Complete 2012 forensic audit documents - Kansas Bioscience ...

Recommendation:
Management should consider the possible violation of Section 8(3) of Thornton’s Employment
Agreement related to the destruction or failure to return all relevant information upon his
termination. Section 8(3) of the Thornton Employment Agreement 83 states:
“Immediately upon termination of Executive’s employment, Executive will return
to KBA all property of KBA and any entities with which KBA has provided
services, including, without limitation, originals and copies of documents and
other materials, whether in printed or electronic format or otherwise, containing
or derived from confidential information in Executive’s possession or under
Executive’s control, and Executive will not retain any copies thereof.”
In addition, management should consider the possible violation of the May 7, 2010 “General
Computer Usage Policy,” 84 which states that “Unauthorized use, destruction, modification and/or
distribution of Kansas Bioscience Authority’s information or information systems are strictly
prohibited.”
KBA should evaluate and consider whether other contractual provisions have been breached or
laws have been broken with respect to the actions taken with respect to Thornton’s computer.
KBA should evaluate and implement procedures for the proper communication of “litigation
hold” processes.
KBA’s Response:
KBA’s outside counsel is reviewing whether KBA may have claims it might assert against
Mr. Thornton. KBA management is not aware at this time of any quantifiable damages to KBA
as a result of Mr. Thornton’s actions. KBA management is also working with outside counsel to
prepare a policy for litigation hold purposes which will be presented to the KBA Board of
Directors.
Allegations Related to Thornton’s Removal of Information from the Server
BKD first interviewed Mr. Thornton’s Executive Assistant, Marsh LoScalzo, on April 15, 2011.
At that time, Ms. LoScalzo indicated that between March 11 th and 14 th , she noticed that Thornton
was in the J-Drive on the network. The J-Drive could only be accessed by Thornton,
Jan Katterhenry, Tariq Abdullah and LoScalzo. The J-Drive holds information that other KBA
staff are not privy to such as personnel files, unapproved BOD minutes, confidential company
information and the like. Ms. LoScalzo noticed that Thornton had gone through the files and
“cleaned up” files and folders. However, she could not say specifically what folders or files
were missing. BKD contacted David O’Dell of Summit Computer Solutions shortly after the
interview of Ms. LoScalzo to inquire about the possibility of getting a back-up copy of the server
prior to March 11, 2011. However, O’Dell indicated that KBA used a standard 30-day rolling
back- up schedule, meaning that information more than 30 days old was no longer available.
Therefore, O’Dell indicated that information from the period of March 11 th through March 14 th
was no longer available.
83 July 1, 2010 Thornton Employment Agreement, Section 8(3).
84 Kansas Bioscience Authority Employee Handbook, page 10.
103