Governor Sam Brownback is withholding the payment of $22 million to the Kansas Bioscience Authority – that's about 2/3 of the agency's state funding.
Administration officials said the KBA had enough money in the bank to meet its current obligations.
Auditors who looked into business practices at the Authority talked to members of the state Senate Ways and Means Committee today.
Both the representatives of the auditing firm and the interim CEO of the Bioscience Authority told the committee that though the audit questioned the business practices of the KBA's now resigned president, it found that the agency has made sound investments and avoided conflict of interest in doing so.
Brownback's office did not address whether the audit was the reason the funds are being withheld.
Hearings before the Kansas Commerce Committee last spring had raised questions about possible improper spending or conflicts of interest at the state-funded Kansas Bioscience Authority, and the Governor's office requested an independent audit.
The long-awaited audit was released late Monday. The agency's news release says the audit “affirms that the KBA's investment process is diligent” and “should clear the air regarding questions and allegations."
But a closer look at the report by the BKD auditing firm reveals serious criticisms of former KBA president Tom Thornton that the agency's news release mentions but minimizes.
The KBA statement notes that Thornton wiped his computer hard drive upon departure, making many aspects of investigation impossible, and was involved in errors or duplicity that resulted in the request of reimbursement to the authority of about $4700.
But the Associated Press report (read its report here) indicates that he also failed to follow policies on $570,000 worth of expenditures.
The audit itself shows that some of those policy violations involved failure to keep documented itemized expense records and late booking of airline flights, resulting in paying a high rate for air fares.
"BKD can make no assurances," the report says, "that information with regard to the appropriateness of investment discussions...or conflicts of interests involving Mr. Thornton have been identified."
The auditing firm did not have access to all of KBA's financial records or investment documents and had to rely heavily on information provided by current or past managers, employees and directors of the KBA.