GASB 103 and NCAA Financial Reporting: Why Institutional Support Won’t Always Match Noncapital Subsidies

For public colleges and universities, the same dollars can produce different reporting results because GASB and NCAA financial reporting are designed to answer different questions. 

A university transfers $15 million to support its athletics program. Under NCAA reporting, that amount would generally be reported as Direct Institutional Support.  

Does that mean the university also has a $15 million noncapital subsidy under GASB Statement No. 103? 

Not necessarily. 

That is the part that can make this new reporting requirement a bit tricky for public colleges and universities. The NCAA and GASB can both be looking at the same underlying dollars and still reach different answers, because they are asking different questions.  

GASB 103 is effective for fiscal years beginning after June 15, 2025, making it applicable to fiscal year 2026 reporting for many public colleges and universities. Among other changes, GASB 103 changes the presentation of the proprietary fund statement of revenues, expenses and changes in fund net position. It requires governments to distinguish operating results from noncapital subsidies and then present a new subtotal for operating income or loss plus noncapital subsidies. GASB has also proposed implementation guidance on how the subsidy definition applies to specific transactions; that guidance remained pending as of this writing, and conclusions may continue to be refined. For a closer look at the changes introduced by GASB 103, read our article on GASB 103 and 104 and what they mean for higher education. 

For institutions already reporting institutional support for their athletics department in the NCAA Membership Financial Reporting System (NCAA FRS) report, it is tempting to use that number as the starting point for reporting noncapital subsidies under GASB 103. It is readily available, it sounds similar, and in some cases the amounts will overlap. But starting there can send the analysis in the wrong direction. 

A better approach is to perform the GASB analysis first, then use the NCAA report to understand and help explain the differences. 

Two Reporting Frameworks, Two Different Questions 

The NCAA FRS report is trying to show what it takes to support the athletics program. That includes direct funding from the university, but it can also include costs incurred elsewhere in the institution on athletics’ behalf. In other words, the NCAA is looking at the resources used by or for athletics. 

GASB 103 is looking at something different. It focuses on recognized resource flows in the financial statements and asks whether those resources are subsidizing the proprietary fund or business-type activity. GASB defines subsidies as resources received from another party or fund when the proprietary fund does not provide goods or services in return and those resources directly or indirectly keep current or future fees and charges lower than they otherwise would be. The definition also includes all other transfers.  

So there are a few things that matter in the GASB analysis, including who received the resources, where the resources came from, whether goods or services were provided in return, whether the resources affect current or future fees and charges, and whether the resources are restricted to capital purposes. 

That is why the same dollars can produce different answers under the two frameworks. Rather than asking, “How do we convert the NCAA number to GASB 103?”, the more useful question is, “What does GASB 103 require us to report?” We can then reconcile that result back to the institutional support reported in the NCAA FRS. 

Why the $15 Million May Not Be $15 Million

Go back to the university that provides $15 million of unrestricted resources to its athletics department. In the NCAA report, that will generally be reported as direct institutional support (Category 4).  

For GASB purposes, however, the answer depends on the level at which the financial statements are presented. 

If athletics is simply a department within a university reported as a single business-type activity or proprietary fund, the $15 million allocation may be an internal budgeting decision rather than a resource received from another party or fund. The university has assigned existing resources to athletics without necessarily creating a new resource inflow at the financial reporting level. 

If athletics is accounted for in a separate proprietary fund, the result can be different. A transfer between funds falls within GASB 103’s subsidy definition. 

The analysis shifts again when athletics is reported by a separate legal entity that issues its own GASB basis financial statements, such as an athletic association. From that entity’s perspective, support received from the university is a resource received from another party. If the entity does not provide goods or services in return and the support directly or indirectly helps keep its current or future fees and charges lower than they otherwise would be, the support would likely meet the GASB subsidy definition. It would generally be reported as a noncapital subsidy unless the resources are limited to capital purposes. 

Same $15 million. Same athletics program. Potentially a different GASB conclusion depending on the financial reporting structure. 

The Indirect-Support Trap

The difference becomes even easier to see with indirect support. 

Assume a university provides accounting, HR, IT, facilities maintenance, utilities, and other services to athletics without charging those costs to the department. Under NCAA reporting standards, the value of those costs and services is reported as revenue in Category 6, Indirect Institutional Support, with an equal amount reflected as expense in Category 36. The result is a gross-up that gives readers a more complete view of the resources the athletics program consumes. 

