STATE AUDITOR MONTEE FINDS MISSOURI HIGHER EDUCATION LOAN AUTHORITY NEEDS MORE OVERSIGHT
Thursday October 11, 2007
CONTACT: Samantha Brewer, Public Affairs Coordinator
(573) 751-5313
E-mail: Samantha.Brewer@auditor.mo.gov
“The MOHELA's focus should be helping as many Missouri students as possible afford college, rather than spending inappropriate amounts of money on staff compensation and perks,” State Auditor Susan Montee said. "The MOHELA and the General Assembly need to work together to ensure that expenditures are in line with Missouri’s educational priorities."
(JEFFERSON CITY, MO) – Today, Missouri State Auditor Susan Montee released an audit of the Missouri Higher Education Loan Authority (MOHELA) that found millions of dollars spent on executive employee salaries and perks. Auditor Montee announced this audit the day she was sworn into office.
Since MOHELA was created in 1981, it has generally reinvested its operating surpluses in additional student loans, resulting in the accumulation of a substantial amount of marketable assets. At June 30, 2006, the MOHELA's net assets totaled about $234 million, with operating revenues exceeding operating expenses by over $25 million in fiscal year 2006. During 2007, a law was enacted that will require the MOHELA to distribute $350 million to the state over the next six years, primarily for various capital improvement projects at the state's public colleges and universities.
The MOHELA has paid or will pay almost $2.3 million in severance benefits to four former executives who either resigned or whose employment was terminated in recent years. Approximately $2 million of this amount represented severance pay to these individuals. The related separation agreements included: total severance payments up to 2.8 times the applicable individual's annual salary, health insurance payments, pension benefits, and other lump sum payments. In addition, from fiscal year 2001 through fiscal year 2004, five MOHELA executives received annual performance bonuses totaling almost $1.5 million.
Other findings include, a lack of competitive bidding for construction of the MOHELA new $11 million headquarters, no formal procurement policy, imprudent use of funds for retreats and parties, fixed assets and closed meetings.
