NCHSAA’s PPP loan comes under fire, but data shows it received less than most state associations
Raleigh, N.C. — A federal loan the North Carolina High School Athletic Association obtained last year is the latest concern expressed by lawmakers seeking to dissolve the group and replace it with a state-appointed commission.
Sen. Tom McInnis, R-Richmond, who has been one of the lawmakers leading an investigation into the NCHSAA, said he was bothered the association got a Paycheck Protection Program loan during the pandemic.
“They took a PPP loan with $40 million in the bank, and I’m again appalled to understand the thinking because we had many citizens and many small businesses in this state that couldn’t get a PPP loan because the money ran out,” McInnis said during a Senate Finance committee hearing on Thursday.
It has been previously reported that the NCHSAA received a $176,200 PPP loan in April 2020, shortly after the aid became available. The money was used to maintain 19 jobs at the NCHSAA during the pandemic.
WRAL News previously reported that McInnis’ company, Iron Horse Auction Company Inc., also received a PPP loan, however McInnis sold the company prior to the loan being obtained.
NCHSAA Commissioner Que Tucker said in previous interviews that the group took the loan in order to prevent layoffs and furloughs. NCHSAA sports were shut down in March 2020 due to the pandemic and did not resume until November 2020, which meant the NCHSAA did not have revenue coming in.
Rules prevent the NCHSAA from using other funds, such as its endowment fund, to pay staff salaries.
The NCHSAA has also said that the $40 million figure is roughly what it holds in total assets. The association does not have $40 million in cash available to spend.
Based on its most recent audited financial state from June 2020, a total of $15.8 million exists in restricted endowment funds, where donors specify how the money can be spent.
Another $10.7 million is board designated money, which was funded through $1 ticket surcharges at playoff game, 25% of gate receipts from endowment games and interest earned from principal funds. The playoff game ticket surcharge and the endowment games have been suspended indefinitely. This is also the fund that provided $4 million of pandemic relief for individual schools.
The NCHSAA holds $13.9 million in undesignated funds, including two years of operating reserves, investments and things like the office building, equipment and vehicles.
Most state associations received PPP funds
In a previous interview, Karissa Niehoff, executive director of the National Federation of State High School Associations, said that nearly all state associations across the country received money from PPP loans.
“For a case like what we just lived through, we had a pandemic — or still closing one out — a lot of our state associations without healthy reserve accounts are really in trouble,” she said. “Without the PPP program, they might not have their doors open next fall. So, we want to see 501(c)(3)s with healthy reserves, with a healthy foundation strategy.”
Through public records, HighSchoolOT found 44 of the 51 state associations received PPP loans. Some state associations received multiple loans, including for individual regions within their associations.
The California Interscholastic Federation and its different 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 PPP funds, followed by the Ohio High School Athletic Association’s total of $1,149,575.
Forty of the 51 state associations received more PPP funds than the NCHSAA. The NFHS also received two PPP loans totaling $1,480,000.
Travis Fain, WRAL statehouse reporter, contributed to this report.
