State Auditor Nicole Galloway is praising the University of Missouri System for reforming its expense and bonus structure for high ranking administrators.

Image courtesy of the University of Missouri system

A 2017 audit from Galloway’s office revealed more than $2 million in “hidden” bonus pay and $1.2 million in unexplained incentives.

It also uncovered more than $800,000 in unreported money that was doled out to cover relocations, housing allowances, and retention bonuses.  The audit further showed that 18 top executives received more than $400,000 in vehicle allowances in 2015 and 2016.

At the time, newly appointed UM system President Moon Choi said payouts were necessary to attract and retain top leaders in a competitive national market.  But he ended the compensation arrangement three days later amid heavy scrutiny from lawmakers and the public.

After releasing the 2017 audit, Galloway said the bonus payments appeared to break the state constitution because they weren’t tied to any incentives.

“Incentive payments are tied to measurable specific criteria designed to incentivize high performance,” said Galloway.  “And what we found is the system did not have that criteria in place.  They didn’t have those types of measurable criteria where it says, ‘If you meet certain goals, you’re going to earn this payment’.”

The audit further showed that many administrators were receiving more than $1,200 per month in vehicle allowance pay to cover the cost of a leased luxury vehicle, insurance, and fuel.  Galloway called this allocation excessive because reimbursement for mileage would total only a third of the cost.

The examination also revealed former Chancellor R. Bowen Loftin was paid 75% of his salary as well as $200,000 in additional money after he resigned his position.  Galloway implied a new contract and compensation for Loftin paid him nearly $500,000 to take to a year off.

Loftin had resigned his position in late 2015 under pressure and a cloud of controversy for allegedly shutting down MU’s ties with Planned Parenthood, mishandling cultural issues after racial tensions spilled over on campus, and for creating a culture of fear and intimidation.

After his resignation, the university said his contract required he be given a tenured position.

Galloway released an updated report Thursday, noting that no incentive pay has been issued since Choi ended the compensation program and that vehicle allowances are being rolled back and phased out.

The new report also updated the status of Loftin, concluding that the position created for him after his resignation had been eliminated and that he now works as a professor at the Columbia campus as required under his original contract.

In a statement, Galloway praised the school for doing away with both Loftin’s special position and the executive compensation program.

“I’m pleased the university system has taken these steps toward more effective fiscal management,” said Galloway.

She called the Thursday release a “progress report”.

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