SAN JOSE STATE UNIVERSITY INTERCOLLEGIATE ATHLETICS DEPARTMENT Report on Applying Agreed-Upon Procedures Year ended June 30, 2016 (With Report of Independent Accountants Thereon)
SAN JOSE STATE UNIVERSITY INTERCOLLEGIATE ATHLETICS DEPARTMENT Table of Contents Page Independent Accountants Report on Applying Agreed-Upon Procedures 1 Statement of Revenues and Expenses 15 Notes to Statement of Revenues and Expenses 16
Independent Accountants Report on Applying Agreed-Upon Procedures Dr. Mary Papazian President San Jose State University: We have performed the procedures enumerated below, which were agreed to by the executive management of San Jose State University (the University), solely to assist the specified parties in evaluating whether the accompanying Statement of Revenues and Expenses (the Statement) of the Intercollegiate Athletics Department of the San Jose State University (the Athletics Program) is in compliance with the National Collegiate Athletic Association (NCAA) Bylaw 3.2.4.15 for the year ended June 30, 2016. Management of San Jose State University is responsible for the Statement and the University 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. The procedures that we performed and our findings are as follows: General Procedures a. We obtained the Statement from management for the year ended June 30, 2016 and compared the totals of each revenue and expense category from the Statement to the general ledger detail spreadsheet provided by management. Each revenue and expense category as reported in the Statement agreed to the general ledger detail spreadsheet. b. We haphazardly selected a sample of operating revenue receipts and expense transactions from the revenue and expense general ledger detail spreadsheet and compared and agreed to documentation as described in procedures 1 through 60 below. Results: No exceptions were found as a result of applying this procedure except for procedure 1 where a variance was identified. c. We obtained a copy of management s comparison of each revenue and expense accounts on the Statement to prior period amounts. We agreed the 2016 revenue and expense to the Statement. Ticket Sales 1. We obtained the Fall 2015 Football Ticketmaster reports from the Department, recalculated the revenues related to tickets sold (for season tickets, mini-plan tickets, single games, and trade-out tickets) per the reports by multiplying the number of tickets sold by the amount per ticket, and agreed the revenues related to tickets and other handling fees to the ticket sales revenue by sport detail provided by the department.
Results: We noted that $45,518 was recorded as sponsorship revenue that should have been recorded as ticket sales revenue. This change has been reflected in the accompanying Statement of Revenue and Expenses. 2. We obtained the University s Season Sales Report for football and agreed the difference between the Ticketmaster revenues and revenues per the detail to internal transfer revenues and other handling fees per the reports. Student Fees 3. We obtained management s calculation allocating student fees to intercollegiate athletics programs during the year ended June 30, 2016. We agreed the student fee amount reported on the Statement to a schedule called Student Success, Excellent & Technology Fee Budget 2015/16 Athletics SSETF-IRA Allocation provided by management. We recalculated the athletics program s student fees portion by multiplying the headcount numbers and waivers by the total student fee amount. Direct Institutional Support 4. We obtained a listing of direct institutional support amount recorded from the University to the Athletics Program provided by management. We agreed the direct institutional support amount recorded by the Athletics Program during the reporting period to the University s approved budgeted funding amount. We recalculated direct institutional support totals on the accompanying Statement by summing the transactions on the general ledger detail spreadsheet provided by management. Results: No exceptions were found as a result of applying these procedures. Indirect Institutional Support 5. We obtained the indirect institutional support schedule provided by management and agreed the total amount per schedule to the indirect institutional support amount reported on the Statement. We obtained the University s funding percentage amount allocation provided by management and recalculated the indirect institutional support amount using the funding percentage amount allocation. Guarantees 6. We obtained the general ledger detail spreadsheet and noted no football settlement for away games were reported for the year ended June 30, 2016. We selected all football contractual agreements pertaining to revenue derived from guaranteed contests during the year ended June 30, 2016 from the general ledger detail spreadsheet provided by management and agreed the contractor s name and amount from the general ledger detail spreadsheet to the contractor s name in the respective contractual agreement and contractor s name and amount in the cash receipt. 