Sunday, August 11, 2013

Michigan State University to Federal Aviation Administration: All university money is 'public money'

A State of Michigan-owned Beechcraft Super King Air worked on in a hangar at the Michigan Department of Transportation Aeronautics Administration Air Transport Terminal facility near the Capital Region International Airport May 20, 2013.   (Lansing State Journal| Rod Sanford)

Documents MSU sent to FAA 

In assisting with a federal investigation into how Michigan’s state-owned planes are used, finance officials at Michigan State University say all money held in university accounts — even if it comes from self-funded, donor-heavy programs such as athletics — is considered “public money.”

MSU’s explanation was revealed in documents it sent the Federal Aviation Administration last month, which were obtained by the Lansing State Journal through a Freedom of Information Act request.

Since early June, the Federal Aviation Administration has been investigating the Michigan Department of Transportation after the State Journal published articles about the state planes, how they’re used and who rides in them. One story explained how MSU head men’s basketball coach Tom Izzo, head football coach Mark Dantonio and other athletics officials use the planes for recruiting trips. MSU is not a target of the investigation.

Federal Aviation Administration officials don’t comment on open investigations, and their review was still ongoing as of Friday. The FAA is responsible for all civilian aviation in the United States, including safety regulations and certifying the use of aircraft.

MDOT documents sent to the FAA in early July suggested the FAA has two concerns: that the MSU Athletics Department isn’t eligible to use the state planes because it is a self-sustaining division of the university and doesn’t use general fund dollars, and that MDOT erred by not obtaining a certificate to provide services for hire outside state government.

MDOT aviation officials deny any wrongdoing. However, MDOT said it is denying any flight requests from universities, pending the outcome of the FAA’s investigation.

MSU officials assisted in the probe by providing explanatory information about the university’s financial operations and nearly 200 pages of invoices, passenger lists and canceled checks, documents show.

The paperwork covered nearly 70 flights taken by MSU employees between January 2012 and April 2013. Although the majority of flights were taken by officials in the Athletics Department, the documents show the university’s central finance office paid for each trip.

“As a public body, all money held in the university’s accounts is considered public money,” MSU Treasurer and Vice President for Finance Mark Haas wrote in a letter to the FAA.

“The Department of Intercollegiate Athletics is not separate from the institution nor does it maintain its own accounts,” Haas added. “Checks used to pay for all travel on MDOT planes are the same, regardless of the department of the university initiating the travel.”

MSU spokesman Jason Cody said last week the university has not had any further correspondence with the FAA since providing its response on July 10. He said the university doesn’t expect to hear anything more from the federal agency but will continue to assist it if needed.

MDOT makes its four passenger planes available to all state employees and employees of Michigan's 15 four-year public universities who can justify the cost of traveling in them for work purposes. Any university, or state department for that matter, that uses the planes, including MSU, reimburses MDOT for the expense of operating the flights, a practice which conforms with federal regulations.

But state-owned aircraft, such as Michigan’s passenger planes, cannot — under federal law — be used as transportation for hire outside government. Aircraft used for commercial purposes must have certification.

If the FAA were to find that MSU is outside the scope of state government, it would would make the university’s flights “commercial” in nature and require MDOT to have proper certification.

Documents MSU sent to FAA

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