Email: I would say something in a round about way to your manager about changing her password. Bring up being hacked on facebook or something. Make a comment about you having to change your password because you thought someone had gotten into your account, etc.
As for the work at home thing, that's a tough one to fix and prove. The only way to prove that would be to have someone higher up try to call them during the time in question. If you covered for an employee that was 'on the clock' but was really on vacation, you could get in trouble for stealing from the company.
Kansas is a 'right-to-work' state which means that the employees can be fired with cause, which you just stated. The company would not have to pay them unemployment. You can only collect unemployment if you are laid off. Not if you are fired.
M.