Allegations of mismanagement, lack of accountability in internal audit of WSU’s athletic department

Better accountability and a better accounting system are long overdue at Washington State University, the school’s governing body was told Thursday afternoon.

The message was well-timed.

Already saddled with a $67 million cumulative budget deficit, WSU’s athletic department also faces allegations of mismanagement, including inflation of home football attendance figures and the improper distribution of free tickets to football games.

Those were the main takeaways from an embarrassing 79-page internal audit released this week. Its overarching conclusion: “The environment within Athletics … did not support a culture of compliance or fiscal responsibility.”

For some regents – who, along with WSU President Kirk Schulz, were presented with the audit’s findings Thursday – the key word was “culture,” specifically the lack of accountability by some athletic department employees.

WSU auditors initially focused on complimentary tickets for a home football game against Arizona in 2016. They found that Cougar Athletics Compliance Office wasn’t told who received free tickets, a violation which could result in NCAA penalties.

In one case, four premium club seats for the Arizona game were given away to “cultivate donors.”

“We put people up there in unused seats to encourage them to purchase seats,” former athletic director Bill Moos said earlier Thursday from Nebraska.

However, the department was unable to say who received those free tickets, the audit found.

More mismanagement was uncovered in WSU’s contract with 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 its contract.

The audit also found the IMG contract was improperly amended, in some cases verbally, by athletics staff. WSU has contracted with IMG since 2006.

WSU does not require ethics training for athletics department employees, a point made in the audit and reinforced Thursday by Chief Audit Executive Heather Lopez.

Several regents responded by suggesting ethics testing for all athletic department employees. Regent Lura Powell proposed an online test with a set of open-ended questions.

Offering the example of the federal government, Powell questioned whether officials, “moving from other environments where certain things are acceptable,” shouldn’t be tested.

“It ought to be something that should be considered,” Powell said.

The university responded to the audit by saying changes were on the way following the hiring of new athletic director Pat Chun and other key administrators.

However, the biggest change may come from an upgrade of accounting systems.

WSU’s decades-old mainframe system “has become really outdated,” Stacy Pearson, WSU’s Vice President for Finance, told the regents and Schulz.

“The risk exists that one day we can’t run payroll,” Pearson said.

Changing to a Cloud-based system would also bring the athletic department under the same accounting umbrella and reduce the risk of the violations uncovered by the audit, Pearson said.

A new accounting system won’t reduce the budget deficit, but Schulz didn’t shy away from the subject.

Since laying out a budget-recovery plan two years ago, Schulz said that “we’ve made a lot of progress.”

“Everyone is working to this particular objective,” Schulz said.