The NCAA Division I Committee on Infractions (“COI” or “Committee”) is an independent administrative body of the NCAA comprised of individuals from the Division I membership and the public. COI decides infractions cases involving member institutions and their staffs. This case involves California Polytechnic State University (“Cal Poly”) and centers on two categories of violations: the provision of impermissible book-related financial aid that did not equal the actual cost of books and supplies; and the institution’s failure to monitor. The underlying facts in this case are undisputed. The only areas of disagreement were the level of the financial aid violations and whether the institution failed to monitor.
The Committee concluded Cal Poly committed the following violations of NCAA rules:
Violations of NCAA Division I Manual Bylaws 14.11.1 and 126.96.36.199 (2012-13); 15.01.2, 15.01.6, 15.2.3, 188.8.131.52 and 184.108.40.206 (2012-13 through 2015-16); 14.10.1 (2013-14); 16.8.13 (2013-14 through 2015-16); and 12.11.1 (2014-15 through 2015-16) (Level II)
Over three and a half years, Cal Poly provided numerous student-athletes impermissible financial aid in the form of cash stipends. In some instances, student-athletes used portions of the cash stipends to pay for items other than course-related books and supplies. As a result of these violations, student-athletes competed while ineligible. The institution agreed to the underlying facts of this violation but asserted that the violation is Level III. The Committee concluded that the violation occurred and is Level II.
From the 2012-13 academic year through the 2015 fall quarter, Cal Poly provided 265 student-athletes impermissible financial aid in the form of cash that was not equal to the actual cost of required course-related books purchased. Some of these student-athletes received cash that exceeded the actual book costs and others exceeded their individual financial aid limits. Further, some student-athletes used portions of the book money to pay for items that were not required course-related books or required course supplies. As a result of the impermissible financial aid, some of the student-athletes competed and received actual and necessary expenses while ineligible. The improper financial aid resulted in violations of Bylaws 15, 16 and 12.
Bylaw 15 governs financial aid, including financial aid for books. Pursuant to Bylaw 15.2.3, institutions may provide a student-athlete with funds that cover the cost of required course-related books and supplies. Further, such financial aid may be in the form of cash, but the amount of cash provided must equal the actual cost of the books and/or supplies. In accordance with Bylaw 15.01.6, institutions are prohibited from awarding financial aid that exceeds the cost of attendance. Receipt of financial aid not permitted by the NCAA renders a student-athlete ineligible under Bylaw 15.01.2. Pursuant to Bylaw 220.127.116.11, institutions are forbidden from providing student-athletes with extra benefits. An extra benefit is any special arrangement by an institution to provide a student-athlete with a benefit not authorized by NCAA legislation. Under Bylaw 16.8.1, a student-athlete may compete and receive expenses associated with competition, but only if the student-athlete is eligible for competition. Bylaw 12.11.1 requires member institutions to withhold student-athletes from competition if they are ineligible.
Cal Poly’s provision of $800.00 cash stipends for books to student-athletes resulted in financial aid, extra benefits and failure-to-withhold from competition violations. Specifically, the $800 cash stipend for books violated Bylaw 15 because the amount was not equal to the cost of books purchased. Further, because the stipend did not equal the cost of books, it is considered improper financial aid and violated an additional provision of Bylaw 15. The receipt of the stipend caused 30 student-athletes to receive aid that exceeded their individual financial aid limits, also violating Bylaw 15.6 Violations of Bylaw 16 occurred when some student-athletes received impermissible benefits by using portions of these stipends to purchase items and services unrelated to books and supplies. Additionally, the receipt of the impermissible $800 cash stipend rendered student-athletes ineligible. When these ineligible student-athletes received expenses associated with competition, additional violations of Bylaw 16 occurred. Finally, Cal Poly violated Bylaw 12 when it failed to withhold ineligible student-athletes from competition.
The COI has previously concluded that violations of Bylaws 15, 16 and, in some cases, Bylaw 12 occur in association with misapplication of book scholarship legislation and/or misuse of financial aid provided for books. See Charleston Southern University (2018) (concluding violations of Bylaws 15, 16 and 12 occurred when, during at least a two-year period, 34 student-athletes received impermissible benefits when student-athletes used their book scholarships to purchase items other than course-related books or supplies.); University of Arkansas at Pine Bluff (2014) (concluding violations of Bylaws 15 and 16 occurred when during two academic years, 15 student-athletes, whose athletics financial aid award did not include books, received impermissible extra benefits in the form of books ranging in value up to $700.00); and Howard University (2014) (concluding violations of Bylaws 14 (now Bylaw12), 15 and 16 occurred when Howard allowed student-athletes to purchase impermissible items at the institution’s bookstore and failed to withhold these student-athletes from competition). Cal Poly’s provision of impermissible book-related financial aid aligns with the type of conduct that consistently gives rise to Bylaw 15, 16 and, in some cases, Bylaw 12 violations.
