REPORT OF THE
DIVISION III FINANCIAL AID
AND AWARDS COMMITTEE
1. ACTION ITEMS.
Revisions
to Proposal No. 2-51. During its October 17-18 meeting, the committee reviewed
the results of the Financial Aid Audit pilot program, comments from
pilot participants, previous recommendations made by the Division III
Management Council and Presidents Council, and feedback received from financial
aid administrators and the Division III membership. The committee recommends the following amendments to the proposed
financial aid audit requirements and procedures.
a. Audit scope—Freshmen and Transfer Students.
(1) Recommendation. Narrow the student-athlete population to
include only full-time freshmen and incoming, full-time transfer
student-athletes, as opposed to the entire student-athlete population.
(2) Rationale. Financial aid packages
typically do not change significantly after initial enrollment. Focusing on freshmen and entering transfer
students will focus the audit process on the perceived area of greatest concern
-- aid packages awarded to incoming student-athletes. It also could help minimize audit costs by reducing the size of
the audit. This was one of the two
recommendations most frequently received by the committee.
b. Audit size—At Least 40.
(1) Recommendation. Require schools to audit the files of at
least 40 freshmen and transfer student-athletes and a corresponding number of
nonstudent-athlete freshmen and full-time transfer students, selected at random
through a method to be identified by the committee. Schools with fewer than 40 freshmen and transfer student-athletes
should audit all freshmen and transfer student-athlete files, with a
corresponding number of nonstudent-athlete files selected at random.
(2) Rationale. The committee believes that an audit of 40 files will produce
valid audit results, without creating excessive administrative burden or
cost.
c. Internal Auditor.
(1) Recommendation. Permit institutions to use an internal
auditor, provided the individual is not associated with the athletics
staff.
(2) Rationale. This
was the other recommendation most frequently received by the committee. It received support from several audit
participants and within the financial aid community, as well as from a group of
CEOs in one Division III conference.
The use of an internal auditor may significantly reduce costs and
administrative burdens created by the audit.
d. Audit Deadline.
(1) Recommendation. Establish an annual deadline of November 15.
(2) Rationale. This date closely follows the deadline for other significant financial
aid forms that will be used to help complete the Division III audit. The deadline also will permit regular and
timely review of audit results by the committee.
e. Committee Review When Student-Athlete Need
Met Varies by 10 Percent or More From Nonstudent-Athletes.
(1) Recommendation. Require
institutions to submit for committee review any audit results indicating
that the percent of average need met with institutional gift aid for student-athletes
in a financial need category exceeds by 10 percent or more the percentage of
nonstudent-athlete need met in the same category. The institutional submission may include information detailing
mitigating factors that support and explain the difference. Institutions also shall submit similar information
to the committee when the percent of student-athlete need met in any one need
category exceeds 100 percent. Following
committee review, a variance not
explained to the committee’s satisfaction shall be forwarded to the enforcement
staff as an apparent violation of Bylaw 15, and will be handled pursuant to the
Association’s infractions process.
(2) Rationale. The committee attempted
to identify a variance that would warrant further review without creating an
unacceptable administrative burden on the committee or the membership. Pilot audit results, membership feedback
and committee expertise all suggest that a variance of at least 10 percent
clearly warrants further explanation and review. Preliminary results indicate that the average variance by need
category for pilot participants consistently was less than 7 percent.
f.
Annual Committee Review of Randomly
Selected Audits.
(1) Recommendation. The committee intends to review annually a
random number of institutional audits, above and beyond the audits it will
review because of percentage variances between
student-athletes and nonstudent-athletes.
(2) Rationale. The
annual review of randomly selected audits will serve to further the compliance
component of the audit process. It also
will permit the committee to monitor the effectiveness of the audit program and
identify any necessary modifications.
The committee will randomly select institutions for review of their
financial aid audit reports.
g. Retention
of Audit Results.
(1) Recommendation.
Require institutional audit results to remain on file in the
institution’s financial aid office available for at least four years (three
prior years plus the current year).
(2) Rationale. This recommendation is consistent with
retention policies applicable to federal audit results.
h. Implementation
Timetable.
Recommendation.
Endorse the revised timetable related to the implementation of proposal
No. 2-51, as amended (Attachment A).
2.
ITEMS OF INFORMATION.
a. Pilot audit participation. The committee originally selected 20
institutions to participate in the audit.
Nineteen of those institutions ultimately were able to participate. Sixteen participants were able to forward
pilot results by the October 15 deadline.
b. Educational efforts. Committee representative presented the audit
model at the following meetings:
January
……...NCAA National Convention
April…………3
NCAA Regional Rules Seminars
May………….EASFAA (Eastern Association of Student Financial Aid Administrators)
June
…………NACDA (National Assoc. of Collegiate Directors of Athletics)
Division III Conference
Commissioners Meeting
July………….NASFAA
(National Association of Student Financial Aid
Administrators)
The
committee obtained valuable feedback regarding the audit model and procedures
during these presentations. The
feedback can be summarized into 4 themes:
Cost
?
Use of external auditors is not cost effective.
?
Requiring review of too many files will increase
cost.
Frequency
?
Requiring yearly audits through an external
auditor too frequent and will overburden directors of financial aid.
Results
?
Concentrate review on freshman and transfers
where abuses are more likely to occur.
Further, the results should compare students of like groups (e.g.
freshmen and transfers compared to other freshmen and transfers, as opposed to
freshmen compared to upper classmen).
?
More clearly define terms regarding financial
awards to be included in the audit report.
Enforcement
?
More clearly define the review and enforcement
process for schools when audit results suggest a rules violation may exist .
c. Proposed Audit Model, Reporting
Instructions and Sample Form. The
committee has revised the audit model, draft reporting instructions and sample
reporting forms to reflect the proposed action items detailed above. Drafts versions are contained in Attachment
B (Attachment B is not available on-line).
d. Institutional Compliance Checklist. If Proposal No. 2-51, as amended, is adopted, the
committee intends to revise the Institutional
Compliance Checklist previously approved by the Management Council to reflect
changes made to the proposed audit model.
The revised checklist will be
incorporated into the Division III Institutional Self-Study Guide
(ISSG).
The
National Collegiate Athletic Association
October 20, 2001 GF