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FY13 Budget Framework Discussion
Monday, 24 October 2011
ICANN Meeting - Dakar


>>XAVIER CALVEZ:  I think we're going to start.  Thank you, everyone,
for coming.  I see that everybody's as spread out as possible in the
room, which is the laws of physics, I guess.  So I will be walking
around then to be able to speak about the presentation.  A very quick
few words.

I'm Xavier Calvez.  I am the new CFO of ICANN.  I have arrived about
six weeks ago in the organization.

I'll say a few words about my past experience.  I have external audit
experience for 8 or 9 years.  I have worked in a large international
corporation for another 10 years in various finance management
positions.  That corporation does not operate in the Internet
industry.  So I do not have Internet experience, other than being a
user, which, in itself, is an experience, I guess.

I have a certain amount of experience with reporting, processes,
systems implementation.  I'll leave it at that.  I will be very happy
to take some time, either through this presentation or later, to take
questions on views that you may have or questions that you may have on
my background separately.

I would also like that this interaction -- this session is very
interactive, so that the size of the room is not necessarily helpful
to that.  But, please, feel free to raise your hand and ask any
questions.  And there's no bad time to do that.  So we will interrupt
ourselves with pleasure to be able to do that.

Is everyone understanding me correctly?  Am I speaking too fast, slow,
too strong an accent?  I forgot to say I'm French as well.  It's not
my fault, but that's how it is.  Sorry?  I forgot Sebastien was here.
I shouldn't have said that.

Quick overview of the table of contents.  So this session is really to
just give you all an overview of what we're going to go through
throughout the fiscal year, the budget process.

There is a certain amount of information here.  There's more details
that will follow throughout the process.  But this is aimed at -- is
giving you an understanding of what the process will contain at a high
level so that you can react.  We'll start with a short introduction.

We'll spend a certain amount of time on the steps of the process and
the planning.  Because I think that that will allow us to have an
interactive session about that timing and some of the changes of the
timing versus last year.  We'll talk also about the budget structure
in the sense of the different dimensions under which the information,
financial information produced as part of the budget process will be
formulated.

We will also -- okay.  So when we will have the presentation -- yeah,
okay.

Coming back.  Any questions at this stage?

Yeah, we started slightly late.  I want to allow for questions and
answers at the end of the presentation.  And I was aiming to make this
presentation -- go through this presentation within about 25-30
minutes so that we have 10-15 minutes of questions and answers.  If we
spend longer on the presentation because we are taking questions
during the presentation, that's completely fine as well.  I just want
to make sure that we do have the opportunity to take input and
questions.

And that's the third point.  So we've addressed that.

Mission of the budget process.  We'll go very quickly over that.  The
whole point here of the budget process is to plan for the distribution
of resources among competing demands.

That sentence was put there especially for Marilyn to have.  This is
the budget process.  We need to plan for how we're allocating the
resources among the functions and demands of the organization.  And,
when I say, "organization," I don't mean ICANN's corporation.  I mean
the ICANN community.

Which is why we're saying here that we're going to communicate to the
community the components of the budget.  This is the start of that
process today, providing view on the projects and the project
prioritization and obtaining the support of the overall community
throughout this interactive process.  Let's move on.

An overview of the milestones.  And for this specific slide, Juan will
jump in to present this.  He will also use the subsequent slide that
gives a slightly different overview of the budget milestones.  And we
will together answer any questions you have during the presentation of
those two slides.

>>JUAN OJEDA:  Thank you, Xavier.  Just for the record, my name is
Juan Ojeda.  I'm controller for ICANN.

So with the revised timeline and milestone delivery schedule that we
have for fiscal year '13, you'll notice that the two major postings
that we'll be handling for fiscal year '13 will be significantly
sooner than we've done in prior years.  And this is primarily two-
fold.  First, this is in response to community feedback specifically
from prior year where certain community members felt that not enough
time was given from when the window for public comments closed to when
the actual draft budget was presented for adoption.  So that's the
primary driver for the earlier scheduling.  The second is also to
accommodate a change in the window of time for public comments from 30
to 45 days now for both postings of the budget documents.

So right now, in the beginning of the phase, we were having this
initial consultation with the community.  At the conclusion of this
meeting, we will begin opening the window for submission of the
budget, the additional budget requests from all the SOs, AC, and
stakeholder group, which the initial window will close on the 9th of
December, allowing us enough time to be able to consolidate that
information and post it in conjunction with the budget framework,
which will now be posted on the 17th of January, which is a full month
ahead of schedule from last year.

This takes us to a 45-day window of public comments through the end of
February allowing staff to summarize the inputs and responses to those
inputs for further discussions during the San Jose ICANN meeting in
Costa Rica in March leading up to the draft budget, which will now be
posted the 1st of May.  Again, this is done to accommodate the 45-day
time for public comments, which will close on the 15th of June,
allowing staff enough time to summarize those comments and consult for
any changes that need to be made to the draft budget in response to
community feedback for inclusion into the draft budget to be
presented, ultimately, to the board for adoption during the Prague
meeting in June.