1 Auburn University $ 1,598,635 2 Oregon State University 425,000 Results: No exceptions were found as result of applying these procedures. 2
7. We recalculated revenue from guarantees by summing up the transactions on the general ledger detail spreadsheet provided by management and agreeing it to the total on the Statement. Results: No exceptions were found as result of applying these procedures. Contributions 8. We obtained a list of all revenue derived from contributions of moneys, goods, or services received directly by management from Tower Foundation, an affiliated organization, and selected all accounts from the general ledger detail spreadsheet provided by management that constituted more than 10 percent in aggregate for the reporting year of all contributions received for intercollegiate athletics for the year ended June 30, 2016. We agreed the donor s name and amount to a donor s name on the gift acceptance form and amount to a check copy. 1 Peter and Virgina Ueberroth $ 200,000 2 The Maley-Hawley Family Foundation 100,000 9. We recalculated revenue from contributions by summing up the transactions on the general ledger detail spreadsheet provided by management and agreeing it to the total on the Statement. Media Rights 10. We haphazardly selected one media (broadcast, television, radio) rights transaction from the general ledger detail spreadsheet listing provided by the Department and agreed the payer name and amount to the respective agreement or email and amount on the check copy or wire form. 1 Mountain West Distribution $ 183,201 Results: No exceptions were noted as a result of applying these procedures. 11. We recalculated revenue from media rights by summing the transactions on the general ledger detail spreadsheet provide by management and agreeing it to the Statement. Results: No exceptions were noted as a result of applying these procedures. 3
NCAA Distributions 12. We haphazardly selected one sample of NCAA distribution from the general ledger detail spreadsheet listing provided by management and agreed the payor name and amount on NCAA distribution schedule to the payor name and amount on the wire transfer form. 1 Mountain West Conference $ 310,911 Results: No exceptions were noted as a result of applying these procedures. 13. We recalculated revenue from NCAA distributions by summing the transactions on the general ledger detail spreadsheet provided by management and agreeing it to the Statement. Results: No exceptions were noted as a result of applying these procedures. Conference Distributions 14. We haphazardly selected one sample of conference distribution from the general ledger detail spreadsheet listing provided by management and agreed the payor name and amount to the Mountain West Conference distribution schedule and wire transfer form. 1 MW Conference Final Distribution FY 15-16 $ 3,130,353 15. We recalculated revenue from conference distributions by summing the transactions on the general ledger detail spreadsheet provided by management and agreeing it to the Statement. Program Sales, Concessions, Novelty Sales, and Parking 16. We haphazardly selected two samples of Program Sales, Concessions, Novelty Sales, and Parking from the general ledger detail spreadsheet provided by management for the year ended June 30, 2016 and agreed the payor name and amount recorded to the name and amount on the cash collection summaries and deposit slips. 1 Parking $ 16,342 2 Parking 24,995 4
