ARC minutes 2020-06-04

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Meeting on Thursday 4th June, 4 - 6pm, online

Introductions and Apologies[edit | edit source]

Present: Jane Carlin, Marnie Woodward. Auditor: Anjali Kothari. Staff: Lucy Crompton-Reid, Davina Johnson, Rich Matthews, Katie Crampton (minuting).

Apologies: Susan Williams.

Review of draft Annual Report and Financial Statements[edit | edit source]

AK reported that it was a very clean audit, with no major points of concern. The management letter contains only one low risk point regarding foreign exchange transactions. AK noted that the auditors were happy with the information provided by Wikimedia UK. The organisation is clearly a going concern; although AK noted that it may not be if the grant from the WMF was not received.

AK highlighted that for the trustees report, Moore Kingston Smith’s only obligation is to confirm that we are not saying anything to contradict the audit. From an initial review the report looks fine and within the statutory requirements.

AK confirmed that there were no overruns, and MKS were able to deliver within the agreed audit fee.

AK clarified that MKS do not need to approve the Strategic Report, and that Wikimedia UK can choose what figures we present as part of this. She added that it is good practice to refer to the availability of the full Annual Report and Accounts within a shorter ‘glossy’ version.

It was agreed that DAJ and LCR would work on the minor additions and changes needed to the report and circulate an updated version to ARC early next week.

Declaration of interests[edit | edit source]

None.

AK left the meeting at this point.

Approval of previous minutes[edit | edit source]

Minutes approved.

Update on actions arising at last meeting[edit | edit source]

Actions from March are all complete, although there is still an outstanding item for JC and LCR to look at recruitment for ARC. LCR reported that she has drafted a resolution for the AGM that enables us to retain Moore Kingston Smith until the 2021 AGM or until we find new auditors through a tendering process. It was agreed that DAJ would start preparing for the audit tender over the summer and that we would highlight at the next board meeting that we will be retendering. MW knows of some mid-level firms with charity specialist teams, and DAJ welcomed suggestions. JC offered audit tender templates, but DAJ has a template from last time. LCR is on the board of another charity which has just gone through a tendering process, so will share information from that. MW requested resources also be shared with her.

Action AJ to start preparing for audit tender

Financials[edit | edit source]

Review of draft QFMR for Q1 2020 - 21[edit | edit source]

DAJ gave an overview of the QFMR for quarter one. We had a surplus of £7k when we were expecting a £5k deficit. Some of this £12k variance relates to income, but most is underspend related to staff costs (particularly the delay in appointing the external relations post) and timing differences. The IT and telephony underspend relates to our consultancy costs, which are not spread evenly through the year. JC gave a summary to check ARC understood that the underspend is half staff costs, half mixed e.g. office costs. DAJ confirmed that this was the case.

JC asked whether the reforecast spreadsheet has been updated but LCR responded that she had made only a few minor changes, and that the underspend on staff costs had already been taken into account when preparing the document for circulation prior to the interim meeting.

JC asked whether reforecasts and scenario planning would be a separate agenda item at the upcoming board meeting, but it was agreed that it should form part of the ARC report (and accompanying papers). LCR noted that KC had made notes of that meeting, which would be sent to participants and included in the board papers.

Cashflow[edit | edit source]

DAJ reported that the cashflow is only up to date until the end of April, because she needs to review it over the next few days with RM. JC asked for more of a general update on where we are cash balance wise if it’s not been updated. DAJ highlighted that we’ve rarely had much of a variance in our cash balance over the years, and that all our reserves are in cash. JC asked for confirmation that nothing moves in the Co-Op and CAF accounts, so Unity is the only account with moving amounts. DAJ confirmed that the cashflow is useful for seeing what the Unity balance is going to be rather than the other accounts, and the finance team reviews it every month; however she clarified that it would not be a good way to monitor key monthly figures, such as donation income and staff costs. JC asked if we are as confident as we can be that the Foundation won’t delay the grant? LCR reported that they might release the second half of our grant before 30th June, which is when their financial year ends. DAJ noted that this would be good for us as the Unity balance gets quite low over the summer.

