A new audit from the California State University Chancellor’s Office questions the need for the Fresno State Athletic Corporation.
The auxiliary organization, which oversees the university’s athletic programs, faces major financial challenges and may not be aligned with CSU policy, per the report.
The big picture: The Athletic Corporation was established in 1982 to administer Fresno State’s athletic programs and is the only such auxiliary organization across the CSU system.
Overall, the audit found that the Athletic Corporation has had ongoing financial and operational pressures due to rising costs, leadership turnover, repeated deficits and the transition from the Mountain West to the Pac-12.
“In our review, we were unable to identify a clear operational or financial benefit of this structure,” the audit reads. “The Athletic Corporation has experienced recurring deficits and relies on external funding sources, including the university, to sustain operation. This may not be fully aligned with CSU policy, which requires that costs incurred by the CSU operating fund for services provided to an auxiliary organization be recovered through payment or a documented exchange of value.”
Financial trouble: The audit found that the Athletic Corporation is not financially self-sustaining and relies on significant support from the university. It also lacks a robust budgeting process and significant reserves.
Over the last three years, the Athletic Corporation has reported operating losses – a loss of $11.1 million in Fiscal Year 2022-2023, $8.7 million in FY 2023-2024 and $16.5 million in FY 2024-2025.
The audit found that Athletic Corporation budgets have not aligned with actual spending patterns, partly because budgets were reduced to meet financial targets without a plan to actually achieve those reductions. For example, actual operating expenses exceeded the budgeted amounts by 11% in FY 2023-2024 and 5% in FY 2024-2025.
To complicate matters even more, the budget does not include all financial support provided by the Bulldog Foundation.
Issues with the personnel structure: Along with budget issues, the audit explored the reporting structure between the Athletic Corporation, the Bulldog Foundation and the university itself, finding that the structure is not aligned with legal and government requirements.
While the Athletic Corporation and the Bulldog Foundation are legally separate entities, there is not a formal government framework in place between the two organizations.
“Instead, management noted that university personnel currently make key employment-related decisions affecting Athletic Corporation and BDF employees, including hiring and supervision,” the audit reads. “Although the BDF board of directors approves certain personnel actions, its role is primarily to endorse recommendations developed by university personnel rather than exercising independent oversight.”
What we’re watching: The first of the dozens of recommendations made by the audit directs Fresno State to reconsider the existence of the Athletic Corporation, noting that the original rationale for establishing the organization is unclear.
“Based on our review, we were unable to identify a clear operational, financial, or governance benefit associated with administering athletics through an auxiliary organization,” the audit reads.
The audit recommends that Fresno State reconsider whether operating athletics through the Athletic Corporation remains the most appropriate governance model.
The audit included Fresno State’s response to the recommendation. The university will conduct a review of the Athletic Corporation’s existence by Sep. 25.
Read the audit: