U Athletics Audit

REPORT TO THE
UTAH LEGISLATURE
Number 2016-10
A Performance Audit of the

University of Utah Athletics Department
November 2016
Office of the
LEGISLATIVE AUDITOR GENERAL
State of Utah
STATE OF UTAH
Office of the Legislative Auditor General

315 HOUSE BUILDING PO BOX 145315 SALT LAKE CITY, UT 84114-5315
(801) 538-1033 FAX (801) 538-1063
Audit Subcommittee of the Legislative Management Committee

President Wayne L. Niederhauser, CoChair Speaker Gregory H. Hughes, CoChair
Senator Gene Davis Senator Ralph Okerlund Representative Brian S. King Representative James A. Dunnigan
JOHN M. SCHAFF, CIA

AUDITOR GENERAL
November 15, 2016
TO: THE UTAH STATE LEGISLATURE
Transmitted herewith is our report, A Performance Audit of the University

of Utah Athletics Department (Report #2016-10). A digest is found on the blue
pages located at the front of the report. The objectives and scope of the audit are
explained in the Introduction.
We will be happy to meet with appropriate legislative committees, individual
legislators, and other state officials to discuss any item contained in the report in
order to facilitate the implementation of the recommendations.
Sincerely,
John M. Schaff, CIA

Auditor General
JMS/lm
Digest of
The University of Utah Athletics Department (Athletics, or the Department) supports 18 team
sports and has competed in the Pac-12 conference since 2011 (fiscal year 2012). Some of the team
sports are nationally ranked and have competed for conference championships. Athletics employs
about 160 administrative and coaching positions and supports over 400 student athletes. In fiscal
year 2015, athletics generated about $63.9 million in revenue, the majority of which ($42.3 million)
came from the football program. This report provides recommendations to help athletics continue
on a path of financial stability and control, better tie performance goals to compensation, improve
building security, and emphasize the need for improved inventory and human resource compliance.
Chapter II
Athletics Department Should
Strengthen Its Budget Practices
For Greater Control, Athletics Should Report the Total Cost of Operations to
Policymakers. Athletics has not been reporting indirect financial support, which we estimate to
have been $1.2 million in fiscal year 2015. This number should be calculated and reported so
University policymakers and other stakeholders can understand the total cost of Athletics
operations. NCAA guidelines require that indirect financial support be tracked and reported in
annual financial reports. A more accurate picture of Department expenses will allow for greater
long-term monitoring and control of those funds.
Continued Emphasis on Budget Management Is Crucial as College Sports Spending
Escalates. As the cost of intercollegiate athletics has grown, some of the University of Utahs peer
Pac-12 athletics departments have overspent their budgets. The department has largely spent within
its means, but pressure to increase spending in order to compete and recruit is substantial.
Therefore, the Department must maintain proper budgetary balance and control going forward. To
aid the University in continued financial control over Athletics, the Department should report key
financial data, including athletics fund and reserve account balances, in its annual NCAA financial
report and on its website.
A Strategic Plan Can Improve Financial Management and Control. To better analyze and
control its finances, the Department can benefit from formalized projections of large capital
expenditure needs and more robust analysis of primary cost drivers, like team travel and equipment.
A departmental strategic plan will help provide a platform to accomplish these and other goals. The
Department has already formulated the foundation of a strategic plan that has yet to be fully
developed. That effort was put on hold until the conclusion of this audit.
Partial Payment Received for Cancelled Mens Basketball Game. The mens basketball team
cancelled a game with Brigham Young University (BYU) initially scheduled for early December
Office of the Utah Legislative Auditor General
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2016 at a cancellation cost of $80,000. The University reported that the mens head basketball
coach was going to repay the cancellation fee out of his own personal funds. The University paid
BYU the $80,000 cancellation fee. The coach paid the first installment of $20,000. Those funds
have been paid from the coaches foundation. However, since the funds were paid from a
foundation account we could not independently determine if the coach used personal funds or
foundation monies from other sources to make the payment. According to University officials the
coach has assured the University that the funds came personally from the coach without
contributions from donors.
Chapter III
Improvements Needed in Measuring
and Rewarding Coaches
Performance Should Have a Tie to Financial Incentives. We found in the past five years that
coaching staff in the majority of sports received a significant pay increase (salary and associated
benefits), despite most teams not fully meeting performance expectations. This practice can diminish
the effectiveness of performance objectives established by the Department. Athletics reports that pay
increases were given to compete with a higher average salary in the Pac-12 conference. Going
forward, the Department should review the reasonableness of their goals and tie performance goals
to a portion of compensation increases.
Athletics Directors Contract Has No Incentives for Smaller Sports. The Departments
athletic director can earn bonuses for various performance goals. There are currently six goals, four
of which are based on the performance of the mens and womens basketball teams, football, and
gymnastics. With the exception of womens basketball and gymnastics, the athletics director is not
incentivized on less visible sports that generate revenue insufficient to cover their costs. We found
nine schools within the Pac-12 that have some language that incentivizes the athletics director to
encourage the on-field success of all sports, not just the revenue generating sports. The University of
Utah president and the athletics director should discuss how to appropriately incentivize all sports in
the athletic directors contract.
Chapter IV
Stronger Controls Over Inventory
and Building Access Are Needed
Accounting for Some Costly Inventory is Inadequate. Athletics has failed to inventory and tag
many assets in buildings where Athletics operates, exposing those assets to the risk of theft.
Untagged assets include computers and laptops, video production equipment, and large screen
televisions. Athletics has also not conducted a University-required audit in several years for assets
between $1,000 and $4,999.99. Assets purchased in this price range over the past five years have an
estimated value of nearly $2 million. As several cases of theft have been reported by the Department,
we are concerned that inventory oversight is insufficient, and the Department may not realize if any
untagged items go missing. Athletics should conduct an audit of all departmental non-capital assets
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A Performance Audit of the University of Utah Athletics Department (November 2016)
to properly tag and account for existing inventory levels. Going forward, this audit would assist in
detecting theft and help in the inventory tracking process.
Stronger Controls Over Building Keys Are Necessary to Control Risk. Adding to the risks
associated with unaccounted inventory, the Department also has unsecure access to some Athletics
spaces, greatly increasing the risk of theft. Athletics inadequate tracking of employee access to sports
and other facilities, for example, has resulted in the loss of 264 keys, including 15 master keys, over
the course of 18 years. The loss of master keys places equipment rooms, arenas, and other campus
spaces at a great risk for theft and vandalism. Such spaces have not been rekeyed for several years.
Because Athletics has not accounted for all non-capital assets in several years, oversight and controls
should be strengthened to reduce these risks.
Chapter V
Stronger Adherence to Human Resources
Policy is Needed to Ensure Employee Equity
Hiring Practices Require Stronger Compliance. Athletics needs to improve compliance with
some University Human Resources (HR) practices. First, we found cases where Athletics has used a
waiver process to avoid competitively recruiting some positions. This practice, when not used
appropriately, bypasses the competitive nature of hiring and can give the appearance of preferential
treatment. Second, Athletics can improve its record keeping through better coordination with HR.
We found that Athletics has hired employees into job codes that do not fit their intended job
description and have hired some employees into contract positions without sufficient HR
involvement.
Timekeeping Policies Require Stronger Compliance. Athletics has not been tracking hourly
employees compensatory (comp) time hours or recording them in the Universitys time and
attendance system. Instead, Athletics has allowed hourly employees to track their own comp time on
off-book spreadsheets that are not approved or entered into the University time and attendance
system. Consequently, these employees have been incorrectly compensated for comp time, which
could become a financial liability to the University if not corrected. We recommend that all
employees and supervisors be trained on proper timekeeping practices, including the accrual and use
of comp time, as well as on University HR timekeeping policies and procedures.
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REPORT TO THE
UTAH LEGISLATURE
Report No. 2016-10

November 2016
Audit Performed By:

Audit Manager
Kade Minchey
Audit Supervisor
Jesse Martinson
Audit Staff
Jake Dinsdale
Matthias Boone
Nicole Luscher
Table of Contents
Digest............................................................................................................................... i
Chapter 1
Introduction ................................................................................................................... 1
Athletics Is a Department Within the University of Utah
That Houses Several Competitive Sports .................................................................. 1
Athletics Revenues and Expenses Have Increased Significantly ................................. 3
Audit Scope and Objectives ..................................................................................... 6
Chapter II
Athletics Department Should Strengthen Its Budget Practices .................................... 7
For Greater Control, Athletics Should Report The
Total Cost of Operations to Policymakers................................................................. 7
Continued Emphasis on Budget Management Is
Crucial as College Sports Spending Escalates .......................................................... 12
A Strategic Plan Can Improve Financial Management and Control ......................... 17
Partial Payment Received for Cancelled Mens Basketball Game ............................. 19
Recommendations ................................................................................................. 19
Chapter III
Improvements Needed For Measuring And Rewarding Coaches ............................... 21
Financial Incentives Should Be Tied to Performance .............................................. 21
Athletics Directors Contract Has No Incentives for Smaller Sports ........................ 28
Chapter IV
Stronger Controls Over Inventory and Building Access Are Needed ........................ 31
Accounting for Some Costly Inventory Is Inadequate ............................................. 31
Stronger Controls Over Building Keys Are Necessary to Control Risk ................... 35
Chapter V
Policy is Needed to Ensure Employee Equity ............................................................. 39
Hiring Practices Require Stronger Compliance ...................................................... 39
Timekeeping Policies Require Stronger Compliance .............................................. 42
Appendix A ................................................................................................................... 47
Agency Response .......................................................................................................... 53
Chapter 1
Introduction
The University of Utah Athletics Department (Athletics, or the
Department) supports 18 teams and has competed in the Pac-12
Conference since 2011 (fiscal year 2012). Some of the team sports are
nationally ranked and have competed for conference championships.
Athletics employs about 160 administrative and coaching positions
and supports over 400 student athletes. In fiscal year 2015 Athletics
generated about $63.9 million in revenue, the majority of which
($42.3 million) came from the football program. This report provides
recommendations to help Athletics continue on a path of financial
stability and control, better tie performance goals to compensation,
better tie performance goals to compensation, improve building
security, and emphasize the need for improved inventory and human
resource compliance.
Athletics generated
$63.9 million in
revenue in FY 2015.
Athletics Is a Department Within the University of

Utah That Houses Several Competitive Sports
Athletics is a revenue-generating subunit within the University of
Utah (University). The Department receives revenue from various
sources such as ticket sales, merchandise, network revenue, and the
University itself. The director of Athletics reports directly to the
president of the University and is responsible for the overall health of
the program. Athletics oversees mens and womens sports, all of
which participate in the Pac-12 Conference. The University joined the
Pac-12 in 2011.
Athletics Oversees 18 Teams
According to a University official, National Collegiate Athletic
Association (NCAA) rules require university athletics departments to
have a minimum of 16 sports programs (mens and womens
combined); Utah Athletics has 18. Athletics employs approximately
160 employees, including coaching and administrative staff. There are
over 400 student athletes that participate in University sports. Figure
1.1 lists the sports in which the University participates and shows each
teams 2015 rostered student-athlete count.
Athletics employs
approximately 160
employees and has
over 400 student
athletes participating
in sports.
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Figure 1.1 Athletics Oversees 18 Mens and Womens Sports.