But it does not automatically mean the University has an equivalent GASB 103 noncapital subsidy.  

At the university-wide level, those salaries, utilities and maintenance costs are already expenses of the university. While the NCAA presentation applies those costs and resources to the athletics program, it does not necessarily create a separate resource received from another party or fund that would meet the definition of a subsidy. 

And It Can Work the Other Way, Too

Not every difference means the NCAA number is higher. Some resources may qualify as GASB subsidies but show up somewhere other than institutional support in the NCAA FRS report. 

State support is a good example. For NCAA reporting, government funding earmarked for athletics that the university cannot reallocate is generally reported in Category 2, Direct State or Other Government Support. State support appropriated to the university and then allocated to athletics at the university’s discretion is instead reported in Category 4. GASB 103 starts with neither category. The institution evaluates the underlying resource and applies the subsidy definition at the financial reporting level. 

Contributions can create another difference. Under NCAA FRS reporting, contributions provided to and used by athletics are included in Category 8. But the NCAA classification does not determine the GASB presentation. The institution still needs to evaluate the underlying resource and determine whether it meets the GASB subsidy definition and, if so, whether the resources are limited to capital purposes. GASB’s proposed implementation guidance illustrates the same point. As drafted, it would treat certain scholarship donations as subsidies because they help keep tuition and fees lower than they otherwise would be, although that guidance was not final as of this writing. 

Facility-related support creates another example. Under NCAA reporting, an athletics department may report support for facility debt service, lease payments and rental fees in Category 6A when those costs are paid by the institution but not charged to athletics. That reporting requirement does not automatically create a separately recognized GASB resource inflow. Similarly, a facility-related gift reported as a contribution under NCAA reporting may need to be evaluated as a potential capital-related subsidy under GASB. 

The point is that the reconciliation can work in both directions. It is not simply a matter of starting with NCAA institutional support and backing out the items that do not qualify under GASB 103. The two frameworks are looking at the same institution from different perspectives, so some differences are expected. 

A Practical Approach to Implementation

Rather than trying to convert the NCAA report into a GASB 103 schedule, I think the cleaner approach is to work in the opposite direction. Start with the financial statements and the resources actually received by the proprietary fund or business-type activity and then use the NCAA report to help explain the differences. 

1. 1.Start with the financial statements. Identify transfers, appropriations, grants, contributions and other recognized resource flows that could meet the GASB subsidy definition. 
2. Apply the GASB103 criteria. For each significant resource flow, consider who provided and received the resources, whether goods or services were provided in return, whether the resources affect current or future fees and charges, whether the transaction is a transfer, and whether any qualifying subsidy is limited to capital purposes. 
3. Map the results to the NCAA report. Compare the GASB conclusions with the relevant NCAA categories, which may include Direct State or Other Government Support, Direct Institutional Support, Indirect Institutional Support, and Contributions. 
4. 4.Documentand explain the differences. A difference between the GASB financial statements and the NCAA FRS report is not automatically an error. In many cases, it is exactly what we would expect because the two frameworks are measuring different things. 

Management, boards, auditors and other stakeholders may see institutional support in the NCAA report and noncapital subsidies in the audited financial statements and reasonably ask why the numbers differ. Having a simple reconciliation, and being able to explain it in plain English, should make those conversations much easier. 

The Bottom Line

NCAA institutional support is a useful reference point when implementing GASB 103, but it should not be the starting point for the accounting analysis. 

The NCAA report is looking at the resources provided to or used on behalf of an athletics program. GASB 103 is looking at how recognized resource flows are classified and presented at the proprietary fund reporting level. 

Start with the university’s actual resource flows and financial reporting structure. Apply GASB 103 on its own terms. Then compare the result with the NCAA financial report and document the differences. 

Some of the numbers may match. Others may not. And that is okay. The important point is understanding and being able to explain why. 

If your institution is implementing GASB 103 or working through how its subsidy presentation relates to NCAA financial reporting, the James Moore Higher Education and Collegiate Athletics teams can help you evaluate the underlying resource flows, document the differences and prepare for conversations with auditors and other stakeholders. Contact us to discuss how GASB 103 applies to your institution. 

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