Complete 2012 forensic audit documents - Kansas Bioscience ...

BKD searched for payments to these vendors by either KBA American Express card or by check
and noted none. Further, BKD reviewed KBA American Express card statements and supporting
documentation from December 2010 through April 2011 and noted no transactions that appeared
to be wedding related.
Fogo de Chao
One expense in this category was brought to BKD’s attention in several staff members’
interviews. On October 21, 2009, a dinner at the Fogo de Chao restaurant in the amount of
$501.06 was charged by Tom Thornton on his KBA credit card. When he submitted the expense
to Marsh LoScalzo for inclusion on his expense report, he reportedly told her that the expense
was related to an SSTI dinner and he could not remember who all was there. Therefore, she
should get the names of 12-13 people from the conference and list them as attendees. LoScalzo
indicated that it made her uncomfortable, but that she completed the expense report in the
manner instructed and submitted it. She indicated that it was her belief that the expense report
went through the approval process as submitted. The approval process included a review and
approval by KBA’s CFO/COO at the time, Jan Katterhenry, and subsequent approval by KBA’s
then COB, Governor Carlin.
Ms. LoScalzo later learned that the dinner was in fact a farewell dinner for Ashley Tyrrell, the
Financial Executive Assistant at KBA, and was only attended by KBA staff. LoScalzo spoke to
Ruth Saale, a member of the accounting staff, who raised the issue with KBA’s CFO/COO Jan
Katterhenry, who was reportedly in attendance at the dinner. Ms. Saale voiced the concern that
the purpose of the dinner was misstated on the expense report and during the approval process.
Reportedly, Ms. Katterhenry indicated that she would take care of it. On a subsequent occasion,
approximately six months later, when LoScalzo had reason to refer to that particular expense
report again, she saw that the purpose of the expense had been changed to “staff dinner.” When
interviewed with regard to this matter, Ms. Katterhenry indicated that when the issue was
brought to her attention, she discussed it with Thornton and he agreed that it was more of a staff
event, so the purpose on the expense report was changed. However, she did not recall whether
the revised version of the expense report was sent through the full approval process again. When
interviewed with regard to this matter, Thornton indicated that he never instructed anyone to
come up with names to put down. However, he did not recall if any attendees to the conference,
other than KBA staff, were in attendance. Thornton agreed that Katterhenry brought the matter
to his attention and that he agreed that the description should be changed.
BKD reviewed both versions of the expense report containing the Fogo de Chao charge, noting
one version contains the description “SSTI State Dinner/KBA Staff and SSTI State Members”
while the second version contains the description “KBA Staff Dinner.” They were both signed
with what appears to be Tom Thornton’s electronic signature and Jan Katterhenry’s manual
signature, with the note “checked by” next to Jan Katterhenry’s signature. Jan Katterhenry’s
signature was dated November 23, 2009 on both versions. Tom Thornton’s signature bore no
date in either version. An email from Governor John Carlin approving the expense report was
included in the file.
The Fogo de Chao receipt indicates nine “#2” Dinners for $42.50 apiece, a “#99” Bday Dessert
for $0.01 and a “#71” Chocolate Molten for $8.25 were purchased, plus $39.96 for taxes and
$70.34 for gratuity were charged for a total of $501.06. No list of attendees was included in
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