UNIVERSITY OF NORTH CAROLINA AT WILMINGTON INTERCOLLEGIATE ATHLETICS PROGRAM

Transcription

1 UNIVERSITY OF NORTH CAROLINA AT WILMINGTON INTERCOLLEGIATE ATHLETICS PROGRAM INDEPENDENT ACCOUNTANTS REPORT ON THE APPLICATION OF AGREED-UPON PROCEDURES FOR THE YEAR ENDED JUNE 30, 2014

2 UNIVERSITY OF NORTH CAROLINA AT WILMINGTON INTERCOLLEGIATE ATHLETICS PROGRAM TABLE OF CONTENTS JUNE 30, 2014 Page(s) Independent Accountants Report on the Application of Agreed-Upon Procedures 1 12 Exhibits Exhibit I Statement of Revenues and Expenses 13 Exhibit II Notes to Statement of Revenues and Expenses 14

3 INDEPENDENT ACCOUNTANTS REPORT ON THE APPLICATION OF AGREED-UPON PROCEDURES Dr. William A. Sederburg, Chancellor, University of North Carolina at Wilmington: We have performed the procedures enumerated below, which were agreed to by the Chancellor of the University of North Carolina at Wilmington (the University), solely to assist the University in evaluating whether the accompanying statement of revenues and expenses (Exhibit I) of the University of North Carolina at Wilmington Intercollegiate Athletics Program (the Program) is in compliance with the National Collegiate Athletic Program (NCAA) Bylaw for the year ended June 30, The University s management is responsible for the statement of revenues and expenses (the Statement) and the statement s compliance with those requirements. This agreed-upon procedures engagement was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants. The sufficiency of these procedures is solely the responsibility of those parties specified in this report. Consequently, we make no representation regarding the sufficiency of the procedures described below either for the purpose for which this report has been requested or for any other purpose. Exceptions totaling the lesser of $25,000 or 10% of the line item total to which an agreed-upon procedure has been applied to, other than exceptions related to internal control procedures of the Program, for which there are no thresholds, have been reported. The procedures that we performed and our findings are as follows: Agreed-Upon Procedures Related to the Statement of Revenues and Expenses Procedure All Revenue Categories 1. Compare and agree each operating revenue category reported in the statement during the reporting period to supporting schedules provided by the Program. 2. Compare and agree a sample of operating revenue receipts obtained from the above operating revenue supporting schedules to adequate supporting documentation. 3. Compare each major revenue account to prior period amounts and budget estimates. Obtain and document an understanding of any significant variations

4 Ticket Sales 1. Compare tickets sold during the reporting period, complimentary tickets provided during the reporting period and unsold tickets to the related revenue reported by the Program in the statement and the related attendance figures. 2. Recalculate totals. Student Fees 1. Compare and agree student fees reported by the Program in the statement for the reporting to student enrollments during the same reporting period. 2. Obtain and document an understanding of the institution's methodology for allocating student fees to intercollegiate athletics programs. We were able to reconcile student fees reported by the Program to student enrollment data provided by the University within approximately $74,000 or 0.97%. We noted that regular differences occur primarily due to refunds of athletic fees for dropped classes where the timing of such refunds may fall in a different fiscal year. An understanding of the institution s methodology was gained, and we noted that the allocation was in accordance with the University s methodology. 3. Recalculate totals. Guarantees 1. Select a sample of settlement reports for away games during the reporting period and agree each selection to the Program's general ledger and/or the statement. 2. Select a sample of contractual agreements pertaining to revenues derived from guaranteed contests during the reporting period and compare and agree each selection to the Program's general ledger and/or the statement. 3. Recalculate totals. Contributions 1. Compare each major revenue account to prior period amounts and budget estimates. Obtain and document an understanding of any significant variations

