Difference between revisions of "Internal:Audit"

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=== Basic background: Audit committee's charter and responsibilities ===
 
=== Basic background: Audit committee's charter and responsibilities ===
* Wikimedia DC has a standing Audit Committee of Directors to conduct annual reviews of its financial records, per the [[Bylaws]]
+
* Wikimedia DC has a standing Audit Committee of Directors to conduct annual reviews of its financial records, per the [[Bylaws]].
* Wikimedia DC's Audit Committee now has five members, listed [[Audit Committee|here]]
+
* As of Nov 2018, Wikimedia DC's Audit Committee has four members, listed [[Committees#Audit|here]].
 
* In other organizations, an "audit committee" would generally be a Board committee interfacing with EXTERNAL auditors. This is what it means at WM PL and WM FR, and in corporations. However we are a small non-profit and our audit committee is to conduct an "internal audit" only, which is a much lighter thing.
 
* In other organizations, an "audit committee" would generally be a Board committee interfacing with EXTERNAL auditors. This is what it means at WM PL and WM FR, and in corporations. However we are a small non-profit and our audit committee is to conduct an "internal audit" only, which is a much lighter thing.
* In 2016, the committee's central task is to verify the accuracy of WMDC's FY2015 accounting records in QuickBooks, and [[Annual financial report (2014–2015)|the summary financial statements in our annual financial report]].
+
* The committee's central task is to verify the accuracy of WMDC's FY2015 accounting records in QuickBooks, and [[Annual financial report (2014–2015)|the summary financial statements in our annual financial report]].
 
* A successful conclusion is one in which the committee produces a statement saying we looked at the records and think that they're accurate and attaches it to the financial report for 2014-2015 (aka FY2015). [[Internal:Audit/Draft_statement_from_2016_audit_committee|Here's our draft]].
 
* A successful conclusion is one in which the committee produces a statement saying we looked at the records and think that they're accurate and attaches it to the financial report for 2014-2015 (aka FY2015). [[Internal:Audit/Draft_statement_from_2016_audit_committee|Here's our draft]].
  +
* Treasurers in the period to be audited were Peter Meyer and then Trisha Melikian.
* Peter can get to the QuickBooks files and one Dropbox directory. Walter may have access to WMDC's bank and Paypal statements and to the final Dropbox directory.
 
  +
* Annual tasks of the Audit Committee: conduct partial audit of financial records and transactions of a fiscal year; certify the chapter meets the records retention policy, the tax-exempt criterion in the bylaws (article 3, section 3), and . . .
* Treasurers in the period to be audited were Peter Meyer and then Trisha Melikian. (So Peter is a respondent to the audit. There were no objections by committee members at 8 May 2016 meeting to his being the chair; he remains chair, but other committee members will audit transactions done while he was chair.)
 
* There are also other obligations of the Audit Committee which we can conveniently square off against now.
 
   
 
=== Tasks ===
 
=== Tasks ===
 
*12. Research task: Look at another nonprofit to see what standards they say they use -- is it GAAP FAS 116 and 117, or something else?
====Background research and reading====
 
 
*19. Review this movement-wide report on finances: [[m:Chapter-wide Financial Trends Report 2013|Movement-wide Financial Report]] -- Walter was an author (Peter and Robert and John)
4. Review what audit committees for nonprofits are supposed to do. See [[#Background on audit committees of nonprofits]] list below under Bibliography. (Robert and Walter both.)
 
 
*21. Draft [[/Draft statement from 2016 audit committee|a statement from this audit committee]] to be attached to the 2014-2015 financial report. A model one is the one at the top of the [[Annual_financial_report_(2011–2012) | Annual Financial Report for Fiscal Year 2011–12]] (which was basically written by Matt Bisanz who I believe is a CPA) (in other years our audit committees have not produced such statements)<ref>[[Annual_financial_report_(2010–2011) | Annual Financial Report for Fiscal Year 2010–11]]</ref> Peter believes that statement should be updated to say (a) we're a 501(c)(3) org now; (b) we checked and the organization did stay within the 501(c)(3) bounds regarding advocacy expenditures; (c) we are reporting this correctly (according to policy) to our donors. (Peter) (Done {{aye}})
 
12. Research task: Look at another nonprofit to see what standards they say they use -- is it GAAP FAS 116 and 117, or something else?
 
 
19. Review this movement-wide report on finances: [[m:Chapter-wide Financial Trends Report 2013|Movement-wide Financial Report]] -- Walter was an author (Peter and Robert and John)
 
 
21. Draft [[/Draft statement from 2016 audit committee|a statement from this audit committee]] to be attached to the 2014-2015 financial report. A model one is the one at the top of the [[Annual_financial_report_(2011–2012) | Annual Financial Report for Fiscal Year 2011–12]] (which was basically written by Matt Bisanz who I believe is a CPA) (in other years our audit committees have not produced such statements)<ref>[[Annual_financial_report_(2010–2011) | Annual Financial Report for Fiscal Year 2010–11]]</ref> Peter believes that statement should be updated to say (a) we're a 501(c)(3) org now; (b) we checked and the organization did stay within the 501(c)(3) bounds regarding advocacy expenditures; (c) we are reporting this correctly (according to policy) to our donors. (Peter) (Done {{aye}})
 
 
====Gathering records====
 
 
1. Figure out who has access to the various files we need and shares what we need, perhaps on Dropbox. Peter to share on Dropbox with all the committee. (Done {{aye}})
 
 
22. New receipts, post-FY2015, are on podio.com not Dropbox. (John and Robert need invites ; Peter get James to send one.) (Done {{aye}})
 
 
23. Additional task: Get receipts/records from Trisha who was treasurer from June-Sept 2015 and share on Dropbox. (Peter) (Done {{aye}})
 
   
 
*22. New receipts, post-FY2015, are on podio.com not Dropbox. (John and Robert need invites ; Peter get James to send one.) (Done {{aye}})
 
====Transaction verifications====
 
====Transaction verifications====
 
 
2. Main task: Do either (a) an exhaustive comparison of the underlying bank/debit/PayPal/etc. transactions against the QuickBooks records, or (b) selective spot checks, or some other form of verification. If we find a problem, work with Walter and Kirill to update/correct it. Essential outcome of this committee in 2016.
 
2. Main task: Do either (a) an exhaustive comparison of the underlying bank/debit/PayPal/etc. transactions against the QuickBooks records, or (b) selective spot checks, or some other form of verification. If we find a problem, work with Walter and Kirill to update/correct it. Essential outcome of this committee in 2016.
   
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* Peter to arrange Skype meeting June 5 at 13:00 eastern time and the Cove meeting room. (Audit committee members generally agreed to this time by email after the meeting.) ({{aye}} Done)
 
* Peter to arrange Skype meeting June 5 at 13:00 eastern time and the Cove meeting room. (Audit committee members generally agreed to this time by email after the meeting.) ({{aye}} Done)
   
=== History of Wikimedia DC finance and accounting ===
+
* [[/History of WMDC finance and accounting roles]]
Includes a timeline of chapter treasurers, audit committees, fiscal policies, and tax status.
 
==== Defining chapter events ====
 
* Wikimedia DC was incorporated in the District of Columbia as the Wiki Society of Washington, DC Inc. on May 7, 2011, and was recognized as a chapter on September 12, 2011. The chapter's stated aims are the advancement of general knowledge, the collection and development of educational content under a free license or in the public domain, and the dissemination of it effectively and globally.
 
 
Wikimedia DC is uniquely situated to support the Wikimedia movement. Being located in the capital region of the United States, the chapter engages in free content promotion, outreach, and partnership efforts with a variety of cultural institutions and government agencies, many of which either have large amounts of public domain content already available or are willing to release content under a free license.
 
