UH will cut athletic budget
By Beverly Creamer, Ferd Lewis and Stephen Tsai
Advertiser Staff Writers
The University of Hawai'i athletic department will cut its budget by $400,000 — 4 percent across the board — for the new fiscal year that starts July 1 in an effort to end three consecutive years of million dollar-plus budget deficits.
After a $1.43 million deficit in 2001-02 and $2.47 million in 2002-03, the athletic department is projecting a loss of $1,466,189 for the fiscal year that ends in two weeks.
A UH-contracted auditor pegged the fiscal year 2002-03 deficit at $700,000 more than previously declared by the athletic department.
The department has pledged to hire a new financial officer — a step supported by Jim Hasselman, a partner with PricewaterhouseCoopers, which handles the UH account.
"This operation needs a strong financial person," Hasselman told the UH Board of Regents. "Someone who's used to troubled situations."
Hasselman also said every year the department releases its financial figures "and they're wildly off," noting that 2002-03 was the first time the university has had to loan money to athletics.
Athletic director Herman Frazier disputes the 2002-03 numbers, saying the shortfall is much less.
Frazier said the audit includes a $1 million loan made by UH to the department to cover losses, as well as approximately $800,000 in accrued vacation pay, which he does not count as part of the deficit.
Under the agreement with the university, the department will offset the no-interest loan through reductions in future budgets. The athletic department receives approximately $1.4 million annually from university general funds, part of which is used to maintain and operate facilities.
Frazier, in announcing a "five-year plan," said he has completely "rebuilt" the budgeting process to put athletics on track to be in the black next year by up to $1 million, with expectations of netting $2.4 million annually by the 2006-07 fiscal year.
Under Frazier's projections, revenues would rise from $16.9 million in the current fiscal year to $22.7 million in 2009. The first phase of the plan is to cut expenses, reducing the next budget for the coming fiscal year to $18 million. The 19-sports program is expected to spend $18,436,000 this fiscal year.
"Let us make this work," he told the regents. "While this may seem bleak, we have a way to get us there."
Some of the immediate fixes include a reduction by two in the number of football road games in 2004 — which Frazier claimed would reduce travel expenses by $200,000 — as well as the reduction in operating expenses.
Frazier said the university administration has authorized him to go out to bid for a new chief financial officer as early as mid-July. He said he seeks someone who can help turn around the department fiscally. Regent Byron Bender asked if a salary level had been set, but Frazier said that had not yet been done.
Regents expressed support of Frazier's new five-year plan, which begins July 1, but asked that he keep tabs on expenses and revenues monthly.
David McClain, the acting UH president since the termination of Evan Dobelle, said, "it is always possible — and I know Herman is on the case — to do an improved job of financial management and also take a good close look at the revenue side. And he's done that in what he's presented to the regents."
