Complete 2012 forensic audit documents - Kansas Bioscience ...

KBA Meeting Expenses
In general, with regard to meeting with legislators in Washington D.C. and in association with
various industry conventions and BOD meetings, KBA spent money to entertain guests in a
manner management felt was appropriate given the circumstances, but others might find
extravagant. With regard to meetings in Washington D.C., KBA at times hosted meals for up to
40 attendees. Meals were often held at nice restaurants and sometimes included expensive wine.
Hotel rooms in Washington D.C. and convention locations were sometimes higher priced than
what is the custom in the Kansas City area. KBA management and BOD members indicate that
the lodging was appropriate given the need to be near the other meeting or convention attendees
for networking purposes. In reviewing the supporting documentation for and discussing the
larger travel and entertainment expenses with management, BKD did not identify any expenses
for which there clearly was not an appropriate business purpose.
Expense Policy and Procedures Review
KBA Travel Policy for Employees
KBA Travel Policy 88 indicates that employees will be reimbursed for all necessary and
reasonable travel expenses related to the normal conduct of business. Original receipts are
required for all expenses and photocopies will not be accepted. Detailed receipts of a meal must
be included; not just the credit card receipt.
Business expenses are defined as:
• those that are necessary to the operations of KBA;
• those that benefit or advance the interests of KBA; and
• those that meet the requirements of reasonableness.
The policy includes a listing of expenses which are not reimbursable, or are only reimbursable
with the employee’s manager’s prior approval. BKD noted some payments that may have
violated the policy. The primary example is personal and guest bar bills without management
approval. A second common example was the failure to provide an itemized receipt, providing
instead only the credit card receipt.
We noted that the current policy appears to be closely adhered to at the staff level, by the former
CFO/COO, Jan Katterhenry and by the Interim CEO/President, David Vranicar, but was less so
by Tom Thornton as described above. However, all employees should ensure they adhere to the
requirements of the Travel Policy.
KBA Travel Policy for BOD
KBA Board of Directors’ Travel Policy 89 states that it is only “advisory” and indicates that BOD
members will be reimbursed for all necessary and reasonable travel expenses related to the
normal conduct of directors’ meetings and activities.
88 KBA Policies – Travel Policy – Employee Travel Policy, May 19, 2009. KBA has issued a total of four travel
policies for employees over time. However, all have been substantially the same with respect to what types of
expenses are allowed or disallowed and what documentation is required. Each iteration primarily clarifies certain
points of possible contention, and in some instances makes minor modifications to the substance of the policy.
89 KBA Policies – Travel Policy – Board of Directors’ Travel Policy, May 19, 2009.
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