Although the parties agreed to the underlying facts of the violations in this case, the parties disagreed on the level of the violations. Cal Poly argued that the book-related financial aid violations were Level III, while the enforcement staff believed they were Level II. COI concluded the violations are Level II.
Bylaw 19.1.2 defines a Level II violation as “a significant breach of conduct” that provides, or is intended to provide, more than a minimal but less than a substantial or extensive recruiting, competitive or other advantage or include more than a minimal but less than a substantial or extensive impermissible benefit. Bylaw 19.1.3 defines a Level III violation as “a breach of conduct.” A breach of conduct is one or more violations that are isolated or limited in nature, provide no more than a minimal recruiting, competitive or other advantage and provide no more than a minimal impermissible benefit. Among examples specifically identified in the legislation as a Level III violation are “inadvertent violations that are isolated or limited in nature and extra-benefit, financial aid, academic violations that do not create more than minimal advantages.”
The book-related financial aid violations do not meet the definition of a Level III violation for several reasons. First, the violations were not isolated. They occurred over three-and-a-half years and involved 265 student-athletes, 72 of whom received funds that exceeded the cost of books. Further, the total value of the impermissible benefits was over $16,000. Therefore, it was more than a minimal benefit. The facts that form the basis of this case more closely align with Level II violations. They occurred over multiple years and therefore were not isolated. In addition, among examples specifically identified in the legislation as a Level II violation are “multiple financial aid violations that do not amount to a lack of institutional control,” as seen in this case. Consequently, pursuant to Bylaw 19.1.2, the panel concludes that the impermissible book stipend violations are Level II.
Finally, although Cal Poly maintained that it inadvertently “misapplied” the financial aid legislation relating to cash for books, the panel notes that Bylaw 18.104.22.168, which requires that cash provided for books must equal the exact cost of the books, has been in the NCAA Manual for over a quarter century. The bylaw number and language have remained unchanged the entire time. While the panel saw no nefarious intent by Cal Poly, there is no ambiguity in the wording of this legislation and thus no room for misinterpretation. Cal Poly simply failed to abide by this rule.
COI’s recent cases involving book-related financial aid violations reflect that in every case, except one, the COI determined that this type of violation is Level II based on factors such as duration of the violations, the number of involved student-athletes and the value of the benefit. See Charleston Southern and Arkansas, Pine Bluff. The only exception to the Level II determination in recent cases for book-related financial aid violations occurred in Alabama State University (2016). In that case, COI concluded that Alabama State committed a Level III violation when, during one academic year, it permitted 170 student-athletes to use their book scholarships to purchase items that were not required course-related books or supplies. Most of the student-athletes received benefits valued at $100 or less. The total amount of the extra benefits received was approximately $5,565. The panel in Alabama State noted that the violations occurred over a relatively short period of time (one year), the benefit for most student-athletes was limited in value (less than $100), and the total value of the benefit was $5,565. In contrast, the financial aid violations in this case occurred over multiple years, involved 265 student-athletes and included individual benefits ranging as high as $734 with a total value in excess of $16,000. Past cases reflect that the majority of book-related financial aid violations have been determined to be Level II. The Level II designation is appropriate here.
Violations of NCAA Division I Manual Constitution 2.8.1 (2012-13 through 2015-16) (Level II)
Over approximately a three-and-a-half-year period, the institution violated the NCAA principle of rules compliance when it failed to monitor its book scholarship program to ensure compliance with NCAA rules. The institution disputed the allegation. COI concluded that the institution failed to monitor book-related financial aid, a Level II violation.
From the 2012-13 academic year through the 2015 fall quarter, the scope and nature of the violations set forth in Violation No. 1 demonstrate that the institution violated the NCAA principle of rules compliance when it failed to monitor its book scholarship program. The monitoring failure manifested in three areas: (1) the institution misapplied financial aid legislation; (2) the institution did not provide pertinent rules education; and (3) the institution failed to implement targeted policies and procedures to enable oversight of the book scholarship program. Cal Poly’s failure to monitor its book-related financial aid violated Constitution 2.8.1 institutional responsibility legislation.
NCAA Constitution 2 sets forth core principles for institutions conducting intercollegiate athletics programs. Specifically, Constitution 2.8.1 requires member institutions to abide by all rules and regulations of the association, monitor compliance with those rules, and report any instances of noncompliance to the NCAA.
Cal Poly lacked a fundamental understanding of the permissible use of cash stipends for books, which it characterized as “misapplying” the rule. At the hearing, the institution admitted that it “had a process that was incorrect” and described the violations as “an inch wide, but going pretty deep” because of the length of time over which they occurred. Because Cal Poly was unaware that it was violating book-related financial aid legislation, the institution did not have rules education programs or monitoring policies designed to ensure the compliant administration of cash stipends for books—effectively perpetuating the violation for a number of years.
The parties agreed that Cal Poly misapplied the legislation relating to cash stipends for books. When institutions misapply or fail to apply legislation, as in this case, they violate their responsibility to monitor under Constitution 2, which requires member institutions to comply with all applicable rules and regulations of the Association. Panels in past cases have concluded that misapplying legislation is a factor in determining that institutions failed to monitor. See North Carolina Central University (2018) (concluding that the institution repeatedly misapplied a specific facet of NCAA progress-toward-degree legislation, which was a factor demonstrating the institution’s failure to monitor); Campbell University (2016) (concluding that the registrar’s misapplication and misunderstanding of eligibility certification legislation contributed to a failure to monitor); and Mississippi Valley State University (2017) (concluding that the institution’s misapplication of eligibility legislation contributed to a failure to monitor).
Further, Cal Poly did not provide education relating to cash stipends for books. As previously established, Cal Poly’s compliance staff did not know how to correctly apply book-related financial aid legislation, specifically how to treat cash stipends for books. Consequently, because Cal Poly’s compliance staff was unaware of the legislation that required cash stipends for books to equal the cost of books, the institution did not provide rules education in this particular area of financial aid to the athletics department and other pertinent departments, such as the financial aid office.
Past cases have included educational failures as contributing factors in determining that institutions failed to monitor. See Southern Illinois University (2018) (concluding that the institution’s failure to educate the women’s swimming and diving coaching staff and others concerning rules governing instruction provided to prospects contributed to a failure to monitor); Houston Baptist University (2018) (concluding that the institution’s failure to educate the football program regarding student host legislation was one of two factors that resulted in a failure to monitor); and Alabama State (concluding that the institution’s failure to provide adequate rules education to institutional staff members and bookstore personnel contributed to a failure to monitor bookstore purchases). As these cases demonstrate, and as seen in this case, providing thorough compliance education as a component of monitoring systems is key to preventing violations of NCAA legislation.
Last, the institution failed to implement appropriate policies and procedures relating to book-related financial aid. Cal Poly’s compliance office did not understand how to apply the legislation governing cash stipends for books. Consequently, the institution mistakenly treated the cash stipend for books in the same manner as room and board stipends. Student-athletes can spend room and board stipends as they see fit to cover their off-campus living expenses. On the other hand, cash provided to student-athletes for books must equal the exact cost of the books. The institution argued that no receipts are required for off-campus room and board expenses, and it treated cash stipends for books in the same manner as room and board stipends. Because of this approach, the institution did not implement policies and procedures to monitor the use of cash stipends for books—such as requiring receipts—to ensure that student-athletes used these stipends only for books and course-related supplies. As seen in this case, some student-athletes used the cash stipends for items such as food, rent, utilities and car repairs, resulting in the receipt of impermissible benefits. This case underscores the risk of directly providing cash to student-athletes as part of a financial aid package without a means to account for the use of the cash.
The COI has previously concluded that book-related financial aid violations and associated education failures alone (i.e. not combined with other violations) reflected that institutions failed to monitor. See Alabama State (concluding Alabama State failed to monitor when it did not fully implement a previously established compliance system for in-store monitoring of student-athletes’ bookstore purchases and failed to provide related rules education); University of Nebraska, Lincoln (2012) (concluding Nebraska failed to monitor when it did not have sufficient procedures in place to monitor and review the bookstore processes for distribution of text books and course supplies); and University of Alabama, Tuscaloosa (2009) (concluding Alabama failed to monitor effectively the student-athlete textbook distribution system, and failed to assure compliance by not providing adequate NCAA rules education pertaining to athletics book aid to student-athletes and book store personnel). Thus, contrary to an argument Cal Poly made at the infractions hearing—that there are no previous cases which included a failure to monitor with underlying violations similar to this case—book-related financial aid violations alone have supported failure to monitor violations in previous cases. Likewise, the book-related financial aid violations in this case—which stemmed from a misunderstanding of the legislation, failure to provide adequate rules education and a lack of targeted policies and procedures—demonstrate that Cal Poly failed to monitor the provision of cash stipends for books.
The Committee concluded that the failure to monitor book-related financial aid is Level II. Pursuant to Bylaw 19.1.2-(b), a failure to monitor is presumed to be Level II unless the failure is substantial or egregious. In such cases, the failure to monitor can be Level I. See California State University, Sacramento (2018) (concluding that the failure to monitor was Level I as the result of underlying egregious Level I violations). The COI has previously concluded that Level II failure to monitor violations occur when the underlying financial aid violations are Level II. See Indiana University-Purdue University, Fort Wayne (2015) (concluding that, when the institution failed to monitor its financial aid processes resulting in Level II violations, the failure to monitor was also Level II). Like the underlying violations, Cal Poly’s failure to monitor its book-related financial aid program is also Level II.
Aggravating and Mitigating Factors in accordance with NCAA Bylaws 19.9.3 and 19.9.4.
Aggravating Factors for the Institution
19.9.3-(b): A history of Level I, Level II or major violations
19.9.3-(g): Multiple Level II violations by the institution.
Mitigating Factors for the Institution
19.9.4-(c): Affirmative steps to expedite final resolution of the case; and
19.9.4-(d): An established history of self-reporting Level III or secondary violations.
The Committee penalized Cal Poly as follows: