Scholarship named after ex-MSU President Simon in 2015 wasn't distributed until after her resignation
An investigation done by The State News finds that a scholarship fund established under ex-MSU President Lou Anna K. Simon and her husband’s name at a 2015 MSU Board of Trustees meeting did not exist prior to March 2018.
At a December 2015 board meeting, the board directed $50,000 to be transferred into the scholarship fund, which was named after Simon and her husband. Then, in December 2016, the board also directed $100,000, respectively, to be transferred into the fund. The scholarship was to be distributed to first-generation students at MSU.
The funds were never transferred into the scholarship nor distributed to any students until March 2018, months after Simon’s resignation on Jan. 24, according to documents obtained by The State News through the Freedom of Information Act, or FOIA.
The documents, along with statements from Melody Kindraka of MSU Communications and Brand Strategy and Trustee Brian Mosallam, confirmed that the The Roy J. and Lou Anna K. Simon Opportunity Scholarship Expendable Fund was created because the board wanted to recognize the contributions Simon and her spouse had made to MSU.
Fund first discovered missing
According to a March 12 memo from Vice President for University Advancement Robert Groves, Groves discovered the fund was missing after Simon's departure from MSU. At the time, he had been reviewing all accounts in her name.
In the memo, Groves wrote to notify Mark Haas, vice president of the university's finance office, that the transfers had never been executed. Groves directed University Advancement to work with the MSU Office of Financial Aid in order to actually establish the scholarship.
He also requested to transfer an additional $10,000 into the fund to compensate for the delay. That transfer of funds was also to ensure there was enough money to immediately be awarded to any recipients of the scholarship at the time.
Groves said in the memo that University Advancement would be transferring a total of $160,000 to the Office of Financial Aid to “establish and support the Roy J. and Lou Anna K. Simon Opportunity Scholarship Fund.”
The Office of Financial Aid's role
The day after Groves sent out the memo, a March 13 email sent from Sean Harwood of University Advancement to other members of University Advancement said the $10,000 was transferred into the fund.
In the email, Harwood specified that it would then become the Office of Financial Aid's job to start assigning awards and distributing the funds. Board of Trustees meeting minutes from December 2015 and December 2016 confirmed the Roy J. and Lou Anna K. Simon Scholarship Fund was initially supposed to be administered by the Office of Financial Aid.
Melody Kindraka, issues, crisis and media specialist at MSU Communications and Brand Strategy, or CABS, said Simon’s contract and compensation were reviewed by the board every December.
Simon requested that her salary not be increased in 2015. The board subsequently voted to create a scholarship under her name, in lieu of a salary increase, with the funding that wasn’t added onto her compensation.
However, those funds were never set aside for the scholarship.
At the 2016 board meeting, Simon again requested to not have a salary increase. The board then voted to give a gift of that compensation to the scholarship fund, Kindraka said.
The 2016 meeting's minutes made mention of the fund being established at the 2015 meeting and also indicated that an additional $100,000 was to be transferred to the fund.
For a second time, those funds were never transferred into the scholarship.
After miscommunications, fund was transferred in March 2018
Money for the Roy J. and Lou Anna K. Opportunity Scholarship Fund was finally set aside in March 2018, months after Simon’s resignation. Her departure came amid heavy criticism of her handling of the child sexual abuse scandal involving ex-MSU and USA Gymnastics doctor Larry Nassar.
“The Advancement was going through a review of just all different things that had her name attached to them,” Kindraka said. "[Groves] said in his letter he was reviewing all accounts in her name and that’s when he realized that the fund wasn’t listed as one of them.”
Kindraka said the funds weren't originally transferred because of miscommunication.
“In my understanding, that was the situation, that coming out of the board meeting, when the board voted to establish the scholarship, the administrative actions that needed to happen did not,” she said.
Receipts and documents obtained through The State News FOIA request showed that a first reward of $10,000 from the $160,000 fund was finally distributed among six students with outstanding balances on March 19, 2018.
Kindraka said the six students who received the scholarship had financial emergencies.
“For the Roy and Lou Anna Simon Scholarship, this, in my understanding, is a general purpose scholarship, so it is set up for students that demonstrate financial need,” Kindraka said. “I think it’s six or seven students that received the funding. In my understanding, these were individuals who had emergency situations.”
Kindraka said the Office of Financial Aid was notified funds weren’t transferred into the scholarship and it hadn’t been set up previously when the March 12 memo was sent out.
She said it was the board's and the university's responsibility for ensuring the scholarship was properly set up with funds.
“In my understanding, it was kind of an administrative oversight between the board and the university,” she said. “The board established the fund at their December 2015 board meeting and, you know, for one reason or another, the paperwork didn’t follow it and it never got established after that.”
Office of Financial Aid had no information on the scholarship fund
On Feb. 8, 2018, Val Meyers, associate director of the Office of Financial Aid, confirmed to The State News that the Office of Financial Aid had no information on the scholarship and hadn’t received the funds at that time.
Meyers again confirmed she had no information on the scholarship or its funding on May 11, 2018.
A representative for University Advancement did not respond to multiple requests for comment on information pertaining to the fund prior to the dates listed within the documents.
Kindraka said University Advancement is responsible for managing much of the accounting and funding that goes through MSU.
“They manage a lot of the accounting, they manage a lot of the donor accounting, a lot of the funding that comes into the university,” she said. “Now that the fund has been created in the Office of Financial Aid, the Office of Financial Aid will be responsible for taking it forward from here.”
Trustee Mosallam's role
Trustee Brian Mosallam presented the Trustee Compensation Committee report at the 2015 meeting during which the fund was first authorized. He repeated this during the 2016 meeting in which additional funds were supposed to be added to the scholarship.
Mosallam said the decision to create the scholarship under the Simons was unique.
“President Simon was quite adamant, both in 2015 and 2016, that she not receive additional compensation," Mosallam said via email. "The Board, however, wanted to recognize the many contributions that she and her spouse had made to MSU."
The board resolved to use the allotted compensation to create a scholarship that recognized the president's accomplishments at the university - something that hadn't happened before, according to Mosallam's understanding.
"The Board decided to set up a scholarship fund named in her honor," Mosallam said. "To my knowledge, this isn’t something that the Board has done before, so there isn’t a normal process for it.”
Mosallam confirmed that the funds were supposed to be put into the scholarship after the 2015 and 2016 board meetings, but no money was ever actually transferred until March 2018.
“After both meetings, the administration was supposed to transfer funds from the general scholarship fund into the fund named in honor of the Simons,” he said. “Unfortunately, due to miscommunication within the administration, this never happened. It has happened now and the fund is funded to the level requested by the Board.”
The Board of Trustees, however, is typically not responsible for creating scholarship funds, Mosallam said.
“Most scholarships are named by the individuals who have contributed the funds for the scholarship,” he said.
Mosallam said the two-year delay in the funds being transferred did not affect students.
“Fortunately, the fact that the transfer of funds was delayed did not impact students,” he said. “The funds that would have been awarded through the Simon Scholarship Fund were awarded from the general scholarship fund during those years, so MSU students did receive those scholarship dollars, they just didn’t bear the Simon name.”
Editor’s note: This investigation was conducted by reporters Kaitlyn Kelley and Riley Murdock. Kelley reported on and wrote the piece while Murdock contributed additional reporting and obtained documents via a FOIA request.