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YELLOW SHEET Office of the State Auditor of Missouri |
June 28, 2001
Report No. 2001-49
Some participants in the University of Missouri�s early retirement
program received inconsistent treatment and compensation
This audit details the implementation of the University�s Voluntary
Early Retirement Incentive Program-2000, a systemwide effort to upgrade the
professor corps and redirect money throughout the University�s four
campuses.� Overall, the University
accomplished its goal of creating an incentive to encourage retirements, with
about 42 percent of eligible employees taking the incentive.� But program provisions allowing University
officials to rehire certain early retirees were applied inconsistently from
campus to campus. �More proactive
management of the rehire program could have prevented many of the inequities
uncovered in this audit.
Funds estimated for redirection
undeterminable
University administrators initially estimated
$10 million would be freed up through the early retirement program for strategic
reinvestment throughout the University System. �Administrators presented this initial estimate to the Board of
Curators with no detailed supporting records or other documents, but based the
estimate on an administrator�s experience with a previous early retirement
program. �Neither the University nor the
auditors could validate this estimate because the University has not tracked
costs of hiring new employees to fill early retiree positions and cannot
estimate costs of hiring future employees. (See page 2)
Rehire
provisions applied differently at various campuses
Campus officials administered the rehire provisions of the early
retirement program to fit campus cultures. �As a result, inconsistencies occurred and some individuals
benefited greater than others. �The
following highlights the major inconsistencies:
�
Some campus
officials sought and received approval to rehire top administrators back in
their administrative positions, a practice strictly prohibited by the program
guidelines.� After the audit was
announced, University officials took various steps to correct these rehires.� (See page 10)
�
Some campuses
rehired a significant number of early retirees above the suggested maximum
rehire level, with the St. Louis campus having the highest percentage of such
occurrences. All of the St. Louis employees rehired above the suggested maximum
level held administrative or support positions, with several being top
administrators and Chancellor support staff. �No St. Louis faculty members were rehired above 53 percent of their previous
salary, which was less than the suggested maximum rehire level of 60 percent. �The administrative and support personnel were
rehired at levels between 70 and 74 percent of their previous salary. �(See page 13)
�
University
System officials did not address the issue of salary increases for rehired
early retirees. �As a result on the
Rolla campus, some rehired retirees could and did receive raises, but rehired
retirees on the St. Louis campus could not. (See page 16)
Some early retirees hit financial �windfall�
with dual incentives
Nine faculty members on various campuses, who had already agreed to retire with a cash buyout, also received the early retirement incentives. �The University paid these faculty members more than $648,000 in buyout incentives and will pay an estimated additional $624,000 in pension benefits for their participation in the early retirement program. �One administrator called the situation a �window of opportunity� that �created a windfall for these individuals.�� As a result, for future employees, the University has revised the standard contract language for tenured buyouts to preclude a person from receiving dual incentives from a buyout and a similar early-retirement incentive program. �(See page 21)
