Complete 2012 forensic audit documents - Kansas Bioscience ...

statements, capital charts and payroll. In addition, in FY2010, KBA began a client company
audit process through which client companies’ Outcomes are periodically validated. The client
companies are chosen subjectively based on the review of information received during the year
and any resulting questions or concerns. To date, nine projects have been audited. The
accounting firm Mize Houser & Company performed Agreed Upon Procedures for the following
grants during FY2010.
• Edenspace – for the annual reporting period ended June 30, 2008
• Eminent Scholar Wooley – WSU – for the annual reporting period ended June 30, 2009
• Eminent Scholar Peterson – KU – for the annual reporting period ended June 30, 2009
• Eminent Scholar Richt – KSU – for the annual reporting period ended June 30, 2009
No adjustments were made to reported Outcomes for those investments.
Ryan White, KBA’s Outcomes & Database Analyst, has taken over the audit process and
performed audits on the following grants during FY2010.
• Remel Expansion – jobs decreased by 17 due to misunderstanding the reported amount in
the Post-Award Report
• ANOxA – this audit is still in process and KBA is questioning the number of jobs in
Kansas and the research dollars generated
• Nowa Technology – jobs decreased by three as Nowa reported some part-time jobs as
full-time jobs
• BRI Training – no adjustments
• KU Breidenthal – jobs decreased by one
KBA intends to audit five to eight projects each year going forward. However, the historical
process of collecting Outcome data based on company submissions without the requirement of
supporting documentation or independent verification calls the veracity of the currently reported
information into question.
Although BKD discussed these procedures with Ryan White, a comprehensive independent
verification of this information was outside of the scope of the Forensic Audit.
Recommendation:
Outcome verification can take a number of different forms depending upon the nature and level
of the assurance that is sought by virtue of the verification process.
With respect to past results and Outcomes that have been reported, management should take into
account the costs of additional verification in assessing whether this is an appropriate
expenditure of funds. BKD has previously communicated that such verification of past results
would likely require independent auditing of organizations outside KBA in order to achieve a
high level of independent assurance with respect to the reported Outcomes. There is a significant
level of expense and time associated with such a verification process.
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