 
The chapter's official bylaws are published on the Wikimedia DC website; a reference copy is posted on Meta. The bylaws were approved by a resolution of the Chapters Committee on August 22, 2011. Source: https://meta.wikimedia.org/wiki/Wikimedia_District_of_Columbia (June 4, 2016)
 
 
* The WMF Board of Trustees [https://wikimediafoundation.org/wiki/Resolution:Recognition_of_Wikimedia_District_of_Columbia provisionally recognized the Wikimedia DC chapter on 12 Sept 2011]. Chapters are supposed to agree to a Chapters Agreement, something like [https://meta.wikimedia.org/wiki/Chapter_agreements/2007_template this one]. I (Peter) do not know what agreement WMDC and WMF did agree to exactly, or when. The audit committee does not have a specific responsibility to verify that the chapter is meeting its agreements with respect to the WMF, nor to report to the WMF on any matter ; the audit committee's one standard report is to be public.
 
 
==== Treasurers ====
 
* James was treasurer at launch of Wiki DC (2010) until at least the board meeting of Feb 9, 2013<ref name=Feb2013mtg>[https://wikimediadc.org/images/b/b9/Wiki_Society_of_Washington%2C_DC_Inc._-_Board_of_Directors_-_Meeting_Minutes_-_February_9%2C_2013.pdf Wikimedia DC Board of Directors meeting, Feb 2013]</ref><ref name=Mar2013mtg/>
 
* Peter was treasurer starting as of the Feb 2013 meeting or perhaps just before the March 2013 one<ref name=Mar2013mtg>[https://wikimediadc.org/images/a/a4/Wiki_Society_of_Washington%2C_DC_Inc._-_Board_of_Directors_-_Meeting_Minutes_-_March_16%2C_2013.pdf Wikimedia DC Board of Directors Meeting, March 2013]</ref>, until June 21, 2015 board meeting<ref name=June2015mtg>[https://wikimediadc.org/images/9/9b/Wiki_Society_of_Washington%2C_DC_Inc._-_Board_of_Directors_-_Meeting_Minutes_-_June_21%2C_2015.pdf Wikimedia DC Board of Directors Meeting, 21 June 2015]</ref>
 
* Trisha Melikian was treasurer starting June 21, 2015<ref name=June2015mtg/> until Dec 6, 2015.<ref name=Dec2015mtg/> She's in touch.
 
* Walter became treasurer at the Dec 6 2015 board meeting<ref name=Dec2015mtg>[https://wikimediadc.org/images/e/ee/Wiki_Society_of_Washington%2C_DC_Inc._-_Board_of_Directors_-_Minutes_-_December_6%2C_2015.pdf Wikimedia DC Board of Directors meeting, 6 Dec 2015]</ref> and is treasurer now.
 
==== Audit committee history ====
 
Main source: [[Committees]] page history<ref>[https://wikimediadc.org/index.php?title=Committees&action=history Committees, history page]</ref>
 
* "The Audit Committee is responsible for conducting an annual review of the financial records of Wikimedia DC. The committee was established by Article VIII, Section 2 of the Bylaws as adopted on May 7, 2011."<ref>[https://wikimediadc.org/index.php?title=Committees&diff=next&oldid=1076 Edit on 17 Dec 2011]</ref>
 
* Sept 2011: First Audit committee member was chair Matthew Bisanz, starting 13 Sept 2011<ref>[https://wikimediadc.org/index.php?title=Committees&diff=next&oldid=425 Edit on 13 Sep 2011]</ref>
 
* July 2012: the audit committee is a standing committee, with three members: Matthew Bisanz [Chair]; Kirill Lokshin; Tiffany L. Smith<ref>[https://wikimediadc.org/index.php?title=Committees&diff=next&oldid=1914 Edit on 22 Jul 2012]</ref>
 
* March 2013: membership is made up of two people: Kirill Lokshin [Chair]; Kathryn Tinker<ref>[https://wikimediadc.org/index.php?title=Committees&diff=next&oldid=3749 Edit on 16 Mar 2013]</ref>
 
