2020 KSA Audit Report

K-State Athletics, Inc.
Manhattan, Kansas
Financial Statements
June 30, 2020 and 2019
K-STATE ATHLETICS, INC.
TABLE OF CONTENTS

PAGE
INDEPENDENT AUDITOR’S REPORT 1–2
FINANCIAL STATEMENTS
Statements of Financial Position 3–4
Statements of Activities 5
Statements of Functional Expense
For the year ended June 30, 2020 6
For the year ended June 30, 2019 7
Statements of Cash Flows 8–9
Notes to the Financial Statements 10 – 31
SUPPLEMENTARY INFORMATION
Schedules of Activities by Program
For the year ended June 30, 2020 32 – 33
For the year ended June 30, 2019 34 – 35
727 POYNTZ AVE. STE 601 • MANHATTAN, KS 66502-0124 • 785.537.0190 • FAX 785.537.0158
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors of

K-State Athletics, Inc.
We have audited the accompanying financial statements of K-State Athletics, Inc. (a non-profit
organization, and blended component unit of Kansas State University), which comprise the
statements of financial position as of June 30, 2020 and 2019, and the related statements of
activities, functional expenses, and cash flows for the years then ended, and the related notes to
the financial statements.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements
in accordance with accounting principles generally accepted in the United States of America; this
includes the design, implementation, and maintenance of internal control relevant to the
preparation and fair presentation of financial statements that are free from material misstatement,
whether due to fraud or error.
Auditor's Responsibility
Our responsibility is to express an opinion on these financial statements based on our audits. We
conducted our audits in accordance with auditing standards generally accepted in the United States
of America. Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and
disclosures in the financial statements. The procedures selected depend on the auditor's judgment,
including the assessment of the risks of material misstatement of the financial statements, whether
due to fraud or error. In making those risk assessments, the auditor considers internal control
relevant to the entity' s preparation and fair presentation of the financial statements in order to
design audit procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the entity' s internal control. Accordingly, we express
no such opinion. An audit also includes evaluating the appropriateness of accounting policies used
and the reasonableness of significant accounting estimates made by management, as well as
evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our qualified audit opinion.
Basis for Qualified Opinion
K-State Athletics, Inc. 's financial statements do not value life settlement contracts and donor pledges to
continue payment of premiums at fair market value as discussed in Note 1. In our opinion, fair market
valuation is required by accounting principles generally accepted in the United States of America.
K-State Athletics, Inc. 's financial statements do not disclose the aggregate carrying amount of all
investments by major type and the related basis for determining the fair values of those investments as
of June 30, 2020. In our opinion, disclosure of the information is required by accounting principles
generally accepted in the United States of America.
Qualified Opinion
In our opinion, except for the possible effects of the matters described in the Basis for Qualified Opinion
paragraphs, the financial statements referred to above present fairly, in all material respects, the financial
position of K-State Athletics, Inc. as of June 30, 2020 and 20 19, and the changes in its net assets and its
cash flows for the years then ended in accordance w ith accounting principles generally accepted in the
United States of America.
Report on Supplementary Information
Our audit was conducted for the purpose of forming an opinion on the financial statements as a whole.
The supplementary schedules of activities by program are presented for purposes of additional analysis
and are not a required part of the financial statements. Such information is the responsibility of
management and was derived from and relates directly to the underlying accounting and other records
used to prepare the financial statements. The information has been subjected to the auditing procedures
applied in the audit of the financial statements and certain additional procedures, including comparing
and reconciling such information directly to the underlying accounting and other records used to prepare
the financial statements or to the financial statements themselves, and other additional procedures in
accordance with auditing standards generally accepted in the United States of America. In our opinion,
r
the information is fairly stated in all material respects in relation to the financial statements as a whole.
&k al---,A,,A,,uJ.u, Cf>A ,f.A,
James Gordon & Associates CPA, P.A.

Manhattan, Kansas
August 3 1, 2020
2
•
STATEMENTS OF FINANCIAL POSITION
JUNE 30,
ASSETS
2020 2019
Current Assets
Cash $ 29,559,478 $ 44,761,619
Tickets receivable 2,362 6,694
Accounts receivable 2,546,533 20,670
Pledges receivable, net of allowance 7,417,474 4,510,257
Investments held by KSU Foundation 2,355,837 3,329,358
Prepaid expenses 367,910 10,457
Total Current Assets 42,249,594 52,639,055
Property and Equipment

Equipment and furniture 13,955,560 13,260,007
Leasehold improvements 289,967,604 264,722,588
Fixed equipment 17,209,760 16,389,579
Construction in progress 14,226,031 11,381,132
335,358,955 305,753,306
Less accumulated depreciation and amortization (75,338,675) (66,115,608)
Total Property and Equipment 260,020,280 239,637,698
Investments
Investments held by trustee under bond indenture 12,042,040 12,009,216
Total Investments 29,261,227 29,784,759
Other Assets
Key employee cash value life insurance 452,166 441,278
Life settlement contracts 2,267,487 2,195,653
Total Other Assets 28,242,675 21,927,899
Total Assets $ 359,773,776 $ 343,989,411
See Accompanying Notes to the Financial Statements.

3

STATEMENTS OF FINANCIAL POSITION
JUNE 30,
LIABILITIES AND NET ASSETS
2020 2019
Current Liabilities
Accounts payable $ 2,548,176 $ 3,833,181
Retainage payable 447,290 825,828
Accrued payroll 1,090,247 944,755
Accrued compensated absences 2,479,853 1,825,298
Accrued interest 1,070,066 1,115,666
Other accrued liabilities 1,500,000 2,910,000
Advance ticket sales 8,371,177 10,956,474
Deferred revenue 5,293 4,453
Bonds payable - current 3,735,730 2,884,244
Total Current Liabilities 21,247,832 25,299,899
Long-term Liabilities
Bonds payable 58,054,714 61,790,445
Accreted interest on bond payable - 728,601
Other accrued liabilities 660,000 570,000
Other long-term liabilities 458,723 447,677
Total Long-Term Debt 59,173,437 63,536,723
Total Liabilities 80,421,269 88,836,622
Net Assets
Without donor restrictions 237,773,611 207,297,236
With donor restrictions 41,578,896 47,855,553
Total Net Assets 279,352,507 255,152,789
Total Liabilities and Net Assets $ 359,773,776 $ 343,989,411

4

STATEMENTS OF ACTIVITIES
FOR THE YEARS ENDED JUNE 30,
2020 2019
Without Donor With Donor Without Donor With Donor
Restrictions Restrictions Total Restrictions Restrictions Total
Revenues and Support
Ticket sales $ 14,544,893 $ - $ 14,544,893 $ 15,903,615 $ - $ 15,903,615
Guarantees 305,000 - 305,000 12,500 - 12,500
Big 12 receipts 40,184,260 - 40,184,260 39,968,833 - 39,968,833
NCAA receipts 122,952 - 122,952 1,100,758 - 1,100,758
Program/video/media guide sales 9,681 - 9,681 60,978 - 60,978
Radio and TV contracts 5,175,000 - 5,175,000 5,714,500 - 5,714,500
Concessions 429,343 - 429,343 423,083 - 423,083
Parking 729,156 - 729,156 773,340 - 773,340
Contributions 15,651,234 4,995,119 20,646,353 18,582,562 1,977,565 20,560,127
Interest income 577,326 - 577,326 558,991 - 558,991
License royalties/commissions 2,178,521 - 2,178,521 2,391,562 - 2,391,562
Investment income (loss), net 12,182 191,058 203,240 288,199 937,333 1,225,532
Other revenue 1,335,382 - 1,335,382 1,226,003 - 1,226,003
Net assets released from restrictions 35,354,338 (35,354,338) - 14,047,127 (14,047,127) -
Total Revenues and Support before

