Wikimedia Foundation Governance Wiki

Committee:Audit Committee/Charter

Purpose

The purpose of the Audit Committee (the "Committee") is to assist the Board of Trustees ("Board") of the Wikimedia Foundation ("Foundation") in overseeing the:

  • Integrity of the Foundation’s financial reporting and related internal controls, accounting and finance management activities and the reliability and adequacy of financial disclosures related to the audited financial statements, the Form 990 and other published  disclosures and communications related to financial matters;
  • Trends in reports or disclosures by Foundation management in connection with any fraud or malfeasance, and management’s design of internal controls to limit such instances as well as reports on other wrongdoing;
  • Appointment of and relationship with the independent auditor, as set forth in this charter;
  • Financial management, including investments and performance against the plan and budget;
  • Soundness of assumptions used in multi-year budget projections and development of the Annual Plan and budget;
  • Budgetary impact related to the Foundation’s compensation policies and practices;
  • The Foundation’s approach to Enterprise Risk Management, the adequacy of mitigants addressing such risks, and trends in any key metrics or measurements relate to mitigation;
  • Review of efforts to improve the efficiency and effectiveness of business operations; and
  • Internal audit requirements as needed.

Membership and Organization

Committee Members

The Board shall appoint at least three trustees to serve as Committee members. The Board may also appoint one or more additional trustees to serve as alternate Committee members, to act in the place and stead of any absent Committee members. Committee appointments are for a term of one year; however, they shall automatically renew for additional one-year terms unless the appointed trustee is replaced as a Committee member or has their committee membership terminated by the Board. The Board shall appoint one trustee to serve as Committee Chair for a term of two years of office. The term of the Committee Chair shall automatically renew and continue until replaced by the Board or resignation.

Each Committee member will be independent and free from any relationships or conflicts of interest with respect to the Foundation that may impair, or appear to impair, the Committee member's ability to make independent judgments regarding the Foundation's finances.

The Board shall seek to appoint as a voting Committee member at least one trustee who has expertise related to the duties of the Audit Committee.

Volunteer Advisory Members

The Committee may appoint volunteer advisory members to participate in Committee meetings and deliberations. The volunteer advisory members shall be formally nominated by the Committee Chair based on their qualifications and expertise (as determined by the Committee Chair in their sole discretion) and approved by a majority of the Committee. Volunteer advisory members shall be appointed by the Committee for renewable one-year terms. All volunteer advisory members must comply with the same disclosure and certification requirements required by the Board under the Foundation's Conflict of Interest Policy. No volunteer advisory members may be voting Committee members.

Foundation Staff

The Chief Financial Officer and the Office of the Chief Executive Officer shall provide staff support to the Committee as needed to allow it to function effectively. The Committee Chair may invite Foundation staff to attend the meetings as necessary. No staff members may be voting Committee members.

Responsibilities

In addition to the specific responsibilities listed below, the Board may revise the Charter to include further additional responsibilities in line with the Committee’s overall  purpose.

The Committee shall:

