THE MISSISSIPPI LEGISLATURE

The Joint Committee on

Performance Evaluation and Expenditure Review

Report # 590

The Mississippi High School Activities Association: An Accountability Review

Executive Summary

Introduction

This report resulted from a legislator’s concern that the Mississippi High School Activities Association no longer serves the best interests of the students it purports to serve.

The Mississippi High School Activities Association (MHSAA) is a 501 (c) (3) not-for-profit corporation chartered by the state of Mississippi. MISS. CODE ANN. Section 5-3-51 et seq. (1972) provides PEER with authority to review this entity because the statutes provide that PEER may:

review agency functions and independent contractors when necessary; and,
study present laws relative to agencies.

MISS. CODE ANN. Section 5-3-57 (b) (1972) provides PEER with comprehensive authority to review the files and functions of agencies and also extends the authority to cover the independent contractors of such agencies when necessary. For the purposes of the statutes addressing PEER’s authority, the term “agency” embraces not only those components of state government commonly thought of as agencies, but also local government entities (see MISS. CODE. ANN. Section 5-3-53 [1972]).

Because the MHSAA’s member schools make regular payments to the association in the form of annual membership dues, member schools agree to abide by the association’s bylaws and rules, and in turn receive the benefits of membership (e. g., regulation of schools’ athletics and activities) in exchange for their regular payments, the relationship between the MHSAA and the member schools constitutes a contractual relationship.

PEER’s power to make recommendations regarding perfection of law (MISS. CODE ANN. Section 5-3-57 [1972]) is also an appropriate basis for authority to conduct a project, as through investigation and audit the Legislature can obtain information relative to the need to amend law or enact new law on any given subject.

Background

The Mississippi High School Activities Association was incorporated as a not-for-profit organization in 1956. MHSAA’s constitution states that its purpose is to “promote the general welfare of member schools in their relations with each other.” The MHSAA regulates sixteen sports and six activities in member schools.

MHSAA has a multi-level governance structure to represent its member schools that includes activity districts and district executive committees at the local level, a Legislative Council, and an Executive Committee. The association has a full-time staff of twelve employees, including an Executive Director.

MHSAA’s Mission and the Role of Extracurricular Activities Within the Context of Academics

According to the MHSAA, its mission is to provide leadership and coordination of interscholastic activities that will “enhance the educational experiences” of students and that will promote opportunities for students’ participation in interscholastic activities “while maximizing the achievement of educational goals.” MHSAA’s stated mission reflects the core value of academic proficiency as the foundation of Mississippi’s educational system. Therefore, MHSAA is responsible for maintaining an emphasis on academics, with the role of extracurricular activities being to provide a fuller, richer educational experience for students but not replacing academics as a priority. The National Association of State Boards of Education has confirmed the principle contained in MHSAA’s mission statement, noting that while athletics may enhance the school experience, academic achievement should be the top priority.

This issue is particularly important for Mississippi, since in school year 2013-14, Mississippi had a total of 105,806 student athlete participants in sixteen sports and approximately 37,000 student participants in four activities. Also, many of Mississippi’s students already struggle academically.

PEER reviewed MHSAA’s due diligence in carrying out its responsibilities to regulate member schools’ athletics and activities as an enhancement of students’ educational experiences while keeping academics as a priority.

Conclusions

Does MHSAA have clearly defined responsibilities for parties participating in the association’s governance?

The current edition of MHSAA’s handbook does not clearly define certain areas related to the association’s operation (i. e., elections and governance). The omission of such important operational standards has led to confusion among stakeholders and disagreements among MHSAA’s governance bodies.

MHSAA policy requires that both the Legislative Council and the Executive Committee vote on proposals twice. Even though the Executive Committee is considered MHSAA’s Board of Directors, the Legislative Council has the power to override the Executive Committee’s vote to veto a proposal.

MHSAA’s bylaws do not outline how nominations for the Executive Committee or Legislative Council should occur, the process candidates must follow to run for seats on these bodies, or how voting for representatives takes place. Also, the MHSAA does not distinguish between its constitution, bylaws, rules, regulations, and policies in its handbook.