* Sept 2013: Three members: Kirill Lokshin [Chair]; Nicholas Bashour; Kathryn Tinker<ref>[https://wikimediadc.org/index.php?title=Committees&diff=next&oldid=4221 Edit on 14 Sep 2013]</ref>
 
* Nov 2013: Members are now: Kirill Lokshin [Chair]; Nicholas Bashour; Emily Temple-Wood<ref>[https://wikimediadc.org/index.php?title=Committees&diff=next&oldid=6146 Edit on 4 Nov 2013]</ref>
 
* Aug 2014: Description expands to say: "The Audit Committee conducts the annual review of Wikimedia DC's financial records and investigates reports of illegal activity and unethical practices within the organization."<ref>[https://wikimediadc.org/index.php?title=Committees&diff=next&oldid=8442 Edit on 18 Aug 2014]</ref>
 
* Dec 2014: Members: Kirill Lokshin [Chair]; Trisha Melikian; Emily Temple-Wood<ref>[https://wikimediadc.org/index.php?title=Committees&diff=next&oldid=8734 Edit on 14 Dec 2014]</ref>
 
* June 2015: Members: Kirill Lokshin [Chair]; Peter Meyer; Emily Temple-Wood<ref>[https://wikimediadc.org/index.php?title=Committees&diff=next&oldid=9890 Edit 21 Jun 2015]</ref>
 
* Dec 2015: 3 members: Peter Meyer (Chair); Robert Fernandez; Emily Temple-Wood<ref>[https://wikimediadc.org/index.php?title=Committees&diff=next&oldid=10113 edit on 6 Dec 2015]</ref>
 
* Feb 2016: 4 members now: Peter Meyer (Chair); Robert Fernandez; Walter Gómez Segura; Emily Temple-Wood<ref>[https://wikimediadc.org/index.php?title=Committees&diff=next&oldid=10930 Edit on 21 Feb 2016]</ref>
 
* April 2016: 5 members now: Peter Meyer (Chair); Robert Fernandez; John Sadowski; Walter Gómez Segura; Emily Temple-Wood<ref>[https://wikimediadc.org/index.php?title=Committees&diff=prev&oldid=11251 Edit on 10 Apr 2016]</ref>
 
 
==== Other financial history events ====
 
* Our bookkeeping was in GNUcash software from 2010 or 2011 through Sept 30 2013. Since then, it's in QuickBooks online which usually gets transaction info automatically from the bank.
 
* Sept 2013: Our chapter's articles of incorporation have an updated statement of specific purposes, phrased to match IRS requirements for tax-exempt charities:
 
* Dec 2013: new [[Fiscal control policy]], mainly describing what treasurer should do.
 
* By May 2014, Kirill had filled in IRS [https://www.irs.gov/uac/About-Form-1023 Form 1023] for IRS, Application for 501(c)(3) recognition. Organizations file this form to apply for recognition of exemption from federal income tax under section 501(c)(3).
 
* We became a 501(c)(3) tax-exempt organization on Dec 22, 2014 according to an IRS letter to us.
 
* At some stage our chapter made a "501(h) election" so that the limits on our lobbying for legislation are defined in terms of actual dollars spent. So long as everyone involved is a volunteer, there's basically no restriction on how much lobbying we can do. As far as our IRS tax status is concerned, public communications only constitutes "grassroots lobbying" if it includes one of four specific calls to action (see e.g. http://www.njnonprofits.org/NPsCanLobby.html). A communication that opposes a bill but doesn't include one of those calls to action is considered advocacy rather than lobbying, and isn't subject to the limits on the latter.
 
