FEDERAL SPENDING IN MINNESOTA.

>> CATHY: CURRENT STATE AUDITOR, DFLER JULIE BLAHA, IS NOT RUNNING FOR RE-ELECTION, LEAVING THE SEAT OPEN FOR A NEWCOMER.

THERE ARE THREE CANDIDATES ON THE BALLOT AND THEY ARE ALL HERE TONIGHT.

REPUBLICAN SCOTT JENSEN WON A THREE-WAY PRIMARY RACE ON TUESDAY TO BECOME HIS PARTY'S STANDARD BEARER.

JENSEN IS A FORMER STATE SENATOR WHO LOST HIS BID FOR THE GOVERNOR'S OFFICE FOUR YEARS AGO.

DEMOCRAT ZACK FILIPOVICH RAN UNOPPOSED IN TUESDAY'S PRIMARY AFTER WINNING THE DFL ENDORSEMENT AT THE STATE PARTY CONVENTION EARLIER THIS SUMMER.

FILIPOVICH IS AN ACCOUNTANT AND FORMER DULUTH CITY COUNCILOR.

AND JAY REEVES IS HERE, ENDORSED BY THE FORWARD INDEPENDENCE PARTY.

REEVES HIGHLIGHTED HIS YEARS OF ARMY SERVICE AND BACKGROUND AS A UNION MEMBER WHEN LAUNCHING HIS CAMPAIGN.

QUICK NOTE BEFORE WE DIVE IN.

THIS WILL BE AN ALMANAC-STYLE DEBATE.

NO OPENING OR CLOSING STATEMENTS NOR TIMED RESPONSES.

IT'LL BE A FREE-FLOWING CONVERSATION ALL OF US AND IT STARTS RIGHT NOW.

THANK YOU, ONE AND ALL, FOR BEING HERE.

APPRECIATE YOUR TIME.

JAY REEVES, I'M GOING TO BEGIN WITH YOU.

>> GREAT.

>> Cathy: NOW, I HAD A LITTLE BIT OF A DEFINITION IN WHAT THE STATE AUDITOR DOES IN THAT INTRODUCTION, UNDER STATE LAW, THE STATE AUDITOR LOOKS AT THE FINANCES, AUDITS THE FINANCES OF CITIES, COUNTIES, SCHOOL DISTRICTS.

WHAT DO YOU THINK THE STATE AUDITOR SHOULD BE DOING THAT IT'S NOT DOING RIGHT NOW?

>> TO BE HONEST, I THINK THAT WHAT THEY SHOULD BE DOING IS THEY SHOULD BE COMING AT IT WITH A MORE PROACTIVE APPROACH.

SO THE TECHNOLOGY PIECE IS MISSING, AND WHAT THEY'RE NOT DOING IS THEY'RE NOT GOING AFTER THE PROACTIVE SYSTEMS AND THEIR RELATIVE APPROACH IS, WE'RE GOING TO JUST AUDIT THE SYSTEMS, WE'RE GOING TO AUDIT THE CITIES AND COUNTIES AND TOWNSHIPS, BUT NOT ALL OF THEM.

MOST OF THEM ARE BEING DONE BY PRIVATE ORGANIZATIONS.

>> Cathy: PRIVATE CPAs.

>> PRIVATE CPAs, SO IT BECOMES MORE OF AN OVERSIGHT.

WHAT I WANT TO DO IS GET IT BACK TO MORE OF AN AUDITING AGENCY AND DOING THE DATA ANALYTIC PIECE TO MAKE SURE WE CAN FIND ANY OF THOSE ANOMALIES AND DEVIATIONS.

>> Cathy: SCOTT JENSEN?

>> I THINK THE AUDITOR IS GETTING HUNG UP ON JUST NUMBERS.

AND I THINK IN MEDICINE, IF I LOOK AT LAB RESULTS, YOU CAN HAVE AI INTERPRET LAB RESULTS.

I THINK YOU HAVE TO LOOK BEHIND IT, SEE WHAT THE STORY IS.

AND I HINK YOU HAVE TO DO IT BEFORE YOU HIT THE DEADLINE.

YOU SHOULDN'T BE FINDING A LINE ITEM ON A BUDGET, SPENDING $100 MILLION A YEAR WHEN IT WAS BUDGETED FOR $4 MILLION, AFTER THE $100 MILLION HAS BEEN SPENT.

YOU SHOULD BE ICKING THAT UP IN REAL TIME.

I THINK WE NEED TO BE MORE PROACTIVE.