MW raised some questions and comments on the QFMR, and thanked DAJ and RM for the new layout. The commentary hits all the high points of the first quarter. She highlighted that it was interesting that small donations seem to be ahead of the budget. MW asked that the board (not just ARC) receive more information on Gifts in Kind and DAJ agreed that she could add this to the commentary for the next meeting. Action for DAJ to add GiK to commentary. JC commented that we have had this conversation before, but agreed that the risk to Gifts in Kind is currently higher than previously, and is therefore happy for this to be added to the narrative commentary.

Budget reforecasts and scenario plans[edit | edit source]

LCR reported that there had been no material changes to these documents since they were circulated for the interim meeting several weeks ago.

MW asked whether we are currently working to the ‘most likely scenario’ budget reforecast, and if we should therefore treat this as a new budget for reporting purposes (including variances). After some discussion it was agreed that this wouldn’t replace the budget, but that our primary analysis would be actuals vs the most likely scenario, with the actuals vs original budget available for information as a separate sheet within the QFMR.

MW asked for the potential grant amounts from Arcadia and National Lottery Heritage Fund to be included in the scenario planning commentary.

Risks Register[edit | edit source]

LCR had reviewed and updated the Risks Register prior to the meeting and indicated where risks had, in her assessment, gone up or down since the last meeting. She talked through these changes at the meeting, which were as follows:

Number 5, the “increased membership figures not matched by increased AGM turnout resulting in inquorate meeting(s) and inability to make decisions” is still a low risk that has been kept green, LCR felt the likelihood of this taking place had increased slightly due to the unknown factor of getting people to an online AGM. It’s worth bearing in mind that we won’t actually have a vote on the day of the AGM because of our articles, it’s about how many proxy votes we can get beforehand to ensure we’re quorate.

Number 10 is the biggest risk, the “impact of Covid-19, economic recession and/or Brexit on partner institutions leads to reduction in programme delivery”. There’s a high likelihood of this risk materialising, and it would have a significant financial impact (although less of a reputational impact as the reasons are manifestly outside of Wikimedia UK’s control). Included as a separate risk is the impact on the pandemic, recession and Brexit on our own ability to raise funds; however LCR pointed out that we are in a relatively buoyant situation compared to many other charities.

JC asked whether number 15, “Reduction in our Annual Plan Grant due to changing strategic priorities of the Foundation or decreased revenue” has been reduced because of the confirmation of next year’s grant from the Foundation, and whether the long term needs to be considered. LCR explained that yes the reassessment was down to that, and that the numbering corresponded to the likelihood of something happening within a given time period. She also added that she is increasingly of the view that a very substantial cut to our grant is not likely in the foreseeable future. She also noted that the risk is still amber, so we will still be monitoring this closely.

Action for LCR to move risk number 18 to Operations (not External) before the register goes to the board.

Number 21 is still green but has increased slightly – “One of the banks that we use fails and we lose money.” This relates to the current instability in the global financial markets.

For number 27, “Lack of internal communications and knowledge management” LCR reported that for home-working we’re dependent on certain channels of communication but not others that would happen more organically in the office. JC asked how our communications have been impacted and LCR responded that an amber risk might in fact be overstating the situation. She considers that we are managing the move to online working relatively well; keeping formal channels open with more regular meetings for both the full staff team, and between managers and their reports, and doing as much as we can to support remote working.

AOB[edit | edit source]

There was a discussion about opening a new bank account through CAF in the light of the current increased likelihood of a bank failing, and it was agreed that this would be added to the board agenda as a consent item. Action for LCR to add bank account opening to the June board meeting agenda.

MW has suggested that DAJ be made an administrator for the corporate credit cards, however LCR and DAJ do not feel comfortable with a member of staff who has a card being in this position. It also goes against the spirit as well as the letter of our Finance Policy and Procedures. LCR suggested we approach Rod Ward to see if he is able to be an administrator. Rod isn’t currently on either of the subcommittees and has a longer term than other trustees. If Rod is not able to be an admin, we can review the situation again. MW also asked if DAJ is on the bank mandate, which DAJ explained that she is not allowed to be within the current terms of the Policy. Action for LCR to approach RW.

LCR gave an overview of what was discussed at the GovCom meeting.

LCR outlined a proposal for opening the office in September, which won’t be that all staff are to be in, it’s more a case of testing out how it will work. DAJ has done some assessments of risks and logistics. The idea of opening in September rather than earlier is to allow staff time to test out how it could work for each of them individually.

Date of the next meeting[edit | edit source]

Thursday 10th September, will be online.