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From my perspective: - What is the $7 million for "Professional service expenses"? That's 8% of the budget and I've got no clue what it might have been spent
by mikekchar 7y ago
From my perspective:
- What is the $7 million for "Professional service expenses"? That's 8% of the budget and I've got no clue what it might have been spent on. Salaries, travel expenses and depreciation is already accounted for.
- What is the $7 million for "Other operating expenses"? Again 8% of the budget in "other" that doesn't include something that is depreciated and doesn't include travel?
- What is the $2.7 million for "In kind service expenses"? To me that sounds like internal "funny money" where you are paying for one service with another service you perform. But how are they calculating the loss and what account is that money actually coming from?
I worry that millions of dollars are being spent on consultants who are essentially just pocketing donations.
Also, I'd really like to see the operating costs broken down because it's impossible to see what's going on here. You've got $3 million in depreciation, but what is that paying for? Desks, computers, telephones? Do they pay rent, or do they own a building?
The thing that's frustrating is that there may be nothing at all wrong. For example, I can see $38 million for salaries and wages, with 300 employees. But where are the other expenses? Is that the "other expenses" section? If so, how hard would it be to break down that cost for me so that I can understand what the money is being used for?
While I disagree with the approach the author of the page is taking, I completely agree that their financial statements are as clear as mud. If this was a company I was thinking of investing in, I would give it a really wide berth based on the terrible financial reporting. As a non-profit operating on public donations they should be doing a much better job.
- qtplatypus 7y agoDepreciation is the cost that comes from the fact that the assets that they have purchased lose value over time.
- therealx 7y agoSounds of things like: trips to conferences, buying SaaS subscriptions/software licenses, consultants (for the first one), etc etc
- deleted 7y ago[deleted]
- lwf 7y agoThe latter two of your questions are answered in https://meta.wikimedia.org/wiki/Wikimedia_Foundation_reports/Financial/Audits/2017-2018_-_frequently_asked_questions#Terms_and_Definitions https://meta.wikimedia.org/wiki/Wikimedia_Foundation_reports... . >"In-kind service revenue” includes goods and services that the Wikimedia Foundation would normally pay for, but have been donated to us at no charge, such as bandwidth and hosting services and pro-bono legal services. Further detail is available in ... > "Other operating expenses” include expenses for facilities such as rent and office and non-office supplies, insurance, annual staff meeting, recruiting, staff development, property taxes and Wikidata project funding. You can find a more detailed audit report at https://upload.wikimedia.org/wikipedia/foundation/6/60/FY17-18_-_Independent_Auditors%27_Report.pdf https://upload.wikimedia.org/wikipedia/foundation/6/60/FY17-...
- mikekchar 7y agoThanks for that. I was scratching my head at the "in-kind service revenue". For others that were likewise confused, there is a line item on both sides: it's income and expenses and cancels out. So that makes sense. The detailed audit report indicates that rent is about $1.5 million. The rest is essentially computer purchases. I'd still like to see a better explanation of the professional services. But it definitely makes more sense.
- realityking 7y agoI suspect that the majority of of professional services spending is on accountants and lawyers. The Independent Audit report itself likely costs a 6-figure sum. Depending on how much accounting is done in-house vs outsourced, some of it might also fall into professional services. The bulk of it is likely going to lawyers. A lot of the in-kind donations fall into the same bucket: > In-kind service revenue and expenses recorded in the statements of activities consist of contributed legal services. The amounts of specialized contributed legal services as revenue and expenses are $2,748,512 and $156,191 for the years ended June 30, 2018 and 2017, respectively. The value of contributed internet hosting services for the years ended June 30, 2018 and 2017 are $32,722 and $58,390, respectively.
- elliekelly 7y agoProfessional Service Expenses will be the lawyers, accountants, auditors, etc. That adds up quickly. I’m actually a bit surprised it’s not higher. It makes me wonder what percentage of the day the GC spends giving legal advice vs. haggling with outside counsel about billing.
- anonu 7y agoWhen you run a large organization you can't exactly nickel and dime every line item. There's a cost to running a business. There's overhead for every employee, usually 25 to 30 percent of their gross pay. That doesn't include office space.