The Department supports over 400 student athletes.
Sport
Football
W. Basketball
M. Basketball
Gymnastics
W. Volleyball
W. Soccer
M. Skiing
W. Skiing
M. Tennis
W. Tennis
M. Golf
W. Swimming*
M. Swimming*
W. Track
Baseball
Softball
Number of Athletes on Roster in 2015

132
13
16
13
17
26
12
11
11
8
11
29
33
39
33
17
Source: University of Utah Athletics Department

*Swimming teams also include Mens and Womens Diving
Football has the largest number of student athletes, accounting for

almost a third of the total. The level of athletic performance within the
conference has varied from team to team as the difficulty of
competition has increased since the university joined the Pac-12 in
2011. In Chapter III, we discuss how Athletics measures the
performance of the teams and how to improve that process.
The University of Utah Has Been A
Member of the Pac-12 Since 2011
The University of Utah

accepted an invitation
to be the 12th member
of the Pac-12 in June
2010.
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On June 7, 2010, the University of Utah accepted an invitation to

become the 12th member of what was known as the Pac-10
Conference. The Conference has won more than 390 NCAA titles,
which is more than any other conference in the country. The Pac-12 is
composed of 10 public universities and 2 private universities
(University of Southern California and Stanford University). Since
joining the Pac-12 the University of Utah has seen an increase in
revenues; this will be discussed in the following section.
A Performance Audit of the Univeristy of Utah Athletics Department (November 2016)
Athletics Revenues and Expenses

Have Increased Significantly
Athletics has received large revenue increases since joining the Pac12. As a result, Athletics is better able to compete with other Pac-12
schools by spending more in the hopes of attracting better recruits.
The largest revenue generators are football and mens basketball which
account for 80 percent of revenues generated for Athletics. Two
categories, football and non-sport-specific expenses, account for more
than 60 percent of all expenses for Athletics.
Football Generates the Majority
Of the Departments Revenue
Athletics generated revenues of almost $64 million in fiscal year
2015. Figure 1.2 shows a breakdown for fiscal year 2015 in which the
majority of Department revenue came from football and mens
basketball.
Figure 1.2 Athletics Department 2015 Revenue Breakdown. The
Department generated $63.9 million in revenue in fiscal year 2015.
Other Sports
$1,884,746
Gymnastics
$615,266
Women's
Basketball
$303,680
Football generated
over $42 million of the
$63.9 million total
revenue generated in
Athletics in 2015.
Non-SportSpecific Revenue
$10,353,200
Men's
Basketball
$8,436,490
Football
$42,270,326
Source: NCAA Agreed-Upon Procedures financial data.
According to Figure 1.2, football generated approximately 67 percent

of Department revenue, followed by mens basketball, which
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generated approximately 13 percent, or more than $8 million.

Therefore, the two sports generate almost 80 percent of all Athletics
revenue.
In fiscal year 2011, the fiscal year prior to joining the Pac-12,
Athletics generated approximately $38 million in revenue. Since that
time, revenue has grown by nearly 70 percent, as shown in Figure 1.3.
Figure 1.3 Athletics Department 6-Year Revenue Breakdown.
The Department has generated a total of $277.1 million in revenue
over the past six fiscal years (2010-2015).
$70,000,000
$63,863,708
$56,407,309
$60,000,000
Athletics revenue grew

from $38 million to $64
million from fiscal year
2011 through 2015.
$46,855,280
$50,000,000
$40,756,665
$38,128,014
$40,000,000
$30,998,558
$30,000,000
$20,000,000
$10,000,000
$FY 2010
FY 2011
FY 2012
FY 2013
FY 2014
FY 2015
Figure 1.3 shows the significant increase in revenue since joining the
Pac-12 in fiscal year 2012. From fiscal year 2011 to 2015, total
revenue increased by $25.7 million, which is a 67 percent increase.
Some of these increases can be attributed to increased ticket revenue
and a new television contract with the Pac-12. However, the television
revenue did not occur until 2013 when Athletics received only 50
percent of television revenue shares. That share increased to 75 percent
in 2014, and then 100 percent in 2015.
Expenses Have Increased Significantly
Since Joining the Pac-12
Since fiscal year 2011, the Department has also increased spending.
Expenses have grown dramatically as revenues increased and in an
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effort to compete with other Pac-12 schools. Figure 1.4 shows the
expense breakdown for fiscal year 2015.
Figure 1.4 Athletics Department 2015 Expense Breakdown. The
Department spent a total of $58.7 million in fiscal year 2015.
Other Sports
$11,287,434
Gymnastics
$2,334,516
Non-Sport-Specific
Expenses
$17,349,750
Football and mens

basketball account for
approximately 43% of
Athletics expenses.
Women's
Basketball
$2,750,929
Men's
Basketball
$6,193,761
Football
$18,817,619
Figure 1.4 shows that football spent the most, accounting for about
32 percent of all expenses. Non-sport-specific expenses, the secondhighest amount, accounted for approximately 30 percent. Expenses
have increased a great deal since fiscal year 2010 as Figure 1.5 shows.
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Figure 1.5 Athletics Department 6-Year Expense Breakdown by

Sport. The Athletics Department has expended a total of $270.2
million over the past six fiscal years (2010-2015).
$70,000,000
$58,734,009
$60,000,000
$49,004,641 $50,124,090
$50,000,000
$44,179,791
$36,399,539
$40,000,000
$31,788,556
$30,000,000
$20,000,000
$10,000,000
Expenses have
increased by $22.3
million, a 61%
increase, since 2011
$FY 2010
FY 2011
FY 2012
FY 2013
FY 2014
FY 2015
Figure 1.5 shows the significant increase in expenses since joining the
Pac-12 in fiscal year 2012. From fiscal year 2011 to 2015, total
expenses increased by $22.3 million, which is a 61 percent increase.
Most of the increases fall into to two categories: football and nonsport-specific expenses. In 2010, football spent about $10.1 million
and non-sport-specific expenses accounted for about $9.6 million.
Spending in these categories rose to $18.8 million and $17.3 million
respectively, in fiscal year 2015, bringing the total combined increase
between those two categories to $16.4 million.
Audit Scope and Objectives

We were asked to look at how efficiently and effectively the
Athletics Department is operating. We reviewed the following:
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Chapter II: The budget practices and management of the

Athletics Department
Chapter III: The academic and on-field performance of sports
teams and the salary increases of coaching staff
Chapter IV: Inventory control and building access
Chapter V: Human Resource policies and timekeeping
compliance
Chapter II
Athletics Department Should
Strengthen Its Budget Practices
Although the University of Utah Athletic Departments finances
compare favorably with those of its peers, there are areas in which the
Department can improve. First, the total cost of operations, including
indirect support, should be reported to University of Utah (U of U, or
the University) policymakers and stakeholders to assist the institution
in exercising control over the financial activity of the Athletics
program. Indirect institutional support, estimated at $1.2 million for
fiscal year 2015, has not been calculated or reported for several years.
Second, because of the pressure in collegiate athletics to increase
spending, the Department must continue to guard against financial
pitfalls. Upon entering the Pac-12 Conference, the Department made
the strategic decision to overspend but has since balanced its budget
and built an approximately $6.4 million reserve fund. As a result of
overspending, the Department accrued a $7.6 million deficit with the
University but has paid down $2.9 million of that obligation. The
balance of the deficit was $4.7 million at the end of fiscal year 2016.
We believe that reporting additional financial information and
developing a strategic plan will help the Department maintain proper
budgetary control.
Because of spending
pressure in collegiate
sports, athletics must
continue to guard
against financial
pitfalls.
Finally, we found that the mens basketball head coach, who

agreed to personally pay an $80,000 cancellation fee, has not yet paid
the full amount. Instead the University paid the cancellation fee and
the coach is expected to repay the University in four installments.
For Greater Control, Athletics Should Report

The Total Cost of Operations to Policymakers
Athletics has not been reporting indirect financial support, which
we estimate to have been $1.2 million in fiscal year 2015. This
number should be calculated and reported so university policymakers
and other stakeholders can understand the total cost of Athletics
operations. NCAA guidelines require that indirect financial support be
tracked and reported in annual financial reports. A more accurate
To help policymakers
and stakeholders
understand the cost of
operations, indirect
costs should be
reported.
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picture of Department expenses will allow for greater long-term

monitoring and control of those funds.
Athletics Should Disclose All University
Support to Provide an Accurate Financial Picture
Financial reports have

not included indirect
financial support from
the University.
NCAA financial reports prepared by the Department for

University leadership have not reflected indirect University financial
support for Athletics.1 With this amount excluded from financial
reports, the board of trustees and the president (for whom the reports
are prepared), as well as any other interested stakeholders are unable
to see the total cost of Department operations. We are not expressing
an opinion on whether the amount of support the University provides
to Athletics is appropriate or not; we are simply recommending that
total costs should be clearly and accurately reported.
Indirect costs have been excluded from Department financial
reports due to evolving interpretations of agreements with the
University and difficulties in calculating exact amounts for services
provided. However, regardless of such difficulties, NCAA guidelines
direct the Department to work with the University to calculate a
reasonable allocation of indirect financial support. The Department
has neglected to report any indirect financial support for several years
now, despite benefitting from qualifying items.
NCAA guidelines
require indirect
support to be reported.
The NCAA financial reports are designed to detail both direct 2 and
indirect university financial support. In its fiscal year 2015 report, the
Department reported $4.3 million in direct financial support and $5.9
million in student fees. Figure 2.1 shows additional detail for these
amounts.
Called Indirect Institutional Support in the NCAA manual, this is defined by the
NCAA as a benefit provided to Athletics for which the Department does not pay.
2
Called Direct Institutional Support in the NCAA manual, this is funding
provided by a university directly to its athletics department for the operations of
intercollegiate athletics.
-8-
Figure 2.1 Utah Athletics Department Reported $10.2 Million in

