I do know most NCAA Div 1 schools do internal drug testing. I have gone through it three times at UND. The results are kept internally, and punishments for a positive result are decided within the athletic dept. and athletic training dept. I do know there are certain positive test results that they have to follow NCAA guidelines & sanctions and go through with a punishment, but I do know of some circumstances where they have detected a positive result from a drug, but was just a slap on the wrist for the student-athlete (mainly street drugs). Many students just drink gallons of water before their urine test to dilute it, although sometimes they have to re-take the test if it is too diluted- key here is that you can extend the testing time period to get rid of certain drugs in your system.
In the NDSU circumstance, the NCAA tested them in playoffs and found the positive result, we may never know if NDSU's internal drug testing detected it throughout the season or not.
Not sure if anyone has posted this yet, but here's a good link for FAQ on the NCAA website: http://www.ncaa.org/sport-science-institute/topics/frequently-asked-questions-about-drug-testing