Audit Finds Mismanagement In Washington State University Athletics Amid $67 Million Deficit

BY NICHOLAS K. GERANIOS,  Associated Press

An internal audit has found extensive mismanagement within the budget-challenged Washington State University athletic department, including the possible inflation of home football attendance figures and the improper distribution of free tickets to football games.

“The environment within Athletics … did not support a culture of compliance or fiscal responsibility,” according to the audit, which was completed in mid-April.

The document comes as leaders of the school grapple with a $67 million athletic budget deficit built up over recent years.

The audit was initially intended to examine the distribution of tickets and passes to WSU football games to ensure regulations were being followed. But it expanded as problems were discovered with contract management, ethics training, attendance data, benefits for athletic department employees and other issues.

The school responded to the audit by saying changes were coming because of the hiring of a new athletic director and other top administrators.

“All aspects of the organization structure of WSU Athletics are being evaluated and will be restructured as appropriate by the new Director of Athletics,” the university said in its management response to the audit. “A new culture and work climate are already being implemented.”

Pat Chun was hired by school President Kirk Schulz in January to be the Cougars’ new AD. He replaced Bill Moos, who was in charge during the period covered by the audit.

Moos, who surprised Cougars fans by leaving for Nebraska last October, said Thursday that he had not seen the audit results.

WSU, located in Pullman, a town of 30,000 far from the state’s major population centers, has the smallest football stadium (32,700 seats) and smallest athletic budget and revenues in the Pac-12 Conference. The school spends about $70 million per year on athletics.

The department has run a deficit of up to $13 million per year in recent years. The deficit is now down to about $9 million per year and the school is developing a plan to balance the sports budget. The $67 million deficit was largely caused by spending on renovations to Martin Stadium and a new football operations building, and lower-than-expected television revenues.

The audit initially focused on complimentary tickets for a 2016 home football game against Arizona.

Auditors determined that the Cougar Athletics Compliance Office did not receive complete information on who got free tickets, a situation which could result in NCAA violations.

In one case, four premium club seats for the Arizona game were given away to “cultivate donors.” But the department was unable to say who received those free tickets, the audit found.

“We put people up there in unused seats to encourage them to purchase seats,” Moos said.

The audit also found mismanagement in the school’s major marketing contract.

Washington State has contracted since 2006 with a company called IMG for sports broadcasting, advertising and marketing. The audit found that IMG was given $40,000 more worth of free football tickets than was required by their contract.

The audit also found the IMG contract was improperly amended, in some cases verbally, by athletics staff.

Management of the university agreed the verbal deals were improper. “We used those instances as training opportunities,” the management response said.

The audit also found that the department was inflating home football game attendance figures.

For the 2016 Arizona game, the program reported a near sellout, when only about 26,000 tickets were scanned for entry, the audit said.

Later that season, athletics officials said the annual Apple Cup game against archrival Washington was a sellout, when scanned attendance was only around 27,000. The audit said accurate attendance numbers were important for budgetary and facility planning purposes.

Management responded that not all ticket buyers showed up for games, and that it had trouble with faulty scanners and errors by temporary staff manning the gates in the past.

“We released attendance as to sold tickets,” Moos said Thursday.

The audit found potential violations of state law in cases where athletics staff used discounts to upgrade to the premium club seating area of Martin Stadium. Those discounts weren’t offered to the public or to any other university employees, which could make them an illegal special privilege, the audit found.

Auditors calculated that the discounts, in place since 2012, potentially cost Washington State over $130,000 in lost revenue for the 2016 football season.

The audit also discovered that over half of athletics staff who took advantage of the discount in 2016 didn’t fully pay for their seats. The athletics department has since ended the discount.

NOTE: WSU holds the broadcast license of Northwest Public Broadcasting, though NWPB is editorially independent.

Copyright 2018 Associated Press