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Division II members will review budget principles/guidelines

Division II delegates to the 1997 Convention will be asked to review a set of proposed principles/guidelines that could guide decisions on the use of funds allocated to the division in the new NCAA governance structure.

The principles/guidelines will be distributed for discussion during the Division II business session on the Convention's Presidential Agenda Day (January 13).

The Budget/Finance Subcommittee of the Division II Presidents Council and Management Council Transition Teams will report on its work and present the principles/guidelines to the membership at the Convention. That subcommittee, chaired by President Anthony F. Ceddia of Shippensburg University of Pennsylvania, was formed last April to review the division's budget allocation and make recommendations related to how Division II will manage itself fiscally in the new structure.

The presentation is planned during Presidential Agenda Day because of the anticipated interest of chief executive officers in division financial matters. The nine-member subcommittee includes five Division II CEOs.

Under budget guarantees adopted at last year's Convention by the Association's membership, Division II will receive an annual allocation equal to 4.37 percent of the NCAA budget.

Surpluses anticipated

The Budget/Finance Subcommittee anticipates significant annual surpluses in the Division II budget, after championships and operations expenses and after distribution of the $3 million in the Division II enhancement fund of the Association's revenue-distribution plan. The total amount of surpluses will approach $15 million during the five years beginning in 1996-97, according to subcommittee projections.

With those projections in mind, the subcommittee is suggesting the following principles/guidelines:

1. That an institution's expenses for participating in championship rounds in an NCAA Division II championship will be adequately covered, and that consistent transportation and per diem guidelines be maintained for all Division II championships.

2. That Division II championships will be the top priority as budget discussions occur and decisions are made.

3. That Division II championships policies will reflect an interest in generating Division II championships revenue to the greatest extent possible consistent with Division II championships principles and guidelines. Further, championships policies will reflect an overall cost-containment philosophy supporting initiatives such as the regionalization concept and geographic proximity of championship sites. For purposes of these budget principles, cost containment encompasses the efficient and cost-effective operation of Division II championships.

4. That, at a minimum, $3 million will be distributed annually to Division II institutions via the current Division II enhancement fund distribution formula or any other formula(s) that may be adopted.

5. That the Division II Championships Committee will be responsible for the mechanics of distributing the enhancement fund and the distribution policies will be developed by the Division II Budget/Finance Committee and ratified by the Division II Management Council and Presidents Council.

6. That at a minimum, five percent of the annual Division II allocation and, at a minimum, five percent of any applicable surpluses from the previous year will be designated for a Division II membership reserve, beginning with the 1997-98 fiscal year.

7. That annual operating surpluses will be designated for the Division II membership reserve and/or to a supplemental distribution at the end of the year.

8. That care will be taken to avoid funding special interests of various segments of the Division II membership or items that may be more an institution's responsibility than that of the Association.

9. That these budget principles will be reviewed annually by the Presidents Council and Management Council and modified as necessary to ensure that they are reflective of Division II philosophy and direction.

Revenue-distribution models

The Budget/Finance Subcommittee also plans to present six alternatives for revenue distribution -- and invite the membership to suggest other approaches -- during the Convention session.

In a survey conducted last spring, respondents were split on whether to maintain the current procedure for distributing the $3 million in the Division II enhancement fund.

That amount currently is distributed to Division II institutions under a formula that calls for half of the amount to be divided evenly among all Division II members (including provisional members) and the other half to be distributed based on participation in the Division II Men's Basketball Championship.

Other approaches were suggested by some respondents, and Division II conference commissioners also have proposed an alternative to the current procedure.

The conference commissioners propose that Division II continue to distribute half of the enhancement fund evenly among Division II members, but change the basis for distribution of the other half of the fund. Instead of basing distribution on participation in the men's basketball championship, the commissioners suggest that distribution be based on a formula that awards points for conference membership and sports sponsorship.

Under that formula, conferences with eight members would be awarded 10 points. Conferences with fewer than eight members would lose two points for each member less than eight; those with more than eight would gain one point for each member more than eight. Points also would be awarded for each men's and women's sport sponsored by a conference. The total points would determine the amount distributed to that conference.

Respondents to the survey suggested other approaches: