The Kansas Department of Commerce has inadequate background check processes, according to the Division of Legislative Post Audit

Kansas state lawmakers requested an audit of whether the Department of Commerce uses "an adequate pre-employment screening process" for staff members who oversee financial matters. The audit came after a former Department of Commerce staffer, Jonathan Clayton, was found to have committed financial crimes prior to being hired.

Clayton went missing amid growing scrutiny over how he handled grants in Peabody and Mullinville. Clayton sent messages to the media alleging corruption in how the state distributed American Rescue Plan Act grants, and in August was found dead in a crashed car on US-50 highway.

The Department of Commerce said it felt a 2018 executive order prohibiting state agencies from ascertaining the criminal record of applicants barred them from conducting criminal background checks.

"We've got crystal clear guidance from the Department of Administration that executive branch agencies cannot perform these criminal history background checks, and so we support the Legislature giving us, giving state agencies that authority," said Bob North, chief counsel for the Department of Commerce.

North said the department needs legislative approval to change its hiring process. The audit says the current hiring process includes a reference check, internet search and social media checks. It also says the agency relies on "applicants being forthcoming and honest" about their work and criminal history.

But lawmakers, and auditors, said the department has several different ways it could have performed checks that would reveal criminal convictions.

"You hired a felon to manage millions of dollars in grant money, and you're looking for a scapegoat. I can't imagine any business that would not do some kind of checks," Sen. Caryn Tyson, R-Parker, told North.

Though background checks couldn't be completed through the Kansas Bureau of Investigation unless specifically required in statute, and a screening couldn't occur throughout the interview process, it is possible to make job offers contingent on passing background checks.

But screenings would have to be targeted and tailored to the specific position.

"Using any criminal history to automatically disqualify an applicant from any job could violate Title Seven of the Civil Rights Act by creating a disparate impact on one or more protected classes," senior auditor Samuel Dadds told the Legislative Post Audit Committee.

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The Kansas Department of Commerce said it's reviewing the BASE program grants that were administered by the department under Clayton. It also hired an independent third-party contractor to review its grant process, which will continue until all grants are closed.

Thus far, the audit hasn't uncovered any improper or ineligible grants, the department said.

(This story was updated because an earlier version included an inaccuracy.)