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[nc-budget] AGENDA
1. Review Voluntary Funding Program
2. Review P{rofessional Services Selection Plans
3. Review Disposition of ICANN-administered funds
4. Other matters (see below)
-----Original Message-----
From: Mike Roberts [mailto:roberts@icann.org]
Sent: Wednesday, November 01, 2000 12:23 PM
To: Ken Stubbs
Cc: rogerc@netsol.com; schroeder@icann.org; ajm@icann.org;
touton@icann.org
Subject: DNSO Accounting
Ken -
In the course of the preparation of our annual financial statements
by Bremer and Hockenberg, our accountants, and the annual audit by
KPMG, Diane and I were informed that the current informal "trust
account" treatment of DNSO funds by ICANN staff is not a permitted
practice under current accounting principles and practices for
non-profits. In order for ICANN staff to get out of trouble, the
funds currently residing in our corporate bank account must go
somewhere else by the end of the calendar year.
I discussed the situation briefly with Roger when Joe and I had lunch
with him last week in DC, since Verisign has made its own funding
offer to the DNSO.
It is up to the Names Council to make a decision about the handling
of the funds it raises, but I see three reasonable alternatives,
listed below in order of my personal preference.
(1) Make accounting a responsibility of a host organization for the
DNSO. This is what the ASO and PSO do, and there are certainly
plenty of large corporations in a position to take on the host
responsibilities for the DNSO, in the US or elsewhere, in a similar
fashion. If the burden is considered significant, the responsibility
can be rotated, as it is in the ASO/PSO. This brings you within an
established organizational framework where, as the saying goes,
"routine things are handled routinely."
(2) Ask the ICANN Board to include a revenue and expense item in the
annual ICANN budget for the DNSO, and to include the necessary staff
effort to administer the funds as well. This also puts you in an
established organizational framework, with annual audits, but would
require that your activities be conducted according to whatever
policies the Names Council and the Board mutually worked out. Since
the DNSO already operates under provisions of the Bylaws, this
shouldn't be a big deal.
(3) Use the DNSO unincorporated association account you have opened
as the basis for all your accounting and adopt whatever procedures
and controls on the account that satisfy the NC's own accountability
requirements. This is the "roll your own" solution and works - if a
Names Council member is willing to ride herd on the procedures and
whomever is doing the accounting.
Sorry to hassle you about administrivia, but we have to get this
cleaned up soon.
- Mike
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