Incoming state auditor to look into Missouri student loan program
Wednesday, November 15, 2006
Among concerns raised was the severance package given to the departing MOHELA director.
JEFFERSON CITY, Mo. Incoming State Auditor Susan Montee said Tuesday that one of her first acts next year will be an audit of the state's student loan authority.
Montee says quasi-governmental groups such as the Missouri Higher Education Loan Authority don't have enough oversight and legislators need to know what they're dealing with.
"We're going to work as quickly as we can to get information to them," said Montee, while noting that she and legislators take office early next year.
Gov. Matt Blunt in January proposed selling MOHELA entirely, then agreed with a plan to sell some MOHELA assets and direct proceeds to college construction projects. The plan failed in the legislature.
Under Blunt's latest proposal, MOHELA would pay $350 million -- generated from existing profits and the sale of billions of dollars worth of student loans -- over six years to the Missouri Development Finance Board. That panel would disperse $335 million to campus projects and $15 million to the Missouri Technology Corp., which recruits high-tech businesses and helps spin off university research into commercial products.
The plan is subject to legislative approval, and lawmakers are expected to consider the matter again next year.
Montee on Tuesday raised particular concerns about the more than $830,000 severance package given to Michael Cummins, who was fired in January after expressing reservations about Blunt's plant o sell MOHELA.
Cummins and the student loan authority signed his severance agreement last month. It provides that Cummins will continue receiving his $13,461.54 salary every two weeks through October 2007. He's also being paid for vacation and sick time and getting a lump sum pension benefit and continued health insurance coverage through July 2007, among other things.
Question of oversight
Montee said the package illustrates the need for outside oversight of MOHELA and other quasi-governmental organizations. She said she would also look at the Missouri Development Finance Board and the Missouri Technology Corp., which are also involved in the MOHELA plan.
She said, "I don't think anyone would've considered that the entity MOHELA was amassing the type of assets that it was.
"You would assume the money would be lent out and there wouldn't be a large buildup of cash."
Once such situations come to light, "it triggers the type of oversight that comes out of the auditor's office," she said.
MOHELA executive director Raymond Bayer Jr. said MOHELA undergoes regular operational and accounting audits by outside groups, including the Missouri guaranty agency under the state Department of Higher Education. He declined to comment on Montee's plans.
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