Direct University Financial Support in FY 2015. Total reported
University support was divided between institutional support ($4.3
million) and student fees ($5.9 million). Our indirect support
estimate is shown in Figure 2.2.
Direct University Support in FY 2015
Tuition Waivers
Unrestricted Athletic Support
Rice-Eccles Stadium Rent Support
Athletics TA Waivers
Title IX Salary Support
Ski Team Support
Total Direct Institutional Support
Amount
$
2,516,967
811,988
795,000
81,624
60,000
30,500
4,296,079
Student Fees
5,926,012
Total Reported University Support
10,222,091
Athletics reported
$10.2 million in
University financial
support in FY 2015.
Source: University of Utah financial records and Athletics 2015 Agreed-Upon Procedures report
The $10.2 million of University support in Figure 2.1 was reported by

the Department, but it excluded an amount for indirect support. We
therefore used NCAA guidelines to estimate the amount of indirect
support that should have been reported in fiscal year 2015. University
contracts and financial records show approximately $1.2 million of
indirect support that was not reported. Figure 2.2 subdivides and
summarizes our estimate for indirect financial support in fiscal year
2015.
Figure 2.2 Utah Athletics Department Received Approximately
$1.2 Million in Unreported Indirect University Support in FY
2015. This amount was not reported as required by the NCAA.
Indirect University Support in FY 2015
Athletics Employee Benefits Paid by University
Amount
$
397,637*
Office Space and Utilities at Huntsman Center
359,320
Facilities Services at Huntsman Center
199,126
Huntsman Center Rental Contract Discount
196,333
Total Unreported Indirect University Support
$1.2 million of indirect

support to the
Department was not
reported in FY 2015.
1,152,416
Source: OLAG generated with data provided by multiple University of Utah departments. Appendix A goes into
further detail on the specific definition and explanation of the Indirect University Support amounts.
*The Department paid directly for all other employee benefits, totaling $4.7 million in fiscal year 2015.
The items in Figure 2.2 include funds paid by the University for
Athletics employee benefits, as well as three items pertaining to the
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interaction between Athletics and U of U Auxiliary Services.3 Based on

NCAA guidelines, we believe these items should be reported as
indirect benefits to Athletics in the Departments annual NCAA
financial reports.
An alternative approach to an indirect cost estimate is a simple
proportional allocation of university general and administrative costs
as is done for other NCAA athletics departments. Depending on how
that amount complements or overlaps the $1.2 million shown in
Figure 2.2, it could make sense to add both amounts or to select some
hybrid that captures but does not double count the total cost in order
to determine an appropriate amount of athletics-related indirect costs.
An accurate amount of
indirect costs should
be calculated and
reported in
collaboration with the
University.
Regardless of the method selected, athletic stakeholders at the

University should collaborate to calculate an accurate amount of
indirect institutional support and disclose it in the Departments
NCAA agreed-upon procedures report. As mentioned earlier, accurate
reporting of total financial support will more fully inform future
finanical decisions.
By comparison, four of the other nine Pac-12 schools for which
data is available4 report some level of indirect university support.
However, this is so because most other Pac-12 athletics departments
pay for their own overhead costs and would therefore have no indirect
support to claim. For example, utility and maintenance costs for the
Departments offices in the Huntsman Center are currently covered by
U of U Auxiliary Services. Other Pac-12 athletics departments pay
directly for these costs.
Pac-12 and other instate athletics

departments pay for or
report indirect support.
Within the state of Utah, Utah State University, Utah Valley

University, Weber State University, and Southern Utah University
(SUU) all report indirect university financial support in their NCAA
financial reports. However, the State Auditors Office only began
requiring SUU to report the amount as of fiscal year 2015 despite
SUU having calculated its indirect support for multiple years prior to
that point. By not reporting its indirect financial support, the U of U
athletic department is not in line with the majority of institutions
Appendix A gives a more detailed explanation of these items.

Data for Pac-12 athletic departments is limited to the 10 public universities
(including Utah) in the Conference. Financial data for Stanford and USC were
unavailable.
4
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which account for both direct and indirect university support, both in
the state and in the Pac-12.
Athletics Also Generates Benefits for the University. Although
we did not perform an impact analysis, Athletics provides benefits to
the University in both tangible and intangible ways. Oregon State
University is currently working with its athletics department in an
attempt to articulate such benefits. Although this is not an amount to
be reported in any formal way, a similar effort at the U of U could be
illuminating for policymakers. Athletics should collaborate with the
University to ensure a fair and accurate amount is calculated.
Reporting Indirect Institutional Support
Will Accurately Reflect Total Subsidy
As mentioned earlier in this chapter, the Department reported $4.3
million in direct institutional support or 7 percent of its $63.9 million
operating revenues. If our estimate of $1.2 million for unreported
indirect institutional support is added to that amount, it would
increase institutional support to $5.4 million, or 9 percent of
operating revenues. The overall university subsidy, including student
fees, would increase from $10.2 million to $11.4 million, or from 16
percent to 18 percent. Figure 2.3 compares these rates to those of the
U of Us Pac-12 peers and other athletic departments in the state of
Utah.
Reporting indirect
support will more
accurately reflect the
total subsidy rate.
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Figure 2.3 Utahs FY 2015 Rate of University Subsidy is Fifth

Highest in Pac-12 Without Student Fees and Third Highest
With Fees. In contrast, even with the additional indirect subsidy
amount, the University of Utahs rate of institutional support is well
below that of other Utah universities.
Institution
With student fees,

Utahs subsidy rate is
the third highest in
Pac-12 but the lowest
compared to other
Utah institutions.
% University Subsidy
(without student fees)
% University Subsidy
(including student fees)
Pac-12 Universities*
Arizona State
Colorado
Utah
Washington State
Arizona
Oregon State
Washington
UCLA
California Berkeley
Oregon
11.2%
15.7%
8.5%
9.2%
10.3%
6.2%
3.8%
0.1%
0.0%
0.0%
23.0%
18.0%
17.8%
11.3%
10.3%
10.0%
3.8%
2.8%
1.5%
1.5%
Other Utah Universities

Southern Utah
Utah State
Utah Valley
Weber State
62.2%
49.0%
48.7%
48.9%
73.7%
62.8%
86.7%
66.4%
Source: NCAA Agreed-Upon Procedures data.

University subsidy in this usage includes direct institutional support (which captures tuition waivers) plus
indirect institutional support less any transfers to the institution. The number excludes or includes student fees
in the figure as indicated above.
*Data for Pac-12 athletics departments is limited to the 10 public universities in the Conference. Financial data
for Stanford and USC were unavailable.
Figure 2.3 shows that after adding our estimate for indirect
institutional support, Utahs rate of total university subsidy ranks fifth
highest among Pac-12 peers if student fees are excluded and third
highest if fees are included. In contrast, compared to other institutions
in Utah, the U of U receives far less university support as a percentage
of total athletics revenue.
Continued Emphasis on Budget

Management Is Crucial as College
Sports Spending Escalates
Utah must maintain
proper control in the
face of pressure to
increase spending.
- 12 -
As the cost of intercollegiate athletics has grown, some of the U of

Us peer Pac-12 athletics departments have overspent their budgets.
The Department has largely spent within its means, but pressure to
increase spending in order to compete and recruit is substantial.
Therefore, the Department must maintain proper budgetary balance

and control going forward. To aid the University in continued
financial control over Athletics, the Department should report key
financial data, including athletics fund and reserve account balances, in
its annual NCAA financial report and on its website.
The U of U Has a Deficit but is in a Better
Position than Some Pac-12 Peers
In recent years, some of the U of Us peer Pac-12 athletics
departments have found themselves in difficult financial positions.
Upon entering the Pac-12 Conference, the Department made the
strategic decision to overspend but has since balanced its budget and
built an approximately $6.4 million reserve fund. As a result of
overspending, the Department accrued a $7.6 million deficit with the
University but has paid down $2.9 million of that obligation. The
balance of the deficit was $4.7 million at the end of fiscal year 2016.
Information about accumulated deficits and reserve funds is very
meaningful in understanding the true financial position of an athletics
department. Despite this, such information is not often reported
publicly by college athletics departments.
Utah ended FY 2016

with a $4.7 million
deficit and $6.4 million
in reserves.
If a department runs an annual operating deficit, its university

must make up that deficit with university funds either by transferring
money to the athletics department or by holding its athletic fund at a
negative balance (i.e., showing that the athletics department owes
money to the university). Running multiple operating deficits from
year to year can cause the negative balance of the athletics fund to
accumulate, creating an obligation that must eventually be satisfied by
either the university or the athletics department. Because of this, it is
imperative that budget management and communication with the
university be robust and transparent to avoid unexpected future
financial obligations.
As a general trend, there has been significant pressure to spend
increasing amounts on budget items like coaching salaries, athletics
facilities, scholarships, food, and student athletes cost of attendance.
This pressure has led some universities to significantly overspend
budgets in recent years. Figure 2.4 shows Pac-12 athletics
departments accumulated athletic fund deficits and reserve funds as of
the end of fiscal year 2016. The deficit and reserve numbers were
reported directly to us from each athletic department. Some amounts
are approximations.
There has been

significant pressure to
spend increasing
amounts on certain
budget items.
- 13 -
Figure 2.4 Some Pac-12 Athletics Departments Carry Large