17. We recalculated program sales, concessions, novelty sales, and parking revenue on the accompanying Statement by summing the transactions on the general ledger detail spreadsheet provided by management. Royalties, Licensing, Advertisements, and Sponsorships 18. We selected all transactions of Royalties, Licensing, Advertisements, and Sponsorships with amounts in excess of $25,000 from the general ledger detail spreadsheet provided by management for the year ended June 30, 2016 and agreed the payor name and amount to the name on the respective agreement, amount in the deposit receipt copy, and a check copy. 1 Intercollegiate Athletics $ 223,405 2 Intercollegiate Athletics 50,000 3 Athletic Marketing 27,800 4 Athletic Marketing 144,000 19. We recalculated royalties, licensing, advertisements, and sponsorships revenue totals on the accompanying Statement by summing the transactions on the general ledger detail spreadsheet provided by management. Other Revenue 20. We obtained a general ledger detail spreadsheet of other revenue transactions from management and selected all transactions with amounts in excess of $10,000. We traced the selections to related invoices, journal entries, or receipt transactions and agreed the amounts to the general ledger detail spreadsheet provided by management for the year ended June 30, 2016. 1 Athletics Special Events $ 10,500 2 Athletics Special Events 11,950 3 Athletics Special Events 33,998 4 Athletics Special Events 15,781 5 Athletics Special Events 15,631 6 Athletics Special Events 25,957 7 Athletics Special Events 31,274 8 Athletics Special Events 16,235 9 Football 10,023 10 Men s Golf 10,000 5
21. We recalculated other revenue totals on the accompanying Statement by summing the transactions on the general ledger detail spreadsheet provided by management. Athletics Student Aid 22. We obtained a listing of student-athletes that received student aid for the year ended June 30, 2016 from management. Since the Athletics Program used NCAA Compliance Assistance (CA) software, we haphazardly selected thirty-four students or 10% of total student-athletes from the listing, listed at procedure 24d. 23. We obtained individual financial aid summaries and related aid award letter for each selection in procedure (22) and compared and agreed total aid allocated from the related aid award letter to the student s financial aid summaries. 24. We performed items a g described below for each student selected in procedure (22) to determine whether information was reported accurately in either the NCAA s CA software or the NCAA Membership Financial Reporting System by performing the following procedures: a. Obtained the squad list and compared the equivalency value to the NCAA Membership Financial Reporting System; b. Compared the names on the squad list to the names reported in the NCAA Membership Financial Reporting System and noted there were four selections that participated in more than one sport. Three students who joined more than one sport had an asterisk within the sport that was not countable towards grants-in-aid revenue distribution; c. Obtained the NCAA CA online summary form and noted the equivalency value reported in (24a) above were rounded to two decimal places; 6
d. Obtained the squad list from management and verified that cost of tuition is calculated and reported based on academic year and not by semester; 1 Men s Basketball $ 16,234 2 Men s Basketball 10,115 3 Men s Basketball 13,261 4 Men s Baseball 38,233 5 Men s Baseball 37,316 6 Men s Cross Country 33,168 7 Football 27,056 8 Football 25,288 9 Football 39,796 10 Football 24,988 11 Football 12,644 12 Women s Volleyball 38,216 13 Football 25,288 14 Men s Golf 24,087 15 Men s Golf 21,869 16 Men s Soccer 38,216 17 Men s Soccer 29,439 18 Men s Water Polo 11,160 19 Women s Basketball 21,601 20 Beach Volleyball 6,696 21 Women s Golf 13,528 22 Gymnastics 36,448 23 Women s Soccer 13,908 24 Women s Soccer 32,439 25 Softball 1,690 26 Softball 22,965 27 Softball 35,159 28 Swimming and Diving 18,160 29 Swimming and Diving 6,764 30 Women s Tennis 8,999 31 Women s Track 36,448 32 Women s Track 7,089 33 Women s Volleyball 23,513 34 Women s Water Polo 38,216 e. Compared the squad list to the NCAA CA online summary form that showed no sports discontinued during the reporting period; f. Obtained and reviewed the squad list and noted all student-athletes selected were marked eligible on the squad list and; 7
