Wichita State University Intercollegiate Athletics Association, Inc.
ICAA Financial Information and Equity in Athletics Disclosure Act Report
FY2017-2020
HLC Accreditation 2020-2021
Evidence Document
Additional information:
This file includes eight reports: WSU-ICAA financial reports FY 2017- FY 2019 and Equity in Athletics Disclosure Act Reports FY 2017-2020. The reports are available at the WSU Athletics website:https://goshockers.com/sports/2015/5/4/Financial_Information.aspx (Accessed February 27, 2021)
Table of Contents
1. Wichita State-ICAA Financial Statements and
Independent Auditor’s Report FY 2017………...3 2. Wichita State-ICAA Financial Statements and
Independent Auditor’s Report FY 2018...22 3. Wichita State-ICAA Financial Statements and
Independent Auditor’s Report FY 2019...43 4. Wichita State-ICAA Financial Statements and
Independent Auditor’s Report FY 2020………...65 5. Equity in Athletics Disclosure Act Report FY 2017....88
.
6. Equity in Athletics Disclosure Act Report FY 2018...104 7. Equity in Athletics Disclosure Act Report FY 2019....120
8. Equity in Athletics Disclosure Act Report FY 2020...136
Wichita State University Intercollegiate Athletic Association, Inc.
(a component unit of Wichita State University)
Financial Statements and Independent Auditor’s Report
June 30, 2017
CONTENTS
Page
Independent Auditor’s Report 1
Financial Statements
Statement of Financial Position 3
Statement of Activities 4
Statement of Cash Flows 5
Notes to Financial Statements 6
Supplementary Information
Schedule of Revenues and Expenses by Major Activity 15
WWW.RCMLLP.COM 300 WEST DOUGLAS AVE, SUITE 900, WICHITA, KANSAS 67202-2914 P 316-264-2335 F 316-264-1489
REGIER CARR & MONROE LLP, CPAs
EL DORADO I MCALESTER I TUCSON I TULSA I WAGONER I WICHITA PO BOX 847, EL DORADO, KANSAS 67042-0847 P 316-321-1150 F 316-264-1489
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Independent Auditor’s Report
Board of Directors Wichita State University Intercollegiate Athletic Association, Inc.
We have audited the accompanying financial statements of Wichita State University Intercollegiate Athletic Association, Inc., a component unit of Wichita State University, which comprise the statement of financial position as of June 30, 2017, and the related statements of activities, and cash flows for the year then ended, and the related notes to financial statements.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the financial statements referred to above present fairly in all material respects, the financial position of Wichita State University Athletic Association, Inc. as of June 30, 2017, and the changes in its net assets and its cash flows for the year then ended, in accordance with accounting principles generally accepted in the United States of America.
- 2 - Report on Supplementary Information
Our audit was conducted for the purpose of forming an opinion on the financial statements as a whole. The Schedule of Revenues and Expenses by Major Activity on page 15 is presented for purposes of additional analysis and is not a required part of the financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated in all material respects in relation to the financial statements as a whole.
September 28, 2017 Wichita, Kansas
The accompanying notes are an integral part of these financial statements.
- 3 -
Wichita State University Intercollegiate Athletic Association, Inc.
STATEMENT OF FINANCIAL POSITION June 30, 2017
Cash and short-term investments $ 11,463,029
Deposits - Wichita State University Foundation 3,528,583
Cash and cash equivalents 14,991,612
Restricted deposits - Wichita State University Foundation 2,287,522 Debt service reserve funds held by bond trustee 195,582
Accounts receivable 134,186
Contributions receivable 4,340,913
Prepaid athletic conference fees 2,553,900
Other assets and prepaid expenses 138,816
Construction in progress 384,588
Capital assets, net of accumulated depreciation of $2,382,832 662,348
Total assets $ 25,689,467
Accounts payable and accrued liabilities $ 1,065,969
Accrued interest 2,146
Deferred revenue
Booster groups 4,609,750
Men's basketball tickets 3,707,039
Other 575,743
Revenue bonds payable 316,000
Loan payable - Wichita State University Foundation 2,879,677
Loan payable - Outfront Media 965,998
Total liabilities 14,122,322
Net assets
Unrestricted 8,952,760
Temporarily restricted 2,614,385
Total net assets 11,567,145
Total liabilities and net assets $ 25,689,467
LIABILITIES AND NET ASSETS ASSETS
The accompanying notes are an integral part of these financial statements.