Capital Campaign Contributions 116,609,268 (30,168,161) 86,441,107 101,052,051 (11,132,229) 89,919,822
Capital campaign contributions - 23,891,504 23,891,504 - 29,204,094 29,204,094
Total Revenues and Support 116,609,268 (6,276,657) 110,332,611 101,052,051 18,071,865 119,123,916
Expenses
Program services 48,714,192 - 48,714,192 49,002,667 - 49,002,667
Management and general 27,808,968 - 27,808,968 30,541,215 - 30,541,215
Fundraising 2,392,117 - 2,392,117 2,685,775 - 2,685,775
Expenses Before Leasehold

Amortization 78,915,277 - 78,915,277 82,229,657 - 82,229,657
Leasehold amortization 7,217,616 - 7,217,616 6,510,387 - 6,510,387

Total Expenses 86,132,893 - 86,132,893 88,740,044 - 88,740,044
Change in Net Assets 30,476,375 (6,276,657) 24,199,718 12,312,007 18,071,865 30,383,872
Net Assets, Beginning of Year 207,297,236 47,855,553 255,152,789 194,985,229 29,783,688 224,768,917
Net Assets, End of Year $ 237,773,611 $ 41,578,896 $ 279,352,507 $ 207,297,236 $ 47,855,553 $ 255,152,789

5

STATEMENT OF FUNCTIONAL EXPENSE
FOR THE YEAR ENDED JUNE 30, 2020
Management
Program and General Fundraising Total
Expenses
Salaries $ 22,963,405 $ 10,627,429 $ 1,137,923 $ 34,728,757
Insurance 758,088 507,266 - 1,265,354
Telephone 142,024 187,768 24,079 353,871
Interest expense - 2,070,129 - 2,070,129
Staff travel 195,452 121,471 142,725 459,648
Team travel 6,993,439 - - 6,993,439
Recruiting 1,413,102 - - 1,413,102
Guarantees 1,849,097 - - 1,849,097
Athletic aid 8,766,039 - - 8,766,039
Maintenance 17,687 1,160,810 50 1,178,547
Equipment and supplies 2,155,338 233,371 1,706 2,390,415
Outside printing 48,677 277,704 74,291 400,672
Game day services 19,509 842,327 8,038 869,874
Officials 819,482 - - 819,482
Institutional support fee - 815,933 - 815,933
Outside medical expenses 121,169 - - 121,169
Operational expenses 2,451,684 8,959,310 1,003,305 12,414,299
Depreciation - 2,005,450 - 2,005,450

Amortization 48,714,192 27,808,968 2,392,117 78,915,277
Leasehold amortization - 7,217,616 - 7,217,616
Total Expenses $ 48,714,192 $ 35,026,584 $ 2,392,117 $ 86,132,893

6

STATEMENT OF FUNCTIONAL EXPENSE
Management
Program and General Fundraising Total
Expenses
Salaries $ 22,753,655 $ 12,468,076 $ 1,144,825 $ 36,366,556
Insurance 722,150 374,124 - 1,096,274
Telephone 181,862 234,954 28,676 445,492
Interest expense - 2,235,243 - 2,235,243
Staff travel 304,685 221,629 329,099 855,413
Team travel 6,250,225 - - 6,250,225
Recruiting 1,654,927 - - 1,654,927
Guarantees 2,112,723 - - 2,112,723
Athletic aid 9,145,995 - - 9,145,995
Maintenance 33,501 1,282,211 - 1,315,712
Equipment and supplies 2,164,244 217,563 3,056 2,384,863
Outside printing 40,959 305,420 112,161 458,540
Game day services 11,866 974,785 7,263 993,914
Officials 803,346 - - 803,346
Institutional support fee - 868,777 - 868,777
Outside medical expenses 116,619 - - 116,619
Operational expenses 2,705,910 9,549,254 1,060,695 13,315,859
Depreciation - 1,809,179 - 1,809,179

Amortization 49,002,667 30,541,215 2,685,775 82,229,657
Leasehold amortization - 6,510,387 - 6,510,387
Total Expenses $ 49,002,667 $ 37,051,602 $ 2,685,775 $ 88,740,044

7

STATEMENTS OF CASH FLOWS
2020 2019
Operating Activities
Changes in net assets $ 24,199,718 $ 30,383,872
Adjustments to Reconcile Change in Net Assets to Net Cash
Provided by Operating Activities:
Depreciation and leasehold amortization 9,223,066 8,319,566
Amortization of bond issuance costs 80,796 87,732
Amortization of bond premium (73,642) (71,360)
Accreted interest on bonds - 62,787
Pledges received restricted for capital projects 23,891,504 29,204,094
Net realized and unrealized (gains) losses on investments 622,613 (83,122)
Life settlement contracts contributions (71,834) (6,963)
Changes in:
Tickets receivable 4,332 (5,273)
Accounts receivable (2,525,863) 14,795
Contributions receivable (38,781,271) (60,075,114)
Prepaid expenses (357,453) 155,083
Key employee cash value life insurance (10,888) (10,625)
Accounts payable, accrued expenses and other liabilities (2,229,096) 3,711,472
Deferred revenues 840 4,453
Advance ticket sales (2,585,297) (674,144)
Other long-term liabilities 11,046 10,779
Net cash provided by operating activities 11,398,571 11,028,032
Investing Activities
Contributions to investments held by KSU Foundation (15,623,757) (20,577,377)
Withdrawals from investments held by KSU Foundation 16,531,021 21,181,350
Deposits to investments held by trustee under bond indenture 413,367 1,452,992
Withdrawals to investments held by trustee under bond indenture (446,191) (1,248,733)
Purchase of property and equipment (29,605,648) (16,941,115)
Net cash used in investing activities (28,731,208) (16,132,883)

8

STATEMENTS OF CASH FLOWS
2020 2019
Financing Activities
Proceeds from pledges restricted for capital projects 5,750,496 25,551,353
Principal payments on athletic facilities revenue bonds (2,891,399) (2,659,432)
Payments on accreted interest on bond payable (728,601) (880,568)
Proceeds from note payable - (5,300,000)
Net cash used in financing activities 2,130,496 16,711,353
Increase (decrease) in cash (15,202,141) 11,606,502
Cash, beginning of year 44,761,619 33,155,117
Cash, end of year $ 29,559,478 $ 44,761,619
Supplemental Cash Flow Information

Interest paid $ 2,915,148 $ 3,167,515

9

NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2020 AND 2019
Note 1: Nature of Operations and Summary of Significant Accounting Policies

Nature of Operations
K-State Athletics, Inc. (KSA) is a not-for-profit entity, organized under the laws of the State of Kansas.
It was formed to provide an intercollegiate athletic program for the students, faculty, alumni, guests
and visitors of Kansas State University (University). KSA’s primary source of revenue is derived from
athletic event ticket sales, conference distributions and contributions. As a blended component unit of
the University, KSA has agreed to operate as a department of the University and be subject to the
regulations and administrative policies of the University.
Basis of Accounting
The financial statements of the Organization have been prepared on the accrual basis in accordance with
accounting principles generally accepted in the United States of America. The financial statements are
presented in accordance with Financial Accounting Standards Board (FASB) Accounting Standards
Codification (ASC) 958 dated August 2016, and the provisions of the American Institute of Certified
Public Accountants (AICPA) "Audit and Accounting Guide for Not-for-Profit Organizations" (the
Guide).
Under the provisions of the Guide, net assets and revenues, and gains and losses are classified based on
the existence or absence of donor-imposed restrictions. Accordingly, the net assets of KSA and changes
therein are classified as follows:
Net assets without donor restrictions: Net assets that are not subject to donor-imposed restrictions
and may be expended for any purpose in performing the primary objectives of KSA. KSA's board
may designate assets without restrictions for specific operational purposes from time to time.
Net assets with donor restrictions: Net assets subject to stipulations imposed by donors, and
grantors. Some donor restrictions are temporary in nature; those restrictions will be met by actions
of KSA or by the passage of time. Other donor restrictions are perpetual in nature, whereby the donor
has stipulated the funds be maintained in perpetuity.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted
in the United States of America requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
Cash and Cash Equivalents
KSA considers all highly liquid demand deposit accounts to be cash equivalents. These include
custodial bank deposits handled by the Kansas State University Division of Financial Services plus
cash in demand deposit accounts and certificates of deposit at other financial institutions.
10
JUNE 30, 2020 AND 2019
Note 1: Nature of Operations and Summary of Significant Accounting Policies (continued)