WE NEED TO HAVE PEOPLE RECOGNIZE, THE AUDITOR IS MORE THAN JUST A DATA ANALYST.

THIS IS SOMEONE WHO'S METHODICALLY AND SYSTEMATICALLY EXAMINING WHAT'S BEFORE THEM, WHETHER IT'S POLICIES, WHETHER IT'S COMPLIANCE TOOLS, WHETHER IT'S DATA POINTS.

AND I THINK IN MY LIFE, I'VE HAD THE CHANCE TO WORK WITH A LOFT ACCOUNTANTS, I'VE BEEN THE BOARD OF DIRECTORS, I'VE BEEN CHAIRING A BOARD OF DIRECTORS FOR AN ACCOUNTING FIRM, I'VE BEEN AN AUDIT COMMITTEE CHAIR FOR A BILLION-DOLLAR BANK, AND I FOUND THE BEST PEOPLE TO BE THE ONES WHO ARE ASKING THE QUESTIONS AND SAYING, LISTEN, I'M NOT BUYING WHAT EVERYBODY ELSE IS SELLING ON THIS.

WE GOTTA GO DEEPER, FIND THE STORY, FIGURE UT HOW THIS HAS HAPPENED.

>> YOU KNOW, STATE AUDITOR'S OFFICE IS HERE TO OVERSEE $56 BILLION OF LOCAL GOVERNMENT SPENDING.

THAT IS THE CHARGE OF THIS OFFICE.

I'M THE ONLY ACCOUNTANT IN THIS RACE.

AND I THINK IT'S IMPORTANT TO HAVE THAT EXPERIENCE.

AND FROM THAT EXPERIENCE I KNOW THAT WE HAVE AN ACCOUNTANT SHORTAGE IN THIS STATE.

75% OF CPAs WILL BE RETIRING IN THE NEXT FIVE TO SEVEN YEARS.

THAT'S UNIVERSITY OF MINNESOTA STUDY THAT WAS DONE A FEW YEARS AGO.

AND, SO, WE NEED TO HELP PREPARE LOCAL UNITS OF GOVERNMENT FOR THAT LARGE, LARGE CHALLENGE THAT WILL BE COMING AT US, AT ALL OF US.

AND, SO, WHEN WE LOOK AT MAKING SURE THAT LOCAL GOVERNMENTS AND LOCAL TAXPAYERS ARE PROTECTED, WE NEED TO BE PARTNERING WITH THOSE LOCAL UNITS OF GOVERNMENT AS THE STATE AUDITOR'S OFFICE TO HELP MAKE SURE THAT WE ARE PREPARING FOR THAT CHALLENGE.

>> I TAKE ISSUE WITH YOU ON THAT, ZACK.

I THINK THE REASON E HAVEN'T HAD AN ACCOUNTANT BE THE STATE AUDITOR FOR 50 YEARS IS BECAUSE THIS ISN'T ABOUT TRYING TO MATCH UP ONE ACCOUNTANT WITH THE JOB DESCRIPTION.

THIS IS A LEADERSHIP EXECUTIVE POSITION THAT HAS TO BUILD A TEAM THAT CAN GET IT DONE.

I MEAN, YOU'VE GOT 100 EMPLOYEES, $10 TO $20 ILLION BUDGET.

THIS ISN'T ABOUT SAYING, WELL, LET'S MAKE SURE THAT THE MINNESOTA VIKINGS FOOTBALL COACH IS THE BEST FOOTBALL PLAYER.

THAT DOESN'T WORK THAT WAY.

THIS IS ABOUT BUILDING A TEAM, MAKING PEOPLE RESPOND TO THE MISSION, AND LITERALLY DO THEIR JOB.

AND IF THEY'RE NOT DOING THEIR JOB, THEY'VE GOT TO BE DISMISSED.

>> THAT MEANS THAT ANYBODY CAN BE THAT -- THAT HAS LEADERSHIP EXPERIENCE SHOULD BE IN THAT ROLE, RIGHT?

SO FOR ME, I'VE GOT MILITARY EXPERIENCE, I'VE GOT SENIOR EXECUTIVE MILITARY EXPERIENCE, BEING AT THE DEFENSE HEALTH AGENCY, WHERE I CREATED DATA DASHBOARDS FOR THE COVID-19 CRISIS THAT WE HAD, AND I HAD TWO WEEKS TO DO IT ON ZERO BUDGET, RIGHT, SO I CAN BRING THAT EXPERTISE THAT I HAVE AND THAT LEADERSHIP EXPERIENCE.