- 4 -
Wichita State University Intercollegiate Athletic Association, Inc.
STATEMENT OF ACTIVITIES For the year ended June 30, 2017
Eck Stadium
Phase V Temporarily Grand
Operations Project Total Restricted Total Revenues
Ticket sales $ 4,761,996 $ - $ 4,761,996 $ - $ 4,761,996 Student fees 2,907,048 165,000 3,072,048 - 3,072,048 SASO memberships 5,977,450 - 5,977,450 - 5,977,450 Contributions 1,179,758 769,833 1,949,591 1,949,887 3,899,478 Direct institutional support 3,208,392 - 3,208,392 - 3,208,392 Indirect institutional support 1,598,877 - 1,598,877 - 1,598,877 Royalties, licensing, advertisements and
sponsorships 2,231,618 - 2,231,618 - 2,231,618 NCAA distributions 735,208 - 735,208 - 735,208 Program, novelty and concession sales 806,328 - 806,328 - 806,328 Media rights 384,929 - 384,929 - 384,929 Endowment and investment income 235,377 186 235,563 - 235,563 Guarantees 204,678 - 204,678 - 204,678 Conference distributions 63,711 - 63,711 - 63,711 Other 610,983 - 610,983 - 610,983 Total revenues 24,906,353 935,019 25,841,372 1,949,887 27,791,259 Net assets released from restrictions 3,268,944 - 3,268,944 (3,268,944) - Total revenues 28,175,297 935,019 29,110,316 (1,319,057) 27,791,259 Expenses
Coaching salaries, benefits and bonuses 6,372,332 - 6,372,332 - 6,372,332 Severance pay 250,000 - 250,000 - 250,000 Administrative and support staff salaries
and benefits 3,612,039 - 3,612,039 - 3,612,039 Athletic student aid 3,870,179 - 3,870,179 - 3,870,179 Marketing, promotion and fundraising 2,513,544 - 2,513,544 - 2,513,544 Team travel 2,345,746 - 2,345,746 - 2,345,746 Indirect institutional support 1,598,877 - 1,598,877 - 1,598,877 Direct overhead and administrative 650,869 - 650,869 - 650,869 Game expenses 574,061 - 574,061 - 574,061 Recruiting 435,613 - 435,613 - 435,613 Sports equipment, uniforms and supplies 352,017 - 352,017 - 352,017 Spirit groups 341,796 - 341,796 - 341,796 Guarantees 491,817 - 491,817 - 491,817 Medical expenses and medical insurance 109,872 - 109,872 - 109,872 Memberships and dues 69,735 - 69,735 - 69,735 Interest 10,006 9,606 19,612 - 19,612 Other 2,191,081 3,214 2,194,295 - 2,194,295 Total expenses 25,789,584 12,820 25,802,404 - 25,802,404 Increase (decrease) in net assets 2,385,713 922,199 3,307,912 (1,319,057) 1,988,855 Net assets (deficit) at beginning of year 5,918,589 (273,741) 5,644,848 3,933,442 9,578,290 Net assets (deficit) at end of year $ 8,304,302 $ 648,458 $ 8,952,760 $ 2,614,385 $ 11,567,145
Unrestricted
The accompanying notes are an integral part of these financial statements.
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Wichita State University Intercollegiate Athletic Association, Inc.
STATEMENT OF CASH FLOWS For the year ended June 30, 2017
Cash flows from operating activities
Increase in net assets $ 1,988,855
Adjustments to reconcile change in net assets
to net cash provided by (used in) operating activities
Depreciation 140,924
Amortization and accretion 3,084
Changes in operating assets and liabilities
Accounts receivable 443,475
Contributions receivable (360,566)
Prepaid expenses and other (2,439,330)
Accounts payable and accrued liabilities (382,407)
Accrued interest (1,040)
Deferred revenue 1,329,327
Net cash provided by (used in) operating activities 722,322 Cash flows from investing activities
Construction in progress (384,588)
Decrease in restricted deposits - Wichita State University Foundation 194,399
Increase in debt service funds held by bond trustee (1,541)
Purchase of capital equipment (100,745)
Net cash provided by (used in) investing activities (292,475) Cash flows from financing activities
Repayment of revenue bonds payable (153,000)
Repayment of Wichita State University Foundation loan (120,550)
Additional Wichita State University Foundation loan 2,500,000
Repayment of Outfront Media loan (217,000)
Net cash provided by (used in) financing activities 2,009,450
Net increase in cash and cash equivalents 2,439,297
Cash and cash equivalents at beginning of year 12,552,315
Cash and cash equivalents at end of year $ 14,991,612
Supplemental cash flow information
Cash paid for interest $ 20,652
Wichita State University Intercollegiate Athletic Association, Inc.
