PEER: Watch private foundation money in Miss. universities

Published 3:26 pm Wednesday, July 25, 2007

A legislative watchdog committee says salary boosts given to Mississippi university employees should be approved by the College Board.

The report, issued Monday by the Performance Evaluation and Expenditure Review Committee, does not accuse the state’s universities or their foundations of misconduct. However, the committee said concerns have been raised over the transfer of money between foundations, overlapping board memberships and contracting practices.

The PEER report said the College Board also should do more to prevent potential conflicts of interest.

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An Institutions of Higher Learning attorney responded that state law prohibits such conflicts and more restrictions could jeopardize the foundations’ nonprofit status.

PEER found that six of the state’s eight universities boost salaries with funds from foundations and at least one alumni association.

A recent $20,000 raise kept University of Mississippi Chancellor Robert Khayat the top-paid leader of the state’s public universities. His $429,000 salary is split roughly between the state and Ole Miss’ foundation.

The committee’s recommendations are “to make sure everything is aboveboard and passes the taste test,” said committee member Sen. Dean Kirby, R-Pearl. “It’s (the College Board) that hires the employees, not the foundation. Therefore, they should be more in control of the salaries.”

The College Board’s Web site says its policy is to submit an annual report detailing employees’ salary supplements.

Higher Education Commissioner Tom Meredith said College Board members are reading the PEER report. “After a thorough review, the board will decide what follow-up action to take,” he said.

While the committee did not find any conflicts of interest among board and foundation members, PEER chairman Rep. Harvey Moss said there is a “great possibility” conflicts could be created.

“We may need to look at some legislation to fine-tune some gray spots,” said Moss, D-Corinth. “We don’t want to interfere with what people do with private money, but when you give it to a public source, you need checks and balances.”

The recommended policy changes could be too far-reaching, some education officials said.

Van Gillespie, the IHL’s special assistant attorney general, wrote in a response to the report that existing state law addresses nonprofit board members and conflicts of interest.

“As long as the university-affiliated entity’s conflicts policies comply with state law, the (College Board) should refrain from imposing additional, unnecessary restrictions on the private entities,” Gillespie wrote.