>>XAVIER CALVEZ:  Yes, Sebastien.

>>SEBASTIEN BACHOLLET:   Thank you.  Just a question about the
process.  Because we're on the way to change the comment period with
one comment period then the second to answer the first comments.  Is
it taken into account, or are you just for the moment taking into
account the 45 days for the first comment period?

It seems to be not clear.  We're in a process to change the way of the
comment period it's organized with first period to make comments and
the second period to have answer to the comments or to make comments
on the comments.  And that's happened to be longer, obviously.  Then
is the 45 days is just for one period comments?  And that's okay.  But
next year we will have to change the process?  Or is it already
included that changes in the comment period?

>>XAVIER CALVEZ:  S what we do intend to do is use the fact that this
period is longer than it used to be by 15 days to first allow a longer
period of time for the community to be provided, but also allow us to
start addressing and interacting during that period of 45 days with
the community on the comments that have been made so that then we can
have a headstart in processing them, understanding them, and be able
to respond to them, which we're expecting to be able to do also past
the end of the 45-day period.  If we have a headstart, we can go a
little bit faster about it.

Marilyn Cade.

>>MARILYN CADE:  I'd like to ask for a clarification of what
"respond" means.  Because I think right now there's a strong feeling
on my part that may be shared by others that "respond" often means
acknowledge, not necessarily incorporate or explain why it's not
incorporated.

>>XAVIER CALVEZ:  Understood.  And, not having the full background of
last year, what I -- what we will do with the team is work on a
process and a clarification of the process that specifies exactly
that.  Because I can imagine that certain requests are simple enough
to answer quickly.  Others can be more complex.  I can imagine -- and
I'm just speculating -- that a request made by one constituency for
that constituency's perspective may be actually completely irrelevant
to everybody else.  And I can imagine that there's a little bit of an
iterative way there that needs to find -- to apply in order to
validate the request.

So understood.  And I think that, at the minimum, we need to be able
to acknowledge the request and suggest what we think the next steps
should be.  And if we -- so that's the minimum, right?  And, if we can
answer the question immediately, then we should.  But I will make sure
with Juan that we clarify the creation of a consultation or input
period and make sure that we have a defined feedback on these
requests.  Understood.  Thank you for that.  Yes.

>>CHRIS CHAPLOW:  Yes.  Chris Chaplow, vice chair of the BC.  Thanks
for showing us that slide and the time scale.  It's a lot better than
last year.  And I think the 45 days will be a big help to us,
particularly those in the constituencies that have got to go back to
our members.  It's still a bit tight at the far end, isn't it?
Because we've got 45 days after May the 1st.  Takes us to the middle
of June.  So then that's what?  8, 10 days before the meeting.  Better
than the two hours we had last year.  And, of course, the start date
starting much earlier, I guess that's partly because of the advantage
of the Dakar meeting being in October as opposed to the Cartagena that
was in December.

We were told last year one of the three big improvements would be that
the strategic planning completion would be tied to the first ICANN
meeting of the fiscal year.  The strategic plan comments aren't due
until the 15th or 16th of November.  So we've just got to hope there's
not going to be any radical changes to the strategic plan from the
community feedback in that.  But, at the end of the day, you're not
magicians and you can't work -- you know, pull the string.  It's got
to fit in somehow.  But I think that's fine.

My -- those are comments, really.  It's not really a question.

My question would be for the SO/AC budget requests, between those
requests going in and sort of the feedback on those, I think that --
we'll have to have some sort of interaction, some sort of confidence
that we -- there's an understanding of what these requests are.  They
can be quite complex.  And it's not just something that we submit,
wait with bated breath and then get a result.  I think we do -- we
would need some interaction in that period, if that's understandable.

>>XAVIER CALVEZ:  So your point is about having a more defined
process of interaction during the period from December 9th to January
17th on the budget requests from the SO and ACs?

>>CHRIS CHAPLOW:  Whether it's defined or not, it's needed.

>>JANICE LANGE:  If I could give you one question, please, from the
remote chatroom?  This is from Steve Metalitz.  He asked, if comments
on the budget are open until June 15th and the Prague meeting closes
June 24th, is there enough time to summarize comments for
consideration by the board finance committee prior to the Prague
meeting?  Including acknowledging the request and recommending what
next step should be as just stated.

>>XAVIER CALVEZ:  Okay.  So two different answers to the questions
that are complementary to each other.

The concern that is expressed there is what we are trying to take into
account by having a staggered process of the budget where we have a
first phase of the project -- of the process or the budget with the
framework that starts to define the direction of the budget and
receives input from the community in order to identify the questions,
concerns, additions, amendments, whatever needs to be taken into
account for the finalization of the budget.

By the time the May 1st deadline is reached, there's already been two
periods of community input to provide comments on issues and requests
and changes.  So we're expecting that this helps sorting out the 80 or
90% issues or questions that the budget could raise in that the period
going from May 1st to June 15th, approximately, is only there to
further fine tune, finalize comments.  And we should not have big
surprises at that time.  Of course, unless there are major events
happening right then that we should take into account.  But,
otherwise, it should be -- it should not be any more a period where
big news happened about what the budget should include or not include.