NOTES TO FINANCIAL STATEMENTS June 30, 2017
- 6 - NOTE A - SUMMARY OF ACCOUNTING POLICIES
A summary of the significant accounting policies applied in the preparation of the accompanying financial statements follows.
1. Reporting entity
The Wichita State University Intercollegiate Athletic Association, Inc. (the Athletic Association), a component unit of Wichita State University, was incorporated to schedule, manage and promote athletic contests of Wichita State University in harmony with the general education policy of the University. The Athletic Association has eight women’s and seven men’s sports which compete in Division I of the National Collegiate Athletic Association and in the Missouri Valley Conference. Men and women compete in basketball, golf, tennis, indoor track, outdoor track and cross country. Women also compete in softball and volleyball, while men compete in baseball. See Note M – Subsequent Events, for discussion of change to American Athletic Conference effective July 1, 2017.
The Athletic Board of Directors serves as an advisory body to the President of the University and the Director of Athletics. The Athletic Board consists of nineteen members who are appointed by the President from the following constituencies: twelve University personnel, three students, and four persons from the community. The Athletic Board provides the President and the Director of Athletics with its views on all significant questions relating to Athletic Association policies and activities. The management functions of the Athletic Association are delegated to the Director of Athletics by the President.
2. Financial statement presentation
The financial statement presentation follows the recommendations of Accounting Standards Codification 958 (ASC 958). Under ASC 958, the Athletic Association is required to report information regarding its financial position and activities according to three classes of net assets: unrestricted net assets, temporarily restricted net assets and permanently restricted net assets. As of June 30, 2017, the Athletic Association does not have any permanently restricted net assets. The financial statements of the Athletic Association have been prepared on the accrual basis of accounting.
3. Use of estimates
In preparing financial statements in conformity with accounting principles generally accepted in the United States of America, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
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NOTE A - SUMMARY OF ACCOUNTING POLICIES - continued
4. Cash and cash equivalents
For purposes of the statement of cash flows, the Athletic Association considers all highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents. Included in cash equivalents are short-term investments, a checking account, repurchase agreements, and deposits held at the Wichita State University Foundation. The Athletic Association maintains its cash balances at the Wichita State University Foundation and at high credit quality financial institutions. Deposits at financial institutions are covered by federal depository insurance up to $250,000. The excess is covered by collateral held in the pledging bank’s trust department in the Athletic Association’s name. Fair value of pledged collateral is maintained at levels in excess of uninsured deposit balances.
5. Repurchase agreements
The Athletic Association enters into repurchase agreements with a bank whereby it purchases United States Government or Agency Securities from the bank under agreement to resell the same securities. Under the agreement, securities are to have a market value at least equal to the Athletic Association’s investment in the repurchase agreement and are to be segregated from other securities held by the bank. The balance held in repurchase agreements at June 30, 2017, was $10,331,000. Repurchase agreements are included in cash and cash equivalents on the statement of financial position.
6. Investments
The Athletic Association accounts for its investments at fair value. Investment earnings or losses, including realized and unrealized gains and losses on investments, interest and dividends are included in the statement of activities as increases or decreases in unrestricted net assets unless restricted by the donor.
7. Accounts receivable
Accounts receivable consist of ticket sales, NCAA and conference distributions, and other operating receivables. Past due accounts determined not to be collectible by management are charged off to other operating expense. Accounts receivable at June 30, 2017, are considered by management to be fully collectible.
8. Capital assets
Capital assets are recorded at cost at the date of acquisition, or fair value at the date of donation in the case of contributed assets. Equipment purchased for amounts equal to or greater than $5,000 is recorded at cost. Equipment is depreciated over its estimated useful life of five to eight years. Expenditures for repairs and maintenance which neither materially add to the value of the property nor appreciably prolong its life are charged to expense as incurred.