5 2. For any contributions of moneys, goods or services received directly by an intercollegiate athletics program from any affiliated or outside organization, agency or group of individuals (two or more) not included above (e.g., contributions by corporate sponsors) that constitutes 10 percent or more of all contributions received for intercollegiate athletics during the reporting period shall obtain and review supporting documentation for each contribution. Compensation and Benefits Provided by a Third-Party 1. Obtain the summary of revenues from affiliated and outside organizations (the "Summary") as of the end of the reporting period from the Program. 2. Select a sample of funds from the Summary and compare and agree each selection to supporting documentation, the Program's general ledger and/or the Summary. As there was no third party support for As there was no third party support for 3. Recalculate totals. As there was no third party support for 4. If the third party was audited by independent auditors, obtain the related independent auditors' report. As there was no third party support for Direct State or Other Governmental Support 1. Compare direct state or other governmental support recorded by the Program during the reporting period with state appropriations, institutional authorizations and/or other corroborative supporting documentation. As there was no direct state or other governmental support for the year ended June 30, 2014, procedure was not performed. 2. Recalculate totals. As there was no direct state or other governmental support for the year ended June 30, 2014, procedure was not performed. Direct Institutional Support 1. Compare the direct institutional support recorded by the Program during the reporting period with state appropriations, institutional authorizations and/or other corroborative supporting documentation. 2. Recalculate totals. Indirect Facilities and Administrative Support 1. Compare the indirect facilities and administrative support recorded by the Program during the reporting period with state appropriations, institutional authorizations and/or other corroborative supporting documentation. As there was no indirect facilities and administrative support for the year ended June 30, 2014, procedure was not performed

6 2. Recalculate totals. As there was no indirect facilities and administrative support for the year ended June 30, 2014, procedure was not performed. NCAA/Conference Distributions Including All Tournament Revenues 1. Obtain and inspect agreements related to the Program s participation in revenues from tournaments during the reporting period to gain an understanding of the relevant terms and conditions. 2. Compare and agree the related revenues to the Program's general ledger, and/or the statement. Agreements were obtained and an understanding of the relevant terms and conditions was gained. 3. Recalculate totals. Broadcast, Television, Radio and Internet Rights 1. Obtain and inspect agreements related to the Program's participation in revenues from broadcast, television, radio and internet rights to gain an understanding of the relevant terms and conditions. 2. Compare and agree related revenues to the Program's general ledger, and/or the statement. As there were no broadcast, television, radio and internet rights revenues for the year ended June 30, 2014, this procedure was not performed. As there were no broadcast, television, radio and internet rights revenues for the year ended June 30, 2014, this procedure was not performed. 3. Recalculate totals. As there were no broadcast, television, radio and internet rights revenues for the year ended June 30, 2014, this procedure was not performed. Program Sales, Concessions, Novelty Sales and Parking for all revenue categories (see procedures 1 through 3 under All Revenue Categories on page 1). 2. Recalculate totals. Royalties, Advertisements and Sponsorships 1. Obtain and inspect agreements related to the Program's participation in revenues from royalties, advertisements and sponsorships during the reporting period to gain an understanding of the relevant terms and conditions. Agreements were obtained and an understanding of the relevant terms and conditions was gained

7 2. Compare and agree the related revenues to the Program's general ledger, and/or the statement. 3. Recalculate totals. Sports Camp Revenues 1. Inspect sports camp contract(s) between the Program and person(s) conducting institutional sports camps or clinics during the reporting period to obtain an understanding of the Program's methodology for recording revenues from sports camps. No exceptions noted and the methodology was determined to be appropriate. 2. Obtain schedules of camp participants. Schedules of participants were obtained. 3. Select a sample of individual camp participant cash receipts from the schedule of sports camp participants and agree each selection to the Program's general ledger, and/or the statement. 4. Recalculate totals. Endowment and Investment Income 1. Obtain and inspect endowment agreements (if any) to gain an understanding of the relevant terms and conditions. 2. Compare and agree the classification and use of endowment and investment income reported in the statement during the reporting period to the uses of income defined within the related endowment agreement. The Program does not hold any endowments. All endowments on behalf of athletics are held by the University of North Carolina at Wilmington. The Program does not hold any endowments. All endowments on behalf of athletics are held by the University of North Carolina at Wilmington. An analysis of investment income was performed and no exceptions were noted. Other 3. Recalculate totals. for all revenue categories (see Procedures 1 through 3 under All Revenue Categories on page 1). 2. Recalculate totals