AND THAT AS NOT A SHORT TIMELINE THAT WE HAD BECAUSE OF ANYTHING OTHER THAN THE WORLD PANDEMIC.

SO IT NEEDED TO BE DONE NOW, WE NEED LEADERS THAT ARE ABLE TO STEP IN NOW ON DAY ONE AND LEAD MULTIPLE -- THIS WAS A WORLDWIDE ENTERPRISE EFFORT IN THE MATTER OF TWO WEEKS, ZERO DOLLARS SPENT, THAT'S THE EXECUTIVE LEADER THAT WE NEED.

>> I AM SO PROUD OF MY LEADERSHIP ABILITIES.

I HELP LEAD AN ORGANIZATION RIGHT OW, A NONPROFIT UP IN DULUTH.

WE DO A LOFT WORK IN RURAL -- A LOT OF WORK IN RURAL ECONOMIES, RURAL UNITS OF GOVERNMENT AND SMALL BUSINESS WORK, HELPING TO BUILD ECONOMIES IN RURAL MINNESOTA.

>> Cathy: YOU MENTIONED THAT CPAS ARE RETIRING OR RETIRING SOON, RIGHT?

I THINK, Mr.

REEVES, YOU BROUGHT THIS UP, STATE LAW ALLOWS PRIVATE CPAs TO AUDIT LOCAL GOVERNMENTS.

DOESN'T SOUND LIKE YOU'RE COMFORTABLE WITH THAT.

>> NOT ALL OF THEM.

I MEAN, THERE'S SOME THINGS THAT GET MISSED AND THERE'S SOME IDENTIFIABLE INFORMATION THAT IS THERE.

SO, IF YOU LOOK AT SOME OF THE AUDITS, THEY'RE JUST -- I DON'T KNOW THAT THE STATE AUDITOR'S DIGGING IN ON THOSE AUDITS AS THEY'RE SUPPOSED TO.

THEY'RE CHECKING THE BOXES, ONE TO ONE, MAKING SURE THAT IT'S DONE IN COMPLIANCE, WHICH THEY'RE BEING DONE.

BUT IS THAT ENOUGH?

I DON'T THINK IT IS.

I THINK WE NEED TO DIG IN WITH THE DATA ANALYTICS PIECE AND SOMEBODY WHO'S GOT THAT EXPERTISE TO DO THAT.

>> Cathy: ARE YOU SAYING, THEN, STATE AUDITOR SHOULD TAKE MORE OF AN ACTIVE ROLE BECAUSE THE CPAs ARE RETIRING?

I'M NOT SURE WHERE YOU'RE -- >> YEAH.

SO, THE RISK OF ALL THE RETIREMENTS OF THE ACCOUNTING CLIFF IS, ALL THESE LOCAL UNITS OF GOVERNMENT HAVE PROFESSIONAL STAFF KEEPING TRACK OF ALL OF OUR UNITS OF GOVERNMENT.

I'M THE ONLY PERSON ON THIS COUCH WHO'S ACTUALLY BEEN IN THAT ROLE AS AN ACCOUNTANT WORKING IN A LOCAL GOVERNMENT FINANCE ACCOUNTING OFFICE.

SO I KNOW THE CHALLENGES THAT THESE FOLKS ARE FACING.

AND I THINK THAT'S GOING TO BE CRITICAL TO MOVE FORWARD.

THESE ARE THE BOOTS ON-THE-GROUND PEOPLE THAT ARE WORKING EVERY SINGLE DAY TO MAKE SURE THAT LOCAL TAX DOLLARS ARE BEING ACCOUNTED FOR AND REPORTED CORRECTLY TO THE STATE AWE TORE'S OFFICE.

AUDITOR'S OFFICE.

>> I DON'T BELIEVE MINNESOTANS ARE LOOKING FOR ANOTHER ACCOUNTANT TO LEAD MORE ACCOUNTANTS.

I THINK THEY'RE LOOKING FOR A LEADER WHO'S GOING TO COME INNING DIG IN, DO THE DATA ANALYTICS COME IN.

WE'RE TALKING ABOUT T.J., WHEN BOTH GOVERNORS COME IN, THEY'RE GOING TO GO TO THE TECHNOLOGY, 21st CENTURY.

WE NEED SOMEBODY WHO CAN TALK THE TALK, WALK THE WALK, AND I'M THAT GUY.

>> Eric: DOES IT LEAVE THE STATE AUDITOR AS EING MORE OF A ARTNER WITH LOCAL GOVERNMENTS, MORE OF A WATCHDOG OR A COMBINATION?