Capital assets as of June 30, 2017, are summarized as follows:
Balance Balance
June 30, 2016 Additions Deletions June 30, 2017 Equipment $ 2,944,435 $ 100,745 $ - $ 3,045,180 Accumulated depreciation (2,241,908) (140,924) - (2,382,832) Net capital assets $ 702,527 $ (40,179) $ - $ 662,348
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NOTE A - SUMMARY OF ACCOUNTING POLICIES - continued
9. Contributions
Contributions are recognized at fair value and are considered to be available for unrestricted use unless specifically restricted by the donor, or designated by the donor as support for future periods. When the donor restriction expires, that is, when a stipulated time restriction ends or purpose restriction is accomplished, temporarily restricted net assets are reclassified to unrestricted net assets and are reported in the statement of revenues and expenses as net assets released from restrictions.
11. Deferred revenue
Deferred revenue is comprised primarily of net revenue from services, special events and ticket sales for future services and events which are not completed at year-end. Revenue is recognized as income at the time the service provided or event has occurred.
10. Income taxes
The Athletic Association is tax-exempt under Section 501(c)(3) of the Internal Revenue Code and a similar provision of state law on income related to its exempt purpose. It has been classified as an organization that is not a private foundation under Section 509(c)(2) of the Internal Revenue Code.
The federal and Kansas income tax returns of the Athletic Association for 2017, 2016, and 2015 are subject to examination by the IRS and state taxing authorities, generally for three years after they were filed. It is the Athletic Association’s policy that penalties and interest assessed by income taxing authorities, if any, are included in operating expenses.
NOTE B - OWNERSHIP, CONTROL AND MANAGEMENT
All land and structures pertinent to the operation of the Athletic Association including Charles Koch Arena, Cessna Stadium, Eck Stadium/Tyler Field, Wilkins Stadium and the Coleman Tennis Complex are owned by the State of Kansas and have not been reflected as assets in the accompanying statements.
The State of Kansas through the University pays directly the salaries of certain Athletic Association personnel, and the University provides additional financial support. The financial statements reflect $3,208,392 of direct institutional support as revenue with a like amount reflected as expense.
In February 2002, the Athletic Association and the University entered into a one-year agreement that states, in general terms, their mutual responsibilities relative to the development and operation of the University’s intercollegiate athletic program and the use of University facilities in connection therewith. The agreement was amended in November 2002. The agreement continues automatically for successive one-year terms, subject to the right of either party to terminate the agreement at the end of the original term or at the end of any subsequent annual term by giving the other party 180 days written notice of the desire to terminate the agreement. The amended agreement provides that the University shall provide full maintenance and housekeeping for the athletic complex at Charles Koch Arena (including Geist Student Services Building, Preferred Health Systems Multipurpose Center and Via Christi Athletic Training/Weight Complex), Cessna Stadium, Wilkins Stadium, Eck Stadium/Tyler Field and the Coleman Tennis Complex. Utilities and certain other facility operating costs are also paid by the University. The costs paid by the University have been reflected in the Athletic Association’s financial statements as indirect institutional support.
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NOTE C - FUNDS HELD BY THE WICHITA STATE UNIVERSITY FOUNDATION
The Wichita State University Foundation (the Foundation) coordinates fundraising for and manages investments on behalf of the University and the Athletic Association. Funds held by the Foundation which are designated for athletics and controlled by the Athletic Association are included in the Athletic Association’s financial statements, including those funds designated for the Eck Stadium Phase V project (Note D).
The Foundation also holds other funds designated for athletics which are not controlled by the Athletic Association.
Such funds are comprised primarily of endowed scholarship funds. The Athletic Association records contributions when such funds are disbursed to the Athletic Association for their restricted use. These funds received $254,723 of contributions during the year, and total cash and investments in these funds totaled $6,196,007 at June 30, 2017.
NOTE D - ECK STADIUM PHASE V PROJECT
In April 2009, the Athletic Association commenced plans to improve Eck Stadium/Home of Tyler Field. These improvements were designated as Phase V and divided into two parts, Part A and Part B. Phase V improvements will be funded by private contributions, student fees and Athletic Association revenues. Phase V, Part A (hereinafter Phase V-A) commenced during the year ended June 30, 2009, and was completed in 2011.
Phase V-A improvements include the construction of an indoor practice facility adjacent to Eck Stadium and the installation of new artificial turf on Tyler Field. Plans for Phase V-B improvements include new baseball offices and improvements to locker rooms and grandstands.
