Complete 2012 forensic audit documents - Kansas Bioscience ...

any future milestone applications or grant applications will go through the standard review and
approval processes mitigates any potentially inappropriate influence on Mr. Krol’s part.
Please refer to the Relationship Appendix for a depiction of Mr. Krol’s relationship map.
Tony Simpson
Tony Simpson reported to a current member of ICM’s management team while both were
employed by a previous employer. In addition, Mr. Simpson listed that individual and another
current member of ICM’s management team as references. ICM received grant awards from
KBA on October 28, 2008 and January 27, 2009. Mr. Simpson was not employed by KBA until
October 2009. Therefore, Mr. Simpson was not a KBA employee when the grants to ICM were
awarded. Mr. Simpson is now the HBV counselor for ICM. However, the fact that any future
milestone applications or grant applications will go through the standard review and approval
processes mitigates any potentially inappropriate influence on Mr. Simpson’s part.
Please refer to the Relationship Appendix for a depiction of Mr. Simpson’s relationship map.
Relationship maps for other KBA staff and BOD members are presented in the Relationship
Appendix.
Recommendation:
KBA’s Conflict of Interest and Documentation Policy defines Interested Persons as “all Officials
of the Authority and spouses, any children of any age and any persons residing in the residence
of such Officials.” The term “Officials” is defined as “all directors and officers of the Authority
and any other person to whom power has been delegated by the Board of Directors of the
Authority.” However, in an industry sector as narrow as bioscience companies in the state of
Kansas, the BOD should consider the need to manage the perception of conflicts of interest
based on previous associations between KBA and its employees and BOD, and those of the
bioscience companies and vendors.
In doing so, the BOD would need to broaden the Conflict of Interest and Documentation Policy
to address the appropriate disclosure of all existing relationships (prior employment/co-workers,
common board or committee membership, personal/social relationships) between KBA’s
employees and BOD members and the employees, owners, directorate and advisors of any
company seeking to transact business with or seeking assistance from KBA.
Furthermore, it is recommended that any BOD member having any financial interest in a client
company or an employment relationship within their immediate family should recuse themselves
and, in addition, physically remove themselves from any and all discussion and authorization of
that project.
Additionally, it is recommended that all Investment Recommendations sent to the Investment
Committee contain a discussion regarding all known potential relationships between KBA
employees and BOD members and the company requesting funding. This analysis should
include relationships disclosed in the conflict of interest disclosure process. Consideration
should also be given to the disclosure of relationships that do not trigger a formal disclosure
under the Conflict of Interest Policy. If no relationships exist, that should be noted as well.
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