g. Obtained the list of sports included in the student aid calculation from management and noted 18 sports were included within the calculation. We compared the list of sports provided by management to NCAA Athletic Grant Sports listing noting only sports in which the NCAA conducts championship competitions and emerging sports for women plus football were included in the calculation. 25. We recalculated the totals for athletic student aid expense on the accompanying Statement by summing the transactions on the general ledger detail spreadsheet provided by management. Guarantees 26. We obtained the general ledger detail spreadsheet for Guarantees and noted no football settlement for away games were reported for the year ended June 30, 2016. We obtained a general ledger spreadsheet of expenses pertaining to contractual agreements recorded by the Athletics Program and haphazardly selected a sample of one transaction. We agreed related amounts to the respective contractual agreement and amount to payment voucher. 1 Football game vs. BYU $ 300,000 27. We recalculated the guarantees expense on the accompanying Statement by summing the transactions on the general ledger detail spreadsheet provided by management. Coaching Salaries, Benefits, and Bonuses Paid by the Institution and Related Entities 28. We obtained a listing of all coaches employed by the Athletics Program for the year ended June 30, 2016 from management and haphazardly selected one football coach, one men s basketball coach, one women s basketball coach, and one men s soccer coach. 1 Football $ 7,408 2 Women s Basketball 7,059 3 Men s Basketball 8,000 4 Men s Soccer 8,044 29. We obtained the general ledger detail spreadsheet listing for each selections from management and the coaches respective employment contract. We recalculated the amount on the general ledger detail spreadsheet by using the coaches financial terms and conditions within the contract. Results: No exceptions were found as a result of applying these procedures. 30. We obtained the payroll summary register for each selections in procedure (28) from management and agreed the amount on the payroll summary registers to the amount on the general ledger detail spreadsheet related to coaching salaries, benefits, and bonuses paid by the University. 8
Results: No exceptions were found as a result of applying this procedures. 31. We recalculated totals for coaching salaries, benefits, and bonuses paid by management on the accompanying Statement by summing the transactions on the general ledger spreadsheet provided by management. Support Staff/Administrative Salaries, Benefits, and Bonuses Paid by the Institution 32. We obtained a listing of support staff/administrative personnel employed by the University for the year ended June 30, 2016 and haphazardly selected two support staffs. 1 Assistant Athletic Director $ 4,458 2 Events and Facilities Coordinator 4,094 33. We obtained the general ledger detail spreadsheet for each selections from management and the support staffs respective employment contract. We recalculated the amount on the general ledger detail spreadsheet by using the support staffs financial terms and conditions within the contract. Results: No exceptions were noted as a result of applying this procedure. 34. We obtained the payroll summary register for each selections in procedure (32) from management and agreed the amount on the payroll summary registers to the amount on the general ledger detail spreadsheet related to support staff/administrative salaries, benefits, and bonuses paid by the University. 35. We recalculated totals for the support staff/administrative salaries, benefits, and bonuses paid by the University on the accompanying Statement by summing the transactions on the general ledger detail spreadsheet provided by management. Recruiting 36. We obtained the University s and NCAA s recruiting policy and agreed management s explanation of the nature of the expense was included within the NCAA recruiting policy. 9
37. We obtained from management the general ledger detail spreadsheet for recruiting for the year ended June 30, 2016 and haphazardly selected a sample of one recruiting expense related to football and agreed the payee name and the amount on the invoice to the payee name and amount on the payment voucher. 1 Football $ 12,000 38. We obtained the expense approval for each selection in procedure (37) and verified that the approval is noted on the Athletic Department s Fiscal Approval Hierarchy (FAH) provided by the Department as being authorized by management to approve such expense based on the expense amount and his/her title. 39. We recalculated recruiting expenses on the accompanying Statement by summing the transactions on the general ledger detail spreadsheet provided by management. Team Travel 40. We obtained the University s NCAA s team travel policy and agreed management s explanation of the nature of the expense was included within the NCAA team travel policy. 