(1) Recommendation. Endorse the proposed Financial Aid Audit Model (Attachment A) and revised administrative procedures.

(2) Rationale. The Financial Aid Audit Model was developed to ensure that Division III institutions are in compliance with NCAA Bylaw 15 regulations and the Division III philosophy of awarding no athletically related financial aid to any student. The audit methodology was developed in conjunction with the Division III Financial Aid Compliance Checklist. The committee interviewed several auditing firms in the development of an adequate and economical tool to ensure compliance. The committee reviewed the recommendations made by the Division III Management Council and Presidents Council and revised the audit model to reflect what it believes to be the most efficient and economical compliance and enforcement mechanism for member institutions.

(3) Budget Impact. Based on interviews with auditing firms, the estimated cost will be between $3,000 - $5,000 per institution. This estimate may vary to some degree based upon the number of student-athlete files an auditing firm will be required to review. The committee consulted with a statistician to determine the most economical methodology that would produce a statistical degree of confidence.

(1) Recommendation. Incorporate the Institutional Compliance Checklist into the Division III Institutional Self-Study Guide (ISSG). The committee recommends that the checklist replace the current financial aid section of the ISSG. The checklist would be distributed to all institutions prior to the institution’s ISSG review date. The checklist is a compliance tool designed to aid institutions in their review of compliance with NCAA financial aid legislation.

(2) Rationale. The current awards review process will end August 1, 2002, pursuant to the adoption of 2001 NCAA Convention Proposal Nos. 46, 46-1 and 46-2. The checklist will aid institutions’ understanding of the new financial aid audit process.

(3) Budget Impact. None.

(1) Recommendation. The committee recommends approval of funding to conduct a pilot program to test the audit process. Ten institutions will be selected to determine whether any changes should be made to the audit process prior to implementation beginning August 1, 2002.

(2) Rationale. At the 2001 Convention, member institutions adopted Proposal Nos. 46, 46-1 and 46-2. The proposals deleted permissible financial aid awards given without consideration of need and the accompanying award review process. The proposals further confirmed that financial aid packaging for student-athletes must be consistent with packaging for students in general. The aforementioned legislation becomes effective August 2002. In conjunction with this legislation, the committee has developed a financial aid audit model to replace the current review process. The audit model will require member institutions to conduct an audit of student financial aid packages for both student-athletes and the student body population generally to ensure the institution is awarding aid consistently among both groups. The previous award review process proved to be inefficient and did not yield the desired results that would allow the committee to determine whether an institution preferentially packaged financial aid for student-athletes. The audit model is designed to yield objective evidence as to whether or not an institution awards aid in a manner consistent with Div. III legislative requirements. In order to ensure that the audit model runs efficiently, the committee will need to conduct a pilot program that will audit several institutions to uncover any unforeseen logistical problems.

(3) Budget impact. $60,000.

January 2002 NCAA Convention – Presentation to review finalized document, logistics of program, results of the pilot program, enforcement procedures explained

The committee determined that to obtain a fair representation of Division III institutions it would be necessary to consider the concentration of student-athletes versus students generally on an institution’s campus. The criteria to request participation by institutions will be based on the following criteria:

1. Private institutions

2. Public institutions

3. Nonconference affiliated institutions

4. Institutions sponsoring football

5. Single gender institutions

Four institutions from each of the aforementioned categories will be selected. Each of the aforementioned categories will be subdivided into four additional categories as follows:

a. Institutions with a small enrollment sponsoring several sports

b. Institutions with a small enrollment sponsoring few sports

c. Institutions with a large enrollment sponsoring several sports and

d. Institutions with a large enrollment sponsoring few sports.

*Only 10 institutions will actually participate in the pilot program. 20 will initially be asked to participate and the committee will select the final 10 participants.

a. Guide to Financial Aid. The committee revised the Division III Guide to Financial Aid to reflect legislative changes that will affect the current award review process. The guide will be distributed as part of 2001 NCAA Regional Rules Seminar CD-ROM at a cost savings of $1,860. The guide is also available on the NCAA Web site.

c. Future Meetings. The committee’s next in-person meeting is scheduled June 1-3, 2001, Marco Island, Florida.