Archive for Saturday, January 28, 2012

Legislative action on KBA audit unclear

January 28, 2012

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— Kansas legislative leaders say they see little need for significant changes to laws governing the Kansas Bioscience Authority, despite a forensic audit that found instances of document destruction and misuse of funds and questioned the management style of its former president and CEO.

The review by BKD Forensic and Valuation Services audit also highlighted how the agency, created in 2004 to invest state funds in emerging bioscience companies, spent its money on an $18 million office building, consultants and related expenses.

House Speaker Mike O’Neal said that he didn’t see where the audit found “systemic or structural” problems with the KBA that would merit scrapping the authority and starting over. He said most of the blame seems to lie with former president and CEO Tom Thornton.

“The problems seem to be with the head guy, who’s now gone. It didn’t really identify, in my view, a lot of structural or systemic problems that would affect the board,” O’Neal, a Hutchinson Republican, said Friday.

Thornton resigned April 13, 2011, two days after the audit began. He now works for the Cleveland Clinic in Ohio and has repaid the KBA some $4,600 for an airline ticket, an oil painting and overpayment for a car allowance.

Republican Gov. Sam Brownback has called the audit’s findings “troubling” but has not suggested what changes should be made, leaving that to legislators. He has said the KBA should refrain from making additional expenditures and investments in companies until legislators make a final decision.

The administration is withholding some $22 million in approved state funds owed to the KBA for operations in the current fiscal year.

Democratic leaders agreed with O’Neal that the problems seemed to stem from Thornton’s activities during his tenure as chairman.

“We found some things that are disturbing. We found some good guidance for the organization going forward, but I think what this comes back to and what I think this has been all along is the governor’s desire to have full control over the Kansas Bioscience Authority,” said House Minority Leader Paul Davis, a Lawrence Democrat.

Brownback will have two appointments to make to the 11-member board this spring as two members end their terms. He already has his secretary of commerce on the board, a voting member, and a member of the Kansas Board of Regents who served on his transition team, who is a non-voting member.

Legislators held three days of hearings on the audit, and the chairmen of the House and Senate commerce committees have promised additional discussions in the coming weeks.

“Tom Thornton is no longer here,” said Senate Minority Leader Anthony Hensley, a Democrat from Topeka. “If there have to be criminal prosecutions that have to take place, so be it. Let’s move on.”

O’Neal said the board of directors was responsible for approving expenses and providing oversight of Thornton and other top officials.

“The fact of the matter is that board essentially is no longer there,” O’Neal said. “The process that’s in place statutorily now for appointments to the board would seem to me to argue that any of those problems will be corrected through the normal process, rather than wholesale changes.”

The Johnson County District Attorney’s office is also investigating the KBA, including a review of its documents. No charges have been filed against Thornton as a result of the audit’s findings.

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