So, having said that, the second part of my answer is that I think
this question raises the same concern that Marilyn was raising
earlier.  And I would give the same answer.  That we'll try to clarify
within that period of 45 day -- 45 days -- sorry -- consultation and
input in the period of processing this input and responding to it. >>
PATRIK FALTSTROM:  Patrik Faltstrom, chair of SSAC.  One of the things
we've been working on almost a year of is to ensure that all the sort
of extraordinary costs that have been so far has been moved in as,
actually, line items in the budget.  So that's the first thing I would
like to say, which I think is a good thing.  It makes it more
comfortable for me to be a chair.

The second thing that I would like to also say is I think this
timeline looks good.  But either for this year or to the next year, we
also have to discuss what happens when we go over from one fiscal year
to another one.  Because, specifically, this year, that specific date
was a little unfortunate, if we look at the planning process for the
ICANN meetings, when you have changes in the budget that might have
impact on, for example, travel and other things planning for the ICANN
meetings themselves.  Specifically, this year we had to start to plan
for a meeting in fiscal year '12 before the budget was actually
approved, which meant that there was a little bit uncertainty on,
actually, various different kinds of costs you have to, decide quite a
lot before the end of the fiscal year what to do the next year.  That
process this year, which is the first year I did this as a chair, I
felt that was a little bit too much ad hoc.  And that is something
that we all can improve a little bit to the next year.

>>XAVIER CALVEZ:  So I think we're going to have an opportunity to
answer at least partially your question on the next slide, which
speaks about the framework format.  But I will do a check with you,
if you don't mind, to make sure we've covered both of your questions
or points by the end of this slide.

So this slide is just to provide an overview of when we say "format,"
we really mean more content of what the framework should or will
include.

Nothing very surprising there.  There's, obviously, an addition, I
think, versus last year's process relative to a 3-year outlook, which
is inserted here at the top of the slide, to be able to provide to all
of us an overview of three years ahead.  The first year of that three-
year period being the next year's budget in order to give ourselves
the opportunity to plan for, as an example, multi-year projects which
we do have in our list of projects.  And, as a result, we should be
able to formulate those projects over a 3-year period.  Few of them
last more than three years, unless I'm mistaken.  So three years is a
pretty good time frame.

It allows us as well to be able to take into account requests or needs
that may not necessarily be possible to schedule within the coming
budget year but that should be layered on the overall plan for the
year two or year three.  That gives also that opportunity.

And it just helps having a perspective, when you plan the next year,
to just look ahead a little bit, to give yourself a little bit of a
point in the future that's a little bit further away so that you can
see where you're going when you build that budget.  And I think it
will allow us to raise questions that we should find a way to give
answers to.  Because, when you start planning, this is when you start
raising questions.

So I answered part of your question, I think.  Okay, thank you.

>>JANICE LANGE:   If I suggest could we go ahead through the slide
set and then take questions at the end.  With 25 minutes remaining, I
think we want to get to the meat of the material.  And then,
certainly, we probably have time in this room with no one behind us
to take the questions.

>>XAVIER CALVEZ:   Yes.  Next one is you.

So the budget structure, and this is meant to present more precisely
the type of information, the categorization of information that will
come as an output of the budget.  Views of expenses by what we call
the natural view, which is just compensation, travel, the nature of
costs, the way they come as quite naturally from the accounting
system.  So that's something relatively standard.

The functional view that I'm assuming most of you know as well, that
provides a view of the costs by those functions, and Juan will
elaborate further and give a view so it will be more specific when we
go on that slide.

The EAG view, and we will also speak on it when it comes.

And the composite view that those of you who looked at this process
last year have seen already of trying to split the budget from a
different perspective of core activities, project, and what's called
here major activities.  But this is strategic projects, core, and
special requests from the community.  Because those elements have a
different nature and follow different processes.

Juan.

>>JUAN OJEDA:   Thank you, Xavier.  So in the natural view is the
traditional view that most companies present their financials, and in
fact are audited financial statements which were posted a couple of
weeks ago on our Web site.

This is how it's presented.  Basically, it focuses on the expenditure
category of each account.  So, for example -- and we have added a
little more granularity than in the past.  So personnel we break out
between compensation, employee benefits as well as other personnel
costs, travel and meetings, how much we spend on airfare, lodging and
meals as well as other travel costs.  Professional services and lastly
admin which we added granularity breaking it out by facilities, how
much we spend on facilities as well as other admin costs.

So this is what most of you are probably used to seeing financials
presented in.

Again, functional view, this is nothing new from prior years.  This
focuses on how does ICANN use their resources from an organizational
activity perspective.  How much in resources is ICANN spending on IDN
programs, for example, on policy development support, core meeting
logistics, what have you.  And again, this is nothing new, and this
view was formulated in prior years based on community input and
feedback.