Deficits in Their Athletic Funds. Deficit amounts must eventually
be satisfied either by the university or the athletics department.
Amounts are reported here as of the end of fiscal year 2016.
Dept. Reserves
Pac-12 Universities*
Washington State
Utah Athletics
compares well to other
Pac-12 departments
with large athletic fund
deficits.
Athletics Fund Deficit
(Amounts in Millions)
0
$ (50)
Oregon State
(30)
California Berkeley
(25)
Colorado
3.5
(20)
Utah
6.4
(4.7)
Arizona State
UCLA
N/A**
Oregon
Arizona
Washington
9
$ 24.5
0
$
Source: Direct report from each athletics departments chief financial officer.
* Data for Pac-12 athletics departments is limited to the 10 public universities in the conference. Financial data
for Stanford and USC were unavailable.
**Oregons reserves are held in a foundation, the balances of which are not subject to public disclosure.
Figure 2.4 reveals an alarming perspective about the true financial

positions of certain athletics departments. For example, the University
of Colorado Boulder passed through difficult financial years that
involved a significant penalty for leaving its prior athletic conference,
large severance payments, and facility expenditures. Payment of these
expenses required the use of all department reserves and an
approximately $20 million loan from the university which the
department is expected to pay back over time. Since those difficult
years, the department has built up an approximately $3.5 million
financial reserve but has yet to address the deficit.
Information about
deficits and reserves
shows athletics
financial position.
Some athletics departments face very large, long-term bond

payments that have severely impacted their budgets and will be a
significant burden for years to come. Others have faced large operating
deficits in recent fiscal years, which were paid for with university
funds, thus creating the significant athletics fund deficits shown in the
figure. It is now up to each respective universitys administration to
determine how and when their athletics departments will repay that
amount.
As mentioned previously, the U of U Athletics Department passed
through two budget deficit years in fiscal years 2012 and 2013 as it
- 14 -
entered the Pac-12, resulting in an athletics fund deficit of $4.68

million as of the year ending June 30, 2016. This amount is currently
being paid off each year. The deficits in those years reflect a strategic
decision to invest in Athletics operations while the Department
awaited a full share of Pac-12 Conference revenue. Figure 2.5 shows a
brief history of the U of Us athletics fund balance.
Figure 2.5 Utah Athletics Fund Balance at 2016 Fiscal Year
End. Athletics has paid back $2.9 million since the deficits peak in
2013. The Department entered the Pac-12 in FY 2012.
Fiscal Year
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
Year-End Athletic Fund Balance

$
2,948,272
1,985,915
1,691,946
1,407,511
2,200,532
1,340,083
2,734,403
(2,962,838)
(7,585,278)
(6,399,121)
(4,976,969)
$
(4,678,030)
Utahs deficit grew to

$7.6 million, but has
been reduced to $4.6
million.
Source: University of Utah financial records

The red line denotes the entrance of the Department into the Pac-12 Conference.
With operating surpluses in fiscal years 2014-2016, the Department

could have entirely eliminated the negative fund balance but, in
cooperation with University administration, it has instead decided to
set money aside in strategic reserve accounts to protect against future
expense volatility. Current reserve amounts total approximately $6.4
million, which is among the highest in the Pac-12.
In cooperation with the

University, Athletics
built reserves instead
of repaying the deficit
more quickly.
Utah Athletics Expenses Are

Lower than Those of Its Peers
As compared to its Pac-12 peers, the U of Us total athletics
expenses (both before and since entering the Conference) have
consistently been the lowest. The Departments low expenses can be
partially attributed to having one of the Conferences lowest revenue
streams. Figure 2.6 compares total expenses for the 10 public Pac-12
athletic departments from fiscal years 2005-2015.
Utah has lower

revenues and
expenses than most
Pac-12 peers.
- 15 -
Figure 2.6 Total Expenses for the 10 Public Pac-12 Athletics

Programs from Fiscal Years 2005-2015. The U of U spent less
than all other institutions both before and since joining the
Conference in fiscal year 2012.
$115 M
$105 M
$95 M
$85 M
$75 M
Even after adjustment,

the U of U spends less
than its conference
peers.
$65 M
$55 M
$45 M
$35 M
$25 M
$15 M
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Source: NCAA financial data via USA Today; Financial data for Stanford and USC were unavailable.
Remaining both
competitive and
fiscally responsible
should continue to be
primary focus.
Even if we include an adjustment for indirect institutional support as

discussed earlier in this chapter, Utah would still rank last in total
expenses during these years. Coaches and administrators frequently
told us that, to remain competitive, college sports departments are
under significant pressure to spend more money. Therefore, questions
of how best to maintain proper budgetary balance going forward
while remaining competitive should remain at the forefront of Utahs
budget management efforts. The Department has thus far been able to
field several successful sporting teams while maintaining the lowest
budget in the Pac-12.
To Bolster Control, the Department Should
Report More Financial Information
Utah should expand its

reporting to include
deficit and reserve
fund balances.
- 16 -
To show a more complete picture and facilitate public review of its

finances, the Department should expand its annual financial reports, as
allowed by NCAA guidelines, to include information about both its
athletics fund and reserve fund balances. We believe that this will
better fulfill the primary purpose of these reports, which is to assist the
University in exercising control over the financial activity of Athletics.
In addition, the Department should create a repository of current

and historical financial information on the Athletics website. Other
Pac-12 athletic departments have already made key financial
information readily available on their websites.
The University of Oregon athletics department has a finance
webpage with a long list of reports and financial information. Items
listed on Oregons website include its NCAA financial reports, internal
reviews and analysis, annual budget summaries, athletics board
reports, on-campus memoranda of understanding, and historical
comparative analysis. The University of California, Berkeleys athletics
website lists audited statements of revenues and expenses from 20022015, recently including its athletics fund balance, and a number of
details pertaining to facilities financing. Washington State Universitys
athletics department lists NCAA financial reports from 2013-2015.
In comparison, the U of U Athletics Department only lists fiscal
year 2016 budget information on its website. Its historical NCAA
financial reports going back to fiscal year 2012 are also publicly
available; however, those are only available through the State
Auditors website.
Given the budgetary pressures in college athletics, we believe a
higher level of budgetary transparency can help stakeholders review
and control the Departments financial activity. Also, with the high
level of emphasis placed on transparency in government financial
reporting in the state of Utah, we feel that the Department would do
well to report a more complete picture of its financial position.
Current and historical

financial information
should be on Athletics
website.
A Strategic Plan Can Improve

Financial Management and Control
To better analyze and control its finances, the Department can
benefit from formalized projections of large capital expenditure needs
and more robust analysis of primary cost drivers, like team travel and
equipment. A departmental strategic plan will help provide a platform
to accomplish these and other goals.
In light of the large increases in revenues and expenses in recent
years, the Department has already formulated the foundation of a
strategic plan that has yet to be fully developed. That effort was put on
hold until the conclusion of this audit. The intent of that plan, as
- 17 -
The Department has

already formulated the
foundation of a
strategic plan.
stated by Department administration, is to more fully align Athletics

with the core missions of the University and to improve academic,
athletic, and financial performance. We feel that this strategic plan
should also be used as a control framework to prevent future
overspending that could put the University at financial risk.
The Department has already made efforts to analyze large cost
drivers to help reduce costs and increase control. However, we see
additional areas that could potentially benefit from more robust
analysis and controls. For example, travel and equipment costs have
often run over budget since the U of U entered the Pac-12, and costs
in these areas could likely be better understood and controlled. Figure
2.7 shows how these two categories have performed relative to their
budgets from 2012-2016.
Figure 2.7 Travel and Equipment Illustrate Areas of Potential
Budget Improvement. Better analysis and coordination could
reduce these variances going forward.
2012
2013
2014
2015
2016
Team Travel
$ (841,500)
51,600
7,990
(657,300)
$ (1,039,400)
Equipment
$ (716,000)
(386,600)
563,200
(700)
$ (426,700)
Source: University of Utah Athletics Department financial records
Additional analysis
could reduce budget
variability.
Figure 2.7 shows an opportunity for more accurate budgeting in two

large budget sub-categories. Despite the variances shown, it is
important to note that Athletics balanced its overall department
budget from 2014-2016.
Additionally, a formalized plan for the maintenance and renovation
of athletics facilities could serve to keep the University aware of both
its current obligations and long-term needs before additional projects
are undertaken. For example, a future project that would warrant a
feasibility study is the south end zone renovation project at RiceEccles Stadium. As mentioned previously in this chapter, facilitiesrelated expenses have taken a large toll on many athletics departments.
Expensive facility
needs should be
formally projected and
tracked with input from
Athletics stakeholders.
- 18 -
A strategic plan, in this context, should be tailored to protect the

future financial viability of Athletics and, by extension, the University.
It should also be crafted to maximize its value and utility for U of Us
unique department. The University of Colorado Boulder recently
created a strategic plan that, according to Colorado athletics CFO, has
been very helpful in orienting the entire department toward common
goals. Colorados plan contains broad strategic objectives and more

specific metrics and targets designed to guide ongoing activity toward
the accomplishment of larger objectives.
Partial Payment Received for

Cancelled Mens Basketball Game
The mens basketball team cancelled a game with Brigham Young
University (BYU) initially scheduled for early December 2016 at a
cancellation cost of $80,000. The University reported that the mens
head basketball coach was going to repay the cancellation fee out of
his own personal funds. However, the University paid BYU the
$80,000 cancellation fee.
University officials reported that the mens basketball coach will
repay the University the cancellation fee in four installments over four
years. The coach has paid the first installment of $20,000. Those funds
have been paid from the coaches foundation (the Krystko
Foundation). However, since the funds were paid from a foundation
account we could not independently determine if the coach used
personal funds or foundation monies from other sources to make the
payment. According to University officials, the coach has assured the
University that the funds came personally from him without
contributions from donors.
The mens basketball

coach agreed to pay,
with personal funds,
the cancellation cost of
the BYU basketball
game. This has not yet
been fully
accomplished.
Recommendations
1. We recommend the University of Utah Athletics Department
work with senior administration at the University to calculate
and report an accurate amount of indirect institutional support
and disclose it in the Departments NCAA agreed-upon
procedures reports.
expand its NCAA agreed-upon procedures reports, as allowed
by NCAA guidelines, to include information about both its
athletics fund and reserve fund balances.
3. We recommend the University of Utah Athletic Department
include current and historical financial information on its
- 19 -
website including NCAA reports, athletic fund balance, and

reserve funds.
4. We recommend the University of Utah Athletic Department
continue its effort to formulate and adopt a departmental
strategic plan with a clear focus on financial analysis and
control.
- 20 -
Chapter III
Improvements Needed For Measuring
And Rewarding Coaches
The University of Utah Athletics Department (Athletics or the
Department) has general performance objectives for all but one of
their team sports. These goals outline the competitive expectations the
Department has for each individual sport. Currently, the goals are not
collaboratively reached with coaches, in fact in most cases the goals are
never shared with the coaches.
Also, many coaches received significant salary increases, regardless
of whether goals were met. In other words, most sports did not meet
their goals, but all sports saw significant pay increases. Department
officials report that coach raises given in the past five years were
necessary due to the higher pay averages and coaching salaries in the
Pac-12 Conference. We understand this justification, but going
forward, the Department should collaborate with coaches to develop
performance metrics that are challenging, yet reasonable, and are used
as a basis for compensation increases. Another way the Department
could encourage greater success is by incentivizing the director of
athletics for achievement in all sports, including those that are less
visible and that generate revenue insufficient to cover their costs.
Going forward,
Athletics should
develop performance
metrics that can be
used as a basis for
compensation
increases.
Financial Incentives Should