8 All Expense Categories 1. Compare and agree each expense category reported in the statement during the reporting period to supporting schedules provided by the institution. 2. Compare and agree a sample of expenses obtained from the above operating expense supporting schedules to adequate supporting documentation. 3. Compare and agree each major expense account to prior-period amounts and budget estimates. Obtain and document an understanding of any significant variations. Athletic Student Aid 1. Select a sample of students from the listing of institutional student aid recipients during the reporting period. 2. Obtain individual student-account detail for each selection and compare total aid allocated from the related aid award letter to the student's account. A sample of ten student aid recipients was selected. 3. Recalculate totals. Guarantees 1. Obtain and inspect home-game settlement reports prepared by the Program during the reporting period and agree related expenses to the Program's general ledger and/or the statement. 2. Obtain and inspect contractual agreements pertaining to expenses recorded by the Program from guaranteed contests during the reporting period. 3. Compare and agree related amounts expensed by the Program to the Program's general ledger and/or the statement. Contractual agreements were obtained and inspected. 4. Recalculate totals. Coaching Salaries, Benefits, and Bonuses Paid by the University and Related Entities 1. Obtain and inspect a listing of coaches employed by the Program and related entities during the reporting period. 2. Select a sample of coaches' contracts that must include men's and women's basketball from the above listing. A listing of all coaches employed by the Program was obtained. A sample of six coaches was selected, including men s and women s basketball head coaches

9 3. Compare and agree the financial terms and conditions of each selection to the related coaching salaries, benefits, and bonuses recorded by the Program and related entities in the statement during the reporting period. 4. Obtain and inspect W-2s, 1099s, etc. for each selection. This procedure is not relevant to the statement of revenues and expenses, as the statement of revenues and expenses is prepared on a fiscal year basis, whereas W-2s and 1099s are prepared on a calendar year basis. As an alternative procedure, we traced and agreed compensation paid for the sample selected to the University s payroll system. 5. Compare and agree related W-2s, 1099s, etc. to the related coaching salaries, benefits and bonuses paid by the Program and related entities expense recorded by the Program in the statement during the reporting period. This procedure is not relevant to the statement of revenues and expenses, as the statement of revenues and expenses is prepared on a fiscal year basis, whereas W-2s and 1099s are prepared on a calendar year basis. As an alternative procedure, we traced and agreed compensation paid for the sample selected to the University s payroll system. 6. Recalculate totals. Coaching Other Compensation and Benefits Paid by a Third-Party 1. Obtain and inspect a listing of coaches employed by third parties during the reporting period. 2. Compare and agree the financial terms and conditions of each selection to the related coaching other compensation and benefits paid by a third party and recorded by the Program in the statement during the reporting period. As there were no third party benefits As there were no third party benefits 3. Obtain and inspect W-2s, 1099s, etc. for each selection. As there were no third party benefits 4. Compare and agree related W-2s, 1099s, etc. to the coaching other compensation and benefits paid by a third party expenses recorded by the Program in the statement during the reporting period. As there were no third party benefits 5. Recalculate totals. As there were no third party benefits - 7 -