   
 
=== References ===
 
=== References ===
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* The chapter's grant reports to WMF are on meta: [[m:Grants:PEG/WM_US-DC]]
 
* The chapter's grant reports to WMF are on meta: [[m:Grants:PEG/WM_US-DC]]
 
* Accounts/platforms: Wikimedia uses Wells Fargo, Paypal, Square (?), QuickBooks online (for bookkeeping, automatically draws from the bank) ; and Dropbox for receipts. WM DC uses no other platforms for money -- right? Must agree amongst ourselves on this statement.
 
* Accounts/platforms: Wikimedia uses Wells Fargo, Paypal, Square (?), QuickBooks online (for bookkeeping, automatically draws from the bank) ; and Dropbox for receipts. WM DC uses no other platforms for money -- right? Must agree amongst ourselves on this statement.
* WM Poland and WM France have *external* auditors. WM DC does not. I believe WM NY does not.
+
* WM Poland and WM France have *external* auditors. WM DC does not.
 
* Wikimedia Australia keeps their financial numbers online at xero.com. Online has the advantage I guess that several of them can access the info, at least with read-only access. Cost maybe $360/year -- note they have much more revenue than WM DC does. For more, talk to treasurer John Vandenburg or previous treasurer now president Charles Franklin. Thanks for Charles Gregory, with whom I spoke at Wikimania 2013.
 
* Wikimedia Australia keeps their financial numbers online at xero.com. Online has the advantage I guess that several of them can access the info, at least with read-only access. Cost maybe $360/year -- note they have much more revenue than WM DC does. For more, talk to treasurer John Vandenburg or previous treasurer now president Charles Franklin. Thanks for Charles Gregory, with whom I spoke at Wikimania 2013.
 
* Movement-wide report on finances: [[m:Chapter-wide Financial Trends Report 2013|Movement-wide Financial Report]] -- Walter was an author
 
* Movement-wide report on finances: [[m:Chapter-wide Financial Trends Report 2013|Movement-wide Financial Report]] -- Walter was an author
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* Nonprofit Accounting Basics. [http://www.nonprofitaccountingbasics.org/topic/audit Audit glossary].
 
* Nonprofit Accounting Basics. [http://www.nonprofitaccountingbasics.org/topic/audit Audit glossary].
 
* Certain institutions evaluate nonprofits. Informally, we'll keep track of some [[Internal:Audit/External evaluators of nonprofits|on this subpage]].
 
* Certain institutions evaluate nonprofits. Informally, we'll keep track of some [[Internal:Audit/External evaluators of nonprofits|on this subpage]].
  +
  +
=== Glossary and bibliography of tax forms ===
  +
* [https://www.irs.gov/pub/irs-pdf/p557.pdf Publication 557] -- General documentation of US-tax-exempt tax forms
  +
* [https://www.irs.gov/forms-pubs/about-form-990 Form 990] -- the core essential category of forms we must file each year. For some of our past examples see [[:Category:Form 990]]
  +
* [https://www.irs.gov/forms-pubs/about-form-8822-b Form 8822-B] - Necessary when handing off the role of "responsible party", aka what Gusto calls the "corporate signatory." (Usually this has been our chapter president.) It would be best to file this form six weeks before the handover, and then once IRS approves it, to make the changes associated with the "corporate signatory" in Gusto. Also necessary if changing the corporation's mailing address or business location.
  +
* From our [[Fiscal Control Policy]]: Our financial statements should be consistent with US GAAP sections [http://www.fasb.org/pdf/fas116.pdf FAS 116] ("Accounting for Contributions Received and Contributions Made") and [http://www.fasb.org/pdf/fas117.pdf FAS 117] ("Financial Statements of Nonprofit Organizations"). (We do not commit the chapter to U.S. [[w:Generally_accepted_accounting_principles|GAAP]] outside of FAS 116 and 117. One reason is that U.S. GAAP overall calls for detailed footnotes to financial statements which are said to be infeasible or unsuitable for small nonprofit organizations.)