Be Tied to Performance
Over the past five years, coaching staff in the majority of sports
received significant pay increases (salary and associated benefits),
despite most teams not fully meeting performance expectations. This
practice can diminish the effectiveness of Department-established
performance goals. Many of the sports teams, including the more
visible sports, have performed very well in the past five years.
However, hardly any of the sports reached the goals set by the
Department from 2011 through 2015. Going forward the
Department should review the reasonableness of its goals and then tie
a portion of compensation increases to the achievement of
performance goals.
Most teams did not

reach the performance
goals set by the
Department for all five
years.
- 21 -
On-field performance is not the only criteria used to determine

the success of a program; the academic progress of the student-athletes
can be additional criteria used to measure success. The Department is
one of the best academically in the Pac-12. This is a significant
achievement, and should also be tied to a financial incentive.
The Universitys Teams
Excel Academically
The U of U has one of

the highest APRs in
the Pac-12.
While we believe the Department can improve the administration

of its on-field performance goals, the department has performed well
in its academic mission. According to the NCAA, the Academic
Progress Rate (APR) holds institutions accountable for the
eligibility and retention of each student-athlete for each academic
term. The APR is a calculated rate that factors in points for staying in
school and being academically eligible, which is averaged over a fouryear period. If a team does not earn a yearly average of 930 (out of a
possible 1000), it is ineligible to participate in the NCAA
championships. The Department has exceeded these requirements
since joining the Pac-12.
The U of U has one of the highest APRs in the Pac-12. All sports
have averaged well above the minimum 930 APR required by the
NCAA. Figure 3.1 shows the APR average from 2011 through 2015.
- 22 -
Figure 3.1 Utah Athletics APR Average from 2011 through

2015. The Department has one of the highest APRs in the Pac-12.
Sport
Football
W. Basketball
M. Basketball
Gymnastics
W. Volleyball
W. Soccer
M. Skiing*
W. Skiing*
M. Tennis
W. Tennis
M. Golf
W. Swimming**
M. Swimming**
W. Track
Baseball
Softball
Utah APR Average

2011- 2015
971
977
982
997
986
971
975
983
993
986
991
985
960
992
984
973
Pac-12 APR Average

2011- 2015
956
976
965
992
983
987
N/A
N/A
983
991
980
987
975
983
974
985
*No other Pac-12 Teams have ski teams

**The diving teams are included in mens and womens swim teams
As Figure 3.1 shows, all of the sports have had relatively high
APRs over the past five years. Coaches and administrative staff have
done a remarkable job maintaining high APRs for their respective
sports. While comparable on-field success is necessary, academic
success should also compare favorably. For example, even though
mens swimming, softball, and womens soccer have APRs well above
the required amount they are still below the Pac-12 average.
We recommend that teams should make APRs comparable to or
higher than other Pac-12 schools in order for increases in
compensation to be given.
Both academic and onfield performance

should be used when
financially rewarding
coaching staff.
- 23 -
Coaches Received Pay Increases

Despite Not Meeting Expectations
Performance goals are

not meaningful if they
are not used to
improve performance.
Since joining the Pac-12, most of the Departments teams have not
met full performance expectations. Despite this, almost all coaches
have received significant increases in salary and associated benefits.
The Department indicated that the increases were intended to bring
the coaches salaries somewhat in-line with those offered at middle of
the tier Pac-12 schools, and we understand that salaries in the Pac-12
are higher than what they were in the Mountain West Conference.
However, performance goals are not meaningful if they are not used
to incentivize performance. Figure 3.2 shows the increases in salaries
and benefits for coaches from 2011 through 2015.
Figure 3.2 Athletics Salary and Benefits for Coaching Staff.
Salaries have significantly increased during the five year period from
2011 through 2015.
Salary Increases were

given to be in line with
other Pac-12
institutions, but were
not connected to onfield achievement.
Sport*
Football
M. Basketball
Gymnastics
W. Volleyball
W. Soccer
W. Tennis
W. Track
Baseball
Softball
M/W. Skiing
% Salary/Benefit Increase from 2011- 2015

89%
84%
70%
67%
18%
39%
45%
112%
40%
73%

*Figure does not include mens tennis, swimming (diving included in swimming), and womens basketball due
to new coach hires from 2011-2015. Golf was not included because financial information was not available.
As Figure 3.2 shows, most coaches received significant pay increases

between 2011 and 2015. According to Athletics officials, pay raises
were given to be competitive with salaries paid by institutions in the
middle of the Pac-12, thus, pay raises were not connected to on-field
achievement but to market factors. We found that most teams did not
fully meet expectations as will be shown in Figure 3.3.
Understandably, partial completion of goals may warrant some
increase, but as stated previously, pay raises were not connected to
meeting performance goals. Going forward, increases should have
some tie to on-field performance.
- 24 -
Figure 3.3 Performance Expectations for Sports from 20112015. The Department has on-field goals which are determined without
input from coaches for each sport.
Sport*
Football
M. Basketball
Gymnastics
W. Volleyball
W. Soccer
W. Tennis
W. Track
Baseball
Softball
M/W. Skiing
Met Full Performance Expectations 2011- 2015

No
No
Yes
No
No
No
No
No
No
Yes

*Figure does not include mens tennis, swimming (diving included in swimming), and womens basketball due
to new coach hires from 2011-2015. Golf was not included because no performance expectations were given.
Examples of performance expectations include goals such as:

participating in NCAA post-conference play three out of every five
years, winning more than half of all games, or reaching a certain
placement in post-conference play. Figure 3.3 shows that most sports
did not meet full performance expectations.
Teams had varying degrees of goal completion; some teams
partially met their expectations, while others did not meet them at all.
For example, one teams expectation was to participate in the NCAA
tournament three out of five years and another post-season invitational
during other years. There was also a goal to obtain a certain placement
in post-season play. This team met the goal of reaching the postseason placement, but it did not reach the other goals. As mentioned
previously, the substantial increase in the salaries and benefits for the
coaching staff was linked to competitive factors resulting from joining
the Pac-12. We found another example in which a team had
consistently finished last in the Conference, yet the staff received raises
every year, including a substantial raise in 2015 after finishing last for
the fourth year in a row. In the future, salary and benefit increases
should have a tie to performance expectations.
In the future salary and

benefits should be
linked to meeting
performance
expectations.
It is up to the discretion of the Athletics administration to

determine performance measures, but the effectiveness of the measures
could be greatly strengthened if they were incentivized through
financial means. Again, we accept that raises in the past five years were
- 25 -
Refining the
expectations to align
with the level of
competition could
enhance the
reasonableness of
performance goals.
primarily given because of joining the Pac-12 and normalizing pay to

that conference; however, future pay raises should have a stronger tie
to performance. The level of competition has increased since the U. of
U. belonged to the Mountain West Conference, which would explain
why some of the teams struggle with being consistently competitive
and are unable to meet performance measures. We were unable to
determine if the expectations were updated from year-to-year because
it appeared they remained relatively unchanged since joining the Pac12. Therefore, the Department should refine these expectations to
make them more realistic and reflect the current level of competition.
However, the goals should also be challenging enough to foster
performance improvement.
Performance Expectations Should Be Reasonable
And Reviewed with Coaches
In addition to not adequately tying compensation to performance
goals, Department administrators have not included coaches when
making these goals. In fact, we found that coaches did not even know
what goals had been set for their teams. We reviewed the win-loss
records of the teams that did not fully meet expectations and found
that some have trended upwards over the past five years and the others
remained relatively the same or did not improve. Figure 3.4 shows
which teams improved and which teams did not.
- 26 -
Figure 3.4 Recent Athletics Performance Trends. Some teams

have shown recent improvements while others are still struggling to
compete within the Pac-12.
Sport
Football
M. Basketball
Gymnastics
W. Volleyball
W. Soccer
M. Tennis
W. Tennis
Golf
W. Track
Baseball
Softball
M/W. Skiing
M/W. Swimming
W. Basketball
Trends 2011 - 2015

Won 9 games and qualified for a bowl game in 2015,
which improved from only winning 5 games the prior
season.
Has increased win total every year since joining Pac-12,
made it to the Sweet 16 in 2015.
Has finished either 1st or 2nd place in Regionals and took
2nd place in the NCAAs in 2015.
Has increased win totals since joining the Pac-12.
Finished 3rd in Pac-12 in 2014 and qualified for NCAA
Tournament, finished 11th in 2015.
Finished 5th in 2014, best finish since joining the Pac-12.
Finished 7th in 2015.
Has finished 6th place or lower since joining the Pac-12.
Has finished 12th in the conference every year since 2012.
Cross Country Conference finish has decreased every
year since 2013.
Has finished in last place in the Pac 12 every year.
Has increased win total since 2013. Had best record and
made the NCAA tournament in 2015.
Has finished in top 5 in the NCAA every year since 2011.
Has had at least one All American since 2013.
Conference finish has decreased since 2013, when they
finished 6th. Finished 12th in the Pac-12 in 2015.
Source: University of Utah Athletics
It must be noted that the timeframe we looked at was from 20112015; however, after that period the baseball team captured the Pac12 championship, which is a considerable improvement over prior
years. Some teams have improved, such as mens basketball, womens
volleyball, and softball, but still did not meet total performance
expectations. Others, such as womens soccer and mens tennis, have
not shown a consistent upward trend; they improve one year and fall
back the next year. Finally, some teams have not shown any noticeable
improvement since joining the Pac-12, such as womens tennis,
womens track, and womens basketball.
Going forward, coaching staff should receive only minimal increases
until coaches and administration agree upon goals and acknowledge
expectations. By discussing on-field performance measures with
coaches, administrators can empower the teams to meet realistic, yet
challenging, goals.
- 27 -
Athletics Directors Contract Has No

