Footage from Arkansas' fifth pre-Spain practice Friday.
Hogs foundation's gifts, grants fall off
Take drops $10.4 million for fiscal ’13
University of Arkansas chancellor G. David Gearhart, former women's head basketball coach Tom Collen, men's head basketball coach Mike Anderson and athletics director Jeff Long throw dirt during the official groundbreaking for the new Razorback Basketball Performance Center Saturday, Dec. 7, 2013 in Fayetteville. The 66,000 square foot facility is one of three new facilities for athletes being built on the campus, funded in part by financial donations to the Razorback Foundation.
Contributions and grants to the Razorback Foundation -- the money raising arm for University of Arkansas sports -- dropped by more than $10 million last fiscal year, to $25.8 million, according to the nonprofit's most recent Internal Revenue Service report.
At the same time, the foundation's spending rose by more than $20 million, mostly for major capital construction projects, the organization's IRS Form 990 report shows.
Expenses also included $291,667 in paid speaking engagements for former head football coach Bobby Petrino, who was fired almost three months before the fiscal year covered in the report.
Comparing all revenue and expenses, the foundation overspent its income by $9.3 million in the 2012-2013 year.
The foundation's top board member said late Monday afternoon that the deficit was no surprise and that the organization is fiscally strong.
"The Form 990 is a single year snap shot of the Razorback Foundation, which includes its commitments from donors and its expenditures that are paid out or requested," board Chairman Ken Mourton said in a Razorback Foundation news release. "As of year-end, there remained approximately $39.2 million in overall net assets. Clearly, this reflects the entity is financially sound."
The period covered in the IRS report is July 1, 2012, to June 30 last year. That included the Razorback football team's four win, eight loss season in fall 2012 under interim head coach John L. Smith and the December 2012 hiring of current head football coach Bret Bielema.
That fiscal year started after Petrino was fired as football coach after a motorcycle wreck in April 2012.
The Razorback Foundation's statement did not address several Arkansas Democrat-Gazette questions. Among them: why officials believe contributions were down in 2012-2013, where contributions stand during the current year and why the nonprofit provided speaking engagement pay to Petrino after his firing.
Mourton, foundation Executive Director Sean Rochelle, Chief Financial Officer Billye Veteto and former Razorback Foundation Executive Director Chris Wyrick were not available to answer further questions. Wyrick is now the vice chancellor for university advancement on the Fayetteville campus. The University Advancement Division is the university's fundraising arm.
Mourton's written statement said the foundation's overspending for 2012-2013 "was indeed planned, as we've made a concerted effort on building our reserves over the past several years as we planned for our capital campaign."
Capital project construction spending mushroomed to $18.5 million in 2012-2013, from $592,000 the year before.
It wasn't clear late Monday which construction projects the foundation is funding.
Mourton's statement said the foundation had been saving for capital construction and took the needed funds from financial reserves set aside for the projects.
"During the 2012-2013 period, approximately $7.9 million was raised restricted specifically for capital projects, while total capital expenses during this same time period were $18.5 million. Due to timing of construction, the difference in spending in 2012-2013 over the amount raised was from the surplus (reserve) restricted specifically for capital projects," Mourton said.
"The Internal Revenue Service requires that the amounts committed be included in revenue, even though restricted, in the year of the commitment. Likewise, our expenditures for capital projects are recorded based on the timing of the request from the University of Arkansas."
The IRS 990 report was dated Feb. 12 and signed by the Razorback Foundation's chief financial officer, Veteto.
Highlights from the report:
• The foundation has not overspent its income in other recent years, according to IRS documents containing financial information back to 2008.
• Contributions, gifts and grants, which account for the vast majority of the foundation's income, totaled $25.8 million for 2012-2013, down from $36.2 million the previous year.
• Spending for salaries and compensation for the foundation's staff were down: $1.21 million in the most recent year compared with $1.29 million a year earlier.
• Other speaking engagement pay included $300,000 for Smith, $417,137 for former athletic director and head coach Frank Broyles, and $700,000 to head basketball coach Mike Anderson.
• Expenses also included a $410,000 contract buyout for former basketball coach John Pelphrey.
A Section on 06/17/2014