Latest revision as of 21:06, 17 September 2022

Workspace: Audit

Basic background: Audit committee's charter and responsibilities

  • Wikimedia DC has a standing Audit Committee of Directors to conduct annual reviews of its financial records, per the Bylaws.
  • As of Nov 2018, Wikimedia DC's Audit Committee has four members, listed here.
  • In other organizations, an "audit committee" would generally be a Board committee interfacing with EXTERNAL auditors. This is what it means at WM PL and WM FR, and in corporations. However we are a small non-profit and our audit committee is to conduct an "internal audit" only, which is a much lighter thing.
  • The committee's central task is to verify the accuracy of WMDC's FY2015 accounting records in QuickBooks, and the summary financial statements in our annual financial report.
  • A successful conclusion is one in which the committee produces a statement saying we looked at the records and think that they're accurate and attaches it to the financial report for 2014-2015 (aka FY2015). Here's our draft.
  • Treasurers in the period to be audited were Peter Meyer and then Trisha Melikian.
  • Annual tasks of the Audit Committee: conduct partial audit of financial records and transactions of a fiscal year; certify the chapter meets the records retention policy, the tax-exempt criterion in the bylaws (article 3, section 3), and . . .

Tasks

  • 12. Research task: Look at another nonprofit to see what standards they say they use -- is it GAAP FAS 116 and 117, or something else?
  • 19. Review this movement-wide report on finances: Movement-wide Financial Report -- Walter was an author (Peter and Robert and John)
  • 21. Draft a statement from this audit committee to be attached to the 2014-2015 financial report. A model one is the one at the top of the Annual Financial Report for Fiscal Year 2011–12 (which was basically written by Matt Bisanz who I believe is a CPA) (in other years our audit committees have not produced such statements)[1] Peter believes that statement should be updated to say (a) we're a 501(c)(3) org now; (b) we checked and the organization did stay within the 501(c)(3) bounds regarding advocacy expenditures; (c) we are reporting this correctly (according to policy) to our donors. (Peter) (Done Green tickY)
  • 22. New receipts, post-FY2015, are on podio.com not Dropbox. (John and Robert need invites ; Peter get James to send one.) (Done Green tickY)

Transaction verifications

2. Main task: Do either (a) an exhaustive comparison of the underlying bank/debit/PayPal/etc. transactions against the QuickBooks records, or (b) selective spot checks, or some other form of verification. If we find a problem, work with Walter and Kirill to update/correct it. Essential outcome of this committee in 2016.

3. Verify that a reconciliation occurred of bank/paypal with QuickBooks at the end of the fiscal year. If we find a problem, work with Walter and Kirill to update/correct it. Essential outcome of this committee in 2016.

5. Review key Bylaws, ARTICLE X - FISCAL CONTROLS (edited to focus on audit issues): (1) Disbursements over $25 shall be made only by check drawn on the Corporation's bank account or by electronic means, except where a resolution of the Board allows for cash disbursements in excess of $25 for specific purposes. Any disbursement over $5 shall be supported by voucher or receipt. All checks, drafts, notes and evidence of indebtedness of the Corporation shall be signed by either the Treasurer or the President. Disbursements in excess of $2,500 shall require the signature or written approval of both the President and the Treasurer. (2) Annual Budget. Before Oct 1 each year, the Board shall prepare an estimated budget for the Oct-Sept for the annual membership meeting to vote to approve. (4) Capital expenditures over $1000 must be approved by a majority at the annual membership meeting. Approval of a line item in the annual budget constitutes membership approval of a capital expenditure.

6. Evaluate: Broadly, were the Fiscal Controls specified in the bylaws followed, as best we know? Should they be revised? Specifically: Was an Annual Budget proposed and approved as specified? Should the rules about the annual budget be changed?

11. Look over our past Annual Financial Reports, and examine any substantive changes in the report for 2014-2015. Do we know why those changes were made and are we comfortable with the changes?

15. Review Delegation of Authority Policy, especially article (3), and Talk:Delegation of authority policy -- do we think the policy was followed, based on our limited information?

