Clarifying NCAA report about athletics budget
Each year Missouri State University reviews the NCAA Financial Reporting Requirements and Minimum Agreed Upon Procedures and submits to the NCAA an Athletic Department Statement of Revenues and Expenses. The 2014 report and the 2015 report are available on the financial services website.
The NCAA Minimum Agreed Upon Procedures were revised in 2015. This changed the sort of expenses that were typically included on this report. Before this year, many universities reported only on costs associated with the operation of athletics, and this had been our approach for years. This practice appears to be consistent with the reports submitted by other comparable Missouri Valley Conference institutions.
Beginning in 2015, the NCAA’s revised procedures required that universities include all expenses related to athletic facilities. Moreover, we were required to report certain items we had budgeted centrally at the University, including utilities associated with running these facilities, other administrative costs related to athletics (e.g. a portion of human resources, financial services, etc.), and out of state scholarship waivers for athletes.
While this shift did not result in increased spending on athletics at the University, it did result in an increase of over $9 million in the total amount of expenses we reported to the NCAA in 2015.
Report reflects addition of expenses, but not revenues, for facilities
On Sunday, a story on this matter written by the “watchdog reporter” of the Springfield News Leader appeared on the front page of the newspaper. The implications of the article seem to be that the University had dramatically increased its spending on athletics and/or the University had been hiding how much it had been spending on athletics. Neither is true. Here are the important facts:
- $6,185,346 of the newly reported money comes from paying the annual bond payments for the Plaster Stadium renovations and the new athletic and recreational fields, the construction of JQH Arena, and the construction of Hammons Student Center. There are no new athletic expenditures here and all of these projects have been approved by our Board of Governors and publicized widely.
- There is revenue to support the bulk of these payments. It comes from the annual gift made by Hammons Trust, seat assessments and student fees. For example, the BEAR fee, which the students passed by over an 80 percent approval vote, pays for the entirety of the Plaster Stadium renovation bond obligation.
- We allocated all of the cost of facilities to athletics even though Plaster Stadium and Hammons Student Center are both used for academic purposes (classes are held in both buildings), and all facilities are used for recreation and general university purposes. For example, we hold graduations and convocations in JQH Arena.
- These facilities produce income for the University. We regularly rent the facilities for conferences, school groups, sports tournaments, concerts, the circus, bull riding and many other activities.
- The University budgets some items like utilities, fee waivers, human resources and other university-wide expenses centrally. No department or division pays for the utilities to operate its buildings or the out-of-state fee waivers its students receive.
Transparency remains a priority
The bottom line is that we used the new NCAA reporting requirements as an occasion to revise how we report athletic spending to be as complete and transparent as possible. Athletic spending did not increase by an exorbitant rate over the last year, and none of these expenditures had been hidden from me, our board or anyone else.
In fact, budgets for athletic facilities, fee waivers and all other accounts have been fully disclosed each year in the University’s board approved budgets. These budgets are and have always been available on the financial services website.
I hope that one hallmark of my administration these last five years has been transparency. For example, we have publicly acknowledged that athletic expenditures have been over-budget in the last several years, in large part to decreasing ticket sales and seat assessments associated with men’s basketball. Moreover, the newspaper has run prior stories about our plan to reduce athletic expenses over the next 2-3 years.
If you have questions over anything contained in this note, send me a question and it will be answered, or come see me. Thanks for all you do for our University.
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