41. We obtained from management the general ledger detail for Team Travel for the year ended June 30, 2016 and haphazardly selected a sample of one team travel expense related to football and one related to basketball and agreed the amount and payee name from the general ledger detail spreadsheet to the invoice and the payment voucher. 1 Football $ 52,680 2 Basketball 7,821 42. We obtained the expense approval or approved Travel Expense claim form for each selection in procedure (41) and verified that the approval is noted on the Athletic Department s Fiscal Approval Hierarchy (FAH) provided by the Department as being authorized by management to approve such expense based on the expense amount and his/her title. 43. We recalculated team travel expenses on the accompanying Statement by summing the transactions on the general ledger detail spreadsheet provided by management. 10
Equipment, Uniforms, and Supplies 44. We selected all equipment, uniforms, and supplies expense transactions with amounts over $10,000 from the general ledger detail spreadsheet provided by management for the year ended June 30, 2016. For each selection, we agreed the payee name and amount from the general ledger detail spreadsheet to the payee name and amount on the invoice and wire transfer. 1 Football Equipment $ 13,617 2 Women's Soccer Equipment 13,405 45. We recalculated equipment, uniform, and supplies expenses on the accompanying Statement by summing the transactions on the general ledger detail spreadsheet provided by management. Game Expenses 46. We haphazardly selected three game expense transactions with amounts over $10,000 from the general ledger detail spreadsheet provided by management for the year ended June 30, 2016. We agreed the payee name and amount of each selection to the corresponding invoices and the wire transfer form. 1 Supplies $ 10,473 2 UPD Security 17,518 3 UPD Security 12,400 47. We recalculated game expenses on the accompanying Statement by summing the transactions on the general ledger detail spreadsheet provided by management. 11
Fund raising, Marketing, and Promotion 48. We haphazardly selected three fund-raising, marketing, and promotion expense transactions with amounts over $10,000 from the general ledger detail spreadsheet provided by management for the year ended June 30, 2016. For each selection, we agreed the payee name and amount in the general ledger detail spreadsheet to the respective invoice and wire transfer form. 1 Digital Marketing $ 14,930 2 Digital Marketing 14,866 3 Ticketmaster hosting fee 45,000 Result: No exceptions were found as a result of applying this procedure. 49. We recalculated fund-raising, marketing, and promotion expenses on the accompanying Statement by summing the transactions on the general ledger detail spreadsheet provided by management. Direct Overhead and Administrative Expenses 50. We haphazardly selected one direct overhead and administrative expense transaction with amounts over $10,000 from the general ledger detail spreadsheet provided by management for the year ended June 30, 2015. For the selection, we agreed the payee name and amount in the general ledger detail spreadsheet to the invoice and wire transfer form. 1 Facilities $ 11,500 51. We recalculated direct overhead and administrative expenses on the accompanying Statement by summing the transactions on the general ledger detail spreadsheet provided by management. Medical Expense and Medical Insurance 52. We haphazardly selected one medical and insurance expense from the general ledger detail spreadsheet provided by management for the year ended June 30, 2016. For the selection, we agreed the payee name and amount in the general ledger detail spreadsheet to the invoice and the payment voucher. 1 Medical Supplies $ 41,740 12