Does MHSAA have a fully informed decisionmaking process that incorporates careful monitoring of the potential academic and financial consequences of decisions?

When considering changes to policies or rules, MHSAA does not have the data that it needs to ensure that the association focuses on academics (e. g., minimizing the loss of instructional time of those students involved in sports and activities). Thus, MHSAA does not ensure that one of the core values expressed in its mission--“maximizing the achievement of educational goals”--is kept central to its decisionmaking processes. Also, MHSAA does not have the fiscal information needed to show the impact of athletics and/or activities on schools’ budgets.

Neither the MHSAA Executive Committee nor the Legislative Council requires the collection or analysis of student-level data needed to determine the “big picture” effects of athletics on Mississippi students’ educational achievement and on member schools’ budgets. For example, if properly collected and reported, MHSAA could use data on student absences related to athletics to make more informed decisions affecting member schools and students. Also, MHSAA does not require that activity districts’ proposals to the Executive Committee and Legislative Council be accompanied by accurate and detailed information on the associated potential educational and financial effects on member schools and students.

Without such information, MHSAA could make a decision or combination of decisions without realizing the true impact of athletics and activities on student educational achievement and schools’ budgets over time.

Is MHSAA proactive in its regulation and monitoring of athletics and activities?

Although MHSAA has rules in place that could act as a means to deter hindrances to academic achievement, it does not proactively monitor adherence to these rules.

MHSAA has some measures in place to help ensure that schools adhere to the athletic calendar and has the authority to impose a significant penalty for infractions, which could inhibit non-compliance by member schools. However, MHSAA could be more proactive in enforcing season lengths and maximum number of contests, which could affect students’ academic efforts. Also, since MHSAA encourages students to participate in multiple sports and in activities, the association should consider the potential effect of the total number of contests and events held during the school year.

MHSAA has not taken a proactive approach to enforce its student athlete eligibility requirements because it does not audit schools’ eligibility files to ensure compliance. Also, MHSAA’s bylaws regarding academic eligibility do not follow state law because they do not base eligibility on state law’s cumulative grade point average requirement.

Regarding complaints and penalties, although the MHSAA Executive Director has authority to investigate complaints of noncompliance by member schools and their personnel, the association’s complaint and penalty files do not contain sufficient documentation that complaints are resolved fairly or consistently.

Is MHSAA transparent in all matters of governance and oversight?

MHSAA has made governance, management, and financial decisions that have not been transparent to its stakeholders. The lack of transparency could create distrust among members of the governing bodies and confusion of stakeholders.

MHSAA’s administration did not make its recent state football championship site selection decision transparently, which caused some member schools to question the decision and its potential financial impact on the schools. By issuing a request for proposals to select sites for the 2014-2017 state football championships, MHSAA implied that there was to be open and transparent competition to select a provider. However, MHSAA did not follow best practices for procurement of services.

Regarding transparency concerning its financial position, MHSAA does not make its financial documents readily available on its public website to outside individuals who have a vested interest in the MHSAA’s decisions (i. e., parents and the community).

Has MHSAA been fully accountable for the efficient use of its resources?

Although MHSAA’s annual audits have not documented instances of misappropriation of funds, the accountability of the association’s financial management practices could be questioned due to its heavy reliance on operating revenue provided by member schools, the imposition of additional fees while maintaining substantial cash reserves, and the recent overpayment of three retirees.

Most of MHSAA’s revenues are provided by member schools’ membership dues or by admission fees charged to persons attending MHSAA events (e. g., gate receipts, season passes). However, although the association appears to be financially stable, in some cases MHSAA has not demonstrated that it has been responsive to the needs of member schools or to changing conditions regarding its revenue collection practices. Despite its substantial financial reserves (approximately $3.4 million at the end of FY 2014), MHSAA increased fees charged to member schools for catastrophic insurance and technology services for the 2014-2015 school year.

