Complete 2012 forensic audit documents - Kansas Bioscience ...

member of KansasBio since 2006. Membership benefits include participation in the BIO
Business Solutions program and other value-added programs, educational resources, networking
opportunities and awareness building for the industry as a whole, such as the annual participation
in the national BIO convention.
At the January 5, 2006 BOD meeting, Angela Kreps 105 asked the board for $100,000 to support
KansasBio’s participation in BIO 2006, to be held in Chicago. After a discussion of the
significant investment being requested and the perceived significant benefit of attendance, the
contribution was approved. 106 Since 2006, KBA has been a significant financial supporter of
KansasBio through its support and contributions to the annual BIO conventions. KBA provided
support of $100,000 for BIO 2006, $75,000 for BIO 2007, $100,000 for BIO 2008 and $100,000
for BIO 2009. Commencing with BIO 2010, KBA made the decision to financially support the
BIO convention through payments for specific goods or services for the Kansas booth at the
convention rather than through a contribution to KansasBio. Direct payments for the benefit of
vendors in the amount of $61,700 were made for BIO 2010 and $42,000 for BIO 2011.
As previously discussed in the Appropriateness of Grants to Organizations with Financial Ties to
BOD section of this report, Ms. Kreps was not a member of KBA’s BOD when the BIO 2006
and BIO 2007 sponsorships were approved. However, the BIO 2008 and BIO 2009 sponsorships
were addressed in the AOPs for those fiscal years, and it appears that Kreps voted affirmatively
for those AOPs with no mention of the fact that funds were designated in those AOPs for
payment to KansasBio in support of the annual BIO conventions. This may have been a
technical violation of K.S.A. 74099b08(a) and KBA’s Conflict of Interest and Documentation
Policy as Ms. Kreps received compensation from KansasBio as its President. 107 Ms. Kreps chose
not to stand for reappointment to KBA’s BOD when her term expired earlier this year and is no
longer a KBA BOD member.
A review of KansasBio’s 990 reports for 2006 through 2009 (the latest year available on the
Internet) indicates that KBA’s support of KansasBio through its membership fees and BIO
convention sponsorships was substantial. KBA paid annual membership dues of $5,000, which
was a minor percentage of operating expenses, inclusive of personnel salary and benefits.
However, KBA’s sponsorship of the annual BIO conventions for 2006 through 2009 was
significant. KBA management indicates that the organization benefited from its sponsorship
participation given the level of visibility that was afforded KBA and the networking
opportunities that resulted.
The December 2008 Kansas, Inc. evaluation of KBA noted the following with regard to conflicts
of interest: “A state the size of Kansas, within a field as narrow as bioscience, does make it hard
to maintain a balance between qualified board members who have no potential conflict with any
KBA project. One example cited in numerous interviews is the funding that KBA has provided
105 This request pre-dated Ms. Kreps becoming a KBA director.
106 January 5, 2006 KBA Board minutes.
107 Ms. Kreps’ position as President of KansasBio had been disclosed to KBA’s BOD and was well known by the
KBA BOD members. The FY2008 AOP lists a specific line item of $100,000 for BIO 2008. The FY2009 AOP
indicates that as part of its marketing and communications strategy, “KBA will continue to tell the Kansas success
story at the world’s largest biotechnology industry event, the BIO International Convention, by providing financial
support and by helping with the planning of the Kansas presentation.” No specific dollar amount was specified in
the FY2009 AOP for BIO 2009.
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