State lawmakers have begun a sweeping investigation of the N.C. High School Athletic Association, a move that could lead to changes on how high school sports are governed.
Carolina Journal reviewed a decade of tax documents showing the nonprofit overseeing high school sports in North Carolina has $41 million dollars in assets, mostly from dues from public high schools.
Legislators are in the fact-finding process, but hearings are possible. Legislators tell CJ they’ve become frustrated with the lack of transparency from the group.
“They are making money every year off our children, off our parents, and off taxpayers,” said N.C. Sen. Tom McInnis, R-Richmond.
“We are just now peeling back the onion, but that money originated off the back of a taxpayer. Everything about high school football, basketball, baseball is owned by the taxpayer. I have serious concerns about how the taxpayer’s money is being collected and not being used to benefit our children.”
In an interview on the Bryan Hanks sports radio show, Sen. Todd Johnson, R-Union, said:
“Being born and raised in Anson County, which is still a very economically distressed part of the state, you actually have high school students wearing the uniforms their parents wore. You have moms and dads basically begging businesses for money to help pay for the travel to help them travel to this school or that tournament and to buy uniforms.”
According to the group’s IRS Form 990 for 2018, the most recent year available, NCHSAA listed more than $41 million in assets. The association’s assets grew from about $22 million in 2009.
The group collects dues from each member school and takes a portion of ticket sales from the playoff and championship games it helps stage.
NCHSAA charges each school 75 cents per student plus an additional $100 administrative fee. It also makes money by providing catastrophic insurance coverage for schools. NCHAA raises more revenue by taking a percentage of all gate receipts for postseason games in exchange for providing locations and logistics for postseason competition.
The association maintains the official rule books and governs the officiating standards across the state. The NCHSAA organizes member schools into conferences and oversees the state championships for each of the sanctioned sports.
But Rep. John Bell, R-Wayne, says amassing that kind of money from taxpayer funded schools “raises serious and legitimate concerns for the legislature. about transparency, accountability, and oversight.”
More than 400 member schools pay dues with five more schools joining in the coming year, according to NCHSAA. It appears about 95% of the member schools are public schools.
Other state high school groups are working with less money, records show. In 2018, for instance, the Georgia High School Association closed the year with $7 million in assets. Georgia is similar to North Carolina in size and demographics.
The Florida High School Athletics Association, governing high school sports in America’s third most populous state, shows assets of about $6 million.
NCHSAA Director Que Tucker, responding to WRAL, said the group has a significant amount of total assets, but, “a large amount of that can be attributed to the NCHSAA Endowed Funds, which are designated for specific purposes.
“The Endowed Funds have helped the association provide money to schools in times of financial distress, including this year’s pandemic. In December, the NCHSAA Board of Directors authorized the COVID Athletic Program Subsidy.”
That would distribute $4 million from the group’s Endowment’s Board Designated Funds to help member schools. The endowment also helps fund numerous scholarship awards and recognitions for deserving student-athletes every year.”
Sen. Jim Perry, R-Wayne, said he was shocked when he began reviewing the group’s tax records.
“We already have to struggle with bake sales and BBQ chicken sales to fund athletics,” Perry said. “Now we find out we are sending these funds so this organization can amass tens of millions of dollars, and the more questions we ask, the more questions we have.
“I can’t believe they have amassed that kind of cash, while asking the poor schools in my poor areas of my district to continue to give them more during a pandemic.”
Further, because of state and NCHSAA regulations, many parents and all fans have been prevented from attending athletic contests this year. Schools throughout the state decided to stream games live. Most of the live streams were free Facebook Live broadcasts or other low-cost low-quality productions. But the NCHSAA told its member schools they had to use that organization’s streaming service, charging parents $70 per year. NCHSAA told its schools that, should they not use the fee-based service, in-which NCHSAA keeps all the revenue, the member schools would be charged $250 for every event they streamed.
Perry is preparing legislation that would prevent the NCHSAA from regulating these types of low-budget live-stream events, intended mostly for parents.
In the Jan. 21 letter, Tucker declined to provide all of the detailed audits from 2010. Tucker noted that the General Assembly only directly funds the Student Services Program, which provides academic and mentoring support, as well as alcohol and drug prevention. She declined to provide audit information on any other of the operations of NCHSAA, other than the Student Services Program.
Tucker, on behalf of NCHSAA, also declined to provide lawmakers with current budget amounts unencumbered by endowment restrictions.
“As a private membership organization, we respectfully decline to provide this information,” Tucker wrote.
“That has been the biggest struggle over the last 12 months, on this search for truth we have been on, is every question we ask brings up three more questions. They are very tight-lipped on this money,” Johnson said.
Marilyn Que (pronounced “cue”) Tucker is a former assistant basketball coach at N.C. State. She began working for the NCHSAA in 1991 and became commissioner in December 2015. In 2018, NCHSAA reported paying Tucker $156,927, with an additional $13,824 in benefits.
The NCHSAA makes clear through its communications that, as a private nonprofit, it doesn’t believe the legislature should have a considerable interest in its operations. Yet, the organization employs two lobbyists at the General Assembly.