A summary of Eck Stadium Phase V funds, all of which are included on the Athletic Association financial statements as of June 30, 2017, and for the year then ended is as follows:
Cash and investments, July 1, 2016 $ 1,012,748
Student fees 165,000
Contributions received 69,967
Investment earnings 186
1,247,901
Principal paid on revenue bonds 153,000
Interest paid on revenue bonds 10,647
Other expense 130
163,777
Cash and investments, June 30, 2017 $ 1,084,124
Cash and investments consist of:
Deposits - Wichita State University Foundation $ 888,543 Deposits - Debt service reserves held by bond trustee 195,581 1,084,124
$
- 10 - NOTE E - CONTRIBUTIONS RECEIVABLE
Contributions receivable are unsecured donor pledges made through the Wichita State University Foundation for men’s basketball, Roundhouse Renaissance project and other Athletic Association activities. Contributions receivable are discounted at a rate of 3%.
Contributions receivable are as follows as of June 30, 2017:
Athletic unrestricted fund $ 1,864,650
Men's Basketball Coach's Club 1,162,905
Roundhouse Renaissance project 522,225
Other funds 1,203,810
Unconditional promises to give before unamortized
discount and allowance for uncollectible contributions 4,753,590
Less unamortized discount (293,837)
4,459,753
Less allowance for uncollectible contributions (118,840)
Net contributions receivable $ 4,340,913
Amounts due in:
Less than one year $ 246,647
One to five years 4,506,943
4,753,590
$
NOTE F - ECK STADIUM PHASE V-A BOND DEBT
During 2009 the Kansas Development Finance Authority issued Athletic Facilities Revenue Bonds Series 2009E in the amount of $1,715,000. The bonds were obtained for the purpose of making improvements to Eck Stadium/Tyler Field. Proceeds of the bonds were deposited directly with the bond trustee with the Athletic Association recording a liability for the face value of the bonds. The bonds are to be repaid over an eight-year period at an initial interest rate of 3.24%, which was subsequently adjusted to 2.37% effective May 1, 2012, and then to 2.72% effective May 13, 2015. The bonds are collateralized by future revenues of the Athletic Association including certain contributions pledged to the Wichita State University Foundation and certain student fee revenue. The bond trustee is to maintain a debt service account balance equal to the lesser of 1) 10% of the original principal balance, 2) the maximum annual debt service in the current or any future fiscal year or 3) 125% of the average future annual debt service.
A schedule of changes in the Athletic Association’s Eck Stadium Phase V-A revenue bonds payable for the year ended June 30, 2017, follows:
Revenue bonds payable, July 1, 2016 $ 469,000
Principal paid (153,000)
Revenue bonds payable, June 30, 2017 $ 316,000
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NOTE F - ECK STADIUM PHASE V-A BOND DEBT – continued
Scheduled principal and interest payments on Eck Stadium Phase V-A revenue bonds payable are as follows:
Principal Interest Year ended June 30
2018 $ 316,000 $ 4,292
NOTE G - LOANS PAYABLE - WICHITA STATE UNIVERSITY FOUNDATION
During 2013, the Athletic Association commenced planning to replace and upgrade the video board and sound system in Charles Koch Arena at a cost of $1,836,759. To partially finance the improvements, the Athletic Association obtained an $847,880 loan from the Foundation. The Foundation’s Board of Directors approved an unsecured loan in March 2013 and the Foundation disbursed the loan proceeds in September 2013. The loan is to be repaid over an eight-year period at an interest rate of 2%. Installation of the video board and sound system was completed in August 2013 and the $1,836,759 cost of the improvements was subsequently transferred to the State of Kansas. The Athletic Association obtained additional financing for the improvements from Outfront Media LLC, formerly CBS Outdoor, Inc. dba CBS Collegiate Sports Properties (Note H).
On June 20, 2017, the Athletic Association obtained a loan in the amount of $2,500,000 from the Foundation for unrestricted purposes. The loan is to be repaid no later than when construction commences on the Student Athletic Success Center, which is targeted for 2017. The agreement provides for no stated interest.
