University of Missouri System Spending Questioned in State Audit

Brian Kelly (@brpkelly)

JEFFERSON CITY, Mo. (KMOX) – In a report she calls “highly-critical,” Missouri State Auditor Nicole Galloway says the University of Missouri System’s administrators, “appear to have forgotten that the system is a public institution, and that they are accountable to taxpayers, students and families.”

In giving the system a grade of “fair” – the second-lowest possible – Galloway says her study uncovered inappropriate bonus payments to top executives. She also strongly questioned the handling of the resignation of former Columbia campus chancellor R. Bowen Loftin.

The report cites $2.3 million in what she calls “hidden payments and incentives” to top administrators, including $1.2 million in incentives awarded to 18 executives over the past three years.

She says the process for formalizing those incentives was not clearly defined, making them appear to be bonuses paid as additional salary.

Galloway also criticizes over $400,000 in vehicle allowance payments and $800,000 in “undisclosed retention bonuses, relocation payments and housing allowances.”

CLICK HERE to read the audit

When it comes to the resignation and rehiring of Loftin, Galloway accuses administrators of “financial mismanagement.”

She questions why Loftin continued receiving his salary over the six-month period after his November 2015 resignation, totaling $230,000.

He then was hired in the newly-created position of Director of National Security Research Development at a salary of $344,000, which she says was, “substantially higher than the university’s other research administrators and higher than Loftin’s supervisors.”

His new contract, she says, includes a $100,000 retention bonus, $15,600 a year luxury vehicle allowance and $35,000 annual stipend.

Galloway concludes, “These decisions demonstrate poor judgement and a lack of accountability in almost every aspect of the former chancellor’s resignation and transition to a new position.”

The system’s response says, in part:

The report does not find a failure to comply with any reporting or disclosure requirements, but concludes that “ensuring all compensation earned by executives and administrators is presented in a transparent manner is in the best interest of the UM System and the public.” The System agrees with the report’s conclusion in this regard and will continue to work towards transparency beyond the requirements of the law.

In response to the concerns over Loftin’s resignation, the system replied:

The System acknowledges that the Chancellor transition unfolded under historically challenging circumstances and the resulting transition agreement was the product of significant negotiation. The Auditor Comment 14 University of Missouri System Administration Management Advisory Report – State Auditor’s Findings System agrees with the report’s recommendation to ensure compensation terms for administrators are in the best interest of the UM System, its universities, and taxpayers.”

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