NCAA Agreed Upon Procedures

1
NCAA Agreed Upon Procedures

• New format is consistent with NCAA/EADA format
• Challenges
• Headings
• Revenues
• 5 Revenue Test
• 16 Revenue Categories and 1 Other category
• Expenses (Not Expenditures)
• 10 Expense Test
• 19 Expense categories and 1 Other category
• Disclosures

2
NCAA Agreed Upon Procedures Format

• New format is consistent with NCAA/EADA format
• Per the NCAA
• The agreed-upon procedures will result in data
  similar to that required by the Equity in
  Athletics Disclosure Act.
• The agreed-upon procedures scope of work shall
  include the reporting of revenues, expenses, and
  capital improvements required in the EADA and
  NCAA financial reporting information. The
  definitions used in the agreed-upon procedures
  provide a consistent means of reporting
  intercollegiate athletics finances

3
NCAA Agreed Upon Procedures Format

• The Agreed Upon Procedures Report to the
  President and the NCAA/EADA report now share the
  same due dateJanuary 15.
• Given the NCAAs desire for consistency between
  the SRE and the EADA report and the same due
  dates, the common elements between both reports
  should agree.

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NCAA Agreed Upon Procedures Challenges

• The 5 Revenue and the 10 Expense Tests
• There are more Revenue and Expense Categories.
  Appropriate classification will likely be more
  difficult.
• Indirect Facilities and Administrative
  Supportfor both revenues and expenses
• Out of State Tuition WaiversDirect
  Institutional Support on the Revenue side and
  Athletic Aid on the expense side.

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NCAA Agreed Upon Procedures Challenges

• Recruiting (travel, meals, lodging, phone,
  postage)
• Four compensation categories with a separate
  category for Severance
• Game day expenses that do not include travel
• Equipment, Uniforms and Supplies for teams only

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NCAA Agreed Upon Procedures Challenges

• As with Old Procedures, changes in loan,
  endowment or plant funds on the institutional AFR
  should not be included in the SRE. However,
  significant additions to restricted funds should
  be disclosed in the notes to the statement.
• Capitalized assets, additions and improvements
  of facilities will be part of a note disclosure
  (more on that later)
• The SRE should not present any fund or net asset
  balances.
• No separate section for transfers in. Transfers
  now part of Direct Institutional Support.

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NCAA Agreed Upon Procedures Challenges

• Old appeared to me more flexible with
  presentation
• an institutions accounting system may not
  facilitate preparation of a statement identical
  to this format. In those cases, the institution
  should prepare a statement consistent with its
  own account structure.
• New procedures do not make this statement.

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NCAA Agreed Upon Procedures Headings

• Suggested headings across the top are Football,
  Mens Basketball, Womens Basketball, Other
  Sports, Non-program Specific, and TotalSame as
  the Old Procedures
• For those that dont have football, its okay to
  have Mens Baseball as one of your headings.

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NCAA Agreed Upon Procedures Revenues

• 16 Revenue Categories
• (Old Provided 10 examples of revenue
  Categories)
• The NCAA defines the categories as typical
  sources of revenue and does not appear to limit
  the number. The key is consistency between the
  SRE and EADA

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NCAA Agreed Upon Procedures Format

• Categories by Institution (excluding transfers
  and sub-totals)

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NCAA Agreed Upon Procedures Revenues
16 Suggested Categories
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NCAA Agreed Upon Procedures Revenues

• 5 Revenue Test
• Less than 5 of total revenues may appear on
  this line. If the number is greater than 5.
  Reclassify adequate revenue to the appropriate
  category(s) to bring the Other category to less
  than 5 of the total revenue.
• For FYE 2004, no Institution reported more than
  5 as miscellaneous or other income.

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NCAA Agreed Upon Procedures Revenues

• Ticket Sales (1)
• Include revenue received for sales of admissions
  to athletics events. Include ticket sales to the
  public, faculty and students and money received
  for shipping and handling of tickets.
• Do not include ticket sales for conference and
  national tournaments that are pass-through
  transactions.
• Report amounts in excess of a ticket's face value
  paid by ticket purchasers (for example, to obtain
  preferential seating) in Line Item 4
  (Contributions).