A schedule of changes in the Athletic Association’s loans payable for the year ended June 30, 2017, follows:
Loan 1 Loan 2 Total
Loan payable, July 1, 2016 $ 500,227 $ - $ 500,227
Principal advanced 2,500,000 2,500,000
Principal paid (120,550) - (120,550) Loan payable, June 30, 2017 $ 379,677 $ 2,500,000 $ 2,879,677
Scheduled principal payments on the loans payable are as follows:
Loan 1 Loan 2 Total
122,962
$ $ 2,500,000 $ 2,622,962 125,421
- 125,421 127,929
- 127,929 3,365
- 3,365 379,677
$ $ 2,500,000 $ 2,879,677 Year ended June 30
2018 2019 2020 2021
- 12 - NOTE H - LOAN PAYABLE – OUTFRONT MEDIA LLC
Beginning July 1, 2013, the Athletic Association entered into a ten-year agreement with Outfront Media to manage its multimedia and sponsorship rights such as radio and television, corporate sponsorships, signage, Internet, game day programs and related publications, promotions, events, activities and broadcasts. Among its provisions, the agreement specifies that Outfront Media shall invest up to $500,000 over the initial term of the agreement to upgrade signage or other fixtures located on or around the athletic facilities, and that Outfront Media shall recoup its investment on straight line basis from future commissions due to the Athletic Association over the ten-year term with no interest. In this regard, Outfront Media provided $494,563 toward the Charles Koch Arena video board and sound system and $21,995 toward a high definition video replay system. Outfront Media then opted to recoup its investment in the video board and sound system over the specified ten-year term and the replay system over a three-year term.
In December 2015, the Athletic Association and Outfront Media amended its ten-year agreement, extending the original term three additional years through June 30, 2026, with Outfront Media making a second additional capital investment in athletic facilities of $1,000,000 to be used toward the purchase of a new fully digital baseball scoring, video and sponsor display (baseball display) and related operating equipment at Eck Stadium/Tyler Field. The second additional capital investment shall be amortized on a straight line basis over six years commencing immediately following installation of the baseball display. The Athletic Association transferred the $836,200 cost of the Eck Stadium/Tyler Field structural component of the baseball display to the State of Kansas (Note B) and capitalized the related operating equipment (Note A).
A schedule of changes in the Athletic Association’s second Outfront Media loan payable for the year ended June 30, 2017, follows:
Loan 1 Loan 2 Total
Loan payable, July 1, 2016 $ 349,998 $ 833,000 $ 1,182,998 Principal paid (50,000) (167,000) (217,000) Loan payable, June 30, 2017 $ 299,998 $ 666,000 $ 965,998
Scheduled principal payments on the loan payable are as follows:
Loan 1 Loan 2 Total
Year ended June 30
2018 50,000 $ 167,000 $ 217,000 2019 50,000 167,000 217,000 2020 50,000 167,000 217,000 2021 50,000 165,000 215,000 2022 50,000 - 50,000 Thereafter 49,998 - 49,998
299,998
$ $ 666,000 $ 965,998
- 13 - NOTE I - COMMITMENTS AND CONTINGENCIES
The Athletic Association has entered into various long-term contracts (aka employment agreements) with certain coaches. The contracts provide for the payment of various amounts of damages should the contracts be terminated without “good cause” prior to their expiration dates.
Salaries and benefits under such contracts are accrued and recorded to expense as services are provided. Following separation of service, future salaries and benefits payable under such contracts are accrued and expensed at the time no future services are required. Remaining future payments for which services are not required total $26,809 as of June 30, 2017.
NOTE J - TEMPORARILY RESTRICTED NET ASSETS
Temporarily restricted net assets are available for the following purposes:
Men's basketball $ 1,711,286
Baseball 391,122
Golf 221,626
Other sports 290,351
2,614,385
$
NOTE K - RETIREMENT PLAN
The Athletic Association maintains a qualified deferred compensation plan under section 403(b) of the Internal Revenue Code. The plan is a defined contribution plan. Under the plan, all employees, after one year of service, are required to defer 5.5% of their compensation. The Athletic Association contributes an additional 8.5%. The Athletic Association, effective July 1, 2014, adopted a new section 403(b) plan with substantially equivalent required employee deferrals and employer contributions. As discussed in Note B, certain Athletic Association personnel are paid through the University’s payroll. These employees participate in the University’s deferred compensation plan under the same general terms and conditions as the Athletic Association plan. The Athletic Association’s contributions to these plans totaled $435,933 for the year ended June 30, 2017.
