FLORIDA INTERNATIONAL UNIVERSITY INTERCOLLEGIATE ATHLETICS PROGRAM INDEPENDENT ACCOUNTANTS REPORT ON APPLYING AGREED-UPON PROCEDURES

Transcription

1 FLORIDA INTERNATIONAL UNIVERSITY INTERCOLLEGIATE ATHLETICS PROGRAM INDEPENDENT ACCOUNTANTS REPORT ON APPLYING AGREED-UPON PROCEDURES FOR THE YEAR ENDED JUNE 30, 2008

2 FLORIDA INTERNATIONAL UNIVERSITY INTERCOLLEGIATE ATHLETICS PROGRAM TABLE OF CONTENTS JUNE 30, 2008 Page(s) Independent Accountants Report on Applying Agreed-Upon Procedures 1 13 Exhibits Exhibit I Statement of Revenues and Expenses 14 Exhibit II Notes to Statement of Revenues and Expenses 15

3 INDEPENDENT ACCOUNTANTS REPORT Dr. Modesto Maidique, President, Florida International University: We have performed the procedures listed below, which were agreed to by the president of Florida International University (the University), solely to assist you in evaluating whether the accompanying Statement of Revenues and Expenses (Exhibit I) of the Florida International University Intercollegiate Athletics Program (the Program) is in compliance with the National Collegiate Athletic Program (NCAA) Bylaw for the year ended June 30, The Program s management is responsible for the Program 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. Our procedures and 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. Ticket Sales 1. Compare tickets sold during the reporting period, complimentary tickets provided during the reporting period and unsold tickets to tie related revenue reported by the Program in the statement and the related attendance figures. 2. Recalculate totals

4 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 Program's methodology for allocating student fees to intercollegiate athletics programs. 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. 2. Any contributions of moneys, goods or services received directly by an intercollegiate athletics program for any affiliated or outside organization, agency or group of individuals (two or more) not included above (e.g., contributions by corporation sponsors) that constitutes 10 percent or more of all contributions received for intercollegiate athletics during the reporting periods shall obtain and review supporting documentation for each contribution

5 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 compensation and benefits provided by a third-party for the year ended June 30, 2008, this As there was no compensation and benefits provided by a third-party for the year ended June 30, 2008, this 3. Recalculate totals. As there was no compensation and benefits provided by a third-party for the year ended June 30, 2008, this 4. If the third-party was audited by independent auditors, obtain the related independent auditors' report. As there was no compensation and benefits provided by a third-party for the year ended June 30, 2008, this 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, 2008, this procedure was not 2. Recalculate totals. As there was no direct state or other governmental support for the year ended June 30, 2008, this procedure was not 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. 2. Recalculate totals

6 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. 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, 2008, this As there were no broadcast, television, radio and internet rights revenues for the year ended June 30, 2008, this 3. Recalculate totals. As there were no broadcast, television, radio and internet rights revenues for the year ended June 30, 2008, this 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. 2. Compare and agree the related revenues to the Program's general ledger, and/or the statement. 3. Recalculate totals

7 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. As there were no sports camp revenues for the year ended June 30, 2008, this 2. Obtain schedules of camp participants. As there were no sports camp revenues for the year ended June 30, 2008, this 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. As there were no sports camp revenues for the year ended June 30, 2008, this 4. Recalculate totals. As there were no sports camp revenues for the year ended June 30, 2008, this 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. Other 3. Recalculate totals. for all revenue categories (see Procedures 1 through 3 under All Revenue Categories on page 1). 2. Recalculate totals. All Expense Categories 1. Compare and agree each operating expense category reported in the statement during the reporting period to supporting schedules provided by the Program. 2. Compare and agree a sample of operating expenses obtained from the above operating expense supporting schedules to adequate supporting documentation

8 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. The University s Office of General Counsel denied us access to certain students files due to privacy laws related to federal and state statutes. However, for the students where we were able to obtain a signed waiver to allow us to review their files, the procedure was performed without exception. We selected ten students to review, of which four signed a waiver allowing us access to review their files. The University s Office of General Counsel denied us access to certain students files due to privacy laws related to federal and state statutes. However, for the students where we were able to obtain a signed waiver to allow us to review their files, the procedure was performed without exception. We selected ten students to review, of which four signed a waiver allowing us access to review their files. 3. Recalculate totals. The University s Office of General Counsel denied us access to certain students files due to privacy laws related to federal and state statutes. However, for the students where we were able to obtain a signed waiver to allow us to review their files, the procedure was performed without exception. We selected ten students to review, of which four signed a waiver allowing us access to review their files. 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

