Bob North, an attorney for the Kansas Department of Commerce, objected to the Kansas Legislature’s audit of hiring at the Commerce Department, including the employment of a felon to run a program distributing more $100 million in economic and infrastructure grants. (Sherman Smith/Kansas Reflector)

TOPEKA — The Kansas Legislature’s audit agency concluded Monday that personnel practices and procedures at the Kansas Department of Commerce were inadequate to prevent the hiring of applicants with criminal histories.

The analysis was inspired by the Commerce Department’s hiring of someone with a criminal record to administer more than $100 million in state funding for infrastructure and economic development. Jonathan Clayton was hired into the business in 2020, although he has been on probation since 2018 after pleading guilty to felonies for stealing more than $200,000 from a Pennsylvania business.

Auditors said the Commerce Department was unaware of Clayton’s criminal history when he was hired and promoted to a role overseeing funding received by the state under the American Rescue Plan Act. His employment at the state agency ended in 2023, but Clayton’s conduct, including allegations that he engaged in conflicts of interest, has continued to be scrutinized since August, when he went missing and was found dead in rural Kansas.

“The commerce’s hiring policies and procedures were not adequate to mitigate the risks associated with hiring applicants with criminal histories,” said Sam Dadds, a state auditor. “This does not include any criminal background checks or even questions about relevant criminal history during the interview.”

The Commerce Department, according to auditors, argued that it was following instructions to avoid criminal background checks when filling unclassified employee positions, except for one position. For the state boxing commissioner position, trade officials said state law requires a national fingerprint-based criminal background check.

State auditors told a joint audit committee of House and Senate members that the Commerce Department should ‘strengthen its background check process for applicants for jobs overseeing financial matters’ . Auditors recommended that the reforms be consistent with Equal Employment Opportunity Commission best practices.

The auditors said their released report on the review did not reveal state laws prohibiting the Commerce Department from using public records when reviewing applications. Candidate information could be collected by state agencies through the Kansas Bureau of Investigation’s public records portal, according to the audit.

Additionally, auditors said criminal history exploration could be conducted with the approval of potential applicants.

Bill North, an attorney at the Commerce Department, said the agency recognizes that the hiring process for jobs involving overseeing financial matters is important. However, he disputed the auditors’ conclusion that Kansas executive agencies had discretion to routinely use criminal background checks when filling positions.

“Commerce operates within a legal and regulatory environment established by the Constitution and the Legislature,” North said. “While criminal background checks may be a good practice, commerce does not have the authority to use these checks as part of the hiring process.”

North pointed to an executive order signed by Gov. Jeff Colyer in 2018 that prevented executive agencies from relying on criminal background checks. He said the Kansas Department of Administration provided “very clear guidance” that there was no “legal authority for executive agencies to conduct criminal background checks as a condition of employment.” .

However, regarding the auditors’ recommendations, Commerce Department officials said they will pass legislation in the upcoming 2025 session to grant the agency more authority to conduct background checks.

Sen. Caryn Tyson, a Republican from Parker who chairs the post-legislative audit committee, said she was deeply concerned by the audit’s findings. She suggested that Parliament should consider imposing a hiring freeze at the Commerce Ministry until the candidate selection process can be improved.

Tyson, while questioning North, indicated that the Commerce Department administers the agency in other ways that are not explicitly spelled out in state law.

“Do you have employees who are now telecommuting – working from home? » said Tyson. “Is this provided for by law? No, that’s not the case. I ask this question because I could make a list of things that…are not in the law. So what is it all about? Are you following the law to the letter or are you ignoring common sense by checking the financial background of someone who is going to manage millions of dollars?

North said he was not aware of a state policy against remote work among state employees, but reiterated that the Department of Administration had ordered the Commerce Department to not conduct unauthorized criminal background checks.

Tyson argued that the Department of Administration offered the Commerce Department the option of using publicly available records or asking for consent from applicants before delving deep into confidential criminal records.

“I disagree,” North said. “I don’t think (the Department of Commerce) gave us those methods. I think these are backdoor methods of circumventing politics.

Tyson’s rebuttal: “Respectfully, Mr. North, you are looking for a scapegoat. Accept responsibility. You hired a criminal to manage millions of dollars in grants. And you’re looking for a scapegoat. I can’t imagine any company that wouldn’t do some sort of monitoring.

She asked North if the Commerce Department would stick to its concept of evaluating applicants if the Legislature and governor did not create a state law clearly stating that criminal background checks were acceptable. Under the current approach, the agency uses interviews, online research, social media reviews and reference checks.

“I think we should absolutely freeze,” Tyson said. “You’re playing a game of words by saying, ‘We need to legislate so you can put these kinds of checks and balances in place.’

Rep. Jason Probst, a Hutchinson Democrat, attempted to clarify whether North’s position was rooted in Colyer’s Executive Order 18-12. His order sought to establish an approach that does not automatically disqualify people with criminal histories from the outset of screening applicants for employment in state government.

“I can look at Order 18-12 and there is very clearly a line that says nothing in this order will prevent criminal background checks as a condition of employment,” Probst said. “You can’t do it in the first part, but you can do it anywhere else in the process, based on my reading.”

The released audit of hiring practices at the Department of Commerce reached the same conclusion regarding the reliance on criminal records when evaluating applications for state employment. The auditors said that in their view, Colyer’s executive order did not prevent agencies from conducting criminal background checks as a condition of employment as the vetting process progressed beyond the first phase.

Auditors requested documents from the Commerce Department related to the review of five candidates hired by the agency, including Clayton.

Reference check summaries were not available for three of the five employees and interview notes were missing for one of the five employees reviewed by auditors. The report did not indicate whether Clayton’s file was incomplete.

Kansas law requires agencies to keep employment records in a personnel file for the duration of an employee’s tenure plus three years, auditors said. The Commerce Department, however, argued that auditors misinterpreted Kansas record retention regulations.

“Commerce officials told us they did not keep certain employment records beyond three years from the date of hire,” the audit said.

One of the auditors’ recommendations was that the Department of Commerce systematically use recruitment process templates to secure interview notes, document reference checks and internet searches in the future.