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State Auditor reviews university contracts

April 19, 2000
By: Jennifer Lutz
State Capital Bureau

JEFFERSON CITY - Norm Stewart's golden parachute caught fire from Missouri's state auditor on Wednesday.

"The biggest problem is that he is getting paid for work before he does the work," said State Auditor Claire McCaskill in releasing an audit on after-retirement contracts at state universities.

The main criticism McCaskill raised with Stewart is that he will be paid $125,000 per year to raise money for the university before he does any actual work.

The former MU men's head basketball coach signed a contract when he retired on April 1, 1999, that allowed him to be retained by the university as a consultant to the chancellor. Although his duties are not explicitly defined, he will be involved with raising money for cancer research and promoting the Ellis Fischel Cancer Center.

In her audit, McCaskill reports Stewart negotiated to be paid up to two years in advance for his services.

She examined separation and retention contracts by state universities to presidents, chancellors, vice presidents or head coaches of major sports. The audit contained fourteen contracts from officials at seven universities from January 1995 to October 1999.

"We concluded that most of the colleges and universities were consistent in the types of contracts they signed," McCaskill wrote.

However, she said contracts like Stewart's, "could establish unfavorable precedents for future contracts."

Another problem McCaskill cited about Stewart's contract is that it does not describe what will happen if the former coach does not perform his duties.

"We went into the process with complete trust that he would continue his service to MU with the same commitment he has demonstrated for more than three decades," said Chancellor Richard Wallace in a statement.

MU sent a reply to McCaskill saying, "In the unlikely event that terms of the contract are not fulfilled, the University still has available to it sufficient legal avenues to seek redress."

Although Stewart was the only retiring coach in the bunch, the contract of a Central Missouri State University president who resigned also was included in the audit. The president received over $620,000, which raised eyebrows of professors and the student newspaper.

Darin Sparks, news editor for the CMSU Muleskinner, said former president Ed Elliott brought this on himself. He said Elliott came to the newspaper and wanted them to look into the contract of the new president.

"Elliott said that the new contract was outrageous," Sparks said.

The newspaper then compared the new president's contract to Elliott's and it raised more questions than it answered.

The contract allowed Elliott to keep university property such as computers, printers, and cell phones, the option to buy his $40,000 company vehicle for only $4,000, yearly physical exams from the Mayo Clinic, paid travel expenses for him and his wife, and benefits for his wife. The contract also increased Elliott's salary level upon which his retirement benefits are based.

"The former president's services are worth something, although the State Auditor may disagree with us as to exactly how much," CMSU wrote in response to the audit.

McCaskill said she hoped that CMSU would void Elliott's contract.

Southeast Missouri State University also had a contract that drew criticism. The university established the position of a chancellor for the former president of the college. The problem ensued when the chancellor decided to move back to his homestate of Ohio, but still collect the $95,000 annual salary and $23,000 annuity benefits.

"I think we all expect chancellors to reside in the state," McCaskill said.

In the contract, the university said it would pay travel and entertainment expenses for the chancellor. The agreement also stated the school would pay for country club fees for the chancellor and his wife.

"The Board of Regents believes it has fulfilled its fiduciary responsibilities and that the Chancellor's contract was in the best interests of the University, the students, and the taxpayers," SEMO responded to McCaskill.