By using incorrect calculation methods, MHSAA managers recently overcompensated three employees who retired a total of $35,174 more than allowed by the association’s own Personnel Handbook. Such expenditures could cause MHSAA’s stakeholders to question its stewardship of resources.

Recommendations

To help ensure open and fair election processes at the state and district levels, MHSAA should outline its election and voting procedures in its constitution and bylaws, including a method for voting for potentially controversial proposals (i. e., closed ballot).
To ensure consistency and improve accountability for decisions, MHSAA should revise its handbook by defining its constitution, bylaws, rules, regulations, and policies. To eliminate confusion regarding powers and duties, the association should also amend its constitution to establish a hierarchy for the previously named documents. MHSAA’s handbook should clearly define which decisionmakers have authority to make changes to which documents and to make certain types of decisions. Also, MHSAA should differentiate in its constitution and bylaws between other similar, related terms, such as “state contests,” “state tournaments,” and “state games.”
MHSAA staff, district committees, and school principals should encourage proposals for change from all stakeholders in education, including teachers without coaching or activity responsibilities, as well as parents. Education stakeholders should be aware that they can help influence MHSAA policy and that decisions made are educational in nature because they can affect students’ time, teachers’ instruction, schools’ budgets, etc.
MHSAA should seek to add stakeholders with solely academic interests (e. g., teachers without coaching responsibilities) to its governance structure, even if that member is a non-voting advisory member. Some other states’ high school activity associations include parents, students, or state education department representatives in the membership of their governance bodies.
Upon joining the Legislative Council or Executive Committee, new members should be reminded of the role of athletics within an academic context. New members should agree upon the basic assumptions outlined on page 17 of this report and should agree to prevent any decisions that do not support those basic assumptions.
The Legislative Council and Executive Committee should require that proposals that come before those bodies be accompanied by a detailed written statement regarding the proposal’s projected educational and financial impact on member schools and students. Specifically, MHSAA should create standards for its proposals. For example, each proposal should be accompanied by relevant data or research to outline not only the academic and financial impact of that proposal, but also an explanation of how that proposal is in the best interest of the students and schools. Such information should be attached in the minutes of each body.
To improve accountability for its decisions, the MHSAA should clearly define in its handbook the conditions under which an expedited proposal may bypass activity districts and/or the Legislative Council and go immediately to the Executive Committee for consideration.
To ensure the collection and analysis of information regarding the impact of athletics and activities on student performance, the Legislature should amend MISS. CODE ANN. Section 37-17-6 (1972) to require the Commission on Accreditation to establish rules for public school districts to submit to the commission at the close of each semester the information necessary to determine the following:
- How do athletics and activities impact student achievement in and out of season?
- How does multi-sport or activity participation affect student achievement?
- How much instructional time is lost for those students participating in athletics and activities?
- What are the effects of athletics and activities on schools’ budgets?
- How do athletics and activities affect graduation rates, absenteeism, and participation in advanced courses?
Before adopting any rules authorized by this paragraph, the commission should confer with MHSAA regarding the substance of any potential data collection requirements for school districts.

The commission should share relevant information with MHSAA for research purposes. MHSAA should request assistance from researchers at the state’s community colleges and universities or persons with backgrounds in statistical and social science research to analyze the commission’s information. MHSAA staff should share such analysis with members of its Executive Committee and Legislative Council when such bodies are considering policy changes regarding matters such as season lengths, number of authorized games in a week, and other matters related to academic performance of student athletes and students participating in extracurricular activities.
To determine the impact and effect over time of student absences related to participation in MHSAA athletics/activities, MHSAA should create and utilize a method to gather periodically from schools the attendance data related to students’ athletic/activity participation. MHSAA should use this information to aid in its decisionmaking.