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NCAA Agreed Upon Procedures Revenues

• Student Fees (2)
• Include student fees assessed for support of (or
  that portion of overall fees allocated to)
  intercollegiate athletics.
• If you had student service fees transferred,
  record those transfers on the SRE as Student Fees
• Guarantees (3)
• No changes--revenue received from participation
  in away games

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NCAA Agreed Upon Procedures Revenues

• Contributions (4)
• Amounts received directly from individuals,
  corporations, associations, foundations, clubs or
  other organizations that are designated,
  restricted or unrestricted by the donor for the
  operation of the athletics program.
• Report amounts paid in excess of a ticket's
  value.
• Cash, marketable securities, pledges and in-kind
  contributions.
• In-kind contributions may include
  dealer-provided automobiles (market value of the
  use of a car), apparel and soft drink products
  for use by staff and teams.
• Report gifts and merchandise from corporate
  sponsorship agreements in Line Item 12
  (Royalties, Advertisement and Sponsorship).

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NCAA Agreed Upon Procedures Revenues

• Third Party Support (5)
• Amounts provided by a Third Party and
  contractually guaranteed by the institution, but
  not included on the institutions W-2 (e.g., car
  stipend, country club membership, entertainment
  allowance, clothing allowance, speaking fees,
  housing allowance, compensation from camps, radio
  income, television income, shoe and apparel
  income).
• Note Does NOT include support from Related
  Interests
• Third Party Support Revenue should equal sum of
  Two Expense Categories
• Coaching Other Compensation and Benefits Paid by
  a Third-Party (20)
• Support Staff/Administrative Other Compensation
  and Benefits Paid by a Third Party (22)

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NCAA Agreed Upon Procedures Revenues

• Direct State or Other Government Support (6)
• State, municipal, federal and other government
  appropriations made in support of the operations
  of intercollegiate athletics. (Note state
  appropriations to Athletics in Texas is
  prohibited.
• If not directly awarded, do not include the
  amounts in this report. For example, UTPA would
  not include use of a city owned baseball
  facility.
• Include Federal Work Study support for student
  workers employed by athletics

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NCAA Agreed Upon Procedures Revenues

• Direct Institutional Support (7)
• Support from institutional resources for current
  operations of intercollegiate athletics,
  including tuition waivers, transfers or
  allocations (e.g., from other Auxiliary
  Enterprises) made in support of the athletics
  department.
• All funds the institution provides to the
  athletics department to run its program.
• This amount will tie to the NCAA athletics
  department audit however, it will be a
  reconciling item to the institution's financial
  statements (i.e., the value of out of state
  tuition waivers would not be included in the
  AFR.)

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NCAA Agreed Upon Procedures Revenues

• Indirect Facilities and Administrative Support
  (8)
• Include institutional subsidy not charged to
  athletics. Includes expenses made on behalf of
  athletics but NOT CHARGED to Athletics. Indirect
  support of athletics may include an allocation
  for
• institutional administrative cost,
• facilities and maintenance,
• grounds and field maintenance,
• security,
• utilities, and debt service.
• If not tracked, make a reasonable allocation for
  indirect institutional support. Offset with an
  expense equal in value in Expense Category
  (32)--Indirect Facilities and Administrative
  Support.

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NCAA Agreed Upon Procedures Revenues

• NCAA and Conference Distributions (9)
• Include revenue received from participation in
  bowl games, tournaments and all NCAA
  distributions.
• Includes amounts received for direct
  participation or through a sharing arrangement
  with an athletics conference, including shares of
  conference television agreements.
• Broadcast, Television, Radio, and Internet Rights
  (10)
• Includes institutional revenue received directly
  for radio and television broadcasts, Internet and
  e-commerce rights received through
  institution-negotiated contracts.

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NCAA Agreed Upon Procedures Revenues

• Program Sales, Concessions, Novelty Sales, and
  Parking (11)
• Include net revenue (gross revenue less related
  expenses) of
• game programs (but not advertising in game
  programs), novelties, food or other concessions,
  and parking revenues
• from third-party contractors (e.g., net revenue
  from licensing and game programs) or the net
  revenue from these services if performed directly
  by the institution.
• Note Include revenue from advertising sales in
  game programs in Revenue Category 12--Royalties,
  Advertisements and Sponsorships.

