December 24, 2024 Dear Friends, As my term as President of USA Track & Field comes to a close, I want to take this opportunity to express my heartfelt gratitude to all of you — our loyal USATF family. Over the past eight years, we have achieved remarkable milestones that reflect our shared resilience and commitment to the sport. Together, we successfully navigated the unprecedented challenges of the global pandemic, emerging stronger as an organization. We celebrated the historic hosting of the World Championships on U.S. soil for the first time — a milestone that will leave a lasting legacy for generations to come. Thanks to the incredible generosity of Phil and Penny Knight, our country now boasts a world-class national track and field stadium. Through our collective efforts, USATF was honored with the 2024 Member Federation Award by World Athletics. These accomplishments would not have been possible without the dedication of so many. To our volunteers, who have nurtured growth in programs like the Junior Olympics and set records in our Masters and Mountain Ultra Trail divisions, to our incredible officials, who ensure the success of every meet, and our coaches, who prepare our athletes to excel in every event — thank you. Your passion and commitment to the sport and community form the backbone of USATF. I also want to acknowledge our partnership with our Paralympic colleagues. Their integration into USATF strengthens our federation and expands opportunities for athletes of all abilities. I want to highlight the unforgettable moments from a record-breaking Olympic Games, where our athletes showcased USATF's exceptional talent on the world stage. As I pass the baton to Curt Clausen, I do so with full confidence in his leadership and excitement for what lies ahead. With the addition of capable new members to the Board of Directors and the opportunity to host the upcoming Olympic Games in Los Angeles, USATF’s potential is limitless. While challenges may lie ahead, I know this incredible community will rise to meet them with the same resilience and determination that have brought us this far. It has been a privilege and an honor to serve as your president. I treasure the relationships we’ve built and the time we’ve shared. Please don’t hesitate to reach out if I can be of help in the future. Thank you for the memories, the support, and your unwavering dedication to USATF. Wishing you all a joyful holiday season and continued success in the years ahead. With gratitude,
The financial statement's start with an explanation as to why their net assets are now almost negative $5 million after being +$548k in 2023. Total assets dropped by roughly $3 million and liabilities jumped by $4 million.
PS. Previously, when Pro-Publica had the tax returns, there was another thread on this topic:
We have closed that thread to new posts and urged people to post here:
How is it possible for your net assets to be less than your liabilities and equity? Everything I remember from accounting is Assets = Liabilities + Owners Equity.
That would be when liabilities are higher than your assets. It's not uncommon among poorly capitalized businesses or foundations like this one that have poor sources of revenue.
How is it that RSM didn't issue the 12/31/23 statements until late December of 2024? That's indicative of pretty bad internal accounting at USATF too. Audited statements shouldn't take a year from the balance sheet date to release and I'd guess they had to fight over the numbers and make a whole lot of audit adjustments.
Executive Compensation: The CEO received $1,168,713 in compensation, significantly higher than typical nonprofit benchmarks for similar-sized organizations. This could indicate excessive compensation practices, especially given the organization's financial difficulties.
Program Expenses vs. Administrative Costs: While program expenses dominate, administrative and supporting services expenses (e.g., salaries, travel) remain high, indicating a potential misallocation of resources.
Loss of Net Assets: The organization reported a deficit of $5.4M in 2023. Repeated operating losses suggest financial instability and poor resource management.
High Service Fees and Consulting Costs: Expenses for professional services totaled $7.3M, with no detailed breakdown in the 990 or audit report. These contracts require further scrutiny to ensure value for money and avoid conflicts of interest.
Asset Decline: Significant declines in cash and equivalents from $2.8M to $1.06M and reduced investments warrant examination to understand liquidity and potential cash flow mismanagement.
Donated Goods Accounting: Donated athlete uniforms and team gear represent significant in-kind contributions, but valuation methods could be subjective, leaving room for manipulation.
Additional Documents Needed for a Comprehensive Review
Board Minutes: To confirm oversight and decision-making regarding key financial allocations and expenditures.
Details of Professional Service Contracts: To analyze services rendered for the $7.3M consulting expenses.
Internal Financial Controls Documentation: To assess risk management and fraud prevention measures.
Donor Agreements and Restrictions: To evaluate compliance with restricted funds.
Inventory and In-Kind Contribution Valuation Reports: To verify the legitimacy of recorded values.
