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Florida A&M athletics $4.2 million in red
Florida A&M University athletics officials face a grueling climb from a deep hole to correct problems identified during a Thursday board of trustees meeting.
Athletics has a $4.2 million deficit — almost double what it was one year ago.
In addition, a department employee was fired after being accused of misdirecting funds, according to university administrators. It is unclear if the deficit was further exacerbated by the employee’s alleged actions.
Either way, FAMU Chief Financial Officer Teresa Hardee has been overseeing the financial side of the athletic department since January, FAMU attorney Avery McKnight said.
Albert Smith was fired in early December, McKnight said. A warrant was issued for his arrest and Smith turned himself in. Smith, who worked with ticketing, is contesting the termination, McKnight added.
“An internal investigation revealed the misdirection of funds by one individual and the matter is currently before the State Attorney’s Office for appropriate action,” said Trustee Karl White in reading Thursday from the audit committee’s report.
A 26-page financial audit also shed light on problems plaguing the department.
“The program concluded one of its most successful football seasons in recent years,” FAMU’s Athletic Director William Hayes and Erica Wilcox, assistant director of athletics for business management, wrote in an overview letter included with the financial report.
However, the financial success of the program is still having difficulty balancing the cost of competition with its anticipated revenues. The overall decline in revenues coupled with the increased cost of operating expenses has resulted in the deficit.”
No red flags or findings were highlighted by the independent auditor. However, it’s unclear how long the athletics department has been operating in the red.
The audit covers from July 2007 to June 30, 2008. Athletics made nearly $8.1 million during that time. But department expenses exceeded $9.7 million, creating nearly a $1.7 million deficit. That deficit only added to the $2.61 million deficit detailed in the report that covered July 2006 to June 2007.
Hayes, hired as FAMU’s athletic director in December 2007, declined to talk about the department’s deficit when reached Thursday afternoon.
“We’ve got to wipe this deficit out,” FAMU President James Ammons said.
Ammons said the university’s administrators have got “to do things a little differently.”
He said an aggressive marketing campaign is under way for the athletic programs. Concessions will be changed to compete with external vendors. Season ticket sales need to be increased, he said. The plan also includes the teaching gym to be used to bring in additional revenue for the athletic department.
“The teaching gym is a state-of-the-art facility,” said the Rev. R.B. Holmes Jr., FAMU trustee vice chairman, about the 9,000 seat gym scheduled to open this spring. “I predict it will generate significant funds.”
By Angeline J. Taylor, Tallahassee Democrat