>> ERIC: WHEN JUDY RANDALL BECAME THE FULL-TIME LEGISLATIVE AUDITOR LESS THAN TWO YEARS AGO, SHE MAY NOT HAVE KNOWN SHE WOULD OVERSEE MULTIPLE REPORTS ON THE SOUTHWEST LIGHT RAIL PROJECT.

EARLIER THIS WEEK, THE OFFICE OF THE LEGISLATIVE AUDITOR ISSUED ITS THIRD REPORT ON THE LONG-DELAYED PROJECT THAT HAS BEEN RIDDLED WITH COST OVERRUNS.

THE METROPOLITAN COUNCIL IS IN CHARGE OF THE PROJECT AND THIS WEEK'S REPORT FOCUSES ON THE NEED FOR MORE COUNCIL OVERSIGHT ON LARGE CONSTRUCTION PROJECTS.

LEGISLATIVE AUDITOR JUDY RANDALL JOINS US.

WELCOME BACK.

THE LONG ARD SHORT OF IT IS, THERE WAS A CONTRACT WITH A CONSTRUCTION COMPANY AND MET COUNCIL DIDN'T GO BY THE TERMS OR... >> THE BOTTOM LINE ARE KIND OF THREE THINGS.

ONE, POOR CONTRACT MANAGEMENT.

A POOR CONTRACT THAT DIDN'T GIVE THEM EFFECTIVE ENFORCEMENT MECHANISMS AND THE ENFORCEMENT MECHANISMS THAT WERE IN THE CONTRACT, THE COUNCIL WASN'T WILLING TO USE.

AND THEN INADEQUATE DOCUMENTATION, WHICH I NOW SOUNDS LIKE A VERY AUDITOR-Y FINDING EXCEPTS THAT INADEQUATE DOCUMENTATION MEANS IT WILL BE HARD TO FIGURE OUT WHO SHOULD PAY FOR WHAT AT THE ENDS.

>> Cathy: BUT THE COUNCIL HAD AUTHORITY TO MAKE THESE DECISIONS, RIGHTS, THEY JUST DIDN'T DO IT?

>> THAT'S CORRECT.

THE COUNCIL IS THE RESPONSIBLE AUTHORITY.

THEY HAD CONTRACTS WITH THE MAIN CONSTRUCTION CONTRACTOR BUT WE ALSO SAW ISSUES WITH AN INDEPENDENT CONSULTING DOING INDEPENDENT COST ESTIMATES AND WHAT WE SAW WAS A RELUCTANCE OF THE COUNCIL TO USE THOSE MECHANISMS.

BASICALLY THEY HAD TWO TOOLS, DEDUCT MONEY OR WITHHOLD MONEY AND THEY WEREN'T WILLING TO DO THAT.

>> Eric: THERE'S SO MUCH FINGER-POINTING YOU COULD GET POKED IN THE EYE ON THIS THING.

THE CONSTRUCTION COMPANY SEEMS TO THINK THE ORIGINAL DESIGN WAS FLAWED AND THAT CAUSED A LOT OF THE PROBLEMS AND THE OVERRUNS, FAIR ENOUGH OR -- >> WE DID NOT LOOK AT THAT.

WE ARE NOT DESIGN EXPERTS.

WE'RE NOT CONSTRUCTION EXPERTS, WE'RE NOT NURSE, RIGHT?

WE'RE AUDITORS AND LOOKING AT PROTECTING -- >> Eric: IS THE MET COUNCIL EQUIPPED TO HANDLE THESE MEGA PROJECTS?

>> I THINK THAT'S A BIG QUESTION RIGHT NOW, HONESTLY.

WE HAVE ISSUED, AS YOU SAID, A NUMBER OF REPORTS HERE THAT WE HAVE QUESTIONED THE MET COUNCIL'S ACTIONS IN TERMS OF OVERSEEING THE CONTRACT, ENFORCING THE CONTRACT, TRANSPARENCY, DECISIONS RAILROADING BUDGET.

I THINK OUR STRUCTURE ISN'T GREAT WHERE WE DON'T NECESSARILY HAVE THE ENTITIES THAT'S FUNDING THESE PROJECTS BEING THE ONE WHO'S THE RESPONSIBLE AUTHORITY.

