YELLOW SHEET Office of the State Auditor of Missouri Claire McCaskill

February 22, 2001

Report No. 2001-11

Questionable practices at Missouri Southern State College include awarding vendor contracts in exchange for donations, and free international trips for employees� spouses. 

Our audit covered fiscal years 1998 and 1999 and noted 14 findings in areas such as questionable contracting practices, concerns of nepotism, weak travel policies, public funding of a private nonprofit organization, overpayments to �seminar coordinators, and unreasonable and improper expenditures.� The following highlight the audit�s conclusions: 

Food vendor made donations to the college to gain and keep contract. 

College officials have not bid the food service contract since 1994 and have not reviewed student surveys evaluating the food quality.� In addition, the food vendor has donated $325,000 to the college for capital improvements and $15,000 to a private, nonprofit organization run by the college president�s wife.� As a result of a 1997 donation of $200,000 for a new cafeteria, the college extended the vendor�s contract through June 2005.� Because the contract has not been bid since 1994, college officials cannot assure the campus has the most qualified vendor at the best cost.� (See Page 8) 

Reviews of international trips revealed weak travel policies. 

Between July 1, 1998 and March 31, 2000, the college spent approximately $655,000 on international travel; however, the college has not established formal written travel policies and procedures.� As a result, we noted inaccurate reporting of trip expenditures, inconsistency in the number of trip chaperones, and no bidding of travel agents. 

In addition, the spouses of the chorale director and a music professor went on free trips to Austria with the student choir, a trip which the students raised money to attend.� These complimentary trips, totaling $3,246, materialized when the travel agent awarded one free trip to the college for the large group attending, and the college�s International Studies department allocated excess funding to the music professor.�  

College officials, in response to our audit, have agreed to repay the costs of the free trips and develop travel policies and procedures.� (See Page 10) 

The college provided public funds to a private piano competition. 

The college pays the operating expenses for the Missouri Southern International Piano Competition, a nonprofit organization run by the college President�s wife.� In addition, the college�s contract with their food vendor provides for donations to this organization.� Using public funds to pay expenses of a private nonprofit organization violates the Missouri Constitution.� (See Page 17) 

Criminal justice seminars coordinators were overpaid. 

A college vice president and a criminal justice professor together received compensation of approximately $87,500 in addition to their regular salaries for coordinating criminal justice seminars. These individuals� inaccurate reports of the seminar resulted in excess compensation of $1,522 each. In addition, the inadequate documentation did not show the number of participants or the amount each participant paid, which made it impossible to verify reported revenues.� 

College officials responded that they have revised their policy governing these seminars, and will request reimbursement of the overpayments from the vice president and the criminal justice professor. (See Page 20) 

The college�s nepotism policy has not been strictly followed. 

A college vice president/dean supervised his son, an assistant professor in his father�s department.� College policy does not allow this type of hiring unless without written approval from the college president.� In addition, the vice president/dean approved a $1,000 dean�s initiative grant for his son, and $8,650 in additional compensation for hours he taught beyond his original employment contract. 

The college responded that the president provided verbal approval for the son�s hiring, and that the father no longer serves as the dean of his son�s department.� (See Page 21) 

Some expenditures appear unreasonable and improper. 

The college paid $30,317 for a $1.5 million life insurance policy for the College President but is the beneficiary for only $500,000 of the policy.� In addition, the college paid $1,145 to send the President to the Mayo Clinic in Rochester, Minnesota for his annual physical examination.� (See Page 16) 

The theatre director used excess fees collected from continuing education students to fund two $882 trips to New York City for two college secretaries.�  

During fiscal years 1998 and 1999, the college spent more than $22,000 hosting a formal Christmas ball for employees and the Board of Regents.� The college responded that they believe this expenditure is a good investment in people.� (See Page 25) 

Our audit also reviewed the college�s policies regarding the use of college-funded vehicles, cellular phones, and credit cards.� The audit also noted bonuses paid to college staff and loans to professors not being properly monitored and collected.� (See Page 21)