And the expense area group or EAG, again this was developed in prior
years based on community consultation on how does ICANN allocate the
resources by stakeholders and other community members based on to
understand the overall impact to the ICANN financials.

This view attempts to represent the resource required to support each
stakeholder group's respective activities.

>>XAVIER CALVEZ:   And the composite view here, as we were saying
earlier, describes this -- the block of core operations, the strategic
projects and splits also the community special requests.  All three
blocks should not necessarily be viewed as there's day-to-day and then
there's other things.  All three blocks are included in the day-to-day
activities of the staff that supports these activities.  I think this
view really looks at these blocks differently from the perspective of
how to plan for them, how to come up with the rationale for these
items and how to come up with the financial information relative to
those budgets.

Let's move on.

So the core -- we're trying to give a little bit of more detailed
understanding on the core operations budget.  In the interest of time,
I will just give you a few seconds to look at it and let you ask any
questions that you may have.  And if you do, please do so.  Otherwise,
I will move on.

>>CHUCK GOMES:  Thanks, Xavier.  On the community basic support,
that's an awfully broad category.  And --

>> (Off microphone).

>>CHUCK GOMES:  Yeah.  And obviously that's probably where it really
hits home for a lot of us in terms of the budget.

And unfortunately, we never really had enough detail there to really
analyze that closely.  Plus, when we're providing input to the
process, which I appreciate is important, if we don't have information
on the existing year budget and how much is allocated to our various
functions in the existing year -- I mean, a typical process in a
budget, you look at how you budgeted the previous year and how that's
going, but we've never had that information to help us.

Is that a realistic thing to have in the future?

>>XAVIER CALVEZ:   To have basically both the current year and the
next year's budget information together in order to be able to relate
one to the other?

>>CHUCK GOMES:  At a detail-enough level that it's useful.

>>XAVIER CALVEZ:   Right.

>>CHUCK GOMES:  We haven't had that kind of detail.  Like, for
example, previously we had the GNSO category.  That's made up of four
stakeholder groups.  And even some of those stakeholder groups are
broken down a little bit further.  For example, I represent the
registries.

So at a really high level, it doesn't help me very much to look at
that information unless I can break it down further.

Now, to date, we haven't been able to do that.

Is that a realistic goal in the not-too-distant future?

>>XAVIER CALVEZ:   So I have also heard the exact opposite argument,
that we had sometimes too much detail which made it look like it was
too baked and too finalized because we were having a lot of details.
But I understand, nonetheless, your point about having enough details
to be able to formulate an opinion.

So I think that the framework, obviously, is a less detailed format of
information.  The final draft of the budget is a more detailed format
of information.  Just to precise your question, when you look at those
two different sets of information, was one not detailed enough and the
other too detailed or both didn't have the amount of detail that you
wanted?

>>CHUCK GOMES:  Well, we haven't had the detail we wanted ever.  So I
think it's a general question.  We haven't had enough detail.  But if
we, for example, in the Registry Stakeholder Group in the GNSO are
trying to provide input into the budget early, you need it early and I
understand that, we need enough information to -- enough detail to
provide legitimate input.  We can provide you some broad things that
we want, but that's not a very effective way to provide meaningful
input.

>>XAVIER CALVEZ:   Understood.

So I think there's a paradigm there that we need to be able to address
as part of iterations in the process.  And I don't want to be too
general in my answer, but the -- an issue that I have seen in many
instances in budget processes in the past is that, especially when
they are spread out in time, is that you are too early to have all the
information that you need to produce a detailed budget; however, you
do need an overall view to move forward.

And so it's a little bit of you can't have everything at one time,
both having something early and having something very detailed because
the detail doesn't yet exist because it's a high-level view.  And we
need to then be able to, at the next step, come up with the detail
that is the bottom-up process.

So I hear you.  I think that we need to make sure that when we provide
the framework, internally we have developed or we are ready to develop
the level of detail that supports the information that ultimately will
go in the budget.  I think we can share a certain amount of that
information, either in terms of format, so that you know what level of
detail you will get ultimately to be able to provide your input.

I just want to be careful of, at the very first stage, we will not
have a huge amount of detail, nor should we, in my views.

>>CHUCK GOMES:   And I understand that, and respect that for the next
year's budget and future-year budgets.

If we could have it for the current year in terms of where we're
going, I would hope that, not-too-distant future, we will be able to
have that relative to our particular area of need so that we can use
that, then, to make better input for the future year.

>>XAVIER CALVEZ:   Okay.  Understood.

So I think I understand what you are suggesting.

What I will want to do is go back to our structure, information, and
process to be able to take that comment into account.  We will do a
follow-up of the comments that have come through through this process
to make sure that we address them and respond one way or the other.

Yeah.

>>JANICE LANGE:   Again, I will ask if you want to take these two
questions in the queue, I would like to give Steve Metalitz question
at this time, because he was in line tiers when we went a little off
plan.  Fine with me, I think we have the time, if you will allow me
one second to ask Steve's question.

>>XAVIER CALVEZ:   So you are suggesting to ask Steve's question now?