NOTE L - OPERATING LEASE
The Athletic Association leases land and is constructing a practice facility at a golf club to be used for the men’s and women’s golf team. The lease also provides for the use of the existing driving range, golf course and related access and parking. Capitalized construction cost for the facility was $384,588 as of June 30, 2017. The lease is effective May 1, 2017, with a term of 30 years. Total expense for the lease for the year ended June 30, 2017, was $4,500.
The future minimum annual rental commitment under this agreement for years subsequent to June 30, 2017, is as follows:
Year Ending June 30
2018 $ 5,000
2019 5,000
2020 5,000
2021 5,000
2022 5,500
Thereafter 167,385 192,885
$
- 14 - NOTE M - SUBSEQUENT EVENT
Management of the Athletic Association has evaluated events subsequent to the statement of financial position date of June 30, 2017 through September 28, 2017, the date the financial statements were available and issued.
Effective July 1, 2017, the Athletic Association accepted an invitation to join the American Athletic Conference for all 15 sports and end its long-term membership with the Missouri Valley Conference.
Supplementary Information
- 15 -
Non- Total Eck Stadium
Men's Women's Other program Special from Phase V Grand
basketball Baseball basketball sports specific activities operations Project total Revenues
Ticket sales $ 3,594,743 $ 270,773 $ 49,050 $ 101,418 $ 45,513 $ 700,499 $ 4,761,996 $ - $ 4,761,996 Student fees - - - - 2,907,048 - 2,907,048 165,000 3,072,048 SASO memberships - - - - 5,977,450 - 5,977,450 - 5,977,450 Contributions 1,539,811 165,689 34,547 223,140 1,166,458 - 3,129,645 769,833 3,899,478 Direct institutional support - 37,640 620,166 932,860 1,617,726 - 3,208,392 - 3,208,392 Indirect institutional support - - - - 1,598,877 - 1,598,877 - 1,598,877 Royalties, licensing, advertisements and
sponsorships 1,238,402 260,598 35,351 30,592 579,662 87,013 2,231,618 - 2,231,618 NCAA distributions 327,075 - - 18,436 306,491 83,206 735,208 - 735,208 Program, novelty and concession sales 191,759 70,712 20,019 22,164 8,326 493,348 806,328 - 806,328 Media rights 304,511 20,643 6,699 3,076 50,000 - 384,929 - 384,929 Endowment and investment income - - - - 235,377 - 235,377 186 235,563 Guarantees 182,678 15,000 - 7,000 - - 204,678 - 204,678 Conference distributions 47,211 - 16,500 - - - 63,711 - 63,711 Other - - - - 79,223 531,760 610,983 - 610,983 Total revenues 7,426,190 841,055 782,332 1,338,686 14,572,151 1,895,826 26,856,240 935,019 27,791,259 Expenses
Coaching salaries, benefits and bonuses 3,446,729 655,056 766,431 1,504,116 - - 6,372,332 - 6,372,332 Severance pay - - 250,000 - - - 250,000 - 250,000 Administrative and support staff salaries
and benefits 310,146 142,703 97,821 150,262 2,870,936 40,171 3,612,039 - 3,612,039 Athletic student aid 397,496 331,153 452,715 2,506,843 119,729 62,243 3,870,179 - 3,870,179 Marketing, promotion and fundraising 171,473 77,806 3,670 16,162 1,262,792 981,641 2,513,544 - 2,513,544 Team travel 919,409 245,900 350,398 830,039 - - 2,345,746 - 2,345,746 Indirect institutional support - - - - 1,598,877 - 1,598,877 - 1,598,877 Direct overhead and administrative 27,876 135,413 23,313 128,875 279,438 55,954 650,869 - 650,869 Game expenses 229,406 135,573 133,140 75,942 - - 574,061 - 574,061 Recruiting 218,454 15,851 102,947 98,361 - - 435,613 - 435,613 Sports equipment, uniforms and supplies 37,667 20,346 25,087 223,427 45,490 - 352,017 - 352,017 Spirit groups 13,223 - 5,378 1,499 321,696 - 341,796 - 341,796 Guarantees 371,000 42,152 65,688 12,977 - - 491,817 - 491,817 Medical expenses and medical insurance - - - - 108,953 919 109,872 - 109,872 Memberships and dues 16,908 180 955 5,565 46,127 - 69,735 - 69,735 Interest - - - - 10,006 - 10,006 9,606 19,612 Other 220,695 72,624 190,336 271,630 1,435,796 - 2,191,081 3,214 2,194,295 Total expenses 6,380,482 1,874,757 2,467,879 5,825,698 8,099,840 1,140,928 25,789,584 12,820 25,802,404 Revenues over (under) expenses $ 1,045,708 $ (1,033,702) $ (1,685,547) $ (4,487,012) $ 6,472,311 $ 754,898 $ 1,066,656 $ 922,199 $ 1,988,855
Wichita State University Intercollegiate Athletic Association, Inc.
