Florida A&M University (FAMU) has developed a plan to make sure the athletic department is in the black in five years.
The university presented the plan to the FAMU Board of Trustees (BOT) Budget and Finance Committee on Wednesday, April 8.
In January, FAMU President James H. Ammons appointed the Division of Administrative and Financial Services to oversee the administrative and financial operations of the FAMU Athletic department.
“Our task is to prepare a reasonable, manageable and aggressive plan to reduce the financial deficits that now exist in the athletic department,” said Teresa Hardee,
chief financial officer and vice president for Administrative and Financial Services.
Hardee worked with Carla Wills, FAMU vice president for University Relations, and Bill Hayes, FAMU athletic director, to develop a five-year plan that will eliminate a projected $5.7 million deficit for FAMU athletics.
At a recent FAMU Board of Trustees (BOT) meeting Hardee, Willis and Hayes presented this plan, an integrated approach, which included projecting current and new revenue and reducing expenses for the next five years.
“Trying not to dwell on the past or in the past, the question became how are we going to bring the athletic department into a positive balance as they continue to move their program to greater heights,” Hardee said.
The student fees projections were based on the 2008-2009 school year credit hours to reach 13,000 students by the year 2010-2011, with a five-percent increase annually in athletic fee, based on the 2009-2010 school year.
FAMU currently has the lowest athletic fee in the Mid-Eastern Athletic Conference and the fourth-lowest in the State of Florida University System.
The sales projections were based on an annual increase of five-percent. The sales include gate receipts, football guarantees, season tickets and classics.
For other revenue sources, projections were also based on an annual five-percent increase.
Other revenue sources include contributions from FAMU boosters, annual fund raising initiatives, the 1,000 Strikes fund raising campaign and golf tournaments.
Expenditures average around $8.1 million. For the 2009-2010 school year, Hardee recommended a five-percent reduction of expenditures and thereafter a slight increase of two percent on the 2009-2010 base-year.
According to the five-year plan presented by Hardee, Willis and Hayes, the deficit will reduce by:
- Approximately $535,000 in the 2009-2010 school year;
- Approximately $1.1 million in the 2010-2011 school year;
- Approximately $1.5 million in the 2011-2012 school year;
- Approximately $1.3 million in the 2012-2013 school year;
- And present a positive fund balance of approximately $663,000 in the 2013-2014 school year.