>>JANICE LANGE:   We kind of went pack to asking questions within, so
I would like to go back to Steve's now, if that's okay.

>>XAVIER CALVEZ:   Yes.

>>JANICE LANGE:   So he was addressing, I believe, Chuck's question on
the framework, which was will the framework document posted for public
comment in January be more detailed than the budget framework posted
last year?

So I believe that that's -- that discussion has been had.  I just
wanted to say that out loud for the record for Steve.

His other question in line prior to that was, for budget submissions
due December 9th, should these only address what our constituency
believes should be spent on our activities directly or would request
for budget levels on, for example, contractual compliance be in order
at that time?

So from a constituency standpoint, do we -- does he, on December 9th,
only think about himself from a budget standpoint or are we looking at
the larger picture?

>>JUAN OJEDA:   Thank you, Janice.  I will take that one.

So in response to the additional budget request that should be
submitted by December 9th, this is consistent with priority.  This
should be for requests for a particular stakeholder group or a
constituency group for any special project, activity, extraordinary
item that they want support for for fiscal year '13.

The vehicle for input from the community or stakeholder groups for
things cross-constituency such as compliance and what have you, that
should be as part of the -- whichever 45-day comment window that the
community wants to use, either the framework or in response to the
framework or to the draft.

So I know in last year for development of the fiscal year '12 budget,
there was some confusion with that so we want to be as clear as
possible to have the communities focus on those specific budget
requests for their groups.

>>XAVIER CALVEZ:   Thank you.  Let's move on.

Yes.

>>CHRIS CHAPLOW:   Can you hear me?  Chris Chaplow from the B.C.  I
just want to come back to the detail, bringing up the point that Chuck
brought up because it is quite important.

What I am seeing on these slides is the headings, while I am hearing
the words "a little bit more detail."  So I'm just wondering -- I'm
not wanting us to go through a whole other year and there for there to
be some misunderstanding.

In the past, the reason we haven't had the detail is because the
systems weren't in place.  We now, as I understand from the last board
budget committee meetings, the Microsoft Dynamic GP system is now well
in place.

So that leads me to the question, who is going to be responsible for
the decision on the detail?  Will it be yourself or will it be the
board?

>>XAVIER CALVEZ:   Sorry, for the decision on the details that's
provided?

>>CHRIS CHAPLOW:   That's provided, yes.  Are you going to make that
decision or will the board give you guidance on that?  I need to know
because in June we will be asking again, I'm not sure.  So I would
like to know now.

>>XAVIER CALVEZ:   I'll ask help from Akram to see his views on that,
but mine would be that I would want to have an opinion and formulate a
recommendation as to the level of detail that we provide, taking into
account a number of criteria to make that definition, workability,
bandwidth, just volume of information to deal with.  What exists from
the perspective of the stage of the budget process that we will be at
at that time.

Another criteria should be what information has already been made
public and validated with the management, the board and so on.

Another aspect would be confidentiality.  It is fairly obvious that
there is a certain amount of detailed information that we are not,
whether we like it or not, allowed to even provide.

So having said that, and taking into account those criterias, I would
want to make recommendations at the minimum on what level of detail we
should interact with so as to have a productive discussion.

Akram, I don't know if you have a view as to whether the board should
--

>>AKRAM ATALLAH:   So it's not about do we want to publish or not
publish the detail.  It's really about the detail.

Now, we have the system in place.  What that means is we have the
capability of entering on a line item what is that expense; right?  So
we can actually put it in there.

Now, the biggest problem for us is that the finance team does not --
cannot take a hundred thousand different line, you know, expenses and
assign them to where they should be.  So we have to count on every
account -- every expense manager to code the expense for the right
category.  So the quality of the data is important.

We have the system now, we put it in place.  Now we are reviewing to
get the data coded in the right way.  And with time, as we train the
employees to actually code everything, because as they showed you
earlier, there are four or five different categories for each expense.
So you have to fill that information so we can extract the data and
put it in a presentable way.

So as the data comes out this year, hopefully towards the end of the
year, the actual end of the year.  Remember, we are only -- what?
Four months into the year now?  So as we get closer, we will have more
data that we can actually present.

So our hope is as we get the year end, we can get more views of the
expenses and more detail.  Other than employee compensation, which is
confidential information, I have no problem showing you anything you
want to see.  So it's not that.  It's just having the data that we can
actually stand behind and make sure it's correct and it's not, you
know, present.

>>GLENN RICART:  I am Glenn Ricart and I am with U.S. Ignite and even
though it astounds even me, I am ex-PWC.

My question is about the views that you talked about.  We are going to
get to see what the organization spends internally.  That's great.  We
are going to see what the support is for the community base.  That's
great.

Will we also, here is the question, have a view on what we are
spending for outreach evangelism?

Outreach evangelism, liaison with other groups.  So we have talked
about our internal operations, we have talked about supporting our
internal communities.  Will we get to see how much money we're
spending to make sure others know about what we're doing and why we're
doing it?

>>XAVIER CALVEZ:   Okay.  So there's a number of initiatives right now
to develop a model for outreach that it's in progress but that will be
finished and completed, and this is in progress of community input.