WE HAD A HEARING ON WEDNESDAY AND AS I SAID THERE, I THINK NOW IS THE TIME TO REALLY TAKE A CLOSE LOOK BEFORE WE GET STARTED ON THESE OTHER TRANSIT PROJECTS.

>> Cathy: CHAIR CHARLIE ZELLE WAS AT THAT HEARING AND HE SAID, IT'S COSTING MORE BECAUSE IT WAS ALWAYS GONNA COST MORE AND IT SHOULD HAVE BEEN BUDGETED AT THE LEVEL IT IS RIGHT NOW.

IS THERE VALIDITY TO THAT STATEMENT, TO THE BEST OF WHAT YOU KNOW ABOUT THE PROJECT?

>> IT WAS A -- IT WAS A PRETTY BIG STATEMENT, I THOUGHT, FOR HIM TO SAY.

I DON'T KNOW AND I DON'T KNOW THAT ANYBODY KNOWS WHETHER OR NOT IT WAS BUDGETED PROPERLY BASED ON THE INFORMATION THEY HAD AT THE TIME.

BUT IT'S CLEAR THAT IT'S GOING TO COST MORE MOW.

>> Eric: CORRUPTION, ILLEGAL BEHAVIOR, ANY OF THAT?

>> NOT THAT WE FOUND.

>> Cathy: SO THIS IS LIKE, WHAT, THE THIRD REPORT?

IS THERE ANOTHER ONE COMING DOWN THE PIKE?

>> THERE IS A FOURTHS ONE, WE'RE DOING A FINANCIAL AUDIT THAT OUR STAFF ARE WORKING ON SO EACH REPORT WE'VE DONE HAS KIND OF GONE DOWN ANOTHER LAYER SO IT STARTED WITH CONTEXT, BACKGROUNDS, HISTORY.

THEN DECISION-MAKING, COMMUNICATION, TRANSPARENCY, NOW WE'RE AT THE CONTRACT LEVEL.

THE NEXT ONE IS GOING TO GO AND LOOK AT SPECIFIC FINANCIAL TRANSACTIONS, MAYBE LOOK AT SUBCONTRACTORS, THINGS LIKE THAT.

>> Eric: IF A VIEWER IS SAYING, WE NEED TO STOP THIS PROJECT, IT'S A BOONDOGGLE, IT'S 70% DONE OR SOMETHING?

>> THAT'S WHAT THE COUNCIL SAYS, YEAH.

I'M NOT SURE THAT IT'S WORTH STOPPING NOW BUT WHAT I THINK IS IMPORTANT IS AKING ALL THESE LESSON WE'VE LEARNED AND APPLYING THOSE TO THE NEXT PROJECT.

>> Eric: ARE YOU CONFIDENT THAT COULD BE DONE WITH WHAT YOU'VE SEEN IN THIS SITUATION, PROJECTING TO NEW BUS LINES AND A NEW LIGHT RAIL LINE?

>> Cathy: ESPECIALLY GIVEN THE STRUCTURE OF THE MET COUNCIL.

>> I THINK CHANGES NEED TO HAPPEN FOR US TO FEEL CONFIDENT WE CAN DO THIS BETTER IN THE FUTURE.

>> Cathy: AND YOU'RE HOPING THAT THE LEGISLATURE WILL TAKE THIS REPORT AND... >> I'M OPING THAT -- WELL, THERE IS A TASK FORCE SET UP RIGHT NOW THAT'S GOING TO START LOOKING AT THE COMPOSITION OF THE COUNCIL.

I'M HOPING FUTURE CONTRACTS HAVE ADDITIONAL ENFORCEMENT MECHANISMS LIKE ALTERNATIVE DISPUTE RESOLUTION, THINGS LIKE THAT.

THAT MAYBE WE ALIGN WHO'S FUNDING IT WITH HO'S IN CHARGE SO THERE IS A MORE BUILT-IN INCENTIVE FOR SOME OF THESE DECISIONS.

>> Eric: YOU HAVE NO ENFORCEMENT, YOU JUST RECOMMEND STUFF, YOU CAN'T MAKE IT HAPPEN.