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NCAA Agreed Upon Procedures Revenues

• Royalties, Advertisements and Sponsorships (12)
• Include all revenue from
• corporate sponsorships,
• sales of advertisements (including those within
  game programs),
• trademarks and royalties.
• Include the value of in-kind products and
  services provided as part of the sponsorship
  (e.g., equipment, apparel, soft drinks, water and
  isotonic products).
• Sports Camp Revenues (13)
• Include amounts received by the athletics
  department for sports camps and clinics, both on
  and off campus, hosted by the athletics department

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NCAA Agreed Upon Procedures Revenues

• Endowment and Investment Income (14)
• Include endowment spending policy distribution
  and other investment income in support of the
  athletics department.
• These categories include both unrestricted and
  restricted investment and endowment income for
  the operations of intercollegiate athletics.
• Disclose investment policy distribution in the
  notes to the SRE?
• Other (15)
• Less than 5 of total revenues may appear on
  this line. If greater than 5, reclassify
  adequate revenue to the appropriate category to
  bring this category to less than 5 of the total
  revenue.
• Subtotal Operating Revenue (16)

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NCAA Agreed Upon Procedures Expenses
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NCAA Agreed Upon Procedures Expenses

• 10 Expense Test
• As a guide, please limit Other Operating
  Expenses to 10 of total operating expenses.
• If the number is greater than 10, please try to
  reclassify adequate expense to the appropriate
  category(s).
• If the number is greater than 10, please
  provide the top 3 categories and amounts.
• Do not include indirect institutional support
  (category 32), or salaries and benefits (category
  19 or 21)

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NCAA Agreed Upon Procedures Revenues

• 10 Expense Test
• As a guide, please limit this category to 10
  of total operating expenses. If the number is
  greater than 10, reclassify adequate expense to
  the appropriate Categories.
• Other Expenditures had different names at each
  campus MO, Operating Supplies/Expense, Other
  Expenditures, and Maintenance General
  Administration.
• For FYE 2004, each Institution reported more
  than 10 in this category (between 15 and 24)

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NCAA Agreed Upon Procedures Revenues

• Athletic Student Aid (17)
• The total amount of athletically related student
  aid awarded, including
• summer school
• tuition waivers (includes aid given to
  student-athletes who have exhausted their
  eligibility or who are inactive due to medical
  reasons)
• As mentioned under Direct Institutional Support,
  tuition waivers will result in reconciling item
  to the AFR

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NCAA Agreed Upon Procedures Revenues

• Guarantees (18)
• Amounts paid to visiting participating
  institutions
• Note we now have 2 coaching and 2 administrative
  categories for compensation (based on source) and
  one for severance
• Coaching Salaries, Benefits, and Bonuses Paid by
  the University and Related Entities (19)
• Coaching Other Compensation and Benefits Paid by
  a Third Party (20)
• Support Staff/Administrative Salaries, Benefits
  and Bonuses Paid by the University and Related
  Entities (21)
• Support Staff/Administrative Other Compensation
  and Benefits Paid by a Third Party (22)
• Severance Payments (23)

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NCAA Agreed Upon Procedures Revenues

• Coaching Salaries, Benefits, and Bonuses Paid by
  the University and Related Entities (19)
• Gross salaries, bonuses, and benefits provided
  to head and assistant coaches which includes all
  gross wages, benefits and bonuses attributable to
  coaching that would be reportable on
• University and
• Related Entities (e.g., foundations, booster
  clubs) W-2 and 1099 forms (e.g., car stipend,
  country club membership, entertainment allowance,
  clothing allowance, speaking fees, housing
  allowance, supplemental retirement allowance,
  compensation from camps, radio income, television
  income, tuition remission, earned deferred
  compensation benefits).
• Note Any payment made to previous coaches to
  satisfy a contractual agreement should be
  reported in Category 23--Severance Payments

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NCAA Agreed Upon Procedures Revenues

• Coaching Other Compensation and Benefits Paid by
  a Third Party (20)
• Compensation paid to the coaching staff by a
  third party and contractually guaranteed by the
  institution, but not included on the
  institution's W-2
• Note Expense Categories 20 and 22 combined
  (i.e., coaching and administrative salaries
  provided by a Third Party that is NOT provided by
  the University or a Related Interest) should
  equal Revenue Category (5) Third Party Support.

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NCAA Agreed Upon Procedures Revenues

• Support Staff/Administrative Salaries, Benefits
  and Bonuses Paid by the University and Related
  Entities (21)
• Gross salaries, bonuses, and benefits paid to
  administrative staff (i.e., football secretary,
  sport-specific trainer) that would be reportable
  on University and Related Entities W-2 and 1099
  forms
• Staff members responsible for the gender-specific
  athletics department, but not a specific sport
  (i.e., director of mens athletics), will have
  their compensation figures reported in the Non
  program specific column.
• Athletics department staff members who assist
  both mens and womens teams (sports information
  director, academic advisor) will be reported in
  Not Allocated by Gender (i.e., Non-Program
  Specific) column.

