Olathe The former head of the Kansas Bioscience Authority destroyed documents after his resignation, paid for an airplane trip to a job interview with KBA funds and failed to notify the board of a relationship with a staff member, according to an audit released on Monday.
Bioscience Authority forensic audit ( .PDF )
The former head of the Kansas Bioscience Authority destroyed documents after his resignation, paid for an airplane trip to a job interview with KBA funds and failed to notify the board of a relationship with a staff member, according to an audit released on Monday.
Tom Thornton, the former head of the Bioscience Authority, resigned in April from his job, which paid $265,000 annually. Thornton reimbursed the authority last week in the amount of $4,679.88, according to a statement from the authority, for the plane trip, and also for an inadvertent duplicate expense reimbursement, an overpayment on a car allowance and the personal use and gifting of a KBA-owned painting.
The KBA hired the auditing firm BKD LLP to conduct the independent audit after state Sen. Susan Wagle, a Republican from Wichita and chair of the Senate Commerce Committee, was critical of several aspects of the authority, including the size of its salaries, its expenses and some of its investments. Gov. Sam Brownback also later called for the audit.
James A. Snyder, managing partner of BKD LLP, said the audit raised no major issues with the authority’s investment programs or conflict of interest policies.
“Generally, we find things to be pretty good with a couple of exceptions that are noted in the report,” he said.
According to the audit report, Thornton used computer cleanup and drive wiping tools to clear his computer hard drive on April 21 and 22, 2011, after his April 13 resignation, and before returning the computer to the KBA on April 26.
He told auditors he cleared the computer because he had used the KBA-owned computer for personal use and that it contained “personal financial and tax information, family photos and other information of a personal nature, some of which would be embarrassing if made public,” according to the report.
The audit also identified issues with compliance with the authority’s contract policy, finding 301 payments without a contract, including 102 payments that violated the KBA’s policy. Those payments totaled more than $570,000.
The audit also indicated that former board member Angela Kreps may have been in “technical violation” of the KBA’s conflict of interest policy by voting on funding for KansasBio, a bioscience trade organization of which Kreps served as president.
The audit also found Thornton failed to inform the KBA board members of a relationship with a KBA staff member, Lindsay Holwick, who would become his wife.
David Vranicar, who had been president of the KBA’s commercialization arm, has served as the authority’s interim president and CEO since Thornton left the authority.
While Brownback and Wagle criticized Thornton, other legislative leaders issued statements praising his efforts following his resignation.
After resigning, Thornton took a position with the Cleveland Clinic in Ohio.
In one case, Wagle alleged that the Wichita-based Center of Innovation in Biomedical and Orthopedic Research had been promised $20 million from the board, but never received the full amount.
A separate auditing firm, Meara Welch Brown, also hired by the KBA, investigated that claim. The firm could not identify documents, records or correspondence where a commitment of $20 million had been made.
The authority is projected to spend about $960,000 on the audits.
The Johnson County District Attorney’s Office has confirmed it was conducting a criminal investigation into the authority, but has not disclosed details of the investigation.
Brownback said the audit's findings were "deeply troubling."
He added, "This is not how we do business in the state of Kansas."
Brownback urged the KBA board to issue a moratorium on new spending and new commitments until the Legislature decides the KBA's future.
But KBA Board Chairman Dan Watkins of Lawrence said the audit showed that the KBA's investment process was sound, and that there were no significant findings of conflicts of interest.
“You can’t grow with moratoriums,” he said, responding to the governor’s statement. “We’ll operate within the authority of the Legislature as created unless the Legislature tells us differently.”
He also said the audit report should clear the air regarding questions and allegations raised in the past year.
Wagle said the audit "clearly shows a dysfunctional agency." She said she had concerns about the destruction of documents, and cronyism and what she said was a lack of accountability at the agency.
She said the Legislature would spend a lot of time combing through the audit. Committees have scheduled hearings for Wednesday and Thursday on the audit and the KBA.