Incentives for Smaller Sports
The U of U athletics
directors contract
does not incentivize
high performance in all
sports.
The Departments director can earn additional bonuses (one

month of salary for the achievement of each goal) for achieving
various performance goals. There are currently six goals, but there is
an annual cap of four bonus opportunities. Of the six goals, four are
based on the performance of the mens and womens basketball teams,
football, and gymnastics. These are the only high profile programs
that generate significant revenues and expenses. The remaining two
are based on the APR for each sports program and the Graduate
Success Rate for all student-athletes. Except for womens basketball
and gymnastics, the athletics director is not incentivized on sports that
generate revenue insufficient to cover their costs. Most athletics
directors in the Pac-12 have additional compensation linked to overall
performance, including these less visible sports. Incentivizing less
visible sports can potentially contribute to improved on-field
performance for all sporting programs, not just those with higher
profiles that generate significant revenues and expenses.
We found nine universities within the Pac-12 that offer incentives
to the athletics director based on success in all sports, not just the
significant revenue-generating ones. These nine schools are Arizona,
Arizona State, Cal-Berkeley, Colorado, Oregon, Oregon State, UCLA,
Washington, and Washington State. For example, one university pays
a bonus if the athletic success of the mens and womens teams result
in a ranking of the [sports] program in the top 20 of Division I
National Associate of Collegiate Directors of Athletics.
The University of Utah president and the Athletics director should
discuss how to appropriately incentivize all sports in the athletics
directors contract.
Recommendations
1. We recommend that the University of Utah Athletics
Department properly incentivize performance when goals have
been met.
Department review and determine if current strategic goals are
- 28 -
adequate and sufficiently measuring desired performance

outcomes.
Department include coaches in determining on-field
performance measures.
4. We recommend that the University of Utah president with the
Athletics Department director, consider changing
compensation measures to incentivize all non-revenue sports.
- 29 -
- 30 -
Chapter IV
Stronger Controls Over Inventory and
Building Access Are Needed
Department) has not adequately accounted for many costly assets, thus
placing the University in the position of not knowing the extent of
fraud and theft in the Department. Specifically, we found many assets
that have not been properly tagged or added to the inventory. The
Department has purchased $2 million in inventory over the last five
years but failed to conduct a biennial inventory audit as required by
University policy. As several cases of theft have been reported by the
Department, we are concerned that inventory oversight is insufficient,
and the Department may not realize if any untagged items go missing.
Additionally, Athletics has not properly accounted for hundreds of
keys, including masters, over a span of 18 yearsthe last time many
locks were rekeyed. Unsecure access, coupled with inventory that has
not been accounted for, places the Department at significant risk.
Athletics should establish stronger accountability and controls to avoid
future risk of theft. The Department should especially consider
replacing locks with electronic card readers in vulnerable spaces.
Because Athletics has

not accounted for
many costly assets,
the Department should
strengthen controls
over inventory greater
than $1,000.
Athletics records
show several keys
have been reported
missing over the span
of 18 years, causing
concerns about theft.
Accounting for Some Costly

Inventory Is Inadequate
The Department has failed to inventory and tag several assets in
buildings where Athletics operates, exposing those assets to the risk of
theft. Untagged assets include computers and laptops, video
production equipment, and large screen televisions. Because the
Department has had recent reports of fraud and theft, we are
concerned that untagged items could be stolen without anyones
knowledge. Athletics has also failed to conduct a University-required
inventory audit of non-capital assets (items valued between $1,000
and $4,999.99) for several years. Assets purchased in this price range
over the past five years have an estimated value of nearly $2 million.
Athletics should conduct an audit of all departmental non-capital assets
to properly tag and account for existing inventory. Going forward, this
audit would detect theft and help in the inventory tracking process.
- 31 -
Costly Assets Have Not Been

Inventoried by Athletics
Untagged equipment in
Athletics includes
laptops, video
processing equipment,
and large-screen
televisions.
Athletics has assets that have not been tagged or inventoried in

accordance with University policy. For example, items in computer
and video production rooms, laptop and desktop computers, and
televisions in multiple buildings are missing proper asset tags.
Interestingly, we observed that while servers in locked and isolated
spaces have individual inventory stickers, more portable and theftprone types of equipment such as cameras, computers, and laptops (as
demonstrated in Figure 4.1), do not have University asset tags.
Inventory shared among different sports has also gone untagged.
Figure 4.1 Observation of Athletics Equipment Shows
Examples of Some Items Not Tagged or Inventoried. We
question Athletics ability to know of missing assets if items have
not been appropriately tagged.
New equipment in
recently constructed
facilities has not been
added to Athletics
inventory list.
Source: OLAG photographs taken while observing equipment in various athletics facilities
A great number of the untagged items we observed were found in the

newly constructed Spence and Cleone Eccles Football Center
(completed in 2013) and in the Jon M. and Karen Huntsman
Basketball Facility (completed in 2015). Apple computers, laptops,
and large-screen televisions were among the items not tagged and
recorded on the inventory list. We reviewed the estimated cost of
some untagged items in these facilities and found that many of these
- 32 -
items were quite costly. For example, the combined estimated value of
large televisions in the basketball and football facilities alone was
$53,000 and $75,000, respectively. The cost of other untagged
inventory falling in the non-capital asset range could be significantly
higher. Although unsure why these items were never tagged, an
Athletics official suggested that the Department may not have
immediately accounted for these items because they were purchased in
bulk and individual asset tags were not assigned. Another suggested
explanation was that the problem lies in a weak tracking process for
non-capital assets at the time they are purchased. Athletics should
review past and future bulk purchases to ensure proper accounting is
made of all assets, especially those over $1,000.
Proper accounting and inventorying are important because, since
2011, Athletics has submitted 10 claims of theft and vandalism,
totaling $27,000, to the Universitys Risk and Insurance Management
Department. Though stolen items were not the result of a single
control weakness, such as lost departmental keys, we were told that
items were reported stolen after coaches or other Athletics staff
noticed the missing items. Additionally, in 2015 the University of
Utah Department of Internal Audit reported two instances of
potential fraud in Athletics where employees either took home
inventory or purchased it with departmental funds and had it shipped
to an off-campus location for personal use. These employees no longer
work for the department. Without proper controls even more
inventory may be lost without the Department knowing about it.
Athletics should reduce risks by strengthening control processes over
the tagging, inventorying, and tracking of non-capital assets. By better
accounting for its inventory, Athletics may find that other items were
stolen, and may be alerted to future cases of fraud.
Proper accounting and

inventorying are
important because
theft and fraud have
recently occurred and
need to be controlled.
Inventory Audits over Some Athletic Equipment

Have Not Been Conducted in Years
To account for the presence, location, and condition of University
property, University policy requires all assets with a value greater than
$5,000 (designated by the University as capital assets) to be annually
audited by each department. Departments are also required to
biennially audit all non-capital assets, as shown in Figure 4.2.
- 33 -
Figure 4.2 University Policy on Non-Capital Assets. Athletics

has not followed University policy, which requires auditing of assets
between $1,000 and $4,999, for several years.
Noncapital Equipment . . . has an acquisition value between
$1,000.00 and $4,999.99, is freestanding, and has a normal life
expectancy of one year or more. Noncapital equipment must have a
yellow property tag affixed when the item is put into service . . . [and]
an inventory of noncapital equipment should be conducted at least
biennially. Noncapital assets must be disposed of according to
University Procedures.
Source: University of Utah Policy
Although required in
University policy,
Athletics has not
performed inventory
audits on some costly
equipment.
Athletics has properly accounted for some inventory levels by

conducting audits of items valued over $5,000 (capital assets) over the
last several years; however, no audit of items in the $1,000 to
$4,999.99 (non-capital assets) have been performed. In fact, the
Department does not remember the last time these items were
reviewed or personally observed.
Based on University records, the Department has purchased about
$1.92 million in non-capital assets over the last five years. The
Universitys Property Accounting Office is concerned that loss may
occur when audits of non-capital assets are not performed.
According to Property Accounting, two other University entities,
Ophthalmology and the Huntsman Cancer Center, both of which
have a high inventory like Athletics, have done well at tracking noncapital assets. Property Accounting suggests Athletics consider an
electronic scanner system, used by other departments across campus,
to expedite the process for tracking and auditing University assets. As
an inventory audit is more of a reactionary control and does not
appropriately detect theft when it occurs, stronger proactive controls
are also needed to protect the Department.
Athletics should
strengthen both
proactive and reactive
controls to protect the
Department from
future loss.
- 34 -
Regardless of whether electronic scanners are implemented,

Athletics should strengthen reactionary controls by biennially
conducting non-capital asset audits, as required by University policy.
The Department should also strengthen proactive controls by ensuring
that all qualifying assets are properly tagged and added to Athletics
inventory in an effort to protect Department assets.
Stronger Controls over Building Keys Are

Necessary to Control Risk
Adding to the risks associated with unaccounted inventory, the
Department also has unsecure access to some Athletics spaces, greatly
increasing the risk of theft. Athletics inadequate tracking of employee
access to sports and other facilities has resulted in the loss of 264 keys,
including 15 master keys, over the course of 18 years. The loss of
master keys places equipment rooms, arenas, and other campus spaces
at a great risk for theft and vandalism. Such spaces have not been
rekeyed for several years. Because Athletics has not accounted for all
non-capital assets in several years, oversight and controls should be
strengthened to reduce these risks.
Master Keys Reported Missing,
Locks Not Rekeyed in 18 Years
Athletics operates 18 team sports that utilize several facilities across
campus, including sporting arenas, training rooms, rehabilitation
rooms, and office and storage space. However, the Department can no
longer account for 264 keys to these spaces, including 15 master and
sub-master keys.5 Missing keys, especially master keys, pose security
risks to Athletics, including theft, vandalism, the inability to know and
control who enters what spaces and when, and potential insurance
liability issues.
Over the last 18 years

264 keys have been
reported missing. This
is a concern because
theft and vandalism
have occurred.
The Department only knows when four of the 264 keys were
reported lost. Therefore, it is uncertain how long the remaining keys
have been missing. Further, several doors with missing keys have not
been rekeyed in 18 years. The Building Access Office (Building
Access) is the University office in charge of issuing department keys.
According to Building Access records, more than 100 keys to the
Huntsman Center alone have been reported missing since the last time
each space was rekeyed as shown in Figure 4.3.
A master key activates all door locks in a building for spaces assigned to a specific
department; whereas a sub-master key typically activates the locks to more than one
door, but not all doors, in spaces assigned to a specific department.
5
- 35 -
Figure 4.3 Record of Huntsman Center Missing Keys. Records

indicate that 103 keys to the Huntsman Center alone have been
reported missing in 18 years.
Key and Space Type
Master Key
The Huntsman Center
alone has reported 103
missing keys.
# Keys
Missing
1
Last Rekey
12/1998
Sub-Master Key
12/1998
Office Space
37
12/1999
Entrances
25
12/1998
Arena
13
12/1998
Ticket Office (2 Sub-Master)
01/2000
Recruiting Room
12/1998
Tunnels
04/2002
Maintenance Room
06/2003
Crimson Club, Marketing, Hall Closets
12/1998
Team Locker Room
12/1998
Total
103
Source: Auditor analysis of Athletics and Building Access records
The lost keys place the Department at added risk of theft. Over the
last five years, Athletics reported more than $19,000 worth of stolen
inventory that may have been the result of unsecured access or because
of a missing key. As previously discussed, the theft could be worse
than what was reported due to poor inventory controls. Stolen items
include computers, phones, ski equipment, a television, and a golf cart.
Recently, $10,000 of
inventory was stolen
from the Huntsman
Center by an outsider
with a master key.
- 36 -
One claim filed with the Universitys Risk and Insurance

