Tuesday, April 3, 2018

Seven Questions for US Soccer on the CA2016 IRS 990

In 2014 the US Soccer Federation, a non-profit charity registered in New York, created a subsidiary non-profit related to the hosting of the Copa America Centenario soccer tournament. Specifically, on 29 October 2014 the USSF set up a single-member LLC, called The CA2016 Local Organizing Committee LLC.

I've reviewed the 2016 IRS 990 form from the CA2016, and this post raises some questions about the numbers reported in that form.

The FY 2015 audited USSF financial statements (PDF) explain:
The CA2016 Local Organizing Committee LLC, a single-member LLC owned by the Federation and formed on October 29, 2014, was established in conjunction with the Federation’s agreement with The Confederation of North, Central America and Caribbean Association Football (“CONCACAF”), for the purpose of organizing and promoting the Copa America Centenario 2016 tournament to be held in the United States in June 2016. Under the agreement, the Federation was established as the official and exclusive local organizing committee to host and stage the tournament. In consideration for the services provided by the Federation under the agreement, the Federation is entitled to receive a share of the ticketing and stadium revenues generated by the tournament games. On March 13, 2015, the Federation loaned $500,000 to COPA 2016, LLC as a startup loan, which will be reimbursed by COPA 2016, LLC.
Via Guidestar, I have taken a close look at the CA2016 IRS 990 form (here in PDF) and I have a few questions that are unanswered by the information reported, but which seems entirely appropriate information for a non-profit organization to provide to the public.

The CA2016 reported $190 million in revenue in 2016 (specifically $189,681,375). CA2016 reported providing a grant of $64,941,805 to the USSF (Schedule I, Part ID, d). USSF 2017 IRS 990 (PDF) reported receiving $50,000,000 from CA2016 (p. 68, Part V (1)).
  • Question #1: Why is there a $14,941,805 discrepancy between the two numbers?
CA2016 employed 24 people in 2016 and reported $5,144,749 in compensation, salaries and wages (IRS 990, Part IX, lines 5 and 7) plus $548,815 in other employee benefits (IRS 990, Part IX, line 9). This results in an average pay of $237,232 per employee.
  • Question #2: What were each of the 24 employees actually paid?
CA2016 reported “fees for services” paid to non-employees of $15,403,641 (IRS 990, Part IX, line 11a, “Management”) and $46,858,610 (IRS 990, Part IX, line 11g, “Other”). Of this latter amount Schedule O explains that $31,192,095 was for “service agreement total fees” and $15,506,572 was for “hosting agreement total fees.”
  • Question #3: To whom (organizations and individuals) were the $15.4m in management fees paid?
  • Question #4: To whom (organizations and individuals) were the $31.2m in service agreement fees paid?
  • Question #5: To whom (organizations and individuals) were the $15.5 million in hosting agreement fees paid?
Schedule O explains that the CA2016 CEO received a bonus after the tournament, as did all USSF employees.
  • Question #6: To whom were these bonuses paid and how much were they?
CA2016 lists $16,328,276 for travel (IRS 990, Part IX, line 17). Under Schedule J, Part 1 “Questions Regarding Compensation,” unanswered was the question (1a, and the two follow up questions, 1b and 2) asking whether travel involved:
  • first class or charter travel
  • travel for companions
  • tax indemnification and gross-up payments
  • discretionary spending account
  • housing allowance or residence for personal use
  • payments for business use of personal residence
  • health or social club dues or initiation fees
  • personal services (e.g., maid, chauffeur, chef)
  • Question #7: Did travel expenses include any of these categories?
I will be happy to publish any answers that come in.
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