9 3. Compare and agree related amounts expensed by the Program during to the Program's general ledger and/or the statement. 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 football, and men's and women's basketball from the above listing. 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 Program 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 Program s payroll system. 6. Recalculate totals

10 Coaching Other Compensation and Benefits Paid by a Third-Party 1. Obtain and inspect a listing of coaches employed by a third-party 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 was no coaching other compensation and benefits paid by a third-party for the year ended June 30, 2008, this procedure was not As there was no coaching other compensation and benefits paid by a third-party for the year ended June 30, 2008, this procedure was not 3. Obtain and inspect W-2s, 1099s, etc. for each selection. As there was no coaching other compensation and benefits paid by a third-party for the year ended June 30, 2008, this procedure was not 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 was no coaching other compensation and benefits paid by a third-party for the year ended June 30, 2008, this procedure was not 5. Recalculate totals. As there was no coaching other compensation and benefits paid by a third-party for the year ended June 30, 2008, this procedure was not 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. 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 Program s payroll system

11 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 Program 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 a third-party during the reporting period. As there was no support staff and administrative compensation paid by a third-party during the year ended June 30, 2008, this procedure was not 2. Obtain and inspect W-2s, 1099s, etc. for each selection. As there was no support staff and administrative compensation paid by a third-party during the year ended June 30, 2008, this procedure was not 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 was no support staff and administrative compensation paid by a third-party during the year ended June 30, 2008, this procedure was not 4. Recalculate totals. As there was no support staff and administrative compensation paid by a third-party during the year ended June 30, 2008, this procedure was not 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. 2. Recalculate totals

12 Recruiting 1. Obtain and document an understanding of the Program's recruiting expense policies. 2. Compare and agree to existing 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 NCAA-related policies. Equipment, Uniforms and Supplies 2. Recalculate totals. Game Expenses 2. Recalculate totals. Fund Raising, Marketing and Promotion 2. Recalculate totals. Sports Camp Expenses As there were no sports camp expenses for the year ended June 30, 2008, this 2. Recalculate totals. As there were no sports camp expenses for the year ended June 30, 2008, this

13 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. 4. Recalculate totals. Medical Expenses and Medical Insurance 2. Recalculate totals. Memberships and Dues 2. Recalculate totals

14 Other Operating Expenses 2. Recalculate totals. Procedure Agreed-Upon Procedures Related to 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 Florida International University Foundation, Inc. (the Foundation) as the only outside organization making expenditures for, or on behalf of the Program or its employees. The Foundation serves as the official legal conduit for the acceptance, investment, and distribution of private gifts in support of the activities and programs of Florida International University. Included in the Program s Foundation accounts are the accounts of the Golden Panther Club. Expenditures for, or on behalf of the Program or its employees are made directly from the Foundation. We obtained the statement of changes in net assets of the Foundation account held for the Program for the year ended June 30, 2008, which represents revenues and expenditures on behalf of the Program. This information was obtained by direct confirmation with the Foundation. The following is a summary of the changes in net assets for the year: Unrestricted Temporarily Restricted Permanently Restricted Total Net assets, beginning of year $ 916,356 $ 482,902 $ 733,685 $ 2,132,943 Revenues earned on behalf of the Program 572,876 (29,379) 30, ,647 Transfers between funds 870 (870) - - Release of restrictions 260 (260) - - Expenditures on behalf of the Program (1,237,391) - - (1,237,391) Change in net assets (663,385) (30,509) 30,150 (663,744) Net assets, end of year $ 252,971 $ 452,393 $ 763,835 $ 1,469,

15 2. 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 Foundation for the year ended June 30, 2008 and the related report on compliance and on internal control. The results of this procedure disclosed that the independent auditors expressed an unqualified opinion on the financial statements of the Foundation. The independent auditors noted no matters involving internal control over financial reporting and its operation that were considered material weaknesses. 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) 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 Florida International University and the Program, the Florida International University Board of Trustees, the State of Florida Board of Education, 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 January 7,