I think we'll have a better view of what type of support for outreach
will be determined by that working group, and I think then from an
accounting and financial statement, we will have the ability to
identify fairly directly what these expenses are, either through their
nature or through their purpose in the accounting system.

And I would say that -- I don't want to offer up too often or too far
that information, but if we have a request for providing that type of
view, we can always formulate a template or report, and we have a
system that is more capable today than it was in the past to help us
answer direct questions.

So if we need to perform an analysis on a slightly more ad hoc basis,
then we have more capabilities to do it as well.

>>GLENN RICART:  I encourage you to think about it when you do the
chart of accounts.

>>XAVIER CALVEZ:   Yes.

>>JUAN OJEDA:   If I may -- I'm sorry, I didn't catch his name.  The
gentleman.

>>XAVIER CALVEZ:   Sorry, we didn't catch your name.

Glenn Ricart.

>>JUAN OJEDA:   Again, this is Juan Ojeda, controller for ICANN.

Under the functional view, there is an organizational activity called
global engagement and increasing international participation.

Does that fall in line with the -- And just to be clear, I just want
to make sure we're not creating something that already exists in a
different format.

>>GLENN RICART:  I can't tell from that description whether it is or
isn't.  But you understand I am sort of about internal support and
external.  And whether what you described is that, I can't tell from
the description.

>>JUAN OJEDA:   Yeah, yeah.  I think that's -- that view within the
functional framework of the budget and financial reporting I believe
will address your question.  And when we get to that stage, and we
definitely open it up to community input, please advise us if that
does not meet what you are looking for.

Thank you.

>>XAVIER CALVEZ:   Thank you.

I don't think we have much more slides, any more than this, after
that.  If you can scroll down, Janice, please.

Don't want to spend too much time on this.

This is just a visual representation of an exercise that is part of
the budget to look at the list of projects.  We -- To ensure we
capture correctly the projects from a given year that we are in right
now.  We are working together on projects, and we're capturing the
cost on those projects.

We want to make sure we have a correct process as part of the budget
to review that list, ensure that we take into account correctly new
projects; that we have a correct understanding of which projects are
finished, done, completed.  And also that we track correctly to my
point earlier about the three-year view the projects that are multi-
year.  And that allows us to have a budgeted or -- budget list of
projects for the new budget year.

So this is what -- this is just aiming at representing so that you
understand that we are, as part of the budget process, looking at
projects pretty closely in order to be able to have a good tracking of
projects throughout the budget process and the actual delivery of
those projects during the year.

>>JUAN OJEDA:   Thank you, Xavier.

So on this slide it gives further detail of the budget component
within the composite view of what makes up community special requests.

The top three columns are the SO, AC and SG requests, which again will
be processed through the additional budget request templates where the
initial period submission will close on the 9th of December.

So of those requests, those that will be included in the budget will
comprise those items.

And a special request will be those projects that ICANN staff is
taking on which are more cross-constituency based, and are above and
beyond the basic set of services that the community groups are being
provided in support of their services and their projects.

Just to recap, these are the various sources of revenue and resources
for ICANN.  The financial resources primarily come from registries and
registrars, and they are based on individual contracts with other
registries and registrars, and some are fixed-fee based, others are
transaction-fee based and some are a hybrid of both.

We also have resources from contributions from the RIRs, the amounts
have been steady for the past couple of years.  We also have
contributions from all the ccTLDs.  And lastly, we also have
sponsorship revenues specifically related to the three ICANN meetings.

>>XAVIER CALVEZ:   Okay.  This slide is just a recap of the main
elements that we have gone over, so we should just pass on it and let
anyone bring up more questions from the online -- Okay.  So we don't
have any more questions right now from online participants.

Normally one more minute, but we can take maybe a few more minutes for
a little bit more questions.

>>JOHN CURRAN:  John Curran, CEO, ARIN.

I want to pick up on what Glenn Ricart said earlier.  And this is in
some ways I am throwing rocks from a glass house because I have just
gone through this with ARIN as well and it's very difficult to do.
But something to think about strategically is we all know when costs
get accrued, we all know what department we are in.  You know what
department the person works for, you know where his travel costs go by
functional area, and every area system knows how to roll that up.
What you don't know is the mission.

So like I travel.  Sometimes I travel for Internet governance.
Sometimes I travel for ARIN's function of keeping the business
running.

So recently, we went through and we broke down all of our cost areas
by mission.  What does it actually do?  What's the deliverable to the
community?  Okay?

So I have to now realize when I am traveling, because I am going to a
board meeting, that's overhead board meeting versus I am traveling to
do outreach versus I am traveling to do Internet governance.

And I guess something to think about, not this year, not next year,
but long term, ideally, you would be able to show us on a mission
scale at the top level of ICANN, here is our major areas of
deliverables, not projects but the mission of the organization, and
here is where the funding is spent.

And it does mean people have to know, the training department has to
know am I doing training for internal people, for core operations?  Or
am I doing training as part of a strategic program?  Or am I doing
training for outreach?  And it's three different codings.