10 Support Staff/Administrative Salaries, Benefits and Bonuses Paid by the University and Related Entities 1. Select a sample of support staff/administrative personnel employed by the Program and related entities during the reporting period. A sample of five support staff/administrative personnel was selected. 2. Obtain and inspect W-2s, 1099s, etc. for each selection. This procedure is not relevant to the statement of revenues and expenses, as the statement of revenues and expenses is prepared on a fiscal year basis, whereas W-2s and 1099s are prepared on a calendar year basis. As an alternative procedure, we traced and agreed compensation paid for the sample selected to the University s payroll system. 3. Compare and agree related W-2s, 1099s, etc. to the related support staff/administrative salaries, benefits and bonuses paid by the Program and related entities expense recorded by the Program in the statement during the reporting period. This procedure is not relevant to the statement of revenues and expenses, as the statement of revenues and expenses is prepared on a fiscal year basis, whereas W-2s and 1099s are prepared on a calendar year basis. As an alternative procedure, we traced and agreed compensation paid for the sample selected to the University s payroll system. 4. Recalculate totals. Support Staff/Administrative Other Compensation and Benefits Paid by a Third-Party 1. Select a sample of support staff/administrative personnel employed by the third parties during the reporting period. As there were no third party benefits 2. Obtain and inspect W-2s, 1099s, etc. for each selection. As there were no third party benefits 3. Compare and agree related W-2s, 1099s, etc. to the related support staff/administrative other compensation and benefits expense recorded by the Program in the statement during the reporting period. As there were no third party benefits 4. Recalculate totals. As there were no third party benefits - 8 -

11 Severance Payments 1. Select a sample of employees receiving severance payments by the Program during the reporting period and agree each severance payment to the related termination letter or employment contract. A sample of employees receiving severance payments was selected. 2. Recalculate totals. Recruiting 1. Obtain and document an understanding of the Program's recruiting expense policies. 2. Compare and agree to existing institutional and NCAArelated policies. We obtained and documented an understanding of the Program s recruiting expense policies. No exceptions noted and policies are consistent with institutional and NCAA-related policies. Team Travel 1. Obtain and document an understanding of the Program's team travel policies. 2. Compare and agree to existing institutional and NCAArelated policies. We obtained and documented an understanding of the Program s team travel policies. No exceptions noted and policies are consistent with institutional and NCAA-related policies. Equipment, Uniforms and Supplies 2. Recalculate totals. Game Expenses 2. Recalculate totals. Fund Raising, Marketing and Promotion 2. Recalculate totals

12 Sports Camp Expenses As there were no sports camp expenses for the year ended June 30, 2014, 2. Recalculate totals. As there were no sports camp expenses for the year ended June 30, 2014, Direct Facilities, Maintenance and Rental 2. Recalculate totals. Spirit Groups 2. Recalculate totals. Indirect Facilities and Administrative Support 1. Obtain and document an understanding of the Program's methodology for allocating indirect facilities support. 2. Sum the indirect facilities support and indirect institutional support totals reported by the Program in the statement. 3. Compare and agree indirect facilities and administrative support reported by the Program in the statement to the corresponding revenue category reported by the Program in the statement. As there was no indirect facilities and administrative support for the year ended June 30, 2014, procedure was not performed. As there was no indirect facilities and administrative support for the year ended June 30, 2014, procedure was not performed. As there was no indirect facilities and administrative support for the year ended June 30, 2014, procedure was not performed. 4. Recalculate totals. As there was no indirect facilities and administrative support for the year ended June 30, 2014, procedure was not performed

13 Medical Expenses and Medical Insurance 2. Recalculate totals. Memberships and Dues 2. Recalculate totals. Other Operating Expenses and Transfers to Institution 2. Recalculate totals. Procedure Agreed-Upon Procedures Related to Affiliated and Outside Organizations 1. The Program shall identify all intercollegiate athletics-related affiliated and outside organizations and obtain those organizations statements for the reporting period. Once the Program has made these statements available, the independent accountant shall agree the amounts reported in the statement to the organization s general ledger or, alternatively, confirm revenues and expenses directly with a responsible official of the organization. In addition, the Program shall prepare a summary of revenues and expenses for or on behalf of intercollegiate athletics programs affiliated and outside organizations to be included with the agreed-upon procedures report. The Program identified the UNCW Student Aid Association, Inc. (the Association) as the only outside organization making expenditures for, or on behalf of the Program or its employees. The University and the Association serves as the official legal conduits for the acceptance, investment, and distribution of private gifts in support of the activities and programs of the Program. Expenditures for, or on behalf of the Program or its employees are made directly from the University and the Association

14 We obtained the statement of activities of the University athletic endowments and the Association accounts held for the Program for which represents revenues and expenditures on behalf of the Program. This information was obtained by direct confirmation with the University and the Association. The following is a summary of the statement of activities for the year: University of North Carolina at Wilmington* UNCW Student Aid Association, Inc. Endowment net position, beginning of year $ 6,115,670 $ 650,886 Changes in beginning net position 108,295 - Increases in net position 817,077 1,447,549 Decreases in net position (210,799) (1,298,365) Change in net position 714, ,184 Endowment net position, end of year $ 6,830,243 $ 800,070 * These figures represent the portion of endowment net assets held by The University of North Carolina at Wilmington designated to benefit the area of Athletics. Procedure 1. The independent accountant shall obtain and review the audited financial statements of the organization and any additional reports regarding internal control matters if the organization is audited independent of the agreed-upon procedures required by NCAA legislation. The Program s independent accountant shall also inquire of institutional and outside organization management as to corrective action taken in response to comments concerning internal control structure (if any). We obtained and read the audited financial statements of the Association for the year ended June 30, 2014, and the related management letters. The results of this procedure disclosed that the independent auditors expressed an unmodified opinion on the financial statements of the Association. The independent auditors noted no material weaknesses in the Association s internal control. We were not engaged to, and did not, conduct an examination, the objective of which would be the expression of an opinion on the compliance of the accompanying statement of revenues and expenses (Exhibit I) of the University and the accompanying notes to the statement of revenues and expenses (Exhibit II). Accordingly, we do not express such an opinion. Had we performed additional procedures, other matters might have come to our attention that would have been reported to you. This report is intended solely for the information and use of the management of the University, the Program, the University of North Carolina at Wilmington Board of Trustees, the University of North Carolina Board of Governors, and the National Collegiate Athletic Association, and is not intended to be and should not be used by anyone other than these specified parties. Gainesville, Florida December 23,

15 UNIVERSITY OF NORTH CAROLINA AT WILMINGTON INTERCOLLEGIATE ATHLETICS PROGRAM STATEMENT OF REVENUES AND EXPENSES FOR THE YEAR ENDED JUNE 30, 2014 (UNAUDITED - SEE ACCOMPANYING INDEPENDENT ACCOUNTANTS' REPORT ON THE APPLICATION OF AGREED-UPON PROCEDURES) Exhibit I Men's Women's Other Nonprogram Basketball Basketball Sports Specific Total Revenues 1 Ticket sales $ 232,433 $ 6,787 $ 70,113 $ 4,761 $ 314,094 2 Student fees ,637,608 7,637,608 3 Guarantees 392,500 35,000 13, ,500 4 Contributions 66,842 41, , ,765 1,203,072 5 Compensation and benefits provided by a third-party Direct state or other government support Direct institutional support 163,598-6, ,087 1,155,747 8 Indirect facilities and administrative support NCAA and conference distributions, including all tournament revenues , , , Broadcast, television, radio and internet rights Program sales, concessions, novelty sales and parking - - 5, , Royalties, advertisements and sponsorships - - 2, , , Sports camp revenues - - 3,740-3, Endowment and investment income 46,810 29, ,943 34, , Other , , , Total operating revenues 902, , ,032 10,462,047 12,268,374 Expenses Athletics student aid 401, ,735 1,769,605-2,491,325 Guarantees 7,500 2,000 2,000-11,500 Coaching salaries, benefits and bonuses paid by the university and related entities 950, ,451 1,295,734-2,643,668 Coaching other compensation and benefits paid by a third-party Support staff and administrative salaries, benefits and bonuses paid by the university and related entities 100, ,121 42,456 2,214,968 2,495,228 Support staff and administrative other compensation paid by a third-party Severance payments 903, ,889 Recruiting 29,610 35,161 60, ,396 Team travel 183, , ,384-1,089,243 Equipment, uniforms and supplies 6,983 5,433 91, , ,213 Game expenses 121,839 92, , , ,951 Fund raising, marketing and promotion - - 3, , ,007 Sports camp expenses Direct facilities, maintenance and rental 5,120 4, , , ,475 Spirit groups ,359 36,359 Indirect facilities and administrative support ,615 26,615 Medical expenses and medical insurance ,729 99,729 Memberships and dues ,582 63,431 75,093 Other operating expenses 88,626 59, , , ,524 Total operating expenses 2,800,501 1,229,950 4,761,860 3,558,904 12,351,215 Transfers to institution Total expenses 2,800,501 1,229,950 4,761,860 3,558,904 12,351,215 Excess (deficiency) of revenues over (under) expenses $ (1,897,718) $ (1,117,438) $ (3,970,828) $ 6,903,143 $ (82,841)

