MINUTES

Kansas Bioscience Authority
Audit Committee of the
Board of Directors
Tuesday, May 5, 2009

Call to Order: A quorum being present, the meeting of the Audit Committee of the Kansas Bioscience Authority was called to order at 3:03 p.m. on May 5, 2009, by Chairwoman Angela Kreps. Other Directors present by phone were Sandra Lawrence, John Carlin, Dr. Ray Smilor, and Bill Sanford. Others attending from the KBA staff were Jan Katterhenry and Marsh LoScalzo. Also present were Jeff Ellis, legal counsel, and Shelly Hammond, CPA with Allen, Gibbs & Houlik, L.C., CPAs.

Approval of Minutes: Chairwoman Kreps asked for approval of the minutes of the October 27, 2008, and January 26, 2009, Committee meetings. It was noted that a motion in the October 27, 2008, minutes authorizing engagement of the auditor did not contain the names of the persons making the motion and the second. Mr. Sanford indicated that he had made the motion and that Mr. Carlin had seconded. Mr. Sanford moved that the October 27, 2008, meeting minutes be approved as amended with the addition of the names of those making the referenced motion and the second. Ms. Lawrence seconded the motion, which was unanimously approved. Ms. Lawrence moved for approval of the minutes of the January 26, 2009, meeting. Mr. Carlin seconded the motion, which was unanimously approved.

Auditor's Engagement: Ms. Hammond was asked to summarize the proposed audit engagement letter for FY 2009, contained at Tab 3 of the Committee booklet. She indicated that there were no substantive changes from last year's audit engagement, although the fees had been modified. She indicated that the base fee for the audit of $26,000 was based on a $130 per hour professional fee. Hourly fees had increased from $112 in the past year. Dr. Smilor noted that the Committee had expected a lower level of activity because quarterly meetings had been authorized to anticipate the extra needs required by the KBA. Ms. Hammond noted that the additional hours spent for research last year are not included in included in the base fee noted above and that the quarterly meetings this year should prevent the need for the additional hours this year. Mr. Sanford noted that the fee increase amounts to a 16 percent increase from last year. The Committee asked Ms. Hammond to consult with her partners regarding the amount of the fee increase. Ms. Hammond indicated that she would revisit the fee issue and report back to the Committee. The Committee agreed to table the consideration of the audit engagement until it has received further information from the auditors regarding fees.

Executive Session: Chairwoman Kreps asked that the Committee recess into executive session to discuss personnel matters.

Dr. Smilor moved that the Audit Committee of the Kansas Bioscience Authority recess into executive session to discuss personnel matters pursuant to K.S.A. §75-4319(b)(1). The executive session will commence at 3:26 p.m. and last for 15 minutes. The session will be attended by members of the Committee, plus Ms. Katterhenry and Mr. Ellis.

Return to Open Session: Upon motion made by Dr. Smilor, seconded by Ms. Lawrence and unanimously approved, the Committee reconvened in open session at 3:46 p.m. There was no action taken.

Adjournment: There being no further business to come before the Committee, the meeting was adjourned at 3:47 p.m.