Accounts Receivable
Accounts receivable are stated at cost, and are written off when management estimates that they will
not be collected. The allowance for doubtful accounts is estimated at zero, based on a minimal history
of incurring bad debts.
Pledges Receivable
KSA reports pledges receivable expected to be collected within one year at net realizable value.
Pledges expected to be collected in future years are initially reported at fair value determined using
the discounted present value of future contributions. KSA provides an allowance for doubtful
collections, which is based upon a review of outstanding pledge receivables, historical collection
information and existing economic conditions. Pledge receivables are considered past due if they are
not received by their payment instrument due date. Delinquent pledges are written off based on
individual credit evaluation and specific circumstances of the donor.
Receivables from estates are recorded at the time KSA is notified of the death of a donor and the
amount receivable from the estate can be reasonably measured.
Inventories
Consumable athletic equipment and supplies are treated as expenditures in the period in which they
are acquired.
Investments Managed by the Kansas State University Foundation
Endowment funds and with donor restriction funds are invested in a pooled fund managed by the
Kansas State University Foundation (the Foundation). Investment earnings are allocated monthly
based on each fund participant’s and/or endowment’s pro rata share in the fund.
Investments in equity securities, mutual funds and futures contracts having a readily determinable fair
value and all debt securities are carried at fair value. Investments in pooled separate accounts, private
capital funds and hedge funds are recorded at the estimated net asset value per share, as a practical
expedient to fair value, of the investments. Closely held stock is recorded at fair value as determined
by a third-party appraiser hired by the Foundation for which KSA holds stock. KSA has elected to
record other investments consisting primarily of real estate at fair value. Investment return includes
dividend, interest and other investment income; realized and unrealized gains and losses on
investments carried at fair value; and realized gains and losses on other investments, less external and
direct internal investment expenses.
Investment return that is initially restricted by donor stipulation and for which the restriction will be
satisfied in the same year is included in net assets without donor restrictions. Other investment return
is reflected in the statements of activities with or without donor restrictions, based upon the existence
and nature of any donor or legally imposed restrictions.
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JUNE 30, 2020 AND 2019

Investments Managed by the Kansas State University Foundation (continued)
The Foundation maintains pooled investment accounts for its and KSA’s endowments. Investment
income and realized and unrealized gains and losses from securities in the pooled investment accounts
are allocated monthly to the individual endowments based on the relationship of the fair value of the
interest of each endowment to the total fair value of the pooled investments account, as adjusted for
additions to or deductions from those accounts.
Investments Held by Trustee under Bond Indenture
Investments held under bond indenture consist of money market funds, which are carried at fair value,
and a guaranteed investment contract, which is recorded at cost.
Property and Equipment
Property and equipment are stated at cost less accumulated depreciation. Depreciation is charged to
expense using the straight-line method over the estimated useful life of each asset. KSA’s policy is to
capitalize property and equipment over $1,000.
Buildings and related improvements constructed and financed by KSA on property owned by the
University are reported as leasehold improvements. The University recognizes these as fixed assets
on their financial statements. The University’s related depreciation expense is reported as leasehold
amortization by KSA. Affixed improvements not recognized by the University as fixed assets are
reported as fixed equipment by KSA.
The estimated useful lives for each major depreciable classification of property and equipment are as
follows:
Leasehold improvements 25 - 40 years
Equipment and furniture 10 years
Fixed equipment 40 years
In-Kind Contributions
KSA receives in-kind contributions of supplies and services from donors and others. It is the policy
of KSA to record, as contribution revenue in the financial statements, the estimated fair value of these
supplies and services received, and also to record a like amount of expense to reflect the immediate
consumption of these supplies and services. Revenue and expense related to in-kind services are only
recorded when the services received create or enhance nonfinancial assets or require specialized skills
possessed by the individuals providing the service and the service would typically need to be
purchased if not donated. For the years ended June 30, 2020 and 2019, $278,308 and $350,017
respectively, of in-kind supplies and services was received and consumed by KSA.
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JUNE 30, 2020 AND 2019

Contributions
Gifts of cash and other assets received without donor stipulations are reported as revenues and net
assets without donor restrictions. Gifts received with a donor stipulation that limits their use are
reported as revenues and net assets with donor restrictions. When a donor stipulated time restriction
ends, or purpose restriction is accomplished, net assets with donor restricted are reclassified to net
assets without donor restrictions and reported in the statement of activities as net assets released from
restrictions. Gifts having donor stipulations which are satisfied in the period the gift is received are
reported as revenue and net assets without donor restrictions.
Gifts of land, buildings, equipment and other long-lived assets are reported at estimated or appraised
values at the time of receipt as revenue and net assets without restriction unless explicit donor
stipulations specify how such assets must be used, in which case the gifts are reported as revenue and
net assets with donor restrictions. Absent explicit donor stipulations, for the time long-lived assets that
must be held, expirations of restrictions resulting in reclassification of the restricted net assets as
unrestricted net assets are reported when the long-lived assets are placed in service.
Unconditional gifts expected to be collected within one year are reported at their net realizable value.
Unconditional gifts expected to be collected in future years are initially reported at fair value,
determined using the discounted present value of estimated future cash flows technique. The resulting
discount is amortized using the level-yield method and is reported as contribution revenue.
Conditional gifts depend on the occurrence of a specified future and uncertain event to bind the
potential donor and are recognized as assets and revenue when the conditions are substantially met
and the gift becomes unconditional.
Life Settlement Contracts
KSA holds title to life settlement contracts donated to the University prior to 2008. The contributors
transferred ownership rights to KSA for the future establishment of an endowment or payment of
future premiums. Several of the contributors have pledged to continue premium payments. KSA
values the contracts at the current cash surrender value. This policy does not comply with current
accounting principles generally accepted in the United States of America which requires valuation at
the fair market value. The fair market value of these contracts is presumed to be significantly higher
than cash surrender value. Management and the Board of Directors have determined that the expense
of obtaining the fair market value precludes adopting a fair market valuation policy.
Compensated Absences
Vacation leave is accrued at eighteen days per year for employees with less than five years of service,
twenty-two days per year for employees with five to nine years of service, twenty-six days per year
for employees with ten to fourteen years of service and thirty days per year for employees with fifteen
or more years of service. Accrued vacation is paid upon an employee’s separation from benefits-
eligible employment up to a maximum of 176 hours for non-retirement eligible separations and 240
hours for retirement eligible separations.
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JUNE 30, 2020 AND 2019