  • Accounting and Financial Reporting
    • Review prior to completion and approve issuance of the Foundation’s annual audited financial statements with management and the independent auditor;
    • As needed, review and discuss with management and the independent auditor: significant financial reporting issues and judgments made in connection with the preparation of the Foundation’s financial statements; changes in US GAAP and the effect such changes have on the Foundation’s financial statements; and significant changes in accounting principles, financial reporting policies, and internal controls implemented by the Foundation;
    • Review and approve the information to be reported to the Internal Revenue Service on the Foundation's annual Form 990 and Form 990-T;
    • Approve the engagement of external consultants or audit firms in matters pertaining to finance and accounting, internal controls, and business processes to provide reasonable assurance and review policies and procedures in place to deter and detect fraud;
  • Oversight of Independent Auditor
    • Appoint and terminate the external auditor;
    • Approve terms of appointment including assurance of independence, fees, and terms;  
    • Approve performance of any non-audit services to be provided by the auditing firm;
    • Oversee the work of the external auditor who shall report directly to the Committee on audit plans, audited financial statements, Form 990, Form 990-T,  and matters of discussion identified during the audit;
    • Review and determine whether to accept the audit;
    • Confer with the auditor to satisfy the Committee that the financial affairs of the Foundation are in order;
    • Discuss and agree with Foundation management the timing, requirements and rationale for re-bidding the work of the external auditor;  
  • Financial Planning and Analysis
    • Review and discuss the draft annual plan and budget, how it was developed, including multi-year financial scenarios, key revenue and expense assumptions and the impact of trade-offs incorporated in the budget;
    • Review and discuss with management the Foundation's monitoring of financial results against the annual plan and against projections, variances from the budget exceeding current Board guidance, updates to projections and working capital reserve, including key assumptions and actions taken or needed to ensure financial stability;
    • Review and make recommendations to the Board regarding approval of any material commitments not already included in the approved budget and that exceed the delegation of authority to the Foundation;
    • Monitor size and use of the working capital reserve and recommend action to the full board on any changes to the current policy;
    • Review the financial impact of existing or proposed subsidiaries;
  • Staff Compensation
    • Review and approve the annual staff country-based increases and merit plans as recommended by the Chief Executive Officer in the context of relevant market data for comparative organizations and job categories;
    • Review changes related to the Foundation’s compensation policies that have material budgetary impact, including executive compensation, benefits, severance, and retention;
  • Capital Management and Investments
    • Approve changes to the investment policy and strategy as needed;
    • Monitor investment performance semi-annually against plan and benchmarks and approve any investment decisions as needed consistent with the Investment policy.
    • Receive and review an annual update on the Environmental, Social and Governmental (ESG) profile of the investment portfolio;
  • Enterprise Risk Management
    • Review and discuss with management the Foundation's enterprise risk assessment, the management of major risk exposures, the steps management has taken to monitor and control such exposures and trends in key risk metrics, and review responsibilities related to financial compliance activities as determined by materiality and severity of non compliance;
  • Other Matters
    • Review proposed changes to policies and procedures related to approval of gift acceptance and use for the Foundation and its subsidiaries including the thresholds and terms for gifts that require board approval prior to acceptance;
    • Review and discuss trends in complaints received by the Foundation regarding questionable accounting, internal controls, or auditing matters, and the confidential submission by employees of other areas of concern regarding fraud, abuse, and other wrongdoing; and
    • Receive annual statistics regarding the receipt, investigation, and resolution of personnel complaints, including any concerning or notable trends;
    • Review with the General Counsel legal matters and emerging legal trends that may have a material financial impact;
    • At least annually, review the effects of Foundation efforts to improve the effectiveness of business operations.

Procedures and Processes

Unless specified otherwise in this Charter, the Committee shall follow the same rules and practices as the full Board follows for its meetings, decision-making, and recordkeeping.

Meetings

The Committee shall meet at least once per quarter, and otherwise as deemed necessary by the Committee Chair. The required attendees are the Committee members and the relevant staff members as determined by the meeting agenda. Trustees serving as alternate Committee members (if any) are not required attendees; they may not vote unless appointed by the Committee Chair to act in the place and stead of an absent regular Committee member. A quorum is a majority of the voting Committee members, and a majority of voting members present shall decide any question brought before the Committee. A meeting may be in person, by telephone, or videoconference so long as all participants are able to hear one another and participate in simultaneous deliberation.

Reporting

At each regular Board meeting, the Committee Chair shall report to the full Board on the Committee's activities since the last regular Board meeting. Each meeting will have an agenda and minutes, which will be available to the Board and relevant staff.

Self-Evaluation

On an annual basis, the Committee will perform a self-assessment, and will review and reassess this charter. The result will be reported to the full Board and include any recommended changes to the Committee activities or its charter.

Independent Auditors and Management

The Committee has the authority in consultation with the Chair of the Board, at the expense of the Foundation, to retain independent auditors, accountants, or other advisors as it deems appropriate to carry out its duties. The Committee has sole authority to approve related fees and retention terms.

Updates and Revisions

The Charter shall be reviewed by management and the audit committee chair annually and any proposed revisions or additions will be discussed with the Chair of the Board and the Committee before voting to approve the changes and recommend that the Board approve the revised Charter.

The committee shall ensure it meets all of its responsibilities annually.  Foundation management shall provide a log cross referencing the responsibilities laid out in this charter to agenda items to ensure coverage was met.

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