Management department stated that a stolen master key, not
belonging to Athletics, assisted in the theft of more than $10,000 of
Athletics inventory. The suspect was later caught and charged after
allegedly stealing computers, monitors, projectors, iPads, and various
sporting gear from the Huntsman Center. One key in their possession
was reportedly identified as a master key to the Huntsman Center.
Although missing keys are reportedly a problem campus-wide, a
Building Access employee stated that Athletics has the largest problem
with unreturned and missing keys and believes Athletics requests more
replacement keys than any other department. Athletics should develop
stronger controls to assist in accounting for keys to all their spaces.
Athletics Should Rekey Spaces or

Consider Electronic Key Readers
Athletics could mitigate risks to departmental assets by installing
electronic card readers in their most vulnerable facilities, a technology
already in use in some Athletics spaces. Rice-Eccles Stadium and the
Burbidge Academic Center, for example, both have electronic card
reader accessibility which provides instant removal of terminated
employee access, and can restrict employee afterhours access.
Electronic card readers can easily be reprogrammed, making them a
good alternative to rekeying spaces if locks are compromised. If this
technology is not adopted, Athletics should work with Building Access
to rekey spaces that have missing keys.
To mitigate the future

risk of theft, the
Department needs to
either adopt electronic
key reader technology
or rekey locks to
spaces and equipment
left vulnerable due to
lost keys.
We also recommend that Athletics work collaboratively with

Building Access to review the access granted to all Department
employees to determine if it is still appropriate and then audit the
locations of all current Athletics keys.
Recommendations
conduct an audit, as required by University policy, of all noncapital assets, provide tags, and inventory all assets currently in
the Departments possession.
provide greater oversight of tracking Athletics inventory and
keeping their records current.
rekey locks for or add electronic card readers in spaces where
keys have been lost.
4. We recommend the University of Utah Athletics Department,
in collaboration with the Building Access Office, provide
proper oversight of keys or electronic cards and keep their
records current.
work with the Building Access Office to review which
employees can access Athletics facilities to determine if such
access is still required.
- 37 -
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Chapter V
Policy is Needed to Ensure Employee
Equity
Department) needs to improve compliance with some University
Human Resources (HR) practices. First, in a few cases, Athletics has
used a waiver process to bypass University job posting requirements.
This practice, when not used appropriately, bypasses the competitive
nature of hiring and can give the appearance of preferential treatment.
Second, Athletics can improve its record keeping through better
coordination with HR. We found that Athletics has hired employees
into job codes that do not fit their intended job descriptions and have
hired some employees into contract positions without sufficient HR
involvement.
Athletics should also improve its adherence to HR policy to ensure
the proper treatment of Department employees and to increase
compliance with federal and University regulations. Athletics
supervisors have not been pre-approving employee compensatory6
(comp) time before its accrual, and they are not ensuring that the
hours earned are accurate or correctly reflected on the Universitys
time and attendance system. Additionally, Athletics may have
incorrectly compensated nonexempt hourly employees for excess time
worked above 40 hours in one workweek. Because of inadequate
timekeeping controls, the University could be responsible for
retroactively reimbursing all eligible employees.
Hiring Practices Require

Stronger Compliance
Athletics needs to improve compliance with some University HR
practices, including improved collaboration with HR. First, we found
cases where Athletics has used a waiver process to avoid competitively
Compensatory hours will, in this report, be referred to as comp hours, and are
those hours worked in excess of 40 per week that are permitted to either be used or
paid out at a rate of time and one half.
6
- 39 -
Lack of compliance
with some HR
practices has, at times,
led Athletics to bypass
hiring practices.
recruiting some positions. We understand there are cases in which a

waiver process can be appropriate, but we found three cases that
appear questionable. For example, the Department used the waiver
process to temporarily hire an employee for a specified five-month
period; however, that employee still works for the department three
years after the waiver was issued without ever having gone through
the competitive hiring process. Second, Athletics can improve its
record keeping through better coordination with HR. We found that
Athletics has hired employees into incorrect job codes that do not fit
their intended job description and have hired some employees into
contract positions without sufficient HR involvement.
Whether or not it was the intention of Athletics to purposefully
bypass HR rules, failing to strictly follow the rules gives that
appearance. We recommend the Department work with HR to review
Athletics hiring practices to ensure they adequately conform with
University HR policy.
Waivers Should Not Be Used to Unnecessarily
Bypass Competitive Recruitment
We reviewed eight instances where Athletics used a waiver to hire
an employee. The waiver process is allowed by HR, but University
policy states that they should only be used in exceptional
circumstances. Of the eight uses of the waiver, we found three that
appear questionable.
Waivers we reviewed
with HR indicate
University policy was
not followed in order to
hire specific people to
the Department.
The normal hiring process typically consists of notifying HR of a

job vacancy and posting the position for a minimum of seven days.
Waivers to this process are allowed in exceptional circumstances. We
reviewed the conditions of eight athletics waivers with University HR.
After our meeting we believe three waivers appear to have bypassed
the intent for which they are permitted and allowed the Department
to unnecessarily avoid job posting requirements.
In these three instances, the waivers were used to hire for positions
that typically go through a competitive hiring process. One of these
waivers was issued to temporarily hire an employee for a specified fivemonth period. This employee was hired and continues to work as a
full-time regular employee nearly three years after the waiver was
issued, without ever having had to apply or go through a competitive
hiring process.
- 40 -
We recommend Athletics work with HR to review the appropriate

use of waivers, and that HR provide training where needed. We also
recommend that Athletics review all hiring practices to ensure they are
competitive, where applicable, and in compliance with HR policy.
Athletics Maintains Some Inaccurate Records,
Better Tracking of Contract Employees is Needed
Athletics can improve its compliance with some HR practices.
First, we found that Athletics has maintained records of hires that we
found to be inaccurate. Second, HR has also been unaware of which
Athletics employees have been placed on a contract, making it difficult
for HR to know which employees need HR training. Going forward,
the Department should work with HR to ensure employees are hired
correctly and that important information is shared among the two
departments.
Athletics can improve its record keeping through better
coordination with HR. We found that Athletics has hired employees
into job codes7 that do not fit their intended job descriptions. Also, as
a way to expedite the hiring process, one Athletics employee
reportedly avoided some recruitment procedures and hired several
individuals into one job code though their job titles were distinctly
different. As a result, there is an appearance that Athletics was
attempting to bypass HR hiring practices. One concern for Athletics is
that they have positions not found in other departments on campus,
making it difficult for them to correctly classify employees. We
recommend that Athletics work with HR on the creation of job codes
specific to the Athletics Department.
Athletics can also improve its tracking of contract employees.
Typically, it is the decision of each department to determine which
employees they wish to place on a contract, but Athletics should work
with HR on hiring these employees, including providing useful
training. However, we found that Athletics has hired several
employees on contract without sufficient HR involvement.
Consequently, HR has not known which employees to offer needed
Through improved
collaboration with HR,
Athletics can correct
some inaccurate
record keeping
practices.
Athletics can also

improve collaboration
on the hire of contract
employees.
Job Codes are university-created codes used to classify job positions by job type,
function, and pay.
7
- 41 -
training to. Going forward, the Department should work with HR to

ensure improved compliance with HR practices.
Athletics has started

working closely with
HR to establish lasting
compliance with
University policy.
The Department reported that work is already underway to

strengthen some control weaknesses. HR officials have also reported
that their collaboration with Athletics has improved, especially with
the use of an embedded HR representative in the Department. We
believe Athletics could continue to benefit from HR interactions as
they strengthen compliance with human resources laws and policies.
Timekeeping Policies Require

Stronger Compliance
Athletics should
strengthen
timekeeping controls
by properly tracking
comp hours worked.
Athletics has not been tracking hourly employees comp time hours
or recording them in the Universitys time and attendance system.
Instead, Athletics has allowed hourly employees to track their own
comp time on off-book spreadsheets that are not approved or entered
into the University time and attendance system. In addition, these
employees have been incorrectly compensated for comp time, which
could become a financial liability to the University if not corrected.
We recommend that all employees and supervisors be trained on
proper timekeeping practices, including the accrual and use of comp
time, as well as on University HR timekeeping policies and
procedures.
Head Coaches and Supervisors Need to Provide
Verification and Control Over Timecards
Supervisors have not

provided strong
enough oversight of
comp hours.
Supervisors have not been approving hourly employees comp time

either before or after accrual. This lack of supervisorial control could
put the University at financial risk, as incorrect hours could be accrued
and paid out. We found examples where nonexempt employees
entered a full day of work into the Universitys time and attendance
system while personally using leave time; one employee was actually
on vacation. In the cases we reviewed, the employees marked comp
time used on their personal tracking sheets to account for the vacation
and leave time. Our concern is that the approved, official time sheet
shows no indication of time off, thus creating an inaccurate record,
and is not recorded in the Universitys system for time and attendance.
We found some instances where employees would submit their
personal comp time balance sheets to their supervisors, but we found
- 42 -
no record showing that these informal sheets were ever approved by

the supervisor before or after the comp time was earned. The lack of
supervisorial control over time worked is a concern. For state
employees, Utah Administrative Code R477-8-8(4) states:
A Supervisor who directs an employee to submit an
inaccurate time record or knowingly approves an
inaccurate time record may be disciplined.
In the cases we reviewed, the accrual and use of comp time remained
undocumented in the Universitys payroll system even with
supervisorial review and approval of the employees timesheets.
University HR recommends payroll trainings for all supervisors
and managers who are viewing, modifying, and approving employee
timecards. Over the previous two fiscal years, HR records indicate that
only one current Athletics employee has attended a University HR
payroll training covering comp time. To improve time sheet approval
practices, we recommend that all Athletics supervisors be required to
attend these trainings.
In the past two years,