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NCAA Agreed Upon Procedures Revenues

• Support Staff/Administrative Other Compensation
  and Benefits Paid by a Third Party (22)
• All compensation paid to the support staff by a
  Third Party and contractually guaranteed by the
  institution, but not included on the
  institutions W-2 (e.g., car stipend, country
  club membership, entertainment allowance,
  clothing allowance, speaking fees, housing
  allowance, compensation from camps, radio income,
  television income, shoe and apparel income).
• Remember Expense Categories 20 and 22 combined
  should equal Revenue Category 5 (Third Party
  Support).

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NCAA Agreed Upon Procedures Revenues

• Severance Payments (23)
• Severance payments and applicable benefits
  recognized for past coaching and administrative
  personnel.
• Recruiting (24)
• Include
• transportation, lodging and meals for
  prospective student-athletes and institutional
  personnel on official and unofficial visits,
• related telephone call charges, postage, and
  such.
• Value of use of institutions own vehicles or
  airplanes as well as in-kind value of loaned or
  contributed transportation.

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NCAA Agreed Upon Procedures Revenues

• Team Travel (25)
• Include air and ground travel, lodging, meals
  and incidentals for competition related to
  preseason, regular season, and postseason.
  Amounts incurred for food and lodging for housing
  the team before a home game also should be
  included. Include value of use of the
  institution's own vehicles or airplanes as well
  as in-kind value of donor-provided
  transportation.
• Equipment, Uniforms and Supplies (26)
• Expenses for items that are provided to the
  teams only. Amounts are those expended from
  current or operating funds.

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NCAA Agreed Upon Procedures Revenues

• Game Expenses (27)
• Game-day expenses other than travel that are
  necessary for intercollegiate athletics
  competition, including officials, security, event
  staff, ambulance and such.
• Fund Raising, Marketing and Promotion (28)
• Expenses associated with fund raising,
  marketing and promotion for media guides,
  brochures, recruiting publications and such.

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NCAA Agreed Upon Procedures Revenues

• Sports Camp Expenses (29)
• Include all expenses, including non-athletic
  personnel salaries and benefits, from hosting
  sports camps and clinics. Athletics personnel
  salaries and benefits should be reported in
  either compensation Categories 19, 20, 21, or 22.
  
• Direct Facilities, Maintenance, and Rental (30)
• Include direct facilities costs CHARGED to
  intercollegiate athletics
• building and grounds maintenance,
• utilities and rental fees,
• operating leases,
• equipment repair and maintenance, and
• debt service

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NCAA Agreed Upon Procedures Revenues

• Spirit Groups (31)
• Include support for spirit groups including
  bands, cheerleaders, mascots, dancers, etc.
• Indirect Facilities and Administrative Support
  (32)
• Amounts for facilities, grounds and field
  maintenance, security, utilities, and debt
  service if NOT CHARGED directly to
  intercollegiate athletics in Category 30. Also
  include indirect administrative overhead provided
  by the university.
• Note Indirect Facilities and Administrative
  Support expenses should equal corresponding
  revenue in Category 8--Indirect Facilities and
  Administrative Support

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NCAA Agreed Upon Procedures Revenues

• Medical Expenses and Medical Insurance (33)
• Include medical expenses and medical insurance
  premiums for student-athletes.
• Memberships and Dues (34)
• Include memberships and conference and
  association dues

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NCAA Agreed Upon Procedures Revenues

• Other Operating Expenses (35)
• Other operating expenses include printing and
  duplicating, dues, subscriptions, memberships,
  insurance, telephone (non-recruiting), member
  dues, postage, operating and equipment leases,
  non-team travel, preseason meals and housing, and
  any other operating expense not reported
  elsewhere.
• Do not include indirect administration overhead
  provided by the university (use Category 32) or
  salaries and benefits (use Categories 19 or 21).
• Limit this category to 10 of total operating
  expenses.
• If the number is greater than 10, please
  reclassify adequate expense to the appropriate
  category(s)

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NCAA Agreed Upon Procedures Revenues

• Continue 10 Contribution Disclosure as Footnote
  to SRE
• An Institution must disclose in a footnote to
  the SRE contributions from any outside source
  that constitutes more than 10 percent of all
  contributions received (e.g., contributions by
  corporate sponsors).
• The source from which such funds are received
  also shall be disclosed in a footnote to the
  Statement of revenues and expenses.

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NCAA Agreed Upon Procedures Revenues

• Capital Asset Related Disclosures
• Disclose the following in the Notes to the SRE
• A description of the Institutions policies and
  procedures for acquiring, approving,
  depreciating, and disposing of intercollegiate
  athletics-related assets.
• Disclose the repayment schedules for all
  outstanding intercollegiate athletics debt
  maintained by the Institution during the
  reporting period.