53. We recalculated medical expense and medical insurance on the accompanying Statement by summing the transactions on the general ledger detail spreadsheet provided by management. Membership and Dues 54. We haphazardly selected one membership and dues expense transaction from the general ledger detail spreadsheet provided by management for the year ended June 30, 2016. For the selection, we agreed the payee name and amount in the general ledger detail spreadsheet to the invoice and the payment voucher. 1 Subscription $ 500 55. We recalculated membership and dues on the accompanying Statement by summing the transactions on the general ledger detail spreadsheet provided by management. Other Operating Expenses 56. We haphazardly selected two other operating expenses expense transactions from the general ledger detail spreadsheet provided by management for the year ended June 30, 2016. For each selection, we agreed the payee name and amount in the general ledger detail spreadsheet to the respective invoices and the wire transfer form. 1 Annual Fee $ 62,500 2 Printing/Copying 3,130 57. We recalculated other operating expenses on the accompanying Statement by summing the transactions on the general ledger detail spreadsheet provided by management. Additional Minimum Agreed-Upon Procedures 58. We obtained the squad list for the year ended June 30, 2016 from management and a list of sports sponsored as reported in the NCAA Membership Financial Reporting System from management. For each sport category, we compared the equivalency award per the squad list to the NCAA Membership Financial Reporting System form, noting no variances. Results: No exceptions were noted as a result of applying this procedure. 13
59. We obtained the Sports Sponsorship and Demographic Forms for the year ended June 30, 2016 from the Program in which management has indicated which sports were considered countable based on the minimum requirements set forth in Bylaw 20.9.6.3, compared and agreed the countable sports reported by management in the Sports Sponsorship and Demographic Forms with the countable sports identified for revenue distribution purposes within the NCAA Membership Financial Reporting System per the Revenue Distribution Form for Division I Sport Sponsorship Report. Results: No exceptions were noted as a result of applying this procedure. Affiliated and Outside Organization Tower Foundation 60. We obtained a rollforward schedule by object account of balances held by San Jose State University Tower Foundation (the Tower Foundation) showing revenue, amounts paid on behalf of the program, amounts transferred to the Athletics Program, and beginning and ending balances. We agreed total amounts on the detail to the general ledger spreadsheet, which agrees with the Statement. 61. We obtained the Tower Foundation s audited financial statements and read the independent auditors report, noting the opinion was unmodified. We were not engaged to, and did not, conduct an examination, the objective of which would be the expression of an opinion on the accompanying Statement as of June 30, 2016. 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 specified parties listed above, and is not intended to be and should not be used by anyone other than these specified parties. February 13, 2017 14
SAN JOSE STATE UNIVERSITY INTERCOLLEGIATE ATHLETICS DEPARTMENT Statement of Revenues and Expenses Year ended June 30, 2016 Men s Women s Other Other Nonprogram Football Basketball Basketball Men s Sports Women s Sports Specific Total Operating revenue: Ticket sales $ 1,503,475 75,681 4,830 16,833 18,804 41,425 1,661,048 Student fees 8,322,552 8,322,552 Guarantees 2,023,635 160,000 40,000 9,000 2,232,635 Contributions 94,329 24,075 13,703 608,564 141,112 1,296,522 2,178,305 Compensation and benefits provided by a third party Direct state or other government support Direct institutional support 10,193,426 10,193,426 Indirect facilities and administrative support 698,342 698,342 NCAA/conference distributions including all tournament revenues 1,392,898 833,273 1,362,608 3,588,779 Broadcast, television, radio, and Internet rights 904,182 904,182 Program sales, concessions, novelty, sales, and parking 188,126 1,710 189,836 Royalties, advertisements, and sponsorships 160,250 160,250 Sports camp revenue 17,180 350 3,128 20,658 Endowment and investment income 17,099 2,356 1,908 17,649 103,031 6,671 148,714 Other 13,635 10,283 502 25,617 64,830 461,458 576,325 Total operating revenue 6,154,559 1,107,378 61,293 677,663 330,905 22,543,254 30,875,052 Operating expenses: Athletics student aid 2,297,532 431,789 432,345 632,012 2,747,998 1,521,450 8,063,126 Guarantees 675,000 10,000 2,495 687,495 Coaching salaries, benefits, and bonuses paid by the institution and related entities 2,385,616 897,645 611,716 1,085,803 1,899,289 6,880,069 Coaching other compensation and benefits paid by a third party Support staff/administrative salaries, benefits, and bonuses paid by the institution 189,724 68,914 32,372 37,858 10,766 