only one current
Athletics employee has
attended HR payroll
training for comp time.
Athletics has taken these issues seriously and has already made
steps toward bolstering HR compliance. Prior to this audit, an HR
specialist had recently been embedded within the Department; as a
result, it appears that many issues, including compliance with HR
policy have improved. It may be in the best interest of other
University departments that do not have embedded HR specialists to
consider the same type of HR representation.
Due to Weak Comp Time Controls, Some
Employees Received Incorrect Compensation
Because comp time was not accurately or properly tracked, some
employees were not fully compensated for the excess hours they
worked. Comp hours accrued by nonexempt employees should be
paid at time and one-half. However, Athletics has only been
reimbursing these employees for straight time. This practice must be
corrected to ensure employees are receiving correct payment for comp
hours worked, consistent with federal and University HR policies.
- 43 -
The Department did

not properly account
comp time at the
appropriate rate for
hourly employees.
In Athletics, 14 hourly nonexempt employees were identified as

having the greatest potential of working more than 40 hours in one
workweek. Several employees were found to be recording, accruing,
and using one hour of comp time for one hour of leave time.
However, since comp hours were not properly tracked and approved,
we could not determine whether employees had actually worked the
self-reported comp hours. Going forward, Athletics should ensure
employees hours are properly tracked and paid.
We recommend that Athletics comply with University time and
attendance policy by logging and tracking all hours worked within the
Universitys HR-designated payroll system.
Compensation Procedures for Comp Time
Accrual Should Be Reviewed with Employees
Comp time should be

pre-approved by
supervisors.
University policy requires all nonexempt employees to obtain prior

approval for the accrual and use of comp time as shown in Figure 5.1.
To ensure compliance, supervisors should preapprove all comp time.
Additionally, supervisors should monitor comp time more closely to
effectively control the comp hours an employee can accrue.
Figure 5.1 HR Comp Time Accrual Procedures. A compensatory
time agreement must be signed for employees to receive comp
time.
A supervisor may offer compensatory time off in lieu of overtime pay.
However, the employee has the right to accept or decline compensatory time
and receive pay at time and one-half. If compensatory time is acceptable to
the employee, then the supervisor must ask the employee to sign a
Compensatory Time Agreement.
Source: University Human Resources Policy
It is the responsibility of the Department head, dean, director, and

supervisor to discuss the accrual and use of comp time with the
employee. However, we found no record that Compensatory Time
Agreements were signed or that employees were given a choice how to
be compensated. We recommend that Athletics comply with
University HR policy and ensure that all nonexempt hourly employees
have signed a Compensatory Time Agreement prior to earning comp
time.
- 44 -
Recommendations
work closely with the Universitys Division of Human
Resources to review the use of hiring waivers and the purposes
for which they are permitted.
Resources to review University hiring practices to ensure they
are consistently followed and that records are accurate and up
to date.
Resources to, if necessary and where appropriate, develop job
codes specific to Athletics.
Resources to review timekeeping practices in Athletics and
provide greater training, especially for supervisors, on how to
strengthen compliance with human resource law and policies.
ensure that all nonexempt hourly employees sign a
compensatory work agreement. The Department should
accurately account for any excess hours earned above 40 hours
in one workweek through the Universitys approved time and
attendance system.
- 45 -
- 46 -
Appendix A
- 47 -
- 48 -
The purpose of this appendix is to give an expanded explanation of the itemized indirect
subsidy amounts reported in Chapter II. The amounts in Figure A.1 have been numbered
to organize the further detail provided here.
Figure A.1 Itemized Indirect University Subsidy for Athletics.
Subsidies in FY 2015
Amount
1.
Athletics Employee Benefits Paid by University
2.
Office Space and Utilities at Huntsman Center
359,320
3.
Facilities Services at Huntsman Center
199,126
4.
Huntsman Center Rental Contract Discount
196,333
Total Indirect Subsidy Not Reflected in NCAA Report
397,637*
1,152,416
Source: OLAG generated with data provided by multiple University of Utah departments.
* The Department paid directly for all other employee benefits, totaling $4.7 million in fiscal year 2015.
1. Athletics Employee Benefits Paid by University

Based on historical practice, the University of Utah (the University) pays for certain
Utah Athletics Department (Athletics or the Department) employees salaries and benefits
each year. The Department then reimburses the University for the cost of the salaries but
not the benefits. The $397,637 shown in the Figure A.1 (and in Chapter II) is the amount
of employee benefits paid by the University in FY 2015 but not reimbursed by the Athletics
Department.
2. Athletic Office Space and Utilities at Huntsman Center
The second amount pertains to Athletics use of space within the Huntsman Center for
Department offices. The Huntsman Center is defined and operated as an auxiliary and, as
such, is expected by definition and policy to generate revenue and operate in a selfsustaining way. Given that and the fact that the NCAA manual specifically cites rental fees
and utilities as appropriate amounts to include in indirect subsidy calculations, we felt that
this amount was appropriate to include here. By comparison, Utah State University
calculates a portion of its indirect subsidy allocation to its athletics department based on the
square footage of facility space the athletics department occupies.
Specifically, conversations with the director of real estate for the Universitys Research
Park indicated that an appropriate, full-service rental amount would be around $20 per
square foot of office space. The square footage used by Athletics in the Huntsman Center is
17,966 ft2. The product of those two numbers comes to the amount shown, $359,320.
- 49 -
3. Facilities Services at Huntsman Center

As mentioned above, the University operates the Huntsman Center as an auxiliary. As
such, Huntsman Center staff are Auxiliary employees but often work on behalf of Athletics
in preparation for basketball, gymnastics, and volleyball events. Based on historical practice,
Huntsman Center staff does not charge Athletics for these services if they are provided
between the hours of 7:00am and 4:00pm. In these hours, their services have been
considered to be part of the staffs routine duties and have not been charged to Athletics.
Recent efforts by Auxiliaries to track and quantify these costs resulted in Huntsman
Center staff billing their time to a special accounting category set up specifically to capture
Athletics-related work. The amount reported here, $199,126, is the exact amount as
recorded in the University accounting system for this special accounting category.
Because Athletics has not yet been afforded the ability to review what, specifically, is
being recorded, we suggest the Department work with Auxiliaries to validate and
potentially refine this amount.
4. Huntsman Center Rental Contract Discount
Contracts are in place between Athletics and Auxiliaries which govern the use of both
the Huntsman Center and Rice-Eccles Stadium. These stipulate how much Athletics must
pay in order to use the facilities on game days. The football stadium contract, dated 2003,
requires that Athletics pay a portion of gross ticket sales, gross income from stadium suite
sales, and a facility fee assessed on each ticket sold. It was reported to us that this contract
approximates a market rate.
The Huntsman Center contract, dated 1989, requires that Athletics pay a flat rate of
$1,750 for mens intercollegiate athletic events and $1,000 plus expenses for womens
athletic events. These terms are below even intra-university market rates that are charged to
other University departments for Huntsman Center usage. The difference between a fair
market rate and this 1989 contract should therefore be included in our calculation of
indirect university support.
The $196,333 shown in the figure is the difference between what Athletics paid in FY
2015 to use the Huntsman Center and what it would pay under a contract like the one at
the football stadium. A percentage of ticket sales revenue from each sport was therefore
calculated and the amount actually paid by Athletics in 2015 was subtracted from that. For
womens basketball and volleyball, the Athletics Department would have actually ended up
paying a combined $25,000 less than what they did.
- 50 -
Nonetheless, with gymnastics and mens basketball ticket sales factored in, the
Department paid approximately $200,000 less than it would have under a contract with
terms similar to those at the football stadium.
On a related note, the fact that this contract was negotiated nearly 30 years ago suggests
a need to reapproach the document. Not only are the rates below what other University
departments pay to use the Huntsman Center but requirements regarding concessions
operations and revenue sharing are no longer accurate since control of concessions moved
from Athletics to Auxiliaries in 2013.
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Agency Response
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REPORT TO THE

A Performance Audit of the

Office of the Legislative Auditor General

Audit Subcommittee of the Legislative Management Committee

JOHN M. SCHAFF, CIA

November 15, 2016

TO: THE UTAH STATE LEGISLATURE

Transmitted herewith is our report, A Performance Audit of the University

John M. Schaff, CIA

Office of the Utah Legislative Auditor General

A Performance Audit of the University of Utah Athletics Department (November 2016)

Office of the Utah Legislative Auditor General

A Performance Audit of the University of Utah Athletics Department (November 2016)

Report No. 2016-10

A Performance Audit of the

Audit Performed By:

Athletics Is a Department Within the University of

Office of the Utah Legislative Auditor General

Figure 1.1 Athletics Oversees 18 Mens and Womens Sports.

Number of Athletes on Roster in 2015

Source: University of Utah Athletics Department

Football has the largest number of student athletes, accounting for

The University of Utah

On June 7, 2010, the University of Utah accepted an invitation to

A Performance Audit of the Univeristy of Utah Athletics Department (November 2016)

Athletics Revenues and Expenses

Source: NCAA Agreed-Upon Procedures financial data.

According to Figure 1.2, football generated approximately 67 percent

Office of the Utah Legislative Auditor General

generated approximately 13 percent, or more than $8 million.

Athletics revenue grew

Source: NCAA Agreed-Upon Procedures financial data.

A Performance Audit of the Univeristy of Utah Athletics Department (November 2016)

Football and mens

Source: NCAA Agreed-Upon Procedures financial data.

Office of the Utah Legislative Auditor General

Figure 1.5 Athletics Department 6-Year Expense Breakdown by

Source: NCAA Agreed-Upon Procedures financial data.

Audit Scope and Objectives

Chapter II: The budget practices and management of the

A Performance Audit of the Univeristy of Utah Athletics Department (November 2016)

Finally, we found that the mens basketball head coach, who

For Greater Control, Athletics Should Report

Office of the Utah Legislative Auditor General

picture of Department expenses will allow for greater long-term

Financial reports have

NCAA financial reports prepared by the Department for

A Performance Audit of the Univeristy of Utah Athletics Department (November 2016)

Figure 2.1 Utah Athletics Department Reported $10.2 Million in

Total Reported University Support

The $10.2 million of University support in Figure 2.1 was reported by

Office Space and Utilities at Huntsman Center

Facilities Services at Huntsman Center

Huntsman Center Rental Contract Discount

Total Unreported Indirect University Support

$1.2 million of indirect

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interaction between Athletics and U of U Auxiliary Services.3 Based on

Regardless of the method selected, athletic stakeholders at the