>> I THINK ONE THING A LOT OF PEOPLE DON'T REALIZE, IN 2021, THE STATE LEGISLATURE, AT THE RECOMMENDATION OF THE OFFICE OF THE LEGISLATIVE AUDITOR, BECAME RESPONSIBLE PARTY FOR THE SINGLE STATEWIDE AUDIT FEDERALLY.

SO WE NOW HAVE THE ABILITY AS THE STATE AUDITOR, IF YOU SEE $5 BILLION COMING FROM THE FEDERAL GOVERNMENT, AND YOU CAN ONLY TRACK IN CITIES, COUNTIES, TOWNS, SCHOOL DISTRICTS, $4 BILLION, YOU'VE GOT LEAKAGE OF A BILLION, YOU NEED TO RAISE THE FLAG, HEY, WHAT'S GOING ON HERE, YOU NEED TO COLLABORATE WITH YOUR MMB COMMISSIONER, YOUR LEGISLATIVE AUDITOR, YOU'VE GOT TO SAY SOMETHING'S WRONG HERE.

THE EXAMPLE THAT I LOOKED AT WAS, IN FEEDING OUR FUTURE, WE SAW THAT THEY DID NOT TURN IN THEIR PAPERWORK ON TIME.

ACTUALLY SOME OF THE VENDORS, FOR FEEDING OUR FUTURE, LOST THEIR TAX-EXEMPT STATUS, AND, YET, THE STATE AUDITOR SIGNED OFF ON FEEDING OUR FUTURE'S FINANCIAL DOCUMENTS EVEN THOUGH THEY WEREN'T THERE.

IT WAS ON PAGE 57.

>> THAT'S NOT THE STATE AUDITOR.

>> JULIE BLAHA SIGNED OFF ON THE STATE AUDITOR FOR THE FEEDING OUR FUTURE, AND YOU CAN LOOK AT THAT AND YOU CAN SEE THAT THEY DIDN'T HAVE ALL THE DOCUMENTS SUBMITTED.

THAT SHOULD HAVE BEEN A RED FLAG.

YOU'VE GOT TO GO INVESTIGATE THAT.

WE COULD HAVE MAYBE FOUND FEEDING OUR FUTURE A LOT SOONER, THE FRAUD, IF WE HAD BEEN DIGGING IN A LITTLE BIT MORE AND SEEING THE STORY BEHIND THE NUMBERS.

>> WITH ALL DUE RESPECT, THE STATE AUDITOR'S PRIMARY ROLE IS TO HELP MAKE SURE THAT LOCAL TAXES ARE ACCOUNTED FOR AND GOING TO THE RIGHT PLACES.

AND, YOU KNOW, YOU SAID IT YOURSELF, Dr.

JENSEN, THAT WE HAVE HAD THIRD-PARTY VENDORS DOING A LOT OF THIS WORK.

I THINK WE NEED TO BRING SOME OF THAT WORK BACK IN TO NOT HAVE THIRD PARTIES DO THAT WORK, BUT LOCAL GOVERNMENTS DO THAT WORK.

AGAIN, THE PRIME EXAMPLE, YOU KNOW, WITH COVID-19, FEEDING OUR FUTURE, IF THAT WORK WAS DONE BY SCHOOL CAFETERIAS, THEY'RE ALREADY BEING AUDITED BY THE STATE AUDITOR'S OFFICE, THAT WOULD HAVE BEEN CAUGHT A LOT SOONER.

AND I AM SO, SO GLAD THAT THE OFFICE OF LEGISLATIVE AUDITOR CAUGHT AND NOW THE ATTORNEY GENERAL'S OFFICE IS PROSECUTING SO MANY OF THOSE PEOPLE.

BECAUSE FRAUD -- >> YOU'RE GOING TO BE GROWING GOVERNMENT WITH WHAT YOU JUST SAID.

YOU WANT TO BE DOING MORE HANDS-ON OUT OF THE STATE AUDITOR'S OFFICE.

>> FOR LOCAL UNITS OF GOVERNMENT.

>> THERE'S MORE THAN 3,000 LOCAL UNITS OF GOVERNMENT.

YOU WANT TO GROW GOVERNMENT.

IF YOU LOOK AT THE STATE AUDITOR'S OFFICE OVER THE LAST TEN YEARS, THE BUDGET HAS GONE UP ENORMOUSLY, THE NUMBER OF PEOPLE, WE JUST KEEP GROWING GOVERNMENT, WE GET FARTHER AND FARTHER AWAY FROM LOCAL GOVERNMENT UNITS AND WE CAN'T SUPPORT THEM.

