only slightly from the service fees charged for 2009 work (from $22,000 to $24,500 for audit services and from $12,250 to $12,600 for tax services). Upon question from the Committee, Mr. Kapfer stated that although the relationship with Grant Thornton was very positive, this would be the fourth year using Grant Thornton. Therefore, ISOC and PIR would jointly seek competitive bids for the 2011 audit and tax work.

Ms. Frölich moved that the engagement proposals from Grant Thornton be accepted for 2010.

Resolution: Appointment of Grant Thornton as ISOC’s Independent Auditors and Tax Preparers for 2010.

RESOLVED: The Audit Committee approves the appointment of Grant Thornton as ISOC’s Independent Audit firm for 2010, including preparation and review of ISOC’s annual Form 990 tax return.

FURTHER RESOLVED: The Audit Committee Chair and ISOC’s CFO are authorized to execute engagement letters as presented to the Audit Committee for consideration.

Mr. Burger seconded the motion and the resolution carried unanimously.

The representatives from Grant Thornton left the meeting.

Review of Third Quarter Financial Statements

Mr. Kapfer noted that ISOC’s third quarter 2010 financial statements had been issued to the Board of Trustees the prior evening. He summarized the results of the statements. The Trustees in attendance had no questions, due to the recent issuance of the information. Mr. Kapfer offered to be available for any future questions.

AOB

Ms. Frölich called for any other business. There being none, Ms. Frolich moved that the meeting be adjourned. The motion was seconded and carried by Mr. Wijnen, and the meeting was adjourned at 13:20 UTC.