The University of Hawaii athletics department declared a milestone victory Tuesday in its decade-long struggle to balance its annual budget, saying it expects to have an estimated $322,000 surplus for the fiscal year that closed June 30.

"We highly suspect that we’ll be in the neighborhood of $300,000 to $400,000 (in the black), and our best estimate today is $322,104," athletic director Jim Donovan told the Star-Advertiser Tuesday.

The estimate, which officials said was based upon unaudited internal figures pending NCAA disbursements, is subject to an independent audit in September. The surplus would be only the second finish on the plus side in 10 years. The last surplus, $295,243 in 2008, was bolstered by $4.4 million in Bowl Championship Series money from the football team’s Sugar Bowl appearance.

"I have not seen the official figures but I am delighted to hear that the program is doing as well as it appears to be," UH president M.R.C. Greenwood said in an email. "Jim Donovan and his team have worked very hard to control costs and being ‘in the black’ is a validation of their efforts."

The $322,000 would be the biggest surplus since 2000 when the athletics department produced a $721,752 windfall. Since then, the department’s budget has grown by more than $10 million to $28.7 million.

The latest surplus will go toward paring down the $9.58 million accumulated net deficit the department had amassed since 2002, according to the last auditor’s report.

Two years ago the UH Board of Regents charged Donovan with running the department "more like a business." Greenwood said Donovan, who took over in 2008, "obviously came into a situation where there already was a pretty significant budget deficit and we’ve had the very bad luck of tough financial times, which makes it really hard to (retire) the deficit."

UH’s reversal of fortunes for the just-completed fiscal year was aided by $816,142 from the first installment of student-paid athletic fees, which began in January; $132,256 in Western Athletic Conference payouts Boise State forfeits by jumping to the Mountain West Conference this year; and spikes in ticket revenue for baseball, men’s basketball and football; plus cost containment. In addition, UH has realized about $200,000 in savings from salary reductions, and Aloha Stadium has worked with the department to trim expenses.

Donovan credited associate athletic director Carl Clapp and assistant AD-business Tiffany Kuraoka "for watching the budget on a daily basis for the whole year. Obviously, we could not have done it if it wasn’t for the corporate culture and the coaches and staff doing everything they could to help with the budget."

Donovan said the department has operated with seven staff positions unfilled but has made a point of trying not to cut the budgets of individual sports for competitive reasons. "In retrospect these last three years, with no budget cuts, should help us from a strategic standpoint," he said.

"We’ll enjoy this and we’re real proud of this, but now the reality is we’re going to work hard to put two years in a row in the black. But it is certainly going to be challenging this upcoming year because we lose over $1 million in estimated WAC revenue (plus) the cost of bringing in Tulane," Donovan added.

When Boise State announced its departure from the WAC for 2011, UH was left to scramble to fill an 11th-hour puka on the football schedule and will pay the Green Wave nearly $400,000 to fill the Nov. 26 vacancy. UH’s own departure from the WAC in 2012 means forfeiting its share of TV and most other conference revenue in June 2012.

Beginning in 2012, UH faces uncertainty with its local TV agreement and the necessity of underwriting an estimated $1.2 million annually in travel costs by its opponents in the Mountain West and Big West as a condition of conference membership.

An independent study of the UH athletic program in 2010 suggested the school should consider a way to "eliminate or forgive" the accumulated net deficit. But Greenwood recently said that wasn’t likely, and she has assigned officials to "manage down" the accumulated net deficit.