16 Exhibit II UNIVERSITY OF NORTH CAROLINA AT WILMINGTON INTERCOLLEGIATE ATHLETICS PROGRAM NOTES TO STATEMENT OF REVENUES AND EXPENSES FOR THE YEAR ENDED JUNE 30, 2014 (UNAUDITED SEE ACCOMPANYING INDEPENDENT ACCOUNTANTS REPORT ON THE APPLICATION OF AGREED-UPON PROCEDURES) (1) Basis of Accounting: The statement of revenues and expenses of the University of North Carolina at Wilmington Intercollegiate Athletics Program (the Program) has been prepared using the accrual basis of accounting except whereas noted below. Under this method, revenues are recorded when earned and expenses are recognized when they are incurred. The statement of revenues and expenses includes adjustments to a liability for compensated absences. Employees earn the right to be compensated during absences for annual leave (i.e. personal leave) and sick leave pursuant to 126-8, North Carolina General Statutes. The Program has recorded an accrual for the liability associated with the employee s right to receive compensation for future absences in preparing the statement of revenues and expenses. (2) Capital Assets: Capital asset purchases of the Program are recorded as expenditures when incurred, as capital assets are recorded in the property funds of the University, and are not recorded as assets in the Program s accounting records. As such, no depreciation expense is recorded in the Program s accounting records. Capital asset activity for was as follows: Beginning Balance Restatement of Beginning Balance Beginning Balance as Restated Additions Decreases Current Year Depreciation Ending Balance Capital assets being depreciated, net of accumulated depreciation: Buildings $ 6,893,568 $ - $ 6,893,568 $ - $ - $ (287,357) $ 6,606,211 Athletic Equipment 1,063,489 (281,583) 781,906 88,842 - (40,855) 829,893 Total capital assets being depreciated, net of accumulated depreciation $ 7,957,057 $ (281,583) $ 7,675,474 $ 88,842 $ - $ (328,212) $ 7,436,104 (3) Contributions: The University and the Association serve as the official legal conduit for the acceptance, investment, and distribution of private gifts in support of the activities and programs of the Program. Contributions of $1,203,072 were recognized from the University and the Association for and have been included in the accompanying statement of revenues and expenses. Contributions received from the University and the Association were the only contributions exceeding 10% of total contributions, as reported in the statement of revenues and expenses, for the year ended June 30, (4) Surplus/Deficit Allocations: The Program is allowed to carry forward all available funds at the end of each fiscal year to the next fiscal year. Deficits are funded by the Program to the extent there are sufficient net assets available