Complete 2012 forensic audit documents - Kansas Bioscience ...

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• Kent Glasscock – President National Institute for Strategic Technology and Acquisition Commercialization at Kansas State University • Sue Peterson – Director of Governmental Relations and Assistant to the President of Kansas State University • Ron Trewyn – Vice President for Research at Kansas State University • Dr. Steven St. Peter – Managing Partner of MPM Capital and CEO of Aratana Therapeutics; Former Advisory Board Member Heartland BioVentures • Dan Schmisseur – Formerly with KTEC • Ron Madl – Director of Bioprocessing and Industrial Value-Added Program at Kansas State University • Baiju Shah – CEO BioEnterprise of Cleveland; Former Advisory Board Member Heartland BioVentures • Tim Cesarek – Managing Director of Organic Growth and Corporate Venturing at Waste Management; Former Advisory Board Member Heartland BioVentures • Mayor Michael Copeland, Olathe, Kansas • Jude Sullivan – Attorney at K&L Gates • David O’Dell – Summit Computer Solutions • Michael Beckloff – President, Beckloff Associates; Former Chairman KansasBio; Chairman KTEC Pipeline; Principal EnalaPed, LLC. • Tim Newkirk – CEO MGP Ingredients • Nick Brill – Principal of Brill Neumann • Karen Shanahan – Senior Counsel Cleveland Clinic Innovations • Cynthia Enright – Principal, iValuation • Dr. Forest Chumley – President/CEO Heartland Plant Innovations, Inc. Interviews were sought with the following persons, for whom contact information could not be located, or who did not return BKD’s telephone calls or emails: • Cary Nourie – Former Director of Commercialization, Heartland BioVentures • Arika Nester – Former Accountant at KBA • Chad Bettes – Former Director of Marketing and Communications at KBA • Bret Healy – Former Director of Commercialization, Heartland BioVentures • Ashley Tyrrell – Former Financial Executive Assistant at KBA • Leslie Genovia – Former Contract Administrator at KBA • Pam Fellin – Former Contract Administrator at KBA • Joe Fritton – Former Consultant at KBA • Dan Glickman – Former BOD Member at KBA • Victoria Haynes – Former BOD Member at KBA • Stephen O’Connor – Former BOD Member at KBA • Tom Corcoran – Former BOD Member at KBA • Melvin Neufeld – Former BOD Member at KBA • Michael Borgman – Former BOD Member at KBA • Robert Hemenway – Former Chancellor of the University of Kansas • Sukh Bassi – MGP Ingredients • John Brooks – Former Advisory Board Member Heartland BioVentures • Tom Wiggans – Former Advisory Board Member Heartland BioVentures 8
• Tom Giarla • Joni Cobb – Cobb Communications; President KTEC Pipeline • Chris Coburn – Executive Director Cleveland Clinic Innovations • Thomas Graham – Chairman of Cleveland Clinic Innovations BKD made available a public email address, KBAFORENSICINPUT@bkd.com, through which members of the public could submit any information or concerns for consideration. The email address was made available on April 11, 2011 and remained active as of the date of this report. Members of the BKD team made their office and cell phone numbers available and were available to meet with any interested party at a mutually convenient location of their choosing. Additionally, BKD made it known to both KBA staff and others that a member of the BKD team was available on November 28, 29 and December 2, 2011 from 11:30 a.m. to 1:30 p.m. at specific Olathe restaurants to meet with any interested party. Documentation Reviewed In performing our forensic procedures, BKD reviewed and analyzed the following: • Available minutes of the BOD, Executive Committee, Investment Committee, Audit Committee and Nominating and Governance Committee from inception through April 2011. It should be noted that no minutes or recording of any Executive Session for any BOD or committee meeting are maintained. Therefore, the content of discussions held during Executive Sessions was not available for consideration by BKD; • Available expense reimbursement forms, supporting documentation and payment documentation for all current and past employees and current and past BOD of KBA from inception through April 2011; • Available American Express statements for three cards issued to Tom Thornton, Jan Katterhenry and Melissa Lynch from inception through April 2011; • Available personnel files, employment contracts, compensation studies and detailed payroll information for all current and past KBA employees from inception through April 2011. The BOD receives no compensation for services as directors; • Available contracts, supporting documentation and payment documentation for contracted services from inception through April 2011; • Available contracts, supporting documentation and payment documentation related to the Kansas Bioscience Park and the Venture Accelerator from inception through April 2011; • Available documentation related to financial grants, investments or other assistance given to bioscience companies, inclusive of applications, awards, post-award reporting, milestone applications and payments and other correspondence from inception through April 2011; • Request for Qualifications and independent third-party review of venture capital companies approved for investment under the Kansas Bioscience Growth Fund; • Available documentation and information related to the relationships or partnering between KBA and KTEC, KansasBio and BioEnterprise of Cleveland; • KBA cell phone records for Tom Thornton from June 12, 2010 through March 11, 2011; and • Various documents supplied by persons interviewed or persons supplying information for consideration in the Forensic Audit. 9
Page 2 and 3: KBA audit summary In meetings of th
Page 4 and 5: KBA Forensic Audit Summary Page 2 o
Page 12 and 13: KBA Forensic Audit Summary Page 10
Page 34 and 35: Table of Contents INTRODUCTION ....
