Luxury cars and "hidden payments" paid for with your tax dollar -

Luxury cars and "hidden payments" paid for with your tax dollars

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A photo from the University of Missouri campus (Credit: University of Missouri) A photo from the University of Missouri campus (Credit: University of Missouri)

If you pay taxes in Missouri, you are funding vehicle allowances for 18 executives and top administrators within the University of Missouri system. 

In some cases, those vehicle allowances exceed $1200 per month which is enough to pay for a luxury car, fuel and insurance according to state auditor Nicole Galloway.

A total of $407,000 was paid out in vehicle allowances in 2015 and 2016.  

Galloway's office was critical of the allowances along with other perks paid out, as they were not included in "published salaries." 

In a news release, Galloway stated, "Administrators appear to have forgotten that the system is a public institution, and that they are accountable to the taxpayers, students and families." 

According to the audit, a total of $2.3 million in "hidden payments" went to top administrators. 

The audit also revealed former chancellor R. Bowen Loftin, who resigned in 2015, was rehired in 2016 for a newly created position titled Director of National Security Research Development. 

In his original position as chancellor, Loftin received $459,000 annually. According to the audit, he continued receiving his chancellor salary for 6 months after resigning despite having "no official duties and was not officially employed in any capacity by the university following his resignation." 

Those continuing payouts totaled $230,000

Galloway's office also revealed Loftin's new position pays $344,000. 

In addition, Galloway revealed Loftin was allowed to keep his $100,000 retention bonus, a $15,600 luxury vehicle allowance, a $35,000 annual stipend with "no restrictions on its use," and a $50,000 travel budget. 

The University of Missouri responded to the audit with the following statement. 


The University of Missouri followed the provisions that were outlined in Dr. Loftin’s original contract when he was appointed chancellor. In his current role as Director of National Security Research Development, he has been connecting with researchers across the University of Missouri System’s campuses in an effort to bolster the university’s research programs in defense, intelligence and homeland security.

           Over the past year, Dr. Loftin has met with national research scientists, including those with the Office of Naval Research and the Army Research Laboratory. In those meetings, he helped to identify where UM researchers could compete for upcoming projects or programs related to improving national security.

           Dr. Loftin will be evaluated this spring to assess his effectiveness and success in locating funding opportunities and partnerships for MU investigators.

             University of Missouri administrators are always mindful of our responsibility to be good stewards of the tax dollars entrusted to us. For more than 175 years, MU has been a resource for the state, educating the workforce, discovering life-saving and innovative technologies, and sharing this knowledge with the citizens of the state. We could not do this without the financial support from Missouri’s citizens and state government.

            We will be reviewing the recent audit very carefully and taking any actions deemed necessary to improve this great university.

The University of Missouri System responded to the audit with this response. 

State audit report confirms UM System follows sound business practices in its operations

COLUMBIA, Mo. – An audit of the University of Missouri System released today by State Auditor Nicole Galloway confirmed that the UM System follows sound business practices and accounting standards in its operation of the state’s largest public university, while identifying no significant deficiencies in internal controls. The audit’s release culminates an extensive, eight-month review of a full range of the UM System’s operations.

 “The UM System strives to be more accountable and transparent in its stewardship of public resources,” President Mun Choi said. “We will use the audit report to continue improving our business processes and our operations.”

 While the audit reviewed a wide range of the UM System’s operations, the report’s findings were limited to the University’s executive compensation program. The program includes incentives that are used among peer higher education institutions, and generally do not exceed the median of the market. Under the UM System’s executive compensation program, executive leaders earn a portion of their annual salary based strictly on performance.

“Our executive compensation program is critical to our capacity to attract and retain top leaders in what is an extremely competitive national higher education market,” Choi continued. “Consistent with the audit report’s recommendation, the UM System will continue to establish objective executive performance goals.”

The UM System is a model of an efficient public institution. Using savings garnered through efficiency and effectiveness measures, the UM System campuses spend 75.3 percent of their operations budget on the core activities of teaching, research and service, compared to other Missouri public four-year universities, which spend an average of 64.2 percent.

Just last week, Standard & Poor’s Global Rating, one of the nation’s premier credit rating services, announced an affirmation of the UM System’s high-grade AA+ credit rating. This follows the recent July rating by Moody’s Investors Service, another leading credit rating agency, which reaffirmed its high-grade rating of Aa1 also with a stable outlook. These two ratings combined keep the UM System among an prestigious group of institutions. Less than 10% of the public institutions rated fall within both rating services’ top two rating categories.

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