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Is Ohio State misusing NCAA funds?

A recent story in the Chronicle of Higher Education suggests that Ohio State may be misappropriating funds from the NCAA's Student Assistance Fund.

Is Gene Smith and Ohio State using SAF funds for unintended purposes?
Is Gene Smith and Ohio State using SAF funds for unintended purposes?
Greg Bartram-USA TODAY Sports

The NCAA doesn't formally allow the paying of student athletes, but that doesn't mean they don't condone a slush fund for personal emergencies. The $75 million dollar strong Student Assistance Fund is doled out to member institutions to help student-athletes with particular financial emergencies that aren't covered by their athletic-scholarships (or if they are only on part-scholarship). Examples of situations that might full under SAF jurisdiction would be if a player wanted to fly their family to campus to be nearby for a surgery, or if teammates wanted to travel to attend a funeral, or non-athletic related medical care, like braces.

A recent investigation by Brad Wolverton at the Chronicle of Higher Education ($) showed that some Big Ten institutions are not always using this money to directly benefit student athletes.

From the article:

Other Big Ten universities have used their distribution in part to pay for lightning-detection software (Northwestern University), "team-building" activities (Ohio State University, the University of Illinois, the University of Michigan, and the University of Wisconsin), and hundreds of thousands of dollars in parking permits—money that, in the end, often goes right into the universities' pockets.

Other institutions spent a share of their allocation on team massages and yoga, chair rental, "welcome back events," and a battery of reading and learning tests. (Pennsylvania State University paid $50,225 for "LD Testing" on 28 athletes.)

Iowa were shown to perhaps be the most egregious offender, using funding to pay for shredding fees and a display for their arena, but declared the spending was an accounting error, and reimbursed their fund. The Bylaw Blog's John Infante saw fit to specifically single out Ohio State as an institution guilty of misusing funds earmarked for the benefit of student athletes.

Years ago Ohio State surveyed its players to find out how they wanted the money spent. The top two responses: health insurance and parking.

Ohio State now uses the fund to pay half the cost of its athletes’ health insurance, Mr. Archie said. And last year the university bought parking permits for 126 students, the Big Ten document shows, for a total of $25,856.

Spending SAF money on parking permits seems reasonable enough, given the demands on athlete's time and the premium parking situation near many buildings at Ohio State. OSU administrators were likely happy to spend funding on parking as well, since that money ultimately goes back to Ohio State.

Ifante took particular exception to Ohio State spending money on athlete health insurance, since the NCAA Bylaws read:

Bylaw 16.4.1 – Permissible.

Identified medical expense benefits incidental to a student-athlete’s participation in intercollegiate athletics that may be financed by the institution are:
(a) Medical insurance;

The thinking then, is that if Ohio State wanted, they could reimburse athletes for their health insurance anyway with funds outside SAF, freeing up SAF funds to use for student athlete expenses like travel, clothes or apparently, parking. Think of it like Ohio State using a gift card to pay for something when they also had a pile of cash.

On one hand, saving SAF money could be viewed as particularly prudent. A large university like Ohio State may want to keep cash reserves so they could rapidly respond to a significant travel expense (say, the football team needing to travel for a funeral) or a natural disaster (SAF funds could be used to replace possessions lost in a hurricane or tornado). If students specifically wanted money to be spent on insurance and parking, as opposed to clothing, tutoring etc, Ohio State could hardly be accused of ignoring student needs.

On the other hand, nobody would really accuse the Ohio State athletic department of poverty. The university could likely easily afford some sort of health insurance subsidy from a different fund, perhaps as part of a general hike in athletic department spending. By choosing to use SAF funds when other funds are available, they could be limiting their ability to respond to student needs later, since use of SAF money is highly regulated by the NCAA.

Without knowing the specifics of individual health insurance policies, it may be impossible to know for sure. Certainly, these problems could be easily avoided if the NCAA actually paid athletes. At the very least, Infante recommends that the NCAA require SAF money to be used only on programs that can't be funded any other way, to prevent this sort of thing from happening.

If they can enforce their accounting practices better than they can prosecute Miami, it may be a good start.