Wikipedia:Wikipedia Signpost/2008-02-11/Audit released

On Friday, Wikimedia Foundation Chair Florence Devouard announced the release of the Foundation's audit, for the fiscal year 2007 (July 1, 2006 — June 30, 2007). The statements, though dated, paint an interesting picture of Wikimedia's financial situation as of June 2007.

The statement (PDF, 158KB) shows that cash and cash equivalents nearly doubled from June 2006 to June 2007, with unrestricted assets rising from US$974,216 to $1,631,282 (a 67.4% increase). Over the year, excluding temporarily restricted net assets, revenues increased by about $1.22 million, while expenses increased by about $1.28 million, resulting in a profit of $657,022, about 10% more than profits in Fiscal Year 2006.

While $514,166 in hardware was purchased this year, steep depreciation, via the double declining balance method commonly used for hardware, caused the overall book value of hardware and software to rise by just $185,766, to $612,375.

Expenses accounted for over $2 million this year, with the largest expense being salaries and wages, at $415,006. Internet hosting was close behind, costing $389,417. Operating and Travel expenses accounted for $310,334 and $264,361, respectively, and most other expenses fell into depreciation and in-kind expenses, those services that were contributed, but that must be booked under the headings of "revenue" and "expenses". Discounting these two categories, actual expenditures were just over $1.4 million.

At the end of 2007, the Foundation, for the first time, designated an allowance for accounts receivable expected to be uncollectible; at the end of the year, $3,817 was expected to be uncollectible.

Among the donations to the Foundation were 681 shares of Google common stock. Along with 187 shares received in FY2006, the shares were sold. Among other contributions were computer equipment (valued at $20,990), legal and public relations services (valued at $80,000), and Internet hosting from Yahoo! and Kennisnet (valued at $236,000). This is the first year that the value of that hosting has been calculated and reported.

This year's report was released later than many expected; in the announcement, Devouard noted that the release was "a bit later than we would have originally liked". By comparison, the statements for Fiscal Year 2006 were released on December 8, 2006, Later in the announcement, Devouard explained the issues that the Foundation ran into that delayed the process:

In the notes to the financial statements, a note near the end concerned some on the mailing list: "In the normal course of business, the Organization receives various threats of litigation on a regular basis. In the opinion of management, the outcome of the pending lawsuits will not materially affect present operations or the financial stability of the Organization." As A. B. noted, the language is standard for many organizations when lawsuits are not deemed to be worthy of concern.

Some users also noted concerns about Wikia's relationship with Wikipedia. A disclosure note explained some relationships between the two entities:

Gwern noted, They share staff, [Wikipedia] favors Wikia in well-known ways, and so on - and people are surprised when the public perception is that [Wikipedia] is the non-profit branch of Wikia, or vice versa? Foundation CTO Brion Vibber replied, however:

With this year's report, only the financial statements were released. Last year, both the financial statements and a management letter were released; Devouard noted last year that she was "surprised Brad chose to publish that letter, as I remember the auditors saying it was a set of recommendations given for internal consideration." The 2006 management letter was deleted last month.

The report was audited by the firm of Gregory, Sharer and Stuart, a St. Petersburg accounting firm that the Foundation employed for its 2006 audit. It's not clear whether the firm will handle the Fiscal Year 2008 audit, or whether a San Francisco-based firm will be hired for the task.