FINANCIAL CONTROL

Structure

The chancellor has the authority and final responsibility for all fiscal affairs in North Carolina State University, including the Department of Athletics. The Department of Athletics' budget is subject to the institution's normal budgeting process. All revenues and expenditures of the Department of Athletics are under clear institutional oversight through procedures established by the vice-chancellor for finance and business. Procedures for the receipt and expenditure of athletics funds are documented in institutional policies and understood by coaches and Department of Athletics personnel [5.6.3.1].

The following table of receipts and expenses for the past five years shows the scope of the athletics program at NCSU.

Table 11.1
Athletics expenses and receipts* 

                                         1989-90        1990-91        1991-92        1992-93  

Total expenses                       $12,699,457    $14,649,067    $15,001,441    $15,168,649  
Total receipts                       $13,969,039    $13,518,854    $15,512,381    $16,288,197  
Transfer to capital-improvements          $3,878             $0        $62,210       $811,709  
       fund 
Source: NCSU Budget Office  
* Includes Carter Finley/Facilities account

Financial Reports

The Office of the Vice-Chancellor for Finance and Business conducts periodic financial audits of the Department of Athletics. These audits are internal and are done on an interval consistent with the schedule for other University departments and units. In these audits the auditors look to improve procedures and operations that relate to financial control.

An annual external audit of the Department of Athletics' finances is also conducted by an independent CPA firm hired by the University's Purchasing and Contracts Office. The independent audit report is transmitted to the director of athletics with a copy to the vice-chancellor for finance and business. The assistant director of athletics/controller gives periodic financial reports to the vice-chancellor for finance and business. The athletics program's financial organization and condition are subject to explicit review through both periodic and annual reports to the chancellor, the vice-chancellor for finance and business, and the Council on Athletics. Periodic reports on the athletics program (which includes both academic and financial matters) are made to the Board of Trustees by the chancellor and the director of athletics [5.6.3.4].

The Wolfpack Club

The Department of Athletics' operating budget is funded through gate receipts, student fees, private contributions, ACC, and NCAA revenue-sharing plans, and revenues from television and radio rights. During 1992-93 a total of 458 students participated in intercollegiate varsity athletics at North Carolina State University. Athletics scholarships supported 239 equivalent grants-in-aid, which through full and partial awards were distributed to 399 students. Money for grants-in-aid are provided by the NCSU Student Aid Association (the Wolfpack Club), a private, nonprofit corporation that works in cooperation with the Department of Athletics. The Wolfpack Club raises money from individual and corporate donors during annual fund-raising drives. The expenditures of the Wolfpack Club for scholarships are administered through the NCSU Financial Aid Office and the Office of the Vice-Chancellor for Finance and Business.

The following table shows receipts from the Wolfpack Club in direct support of scholarships and total scholarship aid for the past five years.

Table 11.2
Athletics scholarship aid by funding source and year 

Source of funding         1989-90         1990-91         1991-92         1992-93         1993-94 
Receipts from WP Club  $1,711,977      $1,759,846      $2,251,854      $2,822,537      $2,643,200 
Total scholarship aid  $2,385,936      $2,304,329      $2,775,944      $2,221,378      $2,671,650
Source: NCSU Department of Athletics

As a corporate entity, the Wolfpack Club has a cooperating relationship with the University, as evidenced by its support of athletics scholarships and by an agency agreement that covers specific items, e.g., ticket sales and distribution for athletic events, advertising purchases in programs for athletic events, advertising on various electronic displays, issuance of reserved parking permits for athletic events, etc. The current agreement between the Department of Athletics and the Wolfpack Club does not clearly establish the University's control over the Wolfpack Club's finances. A new agreement establishing such control is expected to be ratified during winter 1994 [5.6.3.2, 5.6.3.3, 5.6.3.4, 5.6.3.5, 5.6.3.6].

In addition to the Wolfpack Club, NCSU has a number of other athletics support groups (e.g., Lady Pack Backers, Varsity Club, Wolfpack Football Parents, Wolfpack Swimming Parents, etc.). It is not clear that all such organizations operate under the direction of the director of athletics.

Recommendation 11.7: The NCSU Department of Athletics should develop written policies and procedures to ensure that all athletics-support groups associated with specific sports are under the clear control of the director of athletics.

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