Complete 2012 forensic audit documents - Kansas Bioscience ...

KBA again appeared before the Commerce Committee on March 4, 2011. Senator Wagle began
that meeting by reading a letter from Melissa Lynch, former Executive Assistant to Thornton at
KBA, which alleged “unethical actions by Tom Thornton or the waste of taxpayer money.”
Please refer to Exhibit 1 for a copy of the letter. Senator Wagle also presented an anonymous
fax 4 regarding how KBA analyzes job growth, as well as a scope statement from Post Audit
regarding a review of the appropriateness of KBA’s expenditures. Senator Wagle stated that she
thought the Commerce Committee was most concerned about the use of taxpayer dollars and
salaries and bonuses and questioned the validity of the salary information previously submitted
to the Commerce Committee. 5
KBA appeared before the Commerce Committee for a fourth time on April 1, 2011. Information
submitted by KBA as a result of the March 4 th meeting was discussed and additional information
and concerns were presented by Senator Wagle. In that meeting, various questions were raised
regarding Thornton’s employment history and potential conflicts of interest related to Thornton’s
involvement with business and political organizations in Illinois and with various entities and
persons interacting or doing business with KBA. Senator Wagle indicated that the Commerce
Committee was considering the need for a forensic audit. 6
On April 11, 2011, KBA’s Board of Directors (“BOD”) hired BKD, LLP to perform a Forensic
Audit, the result of which is this report. The scope of the audit has changed over time at the
request of representatives of the State of Kansas as presented below.
ENGAGEMENT SUMMARY
Engagement Overview, Scope and Approach
On May 18, 2011, the original scope of the Forensic Audit was finalized, with input from
Governor Brownback’s representative, Secretary of Agriculture Dale Rodman, to address the
following:
1. KBA expenditures from inception to the present related to the current and past
management and employees of KBA, including, but not limited to compensation, travel
and entertainment;
2. payments and contractual arrangements with all contracted entities engaged by KBA
from inception to the present;
3. payments by outside entities from inception to the present, including, but not limited to
compensation, travel and entertainment received by current and past KBA management,
employees and BOD members with voting rights;
4 In an interview with Senator Wagle on October 6, 2011, she indicated that after her inquiries into KBA’s
operations and spending were made public, she received a significant number of emails, phone calls and
documentation regarding possible improprieties in KBA’s operations and spending. BKD requested access to all the
information received by Senator Wagle; however, she declined due to confidentiality concerns for the individuals
who submitted the information to her.
5 Senate Commerce Committee minutes from March 4, 2011.
http://www.kslegislature.org/li/b2011_12/year1/committees/ctte_s_cmrce_1/minutes/.
6 Senate Commerce Committee minutes from April 1, 2011.
http://www.kslegislature.org/li/b2011_12/year1/committees/ctte_s_cmrce_1/minutes/.
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