The policy recommendations contained in this report are intended to provide financial guidelines that can be clearly understood by all concerned parties and allow for decision making at the local level within those guidelines. The recommendations provide institutions with a clear understanding of the state's relationship to financial intercollegiate athletics in the state and an opportunity to make decisions at the local level as to breadth, depth, and, type of program. The document includes: an introduction; a summary of recommendations; a discussion of background information; including: current financial situations--the universities, current financial situation--the state colleges, 1975-77 biennium requests, University of Washington, Washington State University, and State Colleges; and a discussion of financial, recruiting, and HEW Title IX Guidelines information. The document also includes: recommendations one to three concerning grants-in-aid; recommendation four concerning plant operation and maintenance; and recommendation five concerning program 010-administration and general expenses and program 030-student services; and recommendation six concerning participation in decision making. Conclusions and appendixes follow. (Author/KE)