Expense Receipts and Supporting Documents: To validate the high travel, meals, and service fee expenses.
Recommendations for Enhancing Success Cost Optimization: Review executive and administrative compensation to align with benchmarks. Renegotiate or eliminate high-cost service contracts where possible.
Diversify Revenue Streams: Expand membership and grassroots programming to attract more participants and sponsors. Increase transparency to enhance donor confidence, potentially attracting higher contributions.
Improve Financial Oversight: Implement more robust internal controls for monitoring expenses. Provide detailed expense breakdowns in reports for clearer accountability.
Stakeholder Engagement: Increase outreach efforts to grassroots communities to foster growth in memberships and local sponsorships. Highlight measurable outcomes from elite athlete investments to appeal to donors and sponsors.
Based on the financial trajectory observed, if USA Track & Field continues its pattern of significant annual deficits (e.g., $5.4M in 2023 and $7.9M in 2022), coupled with a declining cash reserve (down to $1.06M in 2023), the organization could potentially face collapse within 2 to 3 years.
This estimate assumes:
No significant increase in revenue (e.g., sponsorships, memberships, or events).
Current liabilities remain consistent, including the $4.9M line of credit and other short-term debts.
No drastic cost-cutting measures are implemented.
Without intervention, cash flow issues may accelerate as liabilities grow and assets diminish, leaving the organization unable to fund day-to-day operations or meet financial obligations.
The salary seems high for the results obtained. I'm assuming the broadcasting rights for the national championships is the main source of revenue. The prize money paid to the athletes is next to nothing. It seems the only essential service USATF provides is as a qualifier for worlds and the Olympics. If the qualifiers were chosen by a point system from Diamond League and other events, then the USATF would cease to exist. I'm unaware of any other sports organization (PGA, NBA, USTA) where the head of the organization is paid more than the prize money paid to all of the athletes. Bizarre.
The salary seems high for the results obtained. I'm assuming the broadcasting rights for the national championships is the main source of revenue. The prize money paid to the athletes is next to nothing. It seems the only essential service USATF provides is as a qualifier for worlds and the Olympics. If the qualifiers were chosen by a point system from Diamond League and other events, then the USATF would cease to exist. I'm unaware of any other sports organization (PGA, NBA,USTA) where the head of the organization is paid more than the prize money paid to all of the athletes. Bizarre.
don't care how much usatf goes in the red or even collapses. with the ludicrous money they are paying people like max, snoop, etc., piss on'em. either way, the athlete's get basically nothing. it's a joke. number two to olympic athletes prize money compared to the billions of dollars in t.v. money made that goes to everybody but the athletes.
Serious question: what happens if the USATF collapses?
Very little. They already rely on bidders to host all their championships. The rest can be done by volunteers or a couple us Olympic committee members.
USATF gives a $50 Nike Outlet Store Gift Card to meet volunteers such has Hurdles Crews, Video Camera Man, Still Snap Shooters crawling on the floor at the steeple chase, etc.
The markup on $50 of goods is 100x so a $50 gift card is actually worth only $.50 cents for goods.
The video and still guys have to turn in all video footage and still photos as USATF property and can't sell the footage or pictures.
USATF doesn't pay media volunteers for travel, food, hotel, etc.
USATF then puts an assent valuation on $10,000 on each videographer/photographer submission.
USATF then lists it's media asset valuation to obtain business loans, etc.
That's a common racket amongst US amatuer sports federations.
USATF gives a $50 Nike Outlet Store Gift Card to meet volunteers such has Hurdles Crews, Video Camera Man, Still Snap Shooters crawling on the floor at the steeple chase, etc.
The markup on $50 of goods is 100x so a $50 gift card is actually worth only $.50 cents for goods.
The video and still guys have to turn in all video footage and still photos as USATF property and can't sell the footage or pictures.
USATF doesn't pay media volunteers for travel, food, hotel, etc.
USATF then puts an assent valuation on $10,000 on each videographer/photographer submission.
USATF then lists it's media asset valuation to obtain business loans, etc.
That's a common racket amongst US amatuer sports federations.
Link?
You posted this twice, so you must have evidence to share. I would be interested to see it!
How is it possible for your net assets to be less than your liabilities and equity? Everything I remember from accounting is Assets = Liabilities + Owners Equity.
It’s not possible, you are right. My CPA wife confirmed it.
Your wife should be fired. Liabilities that exceed assets results in a negative net asset.