But when you get to that point, you can eventually let the people in
the room see here is how we're spending your money against the
deliverable list as opposed to the functional budget list.

Not an easy thing to do.  Very hard long term, and an aspirational
direction I ask you to think about.

>>XAVIER CALVEZ:   Thank you for this comment.

I think you are touching a point of complexity in the way the
information is, well, both captured in the financials and processed
and rendered in an output.

I think one element that we're going to need to address, and I agree
with you, it's a reasonably long process, but the first steps of that
process, in my view, is to be able to have a cost accounting system
that has correctly defined the various perspectives that you want to
be able to look at the cost and revenues by.  And there is the
functional view, there is the departmental view, there is the mission
or the purpose or the -- whichever word we put that represents the
rationale as to why that's been spent and what we have been doing with
it.

So I think that we already have in our existing system structure the
premise or portion of what helps doing that.  Which is why I was
saying a little bit earlier to Chris, I think, that we will have a
little bit of help already with the existing system to start having a
more analytical view as to how costs have been spent, and for what
purpose.

I don't think it's necessarily a perfect answer to the ideal picture
that you have shown, but it's going in that direction, and I think our
-- what we still have to define as part of the implementation of the
system is more detailed cost accounting model, and I think that's also
the process to, at the minimum, partially address your concern.

>>JOHN CURRAN:  Agree.  That's all I ask.  Thank you.

>>JUAN OJEDA:  If I may also add to the gentleman -- I'm sorry.  I
didn't catch your name.

We, in response to similar comments in the past, that's what's led to
the two additional views being the functional view as well as the EAG.
The functional trying to answer the question of -- as you were
mentioning earlier, the deliverable in this case, are you spending
money on -- in pursuit of the IDN programs?  Are we spending money on
community support and what have you?  And the EAG is attempting to
address who is the beneficiary of that?  Is it a specific stakeholder
group?  Is it the IETF?  Is it GAC, and what have you?  So, at a later
date, if maybe offline or during the public comment period -- there is
a white paper that was posted online trying to explain these two
views.  And, if, in your mind, you feel you still need more
clarification or a different view, we can certainly address at that
point.  But, if you haven't had a chance to, there is a white paper
online, which I would invite to you read at your leisure.

>>JOHN CURRAN:  I will.  Thank you.

>>JUAN OJEDA:  Thank you.

>>XAVIER CALVEZ:  Any further question at this stage.  We're past the
time.  Olivier?

>>OLIVIER CREPIN-LEBLOND:  Thank you, Xavier.  Olivier Crepin-Leblond.
I wonder if we can go back to the community's support page.  Is that
possible, please?  Okay.  Community requests.  The one after that.
This one.  Thank you.  So we have AC request, SO request, and SG
requests.  All of these are treated, I guess, as silos.  Each SO and
AC would make its requests.

Are there any arrangements or potential arrangements for cross AC and
SO requests for those projects that will actually benefit more than
one AC or SO?

>>XAVIER CALVEZ:  Your question is in terms of the process?

>>OLIVIER CREPIN-LEBLOND:   Yes, that's correct.

>>XAVIER CALVEZ:  We've presented this slide with a picture of how
the requests come to us or have come to us in the past.

We have a blocked transversal log there that special project that
could potentially capture the idea of what you're describing.  Unless
I'm mistaken -- and, please, correct me, if I'm wrong -- but I think
the requests are posted -- the requests of one constituency are posted
so that everyone can see them.  So that allows at least to -- for
others to react and react in order to say, well, we're also interested
in this or we don't actually agree with that.

So that's a portion of the process.  I don't think it necessarily
captures entirely your point about transversal or -- sorry -- requests
that can benefit or that concern all constituencies or a subset of
constituencies.  So that's something that we're going to need to think
about in terms of how to do that.  I think we have staff members in
the organization that have a cross-constituency perspective.  And
we're going to need probably to think about how to capture input from
these people who have a direct line in the constituencies to try to
have a view of that.

We may come across already identified requests.  But I think it's
worth thinking further about it.  Okay.  Thank you.

>>OLIVIER CREPIN-LEBLOND:  Thank you.

>>XAVIER CALVEZ:  And Akram makes a point that's simple as well.  The
requests that can be made by one constituency can be requests that
can apply to everybody.

>>JUAN OJEDA:  To add to Xavier's point, the budget submission
process is a vehicle for those cross constituency group requests that
are not part of the basic set of support services, if that makes
sense.

>>XAVIER CALVEZ:  And I don't know how much it happens or not.  But I
would think that it's also a good practice that, during the
consultation process and the input process, the various
constituencies speak to each other as well so as to exchange on --
you know.  And we're happy to try to help that process.  But I think
it's at the core of the constituencies communication and work on
their comments, questions, or generation of new project ideas to also
try to reach to each other in -- and, certainly, the staff who is
there to support that can help.  Yes, Marilyn.

>>MARILYN CADE:  Xavier, I'm going to go back to the issue of detail,
but in a slightly different way.

