To some surprise, NCAA president Mark Emmert has commented on the disaster unfolding at Penn State University. Most had assumed Jerry Sandusky's alleged crime spree and the resulting apparent cover-up were outside of the NCAA's realm, but it looks like Emmert at least wants to make sure that's the case.
Regarding the ongoing Penn State criminal investigation, the NCAA is actively monitoring developments and assessing appropriate steps moving forward. The NCAA will defer in the immediate term to law enforcement officials since this situation involved alleged crimes. As the facts are established through the justice system, we will determine whether Association bylaws have been violated and act accordingly. To be clear, civil and criminal law will always take precedence over Association rules.
Penn State's mistakes didn't involve student-athletes, so it's hard to say exactly what the NCAA could rule on here. But as long as Penn State wants to play by the NCAA's rules, the NCAA can sort of do whatever it wants. The NCAA can't make Penn State shutter its football program, but it could find a reason to refuse to sanction it for a time, if it wanted to.