17. Review our tax forms submitted to the IRS for this 2014-2015 period; make sure somebody on our committee knows who wrote it and sent it ; do they make sense when matched up with the 2014-2015 annual financial report? (Walter to share tax form on Dropbox.)

20. Review our grant submissions and reports m:Grants:PEG/WM_US-DC from 2014-2015-- any red flags, or anything we should verify with the bank/paypal/quickbooks systems? spot checks? (John)

Non-transaction verifications

13. Review Whistleblower Policy -- it assigns tasks to us. Review it ; if we have received any significant reports of illegal activity that we are taking action. (Brainstorm here.) (John) (Done Green tickY)

14. Review Non-discrimination policy -- assigns a responsibility to chair of Audit committee ; claim: it's been satisfied. (John) (Done Green tickY)

16. Review Record retention policy -- for the purposes of this Policy, the President, the Secretary, the Chair of the Audit Committee, or any legal counsel retained by Wikimedia DC . . . (g) External audit reports. (John) (Done Green tickY)

18. Verify that we didn't spend much on advocacy per our tax-free requirements. This is straightforward. Just need to verify we spend much less than 20% on advocacy of legislation, and did not endorse or financially support political candidates. (Peter to gather evidence.)

Revisions to current policy

(May 22 update: items 7-9 addressed by draft Internal:Fiscal control policy amendments for board consideration; needs further review and study however)

7. Research and revise Fiscal control policy 7.1 to replace "financial records . . . consistent with US GAAP . . . particularly . . . FAS 116 and FAS 117." My accountant-professor friend identified two problem with this phrasing: U.S. GAAP overall is big and heavy and unsuitable for a small nonprofit basically, and we aren't meeting its standards which call for detailed footnotes. Also it applies to financial STATEMENTS not financial RECORDS. Therefore he suggests to replace this sentence by something narrower and more achievable like "the treasurer should maintain financial records that will enable financial statements to be prepared that are consistent with U.S. GAAP FAS 116 (Accounting for Contributions Received and Contributions Made) and FAS 117 (Financial Statements of Nonprofit Organizations)." I'd like to work on that with someone and propose something to the Board. (My friend said there is a discussion among accounting specialists about whether there SHOULD be a "light" version of GAAP, but right now there isn't one.) Therefore we should focus the assertion on those bits of U.S. GAAP that we are specifically trying to meet. (Peter) Green tickY

8. Revise 7.7 to add something like "The treasurer shall keep a register of fixed assets owned by the chapter." (A minor thing; we have just a WiFi device and a few other odds and ends. Somebody should have an official list.) (Peter) Green tickY

9. Revise 6.4 to say "All solicitation documents shall accurately report [the 501(c)(3) status] of the organization." The current assertion make us responsible for too much -- the tax status of the donor's income and the on the tax deductibility of donations made to Wikimedia DC in the donor's jurisdiction --- for example, we should make no such assertion for foreign donors. (Peter) Green tickY

10. Review Fiscal control policy beyond that point?

possible additional task

  • there is a distinction between public charities and private foundations
  • the test starts to apply 5 years after the org becomes a 501c3 so not yet
  • private foundations have to report differently and we probably want to avoid this and to stay in the category we are now in
  • the org needs to get at least a third of its revenues from sources which aren't single or family large donors
  • here is the org getting at least of a third of the revenues from either (a) individuals who didn't give over 2% of the funding ; or (b) public grant sources like WMF or Knight foundation.
  • (c) the test doesn't apply till we've been a 501c3 for 5 years
  • reporting requirements. (b)