4,586,901 4,926,535 Support staff/administrative salaries, benefits, and bonuses paid by third party Severance payments Recruiting 136,604 37,450 40,421 34,384 73,275 322,134 Team travel 1,750,943 240,838 158,571 440,747 840,628 6,768 3,438,495 Equipment, uniforms, and supplies 214,015 29,203 40,385 191,252 231,929 91,464 798,248 Game expenses 650,592 207,548 149,381 117,570 140,996 21,635 1,287,722 Fund-raising, marketing, and promotion 12,238 886 139,419 40,994 631,116 824,653 Sport camp expenses 17,180 350 3,128 20,658 Direct facilities, maintenance, and rental 927 8,102 30,336 39,365 Spirit groups 75,514 75,514 Indirect facilities and administrative support 698,342 698,342 Medical expenses and medical insurance 17,077 565 4,400 550,004 572,046 Membership and dues 200 590 160 6,513 9,993 454,945 472,401 Transfers to the institution 250,000 250,000 Other 229,432 28,127 30,665 166,213 61,297 691,223 1,206,957 Total operating expenses 8,577,080 1,943,555 1,506,366 2,851,771 6,075,290 9,609,698 30,563,760 Excess (deficit) of revenue over expenses $ (2,422,521) (836,177) (1,445,073) (2,174,108) (5,744,385) 12,933,556 311,292 Add capital/restricted gifts raised and carryforward $ 168,750 932,163 911,913 (229,650) 1,783,176 Excess and capital carryforward $ 2,094,468 See accompanying notes to statement of revenues and expenses. 15
SAN JOSE STATE UNIVERSITY INTERCOLLEGIATE ATHLETICS DEPARTMENT Notes to Statement of Revenues and Expenses Year ended June 30, 2016 (1) Contributions The Intercollegiate Athletics Program at San Jose State University (the Program) reports its Statement consistent with the categories defined by the National Collegiate Athletic Association (NCAA). According to the NCAA, institutions should recognize contributions as they are received and allocated by the Institution, not as they are pledged (Do not report pledges until funds are allocated). For the year ended June 30, 2016 (fiscal year 2015/2016), the Program recognized $2,178,304 in contributions revenue. There was an additional $1,783,176 raised as a part of a capital campaign. These gifts are considered restricted and reported separately to the Statement as the construction for these capital projects have not begun as of June 30, 2016. (2) Capital Assets Capital assets are stated at cost or estimated historical cost if purchased, or if donated, at estimated fair value at the date of donation. Capital assets, including infrastructure and intangible assets, with a value of $5,000 or more and with a useful life of one year or more are capitalized. Such costs include, where applicable, interest capitalized as part of the cost of constructed capital assets. Title to all assets, whether purchased, constructed, or donated, is held by the State of California. Although title is not with the University, the University has exclusive use of these assets and is responsible for the maintenance of these assets and thus has recorded the cost of these assets in the schedule below. Capital assets are depreciated on a straight-line basis over their estimated useful lives, which range from 5 to 40 years. The University s recording of depreciation expense and capitalization asset additions for fiscal year 2016 are not included in the Statement of Revenue and Expenses for Intercollegiate Athletics Department per NCAA guidelines; however, these recordings are listed in the schedule below. The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend its life are expensed as incurred. 16 (Continued)
SAN JOSE STATE UNIVERSITY INTERCOLLEGIATE ATHLETICS DEPARTMENT Notes to Statement of Revenues and Expenses Year ended June 30, 2016 The activity for capital assets of the University used predominately to support the Program during the fiscal year 2015/2016 was as follows: San Jose State University Intercollegiate Athletics Program Capital Assets As of June 30, 2016 Balance Balance June 30, 2015 Additions Retirements June 30, 2016 Cost: Building and building improvements $ 10,833,328 10,833,328 Equipment 1,389,402 44,329 1,433,731 Intangible 238,621 18,000 256,621 Total cost 12,461,351 62,329 12,523,680 Less accumulated depreciation: Building and building improvements (8,564,460) (522,742) (9,087,202) Equipment (669,219) (134,972) (804,191) Intangible (198,804) (33,650) (232,454) Total accumulated depreciation (9,432,483) (691,364) (10,123,847) Net capital assets $ 3,028,868 (629,035) 2,399,833 Agreed-upon procedures were not performed over note 2 above. 17