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Auditor: $2M in Hidden Bonuses at University of Missouri

JEFFERSON CITY, Mo. — The University of Missouri System has doled out more than $2 million in hidden bonuses to administrators over the last three years and paid former Chancellor R. Bowen Loftin thousands of dollars in the months after his resignation with no work responsibility, according to an audit released Monday by state Auditor Nicole Galloway.

The audit revealed that the system has paid more than $1.2 million in performance incentives to top university officials without clear criteria and without notifying the public. They also have received inflated vehicle reimbursements, retention payments and housing reimbursements.

“These administrators appear to have forgotten that the university is a public institution and that they are accountable to taxpayers, students and their families,” Galloway said at a news conference.

The audit reviewed the UM System’s executive compensation following a tumultuous time at the Columbia campus. In the fall of 2015, students launched protests over the administration’s handling of several racial incidents on campus. UM System President Timothy Wolfe and Columbia campus Chancellor Loftin resigned, leaving the administration scrambling and raising questions from some lawmakers about the direction of the university.

After Nov. 10, 2015, Loftin was “not officially employed in any capacity by the university,” the audit said. He was still paid $230,000 over six months after his resignation – the equivalent to what he would’ve earned while he was working full time. Loftin’s contract said he should receive 75 percent of his previous salary.

He also received a $35,000 annual stipend, a $15,560 vehicle allowance, $100,000 in retention payments and a $50,000 travel budget to use while on a six-month “developmental leave.”
In June 2016, Loftin was hired as MU’s director of national security research development with a salary of $344,000. The audit says the position pays 31 percent more than the highest paid research administrator on campus, and Loftin’s duties “are not supported by the strategic plans of the UM System or the Columbia campus.”

A statement from the Columbia campus said the payments after Loftin’s resignation followed the provisions outlined in his original contract. Loftin will be evaluated in the spring for how effective he’s been in finding new research opportunities in defense, intelligence and homeland security.

The audit also found that 18 UM System administrators received nearly $1.2 million in performance incentive payments over the last three years. The bonuses are supposed to be distributed based on administrator performance, but the audit noted that the program’s criteria for performance are unclear.

Administrators received thousands of dollars in inflated vehicle reimbursements paid to an average of 15 people over the last two years, according to the audit. Some officials received more than $1,200 per month — the price of leasing a luxury vehicle, insurance and fuel.

UM System President Mun Choi said in a statement that executive compensation, including the performance bonuses, is “critical to our capacity to attract and retain top leaders in what is an extremely competitive national higher education market.” He said the system will work to make the practice more transparent in accordance with the audit.

Galloway, the only Democrat in the state holding an executive position, was appointed by then-Gov. Jay Nixon in 2015 to replace former auditor Tom Schweich. She is seeking re-election in 2018.

Her audit comes after a recommendation from Gov. Eric Greitens to cut 10 percent of university allocations for fiscal year 2018. Many university leaders say they could be forced to raise tuition if the recommended cuts are approved.

Greitens condemned the bonuses in a statement Monday evening.

“I’m all for good pay for people who do a good job, but I won’t support giving tax dollars to people without proven results,” he said.

Greitens said he would discuss the audit in a meeting Tuesday with several university presidents and the commissioner of higher education. The meeting had already been scheduled prior to the audit’s release, Greitens’ spokesman, Parker Briden, said.

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