Schedule of Revenues and Expenses by Major Activity For the year ended June 30, 2017
TUCSON 4801 E. BROADWAY BLVD., STE. 501 TUCSON, AZ 85711-3648 520-624-8229
WICHITA 300 W. DOUGLAS AVE., STE. 900 WICHITA, KS 67202-2914 316-264-2335 McALESTER 101 S. 2ND. STE. B McALESTER, OK 74501-5345 918-426-1234
TULSA 8023 E. 63RD PL. STE 500 TULSA, OK 74133-1209 918-494-8700 WAGONER 611-D W. CHEROKEE ST. WAGONER, OK 74467-4618 918-485-5531 EL DORADO 112 EAST CENTRAL AVE. EL DORADO, KS 67042-2151 316-321-1150
Wichita State University Intercollegiate Athletic Association, Inc.
(a component unit of Wichita State University)
Financial Statements and Independent Auditor’s Report
June 30, 2018
CONTENTS
Page
Independent Auditor’s Report 1
Financial Statements
Statement of Financial Position 3
Statement of Activities 4
Statement of Cash Flows 5
Notes to Financial Statements 6
Supplementary Information
Schedule of Revenues and Expenses by Major Activity 16
WWW.RCMLLP.COM 300 WEST DOUGLAS AVE, SUITE 900, WICHITA, KANSAS 67202-2914 P 316-264-2335 F 316-264-1489
REGIER CARR & MONROE LLP, CPAs
EL DORADO I MCALESTER I TUCSON I TULSA I WAGONER I WICHITA PO BOX 847, EL DORADO, KANSAS 67042-0847 P 316-321-1150 F 316-264-1489
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Independent Auditor’s Report
Board of Directors Wichita State University Intercollegiate Athletic Association, Inc.
We have audited the accompanying financial statements of Wichita State University Intercollegiate Athletic Association, Inc., a component unit of Wichita State University, which comprise the statement of financial position as of June 30, 2018, and the related statements of activities, and cash flows for the year then ended, and the related notes to financial statements.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the financial statements referred to above present fairly in all material respects, the financial position of Wichita State University Athletic Association, Inc. as of June 30, 2018, and the changes in its net assets and its cash flows for the year then ended, in accordance with accounting principles generally accepted in the United States of America.
- 2 - Report on Supplementary Information
Our audit was conducted for the purpose of forming an opinion on the financial statements as a whole. The Schedule of Revenues and Expenses by Major Activity on page 16 is presented for purposes of additional analysis and is not a required part of the financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated in all material respects in relation to the financial statements as a whole.
September 28, 2018 Wichita, Kansas
The accompanying notes are an integral part of these financial statements.
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Wichita State University Intercollegiate Athletic Association, Inc.
STATEMENT OF FINANCIAL POSITION June 30, 2018
Cash and short-term investments $ 10,373,609
Deposits - Wichita State University Foundation 4,053,238
Cash and cash equivalents 14,426,847
Restricted deposits - Wichita State University Foundation 2,856,471
Investments 2,401,551
Accounts receivable 253,426
Contributions receivable 5,732,055
Other assets and prepaid expenses 133,341
Capital assets, net of accumulated depreciation
of $2,534,058 1,483,450
Total assets $ 27,287,141
Accounts payable and accrued liabilities $ 1,794,678 Deferred revenue
Booster groups 4,857,518
Men's basketball tickets 3,585,443
Other 369,531
Loan payable - Wichita State University Foundation 2,756,716
Loan payable - Outfront Media 754,187
Total liabilities 14,118,073
Net assets
Unrestricted 10,980,858
Temporarily restricted 2,188,210
Total net assets 13,169,068
Total liabilities and net assets $ 27,287,141
LIABILITIES AND NET ASSETS ASSETS