Second meeting, May 22

  • Met two weeks later on May 22 @ 14:30
  • Preliminary agenda: Discuss/review what non-profit audit committees are to do, and what standards they follow. Discuss Movement-wide chapters finance report.
  • Only John and Peter attended.
  • We find no specific need to apply additional retention beyond record retention policy article 5. We received no complaints requiring our committee's action so far. Unless other audit committee members wish to discuss further, these tasks are done. (Green tickY Done)
  • Peter to do: make complete copy of Dropbox directory on his local drive, as backup. (Green tickY Done)
  • Peter received more receipts from Trisha and James. Peter will organize these documents/receipts in the shared Dropbox space.
  • John to copy the quickbooks exported spreadsheet -- the "transactions file" -- and to add columns for these elements, more or less: (a) trivial transactions not worth further inspection, (b) board resolution appropriately supports the expense (y/n or date); (c) transaction supported by adequate documentation (y/n) ; (d) fold in checkbook information as desired from checkbook spreadsheet
  • Peter to read Movement-wide Financial Report -- notes: are we using categories that are easy to compare with other chapters? Categories in the report were organized per International Financial Reporting Standards (IFRS). (Green tickY Done)
  • John to read up on how nonprofits do audits or accounting
  • John suggests doodle poll for timing future audit meetings.
  • Peter plans to propose a board policy defining the role of the audit committee at the June 5 meeting (partly drafted, reframed by Kirill) (Green tickY Done)
  • Peter plans to propose Fiscal control policy amendments at some board mtg, incorporating feedback from audit committee members. (drafted, reframed by Kirill) (Green tickY Done)
  • Peter to arrange Skype meeting June 5 at 13:00 eastern time and the Cove meeting room. (Audit committee members generally agreed to this time by email after the meeting.) (Green tickY Done)

References

Bibliography of WM DC records and related

  • Wikimedia DC Annual financial report (2010–2011)
  • Wikimedia DC Annual financial report (2011–2012) -- note the Report from the Audit Committee, a model to emulate this year
  • Wikimedia DC Annual financial report (2012–2013)
  • Wikimedia DC Annual financial report (2013–2014)
  • Wikimedia DC Annual financial report (2014–2015)
  • The chapter's grant reports to WMF are on meta: m:Grants:PEG/WM_US-DC
  • Accounts/platforms: Wikimedia uses Wells Fargo, Paypal, Square (?), QuickBooks online (for bookkeeping, automatically draws from the bank) ; and Dropbox for receipts. WM DC uses no other platforms for money -- right? Must agree amongst ourselves on this statement.
  • WM Poland and WM France have *external* auditors. WM DC does not.
  • Wikimedia Australia keeps their financial numbers online at xero.com. Online has the advantage I guess that several of them can access the info, at least with read-only access. Cost maybe $360/year -- note they have much more revenue than WM DC does. For more, talk to treasurer John Vandenburg or previous treasurer now president Charles Franklin. Thanks for Charles Gregory, with whom I spoke at Wikimania 2013.
  • Movement-wide report on finances: Movement-wide Financial Report -- Walter was an author
  • Key WMF grants terminology: PEG--the kind of grants we get ; APG -- bigger annual grants our chapter president aspires to get ; TPS--travel grants for individuals ; IEG--project grants for individuals

Background on audit committees of nonprofits

Glossary and bibliography of tax forms

  • Publication 557 -- General documentation of US-tax-exempt tax forms
  • Form 990 -- the core essential category of forms we must file each year. For some of our past examples see Category:Form 990
  • Form 8822-B - Necessary when handing off the role of "responsible party", aka what Gusto calls the "corporate signatory." (Usually this has been our chapter president.) It would be best to file this form six weeks before the handover, and then once IRS approves it, to make the changes associated with the "corporate signatory" in Gusto. Also necessary if changing the corporation's mailing address or business location.
  • From our Fiscal Control Policy: Our financial statements should be consistent with US GAAP sections FAS 116 ("Accounting for Contributions Received and Contributions Made") and FAS 117 ("Financial Statements of Nonprofit Organizations"). (We do not commit the chapter to U.S. GAAP outside of FAS 116 and 117. One reason is that U.S. GAAP overall calls for detailed footnotes to financial statements which are said to be infeasible or unsuitable for small nonprofit organizations.)