Page 36 and 37: Other Employment Decision Allegatio
Page 38 and 39: have all provided information and i
Page 40 and 41: KBA again appeared before the Comme
Page 42 and 43: ENGAGEMENT APPROACH Interviews Inte
Page 46 and 47: Computer Forensics Computer hard dr
Page 48 and 49: START-UP PHASE KBA has operated und
Page 50 and 51: State University the proposed grant
Page 52 and 53: described Thornton as an effective
Page 54 and 55: Investment Committee. All current H
Page 56 and 57: The program goals are to: 1) recrui
Page 58 and 59: Through June 30, 2011, three Rising
Page 60 and 61: grants or bonds. KBA also works wit
Page 62 and 63: center is a public and private coll
Page 64 and 65: Some individuals BKD interviewed ob
Page 66 and 67: The Texas Consortium also requested
Page 68 and 69: Accreditation Council for Graduate
Page 70 and 71: $581.8 Million Funding Cap Breakdow
Page 72 and 73: • Tom Thornton - President, Illin
Page 74 and 75: divine interVentures’ Bankruptcy
Page 76 and 77: Sullivan indicated that everything
Page 78 and 79: On January 11, 2011, Mr. Coburn ind
Page 80 and 81: CHANGE OF EMPLOYMENT STATUS OF CFO/
Page 82 and 83: Ethics Investigation Regarding Clay
Page 84 and 85: As a result of the possible violati
Page 86 and 87: large enough to meet KSU’s needs
Page 88 and 89: On January 9, 2007, KBA’s BOD aut
Page 90 and 91: The Kansas City Area Life Science I
Page 92 and 93: The committee that reviewed the arc
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Monthly payments for Series 2009A a
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If KBA is able to maintain the abov
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Debt Service Payments Debt service
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• assisting KBA with understandin
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Business Development: HBV has a net
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Beginning in August 2009, Ryan Whit
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offered by KBA and the federal gove
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On June 8, 2010, ICM announced that
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However, the EarCheck product langu
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Furthermore, HBV Director of Commer
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industry dating back to Marion Labo
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Kansas’ #5 Ranking in Top 10 Stat
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merger, acquisition or other restru
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In summary, it appears that Lindsay
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Allegations have been made that the
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and interview. As previously stated
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Computer Solutions’ invoice detai
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After the RFQ evaluation, Ennis Knu
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venture firms that will co-invest a
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include only those guests determine
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management of KBA-owned facilities
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Audit. After additional requests of
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Mr. Eisenbrandt, Thornton’s attor
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Ms. LoScalzo further recalled that
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Based on these findings, Buck Consu
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In addition to base compensation an
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Tom Thornton Overpaid Car Allowance
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The following expenses are discusse
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either version, contradictory to po
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KBA Meeting Expenses In general, wi
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Furthermore, the required supportin
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Jan Katterhenry was reimbursed twic
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The agreements state that Akin Gump
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Midwest Research Institute Midwest
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Mr. Bret Healy Mr. Healy was origin
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Ennis Knupp & Associates, Inc. KBA
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Cedar Creek Development VI, LLC Ced
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approval. The executive staff will
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General Ledger Classification Gener
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Additionally, KBA’s BOD approved
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Subsequently, on April 4, 2011, KBA
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Cary Nourie Tom Thornton worked wit
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Tom Churchwell Tom Thornton sat on
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KBA’s Response: KBA management wi
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member of KansasBio since 2006. Mem
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statements, capital charts and payr
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Recommendation: The BOD should cons
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RELATIONSHIP APPENDIX 151
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KU Center for Research, Inc. Associ
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APPENDIX B
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Two specific software programs were
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used to remove data from a system i
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Temporary Internet Files and Cookie
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EXHIBIT 1 CCleaner Product Informat
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EXHIBIT 2 Microsoft Word Files from
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Thursday, April 14, 2011 Gov. John
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Kansas Bioscience Authority applaud
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Transition plan.docx
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Personnel Director of Marketing and
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EXHIBIT 4 Archive.PST Folder Schema
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Thornton Laptop Windows Shortcut Fi
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USBStor ControlSet001\Enum\USBStor
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EXHIBIT 8 Windows Shortcut Files Po
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APPENDIX F
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600 BKD Professional Hours through
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