>> I MIGHT BE BREAKING SOME NEWS HERE, SIR.

I'M JUST TELLING YOU GUYS.

RIGHT NOW, THE STATE AUDITOR'S NO LONGER GOING TO BE DOING THE FEDERAL EXPENDITURES.

>> THAT'S TRUE.

>> AS OF NEXT YEAR, THEY'RE DONE.

SO THAT BUDGET PIECE, THAT TIME AND THAT HR PIECE IS NOW NO LONGER THERE.

THEY'RE GOING TO BE ABLE TO CONCENTRATE ON THE LOCAL GOVERNMENTS OF WHICH THEY'RE TASKED TO DO.

SO THAT'S WHAT OUR ROLES ARE SUPPOSED TO BE, WE'RE GOING TO GET BACK TO THE LOCAL AND COUNTIES AND TOWNSHIPS AND EVERYTHING ELSE AND REALLY DIG IN ON THEM AND REALLY SUPPORT THEM BECAUSE THEY'VE BEEN FELT LIKE THEY'RE UNSUPPORTED COMPLETELY.

MINNESOTANS ARE TIRED, THEY'RE FED UP, THEY'RE GROSSED OUT BY WHAT'S GOING ON, AND WE NEED SOMEBODY IN THERE WHO'S GOING TO HOLD EVERYBODY ACCOUNTABLE.

>> Eric: WITH THE OFFICE OF INSPECTOR GENERAL COMING N BOARD 2027, HOW DOES THE STATE AUDITOR DOVETAIL, IF IT DOES AT ALL, WITH ALL OF THIS NEW ENFORCEMENT THAT WE HAVE, ALL THE NEW PREVENTION STUFF?

>> I AM I'M SO HAPPY THAT -- I'M SO HAPPY THAT THE OFFICE OFE OF INSPECTOR GENERAL GOT PASSED PRIMARILY BY DEMOCRATS IN THE LEGISLATURE.

I THINK THE OFFICE OF STATE AUDITOR IS HERE FOR LOCAL UNITS OF GOVERNMENT.

THAT'S WHERE THE FOCUS SHOULD BE.

IF WE START SAYING THE STATE AUDITOR IS GOING TO START LOOKING AT STATE AGENCIES, THAT SORT OF THING, WE'RE GOING TO LOSE FOCUS OF THE $56 BILLION OF LOCAL TAXES, THESE ARE THE MONEYS THAT ARE CLOSEST TO EACH AND EVERY ONE OF US AND ALL OF YOUR VIEWERS.

AND THEY DESERVE TO HAVE A STATE AUDITOR THAT'S FOCUSED ON THEM.

>> Eric: WHAT ARE YOU THINKING?

HOW WOULD YOUR OFFICE BE INTEGRATED WITH THE LARGEST PREVENTION EFFORT?

>> I THINK YOU HAVE TO COLLABORATE.

I MEAN, WE'VE BEEN FORTUNATE IN MINNESOTA TO HAVE JIM NOBLES HEAD UP THE OFFICE OF THE LEGISLATIVE AUDITOR FOR YEARS.

AND I THINK JUDY ANDALL'S DOING NICE JOB.

WE NEED TO WORK WITH THE MMB COMMISSIONER, WE NEED TO WANTED THE REORGANIZATION THAT HAPPENED IN THE -- NEED TO UNDERSTAND THE REORGANIZATION THAT HAPPENED IN THE 1970s.

I THINK IT'S IMPORTANT FOR THE STATE AUDITOR O ABSOLUTELY BE THERE TO SUPPORT SCHOOLS, COUNTIES,S TOWNSHIPS, SCHOOL DISTRICTS, BUT THE BOTTOM LINE IS, WE'VE SEEN OVER AND OVER AGAIN, THINGS ARE BEING GLOSSED OVER.

AND, AGAIN, I THINK THAT FOR THE LAST 20 YEARS, WE'VE HAD ONE PARTY BASICALLY RUNNING THE SHOW.

AND I THINK THAT, ACK, YOU BRING UP, THE DEMOCRATS PASSING INSPECTOR GENERAL.

WELL, THAT'S A LITTLE BIT DISINGENUOUS BECAUSE I THINK WE HAD THE SPEAKER OF THE HOUSE IS A REPUBLICAN, SO I THINK LET'S GIVE CREDIT WHERE CREDIT IS DUE.

