Complete 2012 forensic audit documents - Kansas Bioscience ...

John A. Marshall Company
John A. Marshall Company is the office furniture supplier for KBA. There is a contract with
KBA in October 2008 for $34,489.93 specifically for office furniture. However, there were
additional purchases of $76,734.40 made with purchase orders rather than contracts.
PGAV Architects
PGAV Architects was the architecture firm selected to design the Venture Accelerator. They
were paid both from UMB Bonds and the self-funded KBA Series 2009C Bonds. The contracts,
signed by Michael A. Schaadt, began in September 2008 for $866,000. This amount was
amended up to $1,182,000 when the building square footage adjusted upwards. There was a
third amendment for an additional $56,980, and a fourth for $9,700, giving the final contracted
amount for the Venture Accelerator of $1,248,680. Two additional contracts were signed in May
2010 for $9,700 for architectural services and December 2010 for $12,650 for digital renderings.
The self-funded portion paid with Series 2009C Bonds totaled $939,901. The remaining was
paid through the UMB Bonds, and discussed in the Bioscience Park and Venture Accelerator
section of this report.
General Counsel
KBA’s external counsel, which served as general counsel prior to the hiring of a general counsel,
changed over time. KBA’s initial counsel was Stinson Morrison Hecker (“Stinson”) from mid-
2005 through June 13, 2007. KBA paid Stinson $114,341.92. At the time of the drafting of this
report, KBA could not locate an RFP or engagement letter with Stinson for their services. These
finding is included in Exhibit 53 - Contract Exhibit A- Missing Contract Findings and in
Exhibit 53 - Contract Exhibit B- RFP Findings.
KBA used Polsinelli Shalton Flanigan Suelthaus, PC (“Polsinelli”) from March 2006 through
May 2009, paying a total of $619,446.83. Contracts with Polsinelli relate to representation
regarding Kansas Bioscience Park signed June 12, 2007, and representation regarding Douglas
County Development, Inc., signed August 13, 2007. At the time of the drafting of this report,
KBA could not locate a RFP or an engagement letter with Polsinelli for their general counsel
services until June 12, 2007. This finding is included in Exhibit 53 - Contract Exhibit A-
Missing Contract Findings and in Exhibit 53 - Contract Exhibit B- RFP Findings.
KBA engaged Lathrop & Gage for general counsel/legal services in February 2009. They have
paid a total of $462,112.13 to Lathrop & Gage.
Office, Administrative and Auditing Expense
BKD, LLP
KBA has a contract with BKD who was engaged on April 11, 2011 for a Forensic Audit of KBA.
The total paid to BKD through fiscal year ended June 30, 2011 includes retainers totaling
$125,000 and a bill for $62,357.12. The second retainer of $100,000 was requested in June
2011. At this time, policy dictates that a sole source justification form be approved and placed in
the corporate files. This finding is included in Exhibit 53 - Contract Exhibit B- RFP Findings.
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