[ga] Scope of Audit Committee Work -- Karl Auerbach's Complaints

["Patrick Corliss" <patrick@quad.net.au>]

Dear Stuart & Danny

I refer to an email to Stuart from Danny which was dated Sat, 8 Dec 2001:
http://www.dnso.org/clubpublic/ga/Arc08/msg03512.html

This email, which was copied to the GA mailing list, was a "request for
review" in relation to a dispute between the ICANN Board and one of its
directors, Karl Auerbach over his request for documents.  Apparently these
have not been forthcoming.

I would refer you to the "Audit Committee Charter adopted by the ICANN Board
on 10 March 2000 and, in particular the Scope of Audit Committee Work"
(extract below).  The whole document can be found at the following URL:
http://www.icann.org/committees/audit/charter-10mar00.htm

In this respect, it would seem to me that ICANN has demonstrated serious
inadequacies in its system of internal controls.  This includes ICANN's risk
management policies.  The result may be to affect ICANN's exposure to
contingent liabilities to a material extent (in particular, relating to
Directors
and Officers Liability)  (see Clause III (4) of the Scope below).

It would also appear to me that ICANN's may not be in compliance with
generally accepted accounting principles for nonprofit organizations in
respect of its accounting and financial management systems and reports
(see Clause III (2) of the Scope below).

I therefore ask Stuart Lynn, as ICANN's CEO, to refer the issues which I
have raised to its auditors for their urgent consideration.

They are as follows::

KPMG
355 South Grand Avenue
Suite 2000
Los Angeles, CA 90071-1568

Thanking you.

Best regards,
Patrick Corliss


III. Scope of Audit Committee Work

In accomplishing its assigned responsibilities, the Audit Committee will
review the following listed matters and such other matters as may warrant its
attention. It may, with approval of the Board, engage additional assistance to
undertake such reviews of financial management performance as it deems
necessary.

(1) Recommend to the Board of Directors the selection of ICANN's external
auditors and the annual fees to be paid for services rendered by the external
auditors, review each proposed audit plan developed by management and the
external auditors, periodically review the performance of the external
auditors, and recommend to the Board any proposed retention or discharge of
the external auditors.

(2) Review the Corporation's annual financial statements and reports as
required by the Bylaws, including the compliance of the Corporation's
accounting and financial management systems and reports with generally
accepted accounting principles for nonprofit organizations.

(3) Review and forward to the Board the annual financial management letter of
the external auditors, with such comments of its own as may be appropriate.

(4) Periodically review the Corporation's system of internal controls,
including its risk management policy and any accompanying insurance coverage,
and make recommendations to the Board for changes it considers desirable.


----- Original Message -----
From: <DannyYounger@cs.com>
To: <lynn@icann.org>
Cc: <ga@dnso.org>
Sent: Saturday, December 08, 2001 7:16 PM
Subject: [ga] Request for Review


> Mr. Lynn,
>
> My North American At-Large Director, Karl Auerbach, has once more posted a
> series of comments regarding the "absolute right" of a Director to inspect
> and copy corporate documents, a right that he claims you are denying to him.
> When I hear an argument by my representative that insists that this
> Corporation under your stewardship is engaged in applying its procedures and
> practices inequitably so as to single him out as a particular party for
> disparate treatment, such actions not being justified by either substantial
> or reasonable cause, I have a legitimate right to be concerned that ICANN is
> in violation of its Bylaws.
>
> As Mr. Auerbach's complaints on this subject matter have been set forth in a
> number of fora over the course of several months, and as ICANN's failure to
> resolve this concern continues to cast doubt upon the integrity of our
> Corporation, this impasse now begins to affect all of us.  Accordingly, in
> the interest of resolving this matter, allow me to request that a review of
> the Corporation's actions with respect to Mr. Auerbach's right of inspection
> be undertaken by the full Board.
>
> Please advise if you will honor such request for review.
>
> regards,
> Danny Younger

<snip footers>

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