The Kansas State High School Activities Association conducts a study every four years that measures the loss of instructional time of students participating in extracurricular activities.
In order to protect the best interests of member schools and students, MHSAA should be more proactive in its regulation of schools’ athletics and activities. In particular, MHSAA should utilize a random sampling method for conducting the following activities:
- performing random sports schedule checks prior to the athletic season to ensure that schools do not surpass the allowed number of games per season or per week; and,
- performing random audits of eligibility documentation to ensure that schools are maintaining the appropriate records with which to make valid eligibility rulings.
The MHSAA should revise Bylaws 2.10.2 and 2.10.3 to reflect language in MISS. CODE ANN. Section 37-11-65 (1972) regarding academic eligibility of athletes (i. e., requirement to consider a cumulative grade point average) and then actively monitor compliance with these bylaws (and state law) in member schools.

In the event that MSHAA determines that it cannot implement a policy that comports with state law and such law results in compliance issues for the computation of mid-year grade point averages, the MSHAA should recommend to the Legislature appropriate amendments to MISS. CODE ANN. Section 37-11-65 (1972) that would offer a practicable academic standard for determining eligibility for participation in athletics and activities.

In the future, the MHSAA should, in consultation with the Mississippi Department of Education, determine whether the standard set forth in MISS. CODE ANN. Section 37-11-65 (1972) is an adequate standard for student performance or whether the association and the department should recommend to the Legislature a more stringent academic eligibility requirement for student athletes.
To improve its accountability to member schools, MHSAA should adopt a formal complaint resolution process (and outline that process in its handbook) that includes when responses to complaints should be expected and in what form (e. g., telephone call, letter, or email). In addition, MHSAA should create a complaint form that would serve as the official record of the complaint’s origin. This form, along with any investigative documents, should be maintained in one file, along with the Notice of Penalty and/or other documented resolution.
To be more transparent and provide useful management information, MHSAA should retain and log formal complaint information.
To improve transparency and accountability of its finances, MHSAA should make its financial documents (e. g., budgets, financial statements) available to stakeholders on its website.
Through its survey, PEER learned that many school personnel do not know about MHSAA and what it does. MHSAA should create literature (or post a brief video on its website) explaining what it is, what it does for member schools, how MHSAA rules and regulations could affect schools and students, and how member school personnel can get involved in MHSAA (e. g., by communicating with their principal regarding ideas that he/she could take to district meetings). MHSAA should encourage principals to encourage their staffs to visit MHSAA’s website to learn about the association and how they can play a role in changing MHSAA policies.
In consultation with the association’s certified public accounting firm, the Executive Committee should analyze its funding strategy to determine an optimum mix of revenue sources that could provide the association with stable financial resources while reducing its reliance on dues, fees, assessments, and gate receipts from member schools.
As recommended by the 2010 Nonprofit Operating Reserves Initiative Workgroup, the Executive Committee should develop a written operating reserve policy that includes the following components:
- Statement of purpose: The reason for establishing the operating reserve.
- Policy: Objectives to be achieved.
- Definitions: Descriptions of the meaning of key terms used in the policy.
- Funding: Beginning balance of operating reserve (if any), ultimate target amount for the fund and timeline for achieving it, including an annual increase in targets and strategies/sources for funding.
- Procedures: Details of how the policy is to be implemented, including the formula for calculating the operating reserve ratio, the amount of the operating reserve balance, whether the operating reserve should be formally board-designated, if it is to be a funded operating reserve, and its relationship to the approved investment policy.
- Uses: Circumstances under which the operating reserve can be used.
- Governance: Procedures for approving the use of operating reserves, persons authorized to establish policies and oversee reserve ratio and balance; provisions for recalculating the formula of the operating reserve balance and distributing the excess operating reserve balance, or funding operating reserve deficiencies.
- Authorization of drawdown from the operating reserve: Define terms and conditions for drawdown from the fund for operating purposes in the case of a financial emergency, including procedures for eventual replenishment.
Part of the association’s plan for its reserves could include a goal of financially assisting schools by covering a portion of their expenses associated with participating in athletics and activities regulated by MHSAA.
In the future, when compensating employees who retire from the association, MHSAA managers should strictly adhere to the accumulated leave payment provisions included in the association’s Personnel Handbook and correctly compute an employee’s daily rate of pay by using the total workdays in a year when computing his or her retirement payout.

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