AND I WOULD SAY THIS ABOUT THE INSPECTOR GENERAL.

WHEN YOU GROW GOVERNMENT, YOU DO ALSO POTENTIALLY GROW THE OPPORTUNITY FOR BLAME SOMEONE ELSE, DO THIS AND THAT.

SO FROM MY PERSPECTIVE, I THINK WE NEED TO BE VERY CAREFUL ABOUT GROWING GOVERNMENT, I THINK WHAT WE HAVE RIGHT NOW IS WE'VE HAD CHAOS, AND WE'VE HAD SLOPPINESS IN THE STATE AUDITOR'S OFFICE.

I THINK IT'S GOT TO BE TIGHTENED UP.

I THINK WE NEED TO GO AFTER EXPOSING THE FRAUD.

WE NEED O ELEVATE THE WHISTLEBLOWER, WHEN THEY COME FORWARD AND SAY THERE'S A PROBLEM, WE SHOULDN'T BE THREATENING WITH THEM WITH THEIR JOB.

>> Eric: THE AUDITOR SERVES ON BOARDS AND COMMISSIONS, INCLUDING THE STATE INVESTMENT BOARD.

I WONDER, FROM TIME TO TIME, IT COMES UP, SHOULD WE BE INVESTING IN CERTAIN COUNTRIES, USED TO BE SOUTH AFRICA, NOW IT'S ISRAEL, WHAT KIND OF PHILOSOPHY WILL YOU HAVE TOWARD THE BOARD OF INVESTMENT?

>> YEAH, THE STATE BOARD OF INVESTMENT IS AN IMPORTANT ROLE THAT THE STATE AUDITOR PLAYS.

AND FOR ME, I THINK WE NEED TO BE VERY VERY PRUDENT IN HOW WE MAKE SOME OF THOSE DECISIONS.

THERE ARE PENSIONS TIED UP WITH THE STATE BOARD OF INVESTMENT.

THESE ARE FOLKS WHO HAVE WORKED THEIR ENTIRE LIVES AND THEY DESERVE A GREAT RETIREMENT.

>> BUT IF THAT'S THE CASE, ZACK, THEN WHY DID YOU SIGN A PLEDGE THAT SAID THAT WHEN YOU'RE FOCUSING ON HOW THESE INVESTMENTS AND THESE RETIREMENT FUNDS ARE DOING, YOU WANT TO FOCUS ON DIVERSITY AND THE DEI, YOU SAID THAT YOU WANTED TO MAKE CERTAIN HAT WE WERE NOT AS A STATE INVESTING IN THINGS THAT WEREN'T MEETING SOME POLITICAL MEASUREMENT OR METRIC.

YOU SIGNED A PLEDGE THAT SAID THAT.

I THINK THE TEACHERS AND PUBLIC EMPLOYEES, THEY WANT THEIR RETIREMENT FUNDS TO DO WELL.

>> YEAH.

WELL, YOU KNOW, I THINK WE HAVE -- WE HAVE TO CONTROL THAT RISK AND WE HAVE TO MONITOR THE RISKINESS OF SOME OF THESE INVESTMENTS AND THAT IS THE JOB OF THE STATE BOARD.

EVERY PERSON ON THAT STATE BOARD HAS THAT FIDUCIARY RESPONSIBILITY TO MAKE SURE THAT ALL OF OUR MONEY, THE RESERVE DOLLARS OF THE STATE AND THOSE PENSION DOLLARS ARE INVESTED PRUDENTLY.

>> Cathy: I WANT TO GET JAY REEVES IN HERE.

I WANT TO SAY ONE THING, I'M GOING TO LEAVE THAT FINANCIAL PIECE TO THE PROFESSIONALS THAT DECIDE FOR THE LONG TERM WHAT'S BEST FOR THE FINANCIAL ORGANIZATION.

>> Cathy: UT YOU'RE ON HAT BOARD IF YOU'RE THE STATE AUDITOR.

>> OF COURSE, OF COURSE.

I'LL TAKE EVERYTHING TO HEART, MAKING SURE THAT WE MAKE THE RIGHT DECISIONS AS A WHOLE FOR WHAT'S BEST FOR THEM.

BUT I'M NOT GOING TO SIT HERE AND SAY ANY OF THESE HYPOTHETICALS.

IT DOESN'T MAKE NY SENSE TO DO THAT.

RIGHT NOW WHAT WE NEED TO DO, WE NEED TO PROTECT THE TAXPAYER DOLLARS AND THOSE THAT ARE IN THOSE PENSION FUNDