NCHSAA’s PPP loan criticized, but data shows it received less than most state associations

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During Thursday morning’s Bill 91 hearing in the Senate Finance Committee, the fact that the NC High School Athletic Association received a loan from the Paycheck Protection Program in 2020 was raised as a preoccupation.

Senator Tom McInnis (R-Richmond), who was one of the lawmakers to investigate the NCHSAA, said the P3 loan was a matter of concern.

“They took out a PPP loan with $ 40 million in the bank and I am again appalled to understand the thought because we had many citizens and many small businesses in this state that couldn’t get a PPP loan because that the money was depleted, ”McInnis mentioned.

It was previously reported that the NCHSAA received a PPP loan in the amount of $ 176,200 in April 2020, shortly after the PPP loans became available. It was used to maintain 19 jobs at the NCHSAA during the pandemic.

WRAL previously reported that McInnis’ company, Iron Horse Auction Company, Inc., also received a PPP loan, but McInnis sold the company before obtaining the PPP loan.

NCHSAA commissioner Que Tucker has said in previous interviews that NCHSAA took out the loan in order to avoid layoffs and time off. NCHSAA sports were closed in March 2020 due to the pandemic and did not resume until November 2020, meaning the NCHSAA did not have any income. The rules prevent the NCHSAA from using other funds, such as its endowment fund, to pay staff salaries.

The NCHSAA also said the $ 40 million figure roughly matched its total assets. The association doesn’t have $ 40 million in cash to spend.

Based on its most recent audited financial statement for June 2020, a total of $ 15.8 million exists in restricted endowment funds, which are restricted in perpetuity and donors specify how it can be spent. This money cannot be spent or distributed.

$ 10.7 million are funds designated by the board of directors, which were funded by surcharges of $ 1 for tickets during playoff games, 25% of output from endowment games and interest earned on the main funds. The ticket surcharge for playoff games and staffing games has been suspended indefinitely. It is also the fund from which $ 4 million in pandemic relief for individual schools comes from.

The NCHSAA holds $ 13.9 million in undesignated funds. This includes two years of operating reserves, investments and things like office building, equipment and vehicles.

The Senate Finance Committee gave HB 91 a favorable recommendation Thursday morning. The bill will now go to the Senate Rules and Operation Committee.

Most state associations have received PPP funds

In a previous interview, Dr Karissa Niehoff, executive director of the National Federation of State High School Associations, said almost all state associations across the country receive money from PPP loans.

“For a case like the one we just experienced, we’ve had a pandemic – or we’re still closing one – a lot of our state associations without healthy reserve accounts are really struggling,” she said. “Without the PPP program, they might not open next fall. So we want to see 501 (c) (3) with healthy reserves, with a healthy foundation strategy.”

Through public records, HighSchoolOT discovered that 44 of 51 state associations had received PPP loans. Some state associations have received multiple loans, including for individual regions within their associations.

The California Interscholastic Federation and its various regions received 13 loans totaling $ 2,177,060, more than any other state association. The Minnesota State High School League was next with $ 1,690,120 in P3 funds, followed by the Ohio High School Athletic Association’s total of $ 1,149,575.

40 of the 51 state associations received more PPP funds than NCHSAA. The NFHS also received two PPP loans totaling $ 1,480,000.


Travis Fain, WRAL State House Reporter, contributed to this report.

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