[nc-budget] AGENDA

["Cochetti, Roger" <rogerc@netsol.com>]

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