Audit: Mizzou paid 'excessive' salary to former chancellor
A recent Missouri State audit shows where Missouri taxpayer money is truly going.
The Missouri State Auditor’s report on the University of Missouri system found that exorbitant salaries and bonuses were being paid to top executives, including upwards of $400,000 to disgraced former chancellor R. Bowen Loftin.
The beginning of the report, conducted by State Auditor Nicole Galloway, focuses on several different payments to top executives of the system, including car payments and incentive payments, concluding that “in 2015, 2016 and 2017, the Board of Curators or System President approved approximately $1.2 million in incentive payments to top executives and administrators for their performance during the preceding years.”
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“Incentive payments were made without a formalized and clearly defined process of how the additional compensation was to be earned, giving the appearance of year-end bonuses, which are a violation of the Missouri Constitution,” the document elaborates, adding that $60,000 in retention bonuses were paid out to administrators without Board of Curators approval of the individual amounts.
Galloway emphasizes in the incentives section that there is no objective criteria to determine how much compensation personnel should receive for incentives, and that some of the goals reached by administrators that elicited incentives were standard job duties.
“Many of the goals [for incentives] appear to be standard job duties for the individuals being evaluated,” Galloway says. “For example, the Chief Financial Officer's evaluation contained a "goal" to implement and support the effective use of a new budget system.”
Also included in the audit is the revelation that the system spent $407,00 on vehicle allowances to executives and administrators during the 2015-’16 fiscal year, which Galloway describes as “excessive,” warning that the practice can “result in a lack of transparency in executive compensation.”
Perhaps the most surprising section of the audit covered the chancellor’s transition, which discloses that Loftin continued to receive his full chancellor’s salary for months following his resignation, after which a special position was created for him at a salary far higher than those paid to other administrators in similar roles.
The Columbia Missourian reports that Loftin’s resignation came in the wake of intense criticism of his handling of the protests that rocked Mizzou’s campus in 2015, including an open letter signed by nine of the school’s deans and no-confidence votes from faculty in several departments.
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The audit states that Loftin continued to receive his full chancellor’s salary of $459,000 through April 2016, nearly 6 months after his resignation, resulting in an estimated overpayment of $50,000 relative to the amount he should have been paid under the terms of an agreement in place at the time of his resignation.
In May, he transitioned to his new role as Director of National Security Research Development, a position created specially for him at a salary of $344,250, 75 percent of his original chancellor’s salary and 31 percent more than the next-highest paid research administrator on campus.
The audit shows that the financial largesse surrounding the transition doesn’t stop there, however, revealing that in his new position, Loftin was granted roughly six months of “developmental leave,” which he spent travelling the system and the country to “learn what we do.”
Loftin also received an $35,000 annual stipend on top of his salary, $100,000 in retention payments, a $50,000 travel budget during his developmental leave, and $15,560 in vehicle allowances.
“This level of compensation appears excessive for a non-critical administrative position,” Galloway concludes, “particularly for a position without a significant emphasis in the strategic plans for the system or the Columbia campus, and not in the best interest of the UM System, Columbia campus, or the public.”
[RELATED: Mizzou students demanded ‘heat and refrigeration’ during protests]
This isn’t the first time Loftin has been in the news for compensatory matters, either. Campus Reform reported back in 2013 that after stepping down as President of Texas A&M, Loftin was awarded $850,000 in cash, an iPad, and a job paying $311,000 per year.
The audit concedes that the University of Missouri system has neither broken the law nor violated transparency standards, but nonetheless recommends increased transparency in executive compensation, as well as the adoption of “specific and objective measurement criteria to determine when incentive payments have been earned.”
Victoria Stroup, a sophomore at the University of Missouri and communications director for the school’s Young Americans for Liberty chapter, told Campus Reform that this is another example of the wasteful spending she considers rife at Mizzou.
“It is evident to me and many others of the campus community that MU has demonstrated continually wasteful spending. This audit just continues to show how irresponsible MU is choosing to be,” Stroup declared. “Controversy surrounded R. Bowen Loftin leading up to his official departure from his role as Chancellor, and continuing to pay him more than what his original contract was designed to do is irresponsible, to say the least.”
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“I think the UofM System needs to do a better job of keeping the students and community in mind,” she added, suggesting that “if this was their focus and mission, I don't think we'd be having this conversation.”
“The money could be better invested into keeping Ellis Library open 24 hours, preventing the student health center from fully billing its student patients as will be implemented next semester, or just in generally lowering the high cost of education,” Mizzou freshman Jennifer Sutterer concurred, telling Campus Reform that “there are many organizations and resources on campus that could use the money to better impact the intellectual community here than giving it to a resigned chancellor.”
A press release issued by the University of Missouri system in response to the audit emphasizes that the investigation found no legal malfeasance, though the president of the system, Mun Choi, did indicate support for the audit’s recommendation for more objective criteria for executive compensation.
“Consistent with the audit report’s recommendation, the UM System will continue to establish objective executive performance goals,” Choi pledged. “The UM System strives to be more accountable and transparent in its stewardship of public resources. We will use the audit report to continue improving our business processes and our operations.”
The press release ignores, however, the audit’s overall rating of the system as “fair,” and instead focused on high credit ratings recently achieved.
Follow the author of this article on Twitter: @ChrisNuelle