16 FLORIDA INTERNATIONAL UNIVERSITY INTERCOLLEGIATE ATHLETICS PROGRAM STATEMENT OF REVENUES AND EXPENSES FOR THE YEAR ENDED JUNE 30, 2008 (UNAUDITED - SEE ACCOMPANYING INDEPENDENT ACCOUNTANTS' REPORT ON APPLYING AGREED-UPON PROCEDURES) Exhibit I Revenues 1 Ticket sales $ 121,016 2 Student fees 13,498,190 3 Guarantees 2,103,500 4 Contributions 1,169,912 5 Compensation and benefits provided by a third-party - 6 Direct state or other government support - 7 Direct institutional support 2,156,817 8 Indirect facilities and administrative support 36,574 9 NCAA and conference distributions, including all tournament revenues 773, Broadcast, television, radio and internet rights - 11 Program sales, concessions, novelty sales and parking 12, Royalties, advertisements and sponsorships 226, Sports camp revenues - 14 Endowment and investment income 72, Other 59, Total revenues 20,230,655 Expenses Athletics student aid 4,872,037 Guarantees 349,250 Coaching salaries, benefits and bonuses paid by the university and related entities 3,302,266 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 3,019,037 Support staff and administrative other compensation paid by a third-party - Severance payments 12,113 Recruiting 289,585 Team travel 1,703,774 Equipment, uniforms and supplies 488,774 Game expenses 605,908 Fund raising, marketing and promotion 800,649 Sports camp expenses - Direct facilities, maintenance and rental 609,563 Spirit groups 100,186 Indirect facilities and administrative support 36,574 Medical expenses and medical insurance 442,722 Memberships and dues 135,845 Other operating expenses 1,707,212 Total expenses 18,475,495 Excess of expenses over revenues $ 1,755,160 - See accompanying notes to Statement of Revenues and Expenses

17 Exhibit II FLORIDA INTERNATIONAL UNIVERSITY INTERCOLLEGIATE ATHLETICS PROGRAM NOTES TO STATEMENT OF REVENUES AND EXPENSES FOR THE YEAR ENDED JUNE 30, 2008 (UNAUDITED SEE ACCOMPANYING INDEPENDENT ACCOUNTANTS REPORT ON APPLYING AGREED-UPON PROCEDURES) (1) Basis of Accounting: The statement of revenues and expenses of the Florida International University Intercollegiate Athletics Program (the Program) has been prepared using the accrual basis of accounting. Under this method, revenues are recorded when earned and expenses are recognized when they are incurred. (2) Capital Assets: Capital assets purchased with an original cost of $1,000 or more are recorded at cost and depreciated utilizing the straight-line method over the estimated useful lives of assets (generally ranging from 5 to 10 years). Costs to maintain or repair these assets are expensed as incurred. Costs incurred for the construction of buildings or other permanent facilities are reflected as expenses, as these assets are not capitalized as part of the Program s accounts, but are recorded by the University as assets of other funds. Capital asset activity for the year ended June 30, 2008, was as follows: Beginning Balance Additions Decreases Ending Balance Depreciable capital assets: Furniture and equipment $ 960,525 $ 106,672 $ 50,822 $ 1,016,375 Other capital assets 23,020 81,995 3, ,720 Total depreciable capital assets 983, ,667 54,117 1,118,095 Less: Accumulated depreciation Furniture and equipment 605, ,579 45, ,408 Other capital assets 3,000 26, ,320 Total accumulated depreciation 608, ,009 45, ,728 Total depreciable capital assets, net $ 375,263 $ 46,658 $ 8,554 $ 413,367 (3) Contributions: The Florida International University Foundation, Inc. (the Foundation) serves as the official legal conduit for the acceptance, investment, and distribution of private gifts in support of the activities and programs of Florida International University. Contributions of $1,169,912 were recognized from the Foundation for the year ended June 30, 2008, and have been included in the accompanying statement of revenues and expenses. Contributions received from the Foundation were the only contributions exceeding 10% of total contributions, as reported in the statement of revenues and expenses, for the year ended June 30,