>>XAVIER CALVEZ:  Yes.

>>MARILYN CADE:  It is, you know -- in the past there have been a
number of ideas that have emerged that have gone out for public
comment.  And in some cases there's been fairly strong disappointment
and disagreement in the comments that have been received about a
proposal coming from staff or the executive leadership about how to
do something.

There's -- the description we get of the project is headline news.  A
fair amount of money and resources, including hiring staff, go toward
initiating a project.  One might call it the DNS cert, as an example.
And then the community -- and money is spent.  There's not enough
detail in the budget for us to have identified that, even though there
has been objection to a proposal and the community is strongly
opposing, a fair amount of money has already been spent on a project.

The way we describe the projects that are -- I mean, the level of
detail is not just the financial amount.  But it is also -- it's a
fairly complex environment we're asking you to improve.  And I think
we're going to have to -- and some of these things are going to be
called strategic projects.

So, in the level of detail, I guess we're -- we probably are going to
have to be clear with the board ourselves that it isn't -- you know --
because in the past we were told, well, we didn't want to tell the
community about it because it wasn't approved.  But, when you look at
the amount of money that got invested and spent before the project got
changed -- so the second example I'm going to give you is the project,
that project which the community objects to is back in the plan.

>>XAVIER CALVEZ:  Sorry.  Is back in?

>>MARILYN CADE:   Back in the plan.

>>XAVIER CALVEZ:  Okay.

>>MARILYN CADE:  So this is going to be another question for us is,
if the community's consistent feedback is no about something and it
keeps coming in to the budget and in to the strategic plan, that is
also an area of tension for us, I think, in terms of how we address
it.

>>XAVIER CALVEZ:  Okay.  I can imagine a -- it sounds to me that at
least part of the general answer to your -- what was aimed at, I
think, as being a general question but taking specific examples is
that we need to be able to have probably a more consistent and
effective communication process.  I'm not yet able to know the amount
of feedback that we can give from board discussions and so on.  But
what I'm hearing from you, which sounds reasonable to me, is that,
when there has been a project that's been raised as a request,
whether denied or --

(Speaker off microphone)

>>MARILYN CADE:   A project is initiated at executive level.  Fair
amount of money gets spent on it.  The community objects to the
project.  We don't have the detail to -- as a community, to provide
advice early enough to prevent the spending, which then the project
has to be scrapped.  And I'm not even saying it's a large amount of
money.  But it's just something we're going to have to keep our eye
on so we don't waste money because we're asking you to put more money
into strategic projects that support the constituencies or the SGs,
et cetera.

And I'm -- I don't have an answer.  I'm just saying we need to look
at, when we describe -- the description of the strategic projects.
Strategic plan is kind of headline news.  Right?  By nature.

>>XAVIER CALVEZ:  Right, yeah.  Understood, okay.

I think we will have to try to clarify.  And maybe you were taking
examples.  I think it will be useful that we sit down together on
looking at examples and try to draw out of that operating rules and
communication rules that maybe can help at mitigating the issue.  I'm
not sure everything can be mitigated.  What I mean by that is, if
there is a disagreement on an executive decision that's been made and
engaged and in progress, the disagreement may just stay a
disagreement.  And it doesn't mean that you should not have
information about it.  But what I can imagine is that sometimes it's
just too late to change gears, which is not necessarily a good answer.
But we should be able to at least communicate on this is what's been
happening.  If there's no -- not an agreement at the point of trigger
of the project or the process, sometimes after that it's just too
late.  And I think this is what you want to avoid is the point.  Thank
you.

Okay.  We're 15 minutes late in finishing this meeting.  Thanks to
your input and our interactive discussion.  I think this is great.

>>JULIE HEDLUND:  We just had one more note from Steve Metalitz that
we might want to clarify for the record.

>>XAVIER CALVEZ:  Okay.

>>JULIE HEDLUND:  Steve said, "Doesn't Akram's comment contradict
what Xavier said earlier that requests of cost cutting activities are
not appropriate by the December 9th deadline?"  So we just wanted to
clarify that Steve heard that correctly, that a comment from Akram
contradicted yours.  And we just want to clarify that.

>>XAVIER CALVEZ:  I don't think we were contradicting each other on
that point, no.  So the answer to the question is no.

It shouldn't necessarily stop there.  If you think back about the
project or look back at the slides later, we are reachable.  We're
happy to make sure that you can provide further feedback by e-mail,
phone, or whichever.  We are reachable.  Don't feel that it's now or
never.  So thank you for your input.  It was helpful.  We have notes.
And we will make sure we follow up on the questions that have been
asked and not necessarily entirely or fully answered at the level of
detail they should.  And we're looking forward to your participation
in the next steps of the process, because we're only at point zero
right now.  And it was a helpful process to go through today.  Thank
you very much

[Applause]

>>JUAN OJEDA:  Thank you, everyone.

>>XAVIER CALVEZ:  They're red, white, and blue?  I actually did not
build that specific slide.  Otherwise, it would be black and white,
actually.