Piano competition excellent topic for review

Empire District Electric Company CEO William Gipson praised the Missouri Southern International Piano Competition, organized every two years by Vivian Leon (pictured), in an opinion page column in the Sunday Joplin Globe.
While I don't have any disagreement with Gipson over the cultural value of the event, being a person who spends time dealing with government documents I immediately recalled the 2001 state audit in which the university's expenses for this activity were questioned.
Even though this is the third competition to be held since that audit was issued (and university officials vociferously protested the basic findings of the audit that the competition was a private event and not a promotion of the university), it would still be a worthwhile idea for our local media to examine what changes, if any, university officials have made to bring the event into compliance with state law. (Again, it should be noted university officials strongly disagreed with the audit's findings.)
This is the section of that audit which addressed the piano competition:

4. Missouri Southern International Piano Competition
The college serves as the headquarters for the Missouri Southern International Piano
Competition (MSIPC). The MSIPC is a nonprofit organization whose director is the wife
of the College President. Its main purpose is to bring the citizens of the area a world class cultural event (the piano competition) every two years, which will promote the appreciation of fine music and bring recognition to the college, the City of Joplin, the region, and the state. Our review of the relationship between the MSIPC and the college revealed the following:
1. The college provides office space, utilities, accounting services, public
information services, and the use of two college auditoriums and other rooms in the music building to the MSIPC. The costs associated with these services are not tracked or billed to the MSIPC by the college. In addition, the college also provided a secretary and a student worker to the MSIPC. The college paid $22,437 and $24,029 for these salaries during the years ending June 30, 1999 and 1998.
2. The college bills the MSIPC monthly for telephone, postage, and overtime
janitorial service costs not recovered from the MSIPC ticket sale revenues collected by the college. The balance due from the MSIPC at April 17, 2000, was $1,603. No payments had been made by the MSIPC since November 17, 1999.
3. The College’s contract with their food service vendor provides for a $5,000 biennial cash contribution to the MSIPC, and the college’s Institute of International Studies (IIS) provided a $2,500 cash contribution to the MSIPC in March 2000.
4. The President was reimbursed $572 by the college in January 1999 for meals provided to a group attending the International Piano CompetitionÂ’s New York City Carnegie Hall performance. It does not appear necessary or reasonable to use college funds to cover operating expenses of a private organization, nor to provide donations or require the college’s food service vendor to provide a contribution to this organization. Furthermore, using public funds to pay expenses of a nonprofit organization violates Article III, Section 39 (1) of the Missouri Constitution. Because of the relationship between the MSIPC and the College President, any further contracts with this organization should be approved by the Board of Regents. It should also be noted that the college provides office space to the Missouri Southern Foundation and the Missouri Southern Alumni Association, both of which are legally organized nonprofit organizations.
WE RECOMMEND the MSSC comply with Article III, Section 39 (1) of the Missouri Constitution and refrain from donating or lending public funds to private organizations. In addition, the College should review costs incurred that relate to the operation of the MSIPC, and request full reimbursement for any costs not covered by ticket sale revenues. Also, any further contracts with MSIPC should be approved by the Board of Regents.
AUDITEE'S RESPONSE:
The Missouri Southern International Piano Competition was organized originally by the Music Department at Missouri Southern. It was felt that it fit extremely well into our mission, both from an academic standpoint and as our obligation to serve as the cultural center of the area. With the addition of the international component to our mission, it is even more important than originally envisioned. After the Music Department ran the first two competitions, it was apparent that the event had outgrown the Department’s ability to continue to run it as a stand-alone College program. As a result, a non-profit organization was formed to provide personnel to direct the competition and to raise private funds to cover direct expenses. Based on similar agreements with our Foundation and the Spiva Art Center, the College entered into an agreement with the MSIPC.
1. The agreement provides that the College will provide facilities, secretarial help and some services in return for the non-profit organization continuing to promote the competition as a College event. The MSIPC reimburses the College for all out-of-pocket expenses other than the contracted services.
2. There was no intent to link ticket sales to the costs of the College. It was envisioned that the College would incur some costs that would be more than offset by the promotion of the competition as a Missouri Southern event and the benefits derived by our students and faculty who attend music performances and masters classes for free. Any balances are paid as the MSIPC brings in revenue on a biennial basis.
3. The College, as stated previously in Item 1, did not require the food service vendor to make a biennial contribution to the MSIPC. This was volunteered as part of an RFP response but was not part of the evaluation process when the vendor was selected. The Institute of International Studies did not make an actual cash contribution to the MSIPC. Although the receipt from the MSIPC was on a form which used the term “contribution,” in reality the monies were paid because the College shared the cost of a well-known international lecturer/performer to provide a free presentation to all Missouri Southern students and faculty as part of our lecture series.
4. The President was reimbursed for reasonable business and entertainment expenses directly benefiting the College by furnishing breakfast to a group of individuals who got up at 5:00 a.m. to help promote the College on the Today show.
The College respectfully disagrees that the agreement with the MSIPC violates Article III, Section 39(1) of the Missouri Constitution. That section talks about extending credit of the State to benefit other corporations. We do not extend credit to the MSIPC. We have an agreement which exchanges facilities and services for services rendered (promotion of the College, cultural and educational benefits to our students, and furtherance of its cultural and international mission).
The College will comply with Article III, Section 39(1) of the Missouri Constitution as interpreted by the College Attorney. Our College Attorney advises that Article III, Section 39(1) has been interpreted to permit leasing of stadium facilities because the primary purpose was to increase convention and sports activity just as the primary purpose here is to increase cultural and international knowledge and participation. Any further contracts with MSIPC will be approved by the Board of Regents.
AUDITOR'S COMMENT
The primary purpose of the College's financial support of the MSIPC is not for the promotion of MSSC. In fact, the only promotion of MSSC that we noted in the MSIPC literature was that the event would be held on the MSSC campus. The discussion in the court case referred to by the College's Attorney indicates that if the primary object of a public expenditure is not to subserve (or carry out) a public purpose, but to promote some private end (the MSIPC), the expense is illegal, even though it may incidentally serve some public purpose. Furthermore, we have noted numerous Attorney General Opinions that have addressed the issue of whether public entities can grant or give money to private entities. Specifically these opinions have said that a county is not authorized to grant money without restriction to a private entity, a county could not grant money to a not-for-profit corporation whose purpose was the promotion of the orderly growth and welfare of a city, and a city could not allow a private entity to use space rent free in a municipally owned building.