Income Taxes
KSA is a not-for-profit corporation exempt from federal income taxes under Code Section 501(c)(3)
of the Internal Revenue Code. KSA has met the requirements under Code Section 501(a) and is not
required to file Form 990. However, KSA is subject to federal income tax on any unrelated business
taxable income.
KSA has adopted the application of the uncertain tax position provisions of FASB ASC 740, Income
Taxes. KSA evaluates its uncertain tax positions using the provisions of FASB ASC 450,
Contingencies. Accordingly, a loss contingency would be recognized when it is probable that a
liability has been incurred as of the date of the financial statements and the amount of the loss can be
reasonably estimated.
The amount recognized is subject to estimate and management judgment with respect to the likely
outcome of each uncertain tax position. The amount that is ultimately sustained for an individual
uncertain tax position or for all uncertain tax positions in the aggregate could differ from the amount
recognized. As of June 30, 2020, and 2019, there were no uncertain tax positions identified.
KSA is no longer subject to tax examinations by tax authorities for Forms 990, Return of Organization
Exempt from Income Tax, for fiscal years before July 1, 2016.
Transfers Between Fair Value Hierarchy Levels
Transfers in and out of Level 1 (quoted market prices), Level 2 (other significant observable inputs)
and Level 3 (significant unobservable inputs) are recognized on the date the transaction occurs.
Deferred Revenue
Deferred revenue consists of advanced payments received for special events scheduled in future fiscal
years. Revenue is recognized in the fiscal year the event occurs.
Advance Ticket Sales
Advance ticket sales represent tickets sold for future athletic events. Revenue is recognized in the
fiscal year the athletic event is held.
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JUNE 30, 2020 AND 2019

New Accounting Pronouncement
In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers, to replace a
wide range of industry-specific rules with a broad, principles-based framework for recognizing and
measuring revenue from contracts with customers. The guidance is codified at FASB ASC 606 The core
principle of the new guidance is that an entity should recognize revenue to reflect the transfer of goods
and services to customers in an amount equal to the consideration the entity receives or expects to
receive. KSA has adopted this updated in 2020 under the modified retrospective method. Additionally,
KSA applied the practical expedient (i) to account for revenues with similar characteristics as a
collective group rather than individually, (ii) to not adjust the transaction price for the effects of
significant financing components (if any), and (iii) to not disclose the transaction price allocated to
unsatisfied or partially unsatisfied performance obligations as of the end of the reporting period when
the performance obligations related to contracts with an expected duration of less than one year. There
was no effect on net assets upon the adoption of the ASU.
On June 21, 2018, FASB issued ASU 2018-08, Clarifying the Scope and the Accounting Guidance
for Contributions Received and Contributions Made. This standard is intended to address questions
stemming from ASU 2014-09, Revenue from Contracts with Customers (Topic 606), regarding its
implications on grants and contracts of not-for-profit organizations. The ASU has been applied
retrospectively to all periods presented. There was no effect on net assets upon the adoption of the
ASU.
Pending Accounting Pronouncements
In February 2016, the FASB issued ASU 2016-02, Leases. The update requires a lessee to recognize
a right-of-use asset and lease liability, initially measured at the present value of the lease payments,
in its statements of financial position. The guidance also expands the required quantitative and
qualitative lease disclosures. On April 8, 2020 the FASB voted to defer the effective date of ASU
2016-02 by one additional year. The ASU is now effective for the Organization's 2022 fiscal year.
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JUNE 30, 2020 AND 2019

Functional Expenses
The costs of providing program and other activities have been summarized on a functional basis in
the statements of activities. Accordingly, certain costs have been allocated among program services
and supporting services benefited. Such allocations are determined by management on an equitable
basis. The expenses that are allocated include the following:
Expense Method of Allocation
Salaries Time and Effort
Insurance Time and Effort
Telephone Time and Effort
Staff travel Time and Effort
Maintenance Time and Effort
Equipment and supplies Time and Effort
Outside printing Time and Effort
Game day services Time and Effort
Officials Time and Effort
Operational expenses Time and Effort
Note 2: Cash on Deposit with Kansas State University Division of Financial Services
The Kansas State University Division of Financial Services is the custodian for cash deposited at
banks on behalf of KSA. This cash is in a combined account with other custodial cash from affiliates
of the University, such as the K-State Student Union, to increase the potential earnings on the
accounts. The Kansas State University Division of Financial Services distributes the account income
monthly based upon the relative share of the participants’ cash balances.
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JUNE 30, 2020 AND 2019
Note 3: Pledges Receivable

At June 30, 2020 and 2019, pledges receivable consisted of the following, discounted at a rate of
3.25% and 5.50%, respectively:
2020 2019
Due within one year $ 7,959,574 $ 4,779,264
Due in one to five years 20,443,549 17,572,679
More than five years 9,388,750 6,005,000
37,791,873 28,356,943
Less unamortized discount 4,167,670 4,237,188
Less allowance for uncollectible accounts 683,707 318,530
$ 32,940,496 $ 23,801,225
Pledges receivable are classified within the statements of financial position as follows:
2020 2019
Pledges receivable - current $ 7,417,474 $ 4,510,257
Pledges receivable - non-current 25,523,022 19,290,968
$ 32,940,496 $ 23,801,225
Management estimates an allowance for doubtful collections on pledges receivable based on historical
trends, individual donor circumstances and current economic conditions. Actual future collections on
pledges could result in material future losses.
17
JUNE 30, 2020 AND 2019
Note 4: Investments and Investment Return

Investments as of June 30, 2020 and 2019 consisted of the following:
2020 2019
Held by KSU Foundation:
Cash $ 2,355,837 $ 3,329,358
Endowment pool 17,219,187 17,775,543
19,575,024 21,104,901
Held by Trustee Under Bond Indenture:

Money market mutual funds 12,042,040 11,659,627
Guaranteed investment contract - 349,589
12,042,040 12,009,216
Total Investments $ 31,617,064 $ 33,114,117
Investments are classified within the statement of financial position as follows:

2020 2019
Current:
Investments held by KSU Foundation $ 2,355,837 $ 3,329,358
Non-current:
Investments held by trustee under bond indenture 12,042,040 12,009,216
$ 31,617,064 $ 33,114,117
Total investment return is comprised of the following:

2020 2019
Interest and dividend income $ 825,853 $ 1,142,410
Net realized and unrealized gains (losses) (622,613) 83,122
$ 203,240 $ 1,225,532
The Foundation holds various investments for KSA. The majority of these investments originated
from donor contributions and were entrusted to the Foundation for the benefit of KSA’s operations
and activities.
18
JUNE 30, 2020 AND 2019
Note 4: Investments and Investment Return (continued)

In order to ensure observance of limitations and restrictions that donors may have placed on the use
of these resources, the Foundation manages the resources as separate fund accounts, according to their
nature and purpose; however, these separate accounts have been combined into appropriate accounting
classifications in the accompanying financial statements.
The Foundation invests the funds in accordance with its investment policies and procedures. The
following is a description of the investment funds held at the Foundation:
Cash and Cash Equivalents
The Foundation considers all liquid investments with original maturities of three months or less to be
cash equivalents. Cash equivalents consist primarily of uninsured money market mutual funds and
certificates of deposit.
Endowment Pool
The Foundation’s endowment pool includes debt and equity securities for liquidity, donated assets
and real estate, as well as a managed portfolio of long-term investments.
Private capital and hedge funds are included in the endowment pool to diversify assets, provide
portfolio return enhancement and dampen volatility. Hedge fund managers run proprietary strategies
employing securities and instruments such as cash, stocks, partnerships, bonds and derivative
instruments including options, futures and swaps in various combinations, sometimes shorting various
securities and employing leverage to construct desired risk/return characteristics that are less
correlated to the major asset classes.
Information to determine the June 30, 2020 aggregate carrying amounts was not made available by
the Foundation as of the date of the independent auditor’s report. Presentation of the information is
required by accounting principles generally accepted in the United States of America.
Endowment Pool Return
The Foundation’s endowment pool investment management is governed by policies and procedures
established by the Asset Management Committee, a committee of the Foundation’s Board of
Directors, in collaboration with staff and consultants. Staff implements the policies through: 1) the
selection of investment strategies; 2) the hiring, monitoring and changing of investment managers;
and 3) rebalancing the portfolios. Investment results are monitored by the committee quarterly
through manager and portfolio performance and due diligence reporting.
19
JUNE 30, 2020 AND 2019


Endowment Pool Return (continued)
The Foundation’s endowment pool strives to achieve long term capital appreciation and consistent
income by utilizing a “total return investment strategy.” The Foundation uses an inflation adjusted
distribution policy attempting to provide a stable revenue stream to the University while maintaining
intergenerational equity. The distributions from the endowment pool are calculated by adjusting the
prior year’s distribution amount annually for inflation. To avoid potential unconscionable under-
distributions or unsustainable over-distributions relative to the endowment pool market value, the
annual inflation adjusted distribution is limited to maximum and minimum total distributions to
purpose. The maximum distributions to purpose are 4.50% of market value and the minimum
distributions are 3%, both of which are calculated annually using the market value at the beginning
of the fiscal year. This action is consistent with the Foundation’s Board of Directors’ long-term
strategic plans and attempts to treat all generations equitably and protect future purchasing power.
To satisfy its long-term rate of return objectives, the Foundation relies on a total return strategy in
which investment returns are achieved through both current yield (investment income such as
dividends and interest) and capital appreciation (both realized and unrealized). The Foundation targets
a diversified asset allocation to achieve its long-term return objectives within prudent risk constraints.
Total endowment pool investment returns reported by the Foundation are as follows:
Annual Fiscal Year Returns

June 30, 2020 n/a*
June 30, 2019 6.80%
June 30, 2018 9.15%
* Information for June 30, 2020 is not available at the date of the audit report.
20
JUNE 30, 2020 AND 2019


Alternative Investments
The fair value of alternative investments that have been estimated using the net asset value per share
as a practical expedient consist of the following at June 30, 2019:
June 30, 2019
Unfunded Redemption Redemption
Fair Value Commitments Frequency Notice Period
Pooled separate funds (A)
Equity Securities 4,308,086 - Monthly 5-45 days
Private Capital (B)
Real estate investments 1,034,856 248,365 None None
Venture capital 2,417,644 797,823 None None
Domestic private equity 1,124,154 1,371,468 None None
International private equity 402,885 245,760 None None
Private capital distressed debt - Illiquid 108,381 195,086 None None
Natural resources 702,620 470,755 None None
Fixed income 131,785 64,575 None None
Futures 468,585 - Monthly 3 days
Hedge funds
Absolute return (C) 621,745 - Monthly to Annually 45 days
Long/short equity (D) 1,543,153 - Monthly to Annually 30-90 days
(A) This category includes investments in pooled separate accounts which hold exchange-
traded equity securities, fixed income securities, and a multi-strategy commodities fund.
While the underlying securities in these accounts are primarily highly liquid, exchange-
traded securities, the nature of this type of account only allows for monthly liquidity at a
month end net asset value.
(B) This category includes investments in private equity and venture capital that invest
primarily in domestic and international private companies. Private capital funds are
structured as closed-end, commitment-based investment funds where a specified amount of
capital is committed upon inception of the fund which is then drawn down over a period of
three to five years, and distributions are received through the liquidation of underlying
assets of the fund. The typical term of these investments is 12-15 years. Such funds generally
do not provide redemption options for investors.
(C) This category includes investments in hedge funds that pursue multiple strategies to
diversify risks and reduce volatility. The funds’ composite portfolio includes investments in
U.S. common stocks, global real estate projects, and arbitrage investments. Certain funds
may have the ability to impose a suspension or postponement of redemptions until further
notice (a “Gate”). In addition, certain funds may delay payment of a portion of redemption
proceeds (a “Holdback”) until the annual audited financial statements are distributed.
21
JUNE 30, 2020 AND 2019


Alternative Investments (continued)
(D) This category includes investments in hedge funds that take both long and short positions,
primarily in U.S. common stocks. Management of the funds has the ability to shift
investments among differing investment strategies. Certain funds may have the ability to
impose a suspension or postponement of redemptions until further notice (a “Gate”). In
addition, certain funds may delay payment of a portion of redemption proceeds (a
“Holdback”) until the annual audited financial statements are distributed.
Note 5: Disclosures About Fair Value of Assets

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date. Fair value measurements must
maximize the use of observable inputs and minimize the use of unobservable inputs. There is a
hierarchy of three levels of inputs that may be used to measure fair value:
Level 1 Quoted prices in active markets for identical assets or liabilities.
Level 2 Observable inputs other than Level 1 prices, such as quoted prices for similar assets or
liabilities; quoted prices in markets that are not active; or other inputs that are observable
or can be corroborated by observable market data for substantially the full term of the
assets or liabilities.
Level 3 Unobservable inputs supported by little or no market activity and are significant to the
fair value of the assets or liabilities.
Recurring Measurements
The following tables present the fair value measurements of assets and liabilities on a recurring basis
recognized in the accompanying statements of financial position and the corresponding level within
the fair value hierarchy at June 30, 2020 and 2019. Information to determine the June 30, 2020 levels
was not available from the Foundation as of the date of the audit report.
June 30, 2020
Fair Value Level 1 Level 2 Level 3
Investments held by trustee under
bond indenture
Money market mutual funds 12,042,040 12,042,040 - -
$ 12,042,040 $ 12,042,040 $ - $ -
22
JUNE 30, 2020 AND 2019

Note 5: Disclosures About Fair Value of Assets (continued)

Recurring Measurements (continued)
June 30, 2019

Fair Value Level 1 Level 2 Level 3
Investments held by KSU
Foundation
Cash and cash equivalents
Money market mutual funds $ 3,329,358 $ 3,329,358 $ - $ -
Investments
Marketable equity securities 4,911,649 4,911,649 - -
Pooled Separate funds
Equity securities (A) 4,308,086 - - -
Private capital
Real estate investments (A) 1,034,856 - - -
Venture capital (A) 2,417,644 - - -
Domestic private equity (A) 1,124,154 - - -
International private equity (A) 402,885 - - -
Private capital distressed debt (A) 108,381 - - -
Natural resources (A) 702,620 - - -
Fixed income (A) 131,785 - - -
Futures (A) 468,585 - - -
Hedge funds
Absolute return (A) 621,745 - - -
Long/short equity (A) 1,543,153 - - -
Investments held by trustee under
bond indenture
Money market mutual funds 11,659,627 11,659,627 - -
$ 32,764,528 $ 19,900,634 $ - $ -
(A) Certain investments that are measured at fair value using the net asset value per share (or
its equivalent) practical expedient have not been classified in the fair value hierarchy. The
fair value amounts included above are intended to permit reconciliation of the fair value
hierarchy to the amounts presented in the statements of financial position.
Following is a description of the valuation methodologies and inputs used for assets and liabilities
measured at fair value on a recurring basis and recognized in the accompanying statements of financial
position, as well as the general classification of such assets and liabilities pursuant to the valuation
hierarchy. There have been no significant changes in the valuation techniques during the year ended
June 30, 2020. For assets classified within Level 3 of the fair value hierarchy, the process used to
develop the reported fair value is described below.
23
JUNE 30, 2020 AND 2019

Note 5: Disclosures About Fair Value of Assets (continued)

Investments
Where quoted market prices are available in an active market, securities are classified within Level 1
of the valuation hierarchy. If quoted market prices are not available, then fair values are estimated by
using quoted prices of securities with similar characteristics or independent asset pricing services and
pricing models, the inputs of which are market-based or independently sourced market parameters,
including, but not limited to, yield curves, interest rates, volatilities, prepayments, defaults, cumulative
loss projections and cash flows. Such securities are classified in Level 2 of the valuation hierarchy. In
certain cases where Level 1 or Level 2 inputs are not available, securities are classified within Level
3 of the hierarchy.
Fair value determinations for Level 3 measurements of securities, closely held stock and real estate
investments are the responsibility of management. Management obtains fair value estimates from the
investment managers or fair value specialist on a monthly, quarterly or annual basis. For real estate
investments, management obtains fair value estimates from both internal and external valuation
sources, including county tax appraisals and historic comparable sales information. Management
challenges the reasonableness of the assumptions used and reviews the methodology to ensure the
estimated fair value complies with accounting standards generally accepted in the United States.
Note 6: Life Settlement Contracts

At June 30, 2020 and 2019, donors have assigned ownership of their life settlement contracts to KSA.
The face value of the assigned policies at June 30, 2020 and 2019 was $12,870,134. The cash
surrender values of these policies are $2,267,487 and $2,195,653, as of June 30, 2020 and 2019,
respectively.
Note 7: Endowment Funds

KSA follows the investment and endowment pool policies of the Foundation, a separately audited
entity. KSA has adopted the same policies for their endowments. The Foundation’s endowment pool
strives to achieve long-term capital appreciation and consistent income by utilizing a “total return
investment strategy.” The Foundation uses an inflation adjusted distribution policy attempting to
provide a stable revenue stream from KSA endowed funds while maintaining intergenerational equity.
KSA has approximately 160 individual endowment funds established for a variety of purposes that
are held and managed by the Foundation. As required by accounting principles generally accepted in
the United States of America, net assets associated with endowment funds are classified and reported
based on the existence or absence of donor-imposed restrictions. KSA, in conjunction with the
Foundation, has interpreted the State of Kansas’ Uniform Prudent Management of Institutional Funds
Act (UPMIFA) as requiring the preservation of the fair value of the original gift as of the gift date of
the donor-restricted endowment funds, absent explicit donor stipulations to the contrary.
24
JUNE 30, 2020 AND 2019

Note 7: Endowment Funds (continued)

As a result of this interpretation, KSA classifies amounts in its donor-restricted endowment fund as
net assets with donor restrictions until the Board of Directors appropriates amounts for expenditure
and any purpose restrictions have been met. The Board of Directors of KSA has interpreted UPMIFA
as requiring the maintenance of only the original gift amount contributed to an endowment fund,
unless a donor stipulates the contrary. As a result of this interpretation, KSA would consider the fund
to be underwater if the fair value of the fund is less than the sum of (1) the original value of initial and
subsequent gifts donated to the fund and (2) any accumulations to the fund that are required to be
maintained in perpetuity in accordance with applicable donor gift instrument. KSA has interpreted
UPMIFA to permit spending from underwater funds in accordance with prudent measures required
under the law. The fund is not currently underwater.
In accordance with UPMIFA, KSA and the Foundation considers the following factors in making a
determination to appropriate or accumulate donor-restricted endowment funds:
1. The duration and preservation of the fund;
2. The purposes of KSA and the donor-restricted endowment fund;
3. General economic conditions;
4. The possible effect of inflation and deflation;
5. The expected total return from income and the appreciation of investments;
6. Other resources of the Foundation; and
7. The investment policies of the Foundation
From time to time, the fair value of assets associated with individual donor-restricted endowment
funds may fall below the level that the donor or UPMIFA requires KSA and the Foundation to retain
as a fund of perpetual duration. In accordance with GAAP, deficiencies of this nature that are reported
in without donor restricted net assets were $40,327 and $5,368 as of June 30, 2020 and 2019,
respectively. These deficiencies resulted from unfavorable market fluctuations that occurred shortly
after the investment of new permanently restricted contributions and continued appropriation for
certain programs that was deemed prudent by KSA and the Foundation.
At June 30, 2020 and 2019, the endowment fund is composed of:
2020 2019
Amounts required to be invested in perpetuity $ 15,779,188 $ 15,675,319

Accumulated investment gains 3,314,470 3,889,110
Amounts available for appropriation $ 19,093,658 $ 19,564,429
25
JUNE 30, 2020 AND 2019

Note 7: Endowment Funds (continued)

Changes in endowment net assets for the years ended June 30, 2020 and 2019, are as follows:
2020
Without Donor With Donor
Restriction Restriction Total
Endowment net assets, beginning of year $ (5,368) $ 19,564,429 $ 19,559,061

Investment return (net) - 190,872 190,872
Recovery of loss to unrestricted (34,959) 34,959 -
Contributions - 218,786 218,786
Appropriation of endowment assets for expenditure - (915,388) (915,388)
Endowment net assets, end of year $ (40,327) $ 19,093,658 $ 19,053,331
2019
Without Donor With Donor
Restriction Restriction Total
Endowment net assets, beginning of year $ (10,098) $ 19,246,400 $ 19,236,302

Investment return (net) - 937,333 937,333
Recovery of loss to unrestricted 4,730 (4,730) -
Contributions - 257,998 257,998
Appropriation of endowment assets for expenditure - (872,572) (872,572)
Endowment net assets, end of year $ (5,368) $ 19,564,429 $ 19,559,061
Note 8: Property and Equipment

KSA has construction in progress at June 30, 2020 and 2019 of $14,226,031 and $11,381,132,
respectively. During 2019, KSA had the following major projects: Baseball field renovation and
soccer field renovation. During 2020, KSA had the following major projects: Football south endzone.
Note 9: Debt Service and Debt Service Reserve Accounts

In accordance with the loan agreements, detailed in Note 10, with the Kansas Development Finance
Authority (KDFA), KSA has required reserve deposits with UMB Bank. The required balances as of
June 30, 2020 and 2019 were $7,175,000 and $7,524,589, respectively. The amounts held in the
required reserve deposits at June 30, 2020 and 2019 were $7,236,155 and $7,649,523, respectively.
26
JUNE 30, 2020 AND 2019

Note 10: Long-Term Debt

Long-term debt consisted of the following at June 30:
Description 2020 2019

KDFA Series 2002E Bonds, net of
unamortized bond issuance costs of $0 and
$0 respectively. $ - $ 481,399
KDFA Series 2012B-2 Bonds, net of
unamortized bond issuance costs of
$36,560 and $54,721, respectively. 17,288,440 18,700,279
KDFA Series 2016D Bonds, net of
unamortized bond issuance costs and bond
premium of $482,004 and $493,011,
respectively. 44,502,004 45,493,011
Total Bonds Payable 61,790,444 64,674,689
Less current maturities 3,735,730 2,884,244
Total Long Term Bonds Payable $ 58,054,714 $ 61,790,445
During 2002, KSA issued Series 2002E Athletic Facilities Revenue Bonds through the KDFA in the
amount of $3,495,889. These bonds are capital appreciation bonds where interest is accreted over the
life of the bonds and the bonds mature in various amounts during fiscal years 2016-2020 with interest
rates ranging from 5.00-5.40%. Accreted interest for the years ending June 30, 2020 and 2019 was $0
and $62,787, respectively, and accumulated accreted interest was $0 and $728,601, respectively. Bond
issuance costs were amortized using the effective interest rate method at approximately 5.20%. The
bond was paid off in the current year.
During 2012, KSA issued Series 2012B-2 Athletic Facilities Revenue Bonds through KDFA in the
amount of $23,640,000, with remaining interest rates ranging from 3.483-4.223% and maturity in
2033. Bond issuance costs are amortized using the effective interest rate method at approximately
3.47%.
27
JUNE 30, 2020 AND 2019

Note 10: Long-Term Debt (continued)

During 2016, KSA issued Series 2016D Athletic Facilities Refunding Revenue Bonds through KDFA
in the amount of $48,110,000 with interest rates ranging from 2.375-5.00%. The 2016D bonds are
subject to optional redemption provisions starting on July 1, 2025, and on any interest payment date
thereafter, at par plus accrued interest. Bond issuance costs and bond premium are amortized using
the effective interest rate method at rates of approximately 3.32% and 3.17%, respectively.
Aggregate annual maturities of long-term bonds are as follows at June 30:
Interest Principal Total

2021 2,072,285 3,735,730 $ 5,808,015
2022 1,927,048 3,888,758 5,815,806
2023 1,768,689 4,056,939 5,825,628
2024 1,596,927 4,235,297 5,832,224
2025 1,412,159 4,433,208 5,845,367
2026-2030 4,524,446 24,749,228 29,273,674
2031-2035 796,561 16,691,284 17,487,845
$ 14,098,115 $ 61,790,444 $ 75,888,559
KSA has an available $7,000,000 revolving line of credit with a banking institution with a variable
interest rate currently at 2.52% and maturity on February 1, 2023, of which KSA has an outstanding
balance of $0 at June 30, 2020 and 2019. Pledged as collateral are all uncollected pledges associated
with the baseball and soccer capital campaign, and all pledges designated for the Vanier Family
Football Complex.
Note 11: Net Assets with Donor Restrictions

Time and/or Purpose: These restricted net assets represent the net proceeds of donations and pledges
receivable that have been restricted by the donors to be used only for the following purposes:
2020 2019
Endowment fund
Student scholarships and support $ 3,190,578 $ 3,250,424
Other 123,892 638,686
Capital projects 22,197,230 27,962,448
Other 288,008 328,676
$ 25,799,708 $ 32,180,234
28
JUNE 30, 2020 AND 2019

Note 11: Net Assets with Donor Restrictions (continued)

Perpetual in Nature: These restricted net assets represent the net proceeds of donations and pledges
receivable that have been restricted by the donors to be used only for the following purposes:
2020 2019
Student scholarships and support $ 11,110,634 $ 10,888,114
$ 15,779,188 $ 15,675,319
Note 12: Net Assets Released from Restrictions

Net assets were released from donor restrictions by incurring expenses satisfying the restricted
purposes or by occurrence of other events specified by donors:
2020 2019
Endowment fund
Student scholarships and support $ 59,846 $ -
Other 661,683 739,879
Other 40,668 190,932
Total net assets released from restrictions $ 35,354,338 $ 14,047,127
Note 13: Bequests

Donors have notified KSA of bequests that they have made. These conditional promises to give are
not reported on the financial statements due to the unknown timing of a specified future event and
revocability of the bequest. At June 30, 2020 and 2019, the amount of these bequests totaled
$25,818,818 and $21,662,968, respectively.
Note 14: Retirement Plan

KSA has a defined contribution retirement plan through the Teachers Insurance Annuity Association
and College Retirement Equities Fund available to most permanent positions. For eligible employees,
KSA contributes 8.5% of annual compensation, subject to IRS limitations. Contributions to the plan
were $1,445,743 and $1,358,674 for the years ended June 30, 2020 and 2019, respectively.
29
JUNE 30, 2020 AND 2019

Note 15: Liquidity

KSA’s financial assets available within one year of the balance sheet date for general expenses are as
follows:
2020 2019
Cash $ 29,559,478 $ 44,761,619
Tickets receivable 2,362 6,694
Accounts receivable 2,546,533 20,670
Less those unavailable for general expenditures (855,837) (829,358)
Prepaid expenses 367,910 10,457
$ 41,393,757 $ 51,809,697
KSA's financial assets have been reduced by amounts not available for general use because of donor
imposed restrictions within one year of the balance sheet date. As part of KSA's liquidity management,
it has a policy to structure its financial assets to be available as its general expenses, liabilities, and
other obligations come due. KSA has lines of credit with a maximum drawable amount of $7,000,000.
Note 16: Leases

KSA leases certain equipment and facilities for various terms under long-term operating lease
agreements. The leases expire at various dates through 2027. Lease expense totaled $531,907 and
$405,157 during the year ended June 30, 2020 and 2019, respectively.
Future minimum rental payments required under the operating lease agreements are as follows:
2021 $ 626,320
2022 650,774
2023 464,946
2024 142,500
2025 146,669
Thereafter 88,800
$ 2,120,009
30
JUNE 30, 2020 AND 2019

Note 17: Related Parties

KSA, along with other University affiliates, are under common control of the State of Kansas. This
relationship is predicated by the fact that the State of Kansas owns all land used by KSA and any
purchases and/or construction of permanent real property (i.e. buildings, land and improvements) on
the land are recorded as leasehold improvements.
KSA has various transactions with the University and its affiliates for various types of goods and
services. The main revenues are for student fees that pass through the University. The majority of the
expenditures are related to student-athlete tuition and fees, as well as housing and dining fees. The
total expenditures to the University and its affiliates for the periods ending June 30, 2020 and 2019
are $22,691,151 and $10,309,588, respectively, and the total receipts were $18,928,138 and
$22,588,708, respectively.
Note 18: Subsequent Events

In December 2019, an outbreak of a novel strain of corona virus (COVID-19) originated in Wuhan,
China and has since spread to other countries, including the U.S. On March 11, 2020, the World Health
Organization characterized COVID-19 as a pandemic. In addition, multiple jurisdictions in the U.S.
have declared a state of emergency. It is anticipated that these impacts will continue for some time.
Future potential impacts may include disruptions or restrictions on KSA’s ability to operate under its
current mission and operating model.
KSA has evaluated events and transactions for potential recognition or disclosure through the date of
the independent auditor’s report, which is the date the financial statements were available to be issued.
31

SUPPLEMENTARY INFORMATION
SCHEDULE OF ACTIVITIES BY PROGRAM
Women's Non-Program
Football Men's Basketball Basketball Other Sports Specific Total
Ticket sales $ 11,671,944 $ 2,633,469 $ 166,405 $ 73,075 $ - $ 14,544,893
See independent auditor’s report on supplementary information.
Guarantees 300,000 - - 5,000 - 305,000

Big 12 receipts 32,821,900 6,925,286 38,689 150,418 247,967 40,184,260
NCAA receipts - - - 9,043 113,909 122,952
Program/video/media guide sales 7,912 922 369 180 298 9,681
Radio and TV contracts - - - - 5,175,000 5,175,000
Concessions - - - - 429,343 429,343
Parking 525,451 165,161 38,469 75 - 729,156
Contributions 212,970 - - - 15,438,264 15,651,234
Interest income - - - - 577,326 577,326
License royalties/commissions - - - - 2,178,521 2,178,521
Investment income, net - - - - 12,182 12,182
32
Other revenue 79 - - - 1,335,303 1,335,382

Net assets released from
restrictions 11,326 22,282 8,402 88,833 35,223,495 35,354,338
Total Revenues and Support 45,551,582 9,747,120 252,334 326,624 60,731,608 116,609,268
Women's Non-Program
Expenses
Salaries $ 9,446,872 $ 4,050,354 $ 1,644,570 $ 4,048,989 $ 15,537,972 $ 34,728,757
Insurance - - - - 1,265,354 1,265,354

Telephone 52,441 13,304 14,642 41,946 231,538 353,871
Interest expense - - - - 2,070,129 2,070,129
Staff travel 137,748 9,641 894 38,064 273,301 459,648
Team travel 3,123,777 1,320,837 966,294 1,507,583 74,948 6,993,439
Recruiting 611,322 295,495 178,637 327,648 - 1,413,102
Guarantees 1,265,000 365,400 - 218,697 - 1,849,097
Athletic aid 3,257,216 483,632 502,997 4,522,194 - 8,766,039
Maintenance 9,471 - 117 4,255 1,164,704 1,178,547
Equipment and supplies 1,007,278 228,658 128,423 738,462 287,594 2,390,415
Outside printing 32,117 7,545 3,370 5,614 352,026 400,672
33
Game day services 615,744 95,277 63,196 47,025 48,632 869,874

Officials 344,587 202,925 167,125 104,845 - 819,482
Institutional support fee - - - - 815,933 815,933
Outside medical expenses 53,350 7,428 - 60,391 - 121,169
Operational expenses 1,174,558 232,215 161,400 796,991 10,049,135 12,414,299
Depreciation - - - - 2,005,450 2,005,450

Amortization 21,131,481 7,312,711 3,831,665 12,462,704 34,176,716 78,915,277
Leasehold amortization - - - - 7,217,616 7,217,616

Total Expenses 21,131,481 7,312,711 3,831,665 12,462,704 41,394,332 86,132,893
Increase (Decrease)
in Net Assets $ 24,420,101 $ 2,434,409 $ (3,579,331) $ (12,136,080) $ 19,337,276 $ 30,476,375
Women's Non-Program
Ticket sales $ 12,297,644 $ 3,213,679 $ 168,619 $ 172,033 $ 51,640 $ 15,903,615
Guarantees - - - 12,500 - 12,500
Big 12 receipts 32,363,122 7,104,100 39,104 156,418 306,089 39,968,833

NCAA receipts - 80,063 44,280 22,957 953,458 1,100,758
Program/video/media guide sales 7,698 1,372 748 538 50,622 60,978
Radio and TV contracts - - - - 5,714,500 5,714,500
Concessions - - - - 423,083 423,083
Parking 530,400 201,785 38,710 (420) 2,865 773,340
Contributions 354,201 - - - 18,228,361 18,582,562
Interest income - - - - 558,991 558,991
License royalties/commissions - - - - 2,391,562 2,391,562
Investment income, net - - - - 288,199 288,199
34
Other revenue - 90 - - 1,225,913 1,226,003

Net assets released from
restrictions 179,989 59,760 21,222 78,166 13,707,990 14,047,127
Total Revenues and Support 45,733,054 10,660,849 312,683 442,192 43,903,273 101,052,051
Women's Non-Program
Expenses
Salaries $ 9,306,897 $ 4,222,568 $ 1,662,753 $ 4,154,831 $ 17,019,507 $ 36,366,556
Insurance - - - - 1,096,274 1,096,274
Telephone 62,617 16,882 18,494 57,920 289,579 445,492

Interest expense - - - - 2,235,243 2,235,243
Staff travel 155,773 49,364 27,053 42,512 580,711 855,413
Team travel 1,437,167 1,255,637 827,239 2,676,390 53,792 6,250,225
Recruiting 689,318 377,942 197,070 390,597 - 1,654,927
Guarantees 1,325,000 583,213 - 204,510 - 2,112,723
Athletic aid 3,382,014 544,658 551,592 4,667,731 - 9,145,995
Maintenance 4,639 - 11 12,882 1,298,180 1,315,712
Equipment and supplies 920,805 208,858 169,752 767,151 318,297 2,384,863
Outside printing 26,216 4,354 5,316 5,002 417,652 458,540
35
Game day services 661,392 102,254 60,390 67,520 102,358 993,914

Officials 243,793 186,100 177,650 195,803 - 803,346
Institutional support fee - - - - 868,777 868,777
Outside medical expenses 38,188 9,566 - 68,865 - 116,619
Operational expenses 1,092,882 294,065 171,399 823,568 10,933,945 13,315,859
Depreciation - - - - 1,809,179 1,809,179

Amortization 19,346,701 7,855,461 3,868,719 14,135,282 37,023,494 82,229,657
Leasehold amortization - - - - 6,510,387 6,510,387

Total Expenses 19,346,701 7,855,461 3,868,719 14,135,282 43,533,881 88,740,044
Increase (Decrease)
in Net Assets $ 26,386,353 $ 2,805,388 $ (3,556,036) $ (13,693,090) $ 369,392 $ 12,312,007

2020 KSA Audit Report

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What are the main components of the financial statements?

What are the main components of the financial statements?

What does the independent auditor's report assess?

What does the independent auditor's report assess?

K-State Athletics, Inc.

INDEPENDENT AUDITOR'S REPORT

To the Board of Directors of

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James Gordon & Associates CPA, P.A.

Property and Equipment

Total Assets $ 359,773,776 $ 343,989,411

See Accompanying Notes to the Financial Statements.

LIABILITIES AND NET ASSETS

Total Liabilities 80,421,269 88,836,622

Total Liabilities and Net Assets $ 359,773,776 $ 343,989,411

See Accompanying Notes to the Financial Statements.

Total Revenues and Support before

Capital campaign contributions - 23,891,504 23,891,504 - 29,204,094 29,204,094

Expenses Before Leasehold

Leasehold amortization 7,217,616 - 7,217,616 6,510,387 - 6,510,387

Change in Net Assets 30,476,375 (6,276,657) 24,199,718 12,312,007 18,071,865 30,383,872

See Accompanying Notes to the Financial Statements.

Expenses Before Leasehold

Leasehold amortization - 7,217,616 - 7,217,616

Total Expenses $ 48,714,192 $ 35,026,584 $ 2,392,117 $ 86,132,893

See Accompanying Notes to the Financial Statements.

Expenses Before Leasehold

Leasehold amortization - 6,510,387 - 6,510,387

Total Expenses $ 49,002,667 $ 37,051,602 $ 2,685,775 $ 88,740,044

See Accompanying Notes to the Financial Statements.

See Accompanying Notes to the Financial Statements.

Increase (decrease) in cash (15,202,141) 11,606,502

Cash, beginning of year 44,761,619 33,155,117

Cash, end of year $ 29,559,478 $ 44,761,619

Supplemental Cash Flow Information

See Accompanying Notes to the Financial Statements.

Note 1: Nature of Operations and Summary of Significant Accounting Policies

Note 1: Nature of Operations and Summary of Significant Accounting Policies (continued)

Note 1: Nature of Operations and Summary of Significant Accounting Policies (continued)

Note 1: Nature of Operations and Summary of Significant Accounting Policies (continued)

Note 1: Nature of Operations and Summary of Significant Accounting Policies (continued)

Note 1: Nature of Operations and Summary of Significant Accounting Policies (continued)

Note 1: Nature of Operations and Summary of Significant Accounting Policies (continued)

Note 3: Pledges Receivable

Note 4: Investments and Investment Return

Held by Trustee Under Bond Indenture:

Total Investments $ 31,617,064 $ 33,114,117

Investments are classified within the statement of financial position as follows:

Total investment return is comprised of the following:

Note 4: Investments and Investment Return (continued)

Note 4: Investments and Investment Return (continued)

Annual Fiscal Year Returns

Note 4: Investments and Investment Return (continued)

Note 4: Investments and Investment Return (continued)

Note 5: Disclosures About Fair Value of Assets

Note 5: Disclosures About Fair Value of Assets (continued)

June 30, 2019

Note 5: Disclosures About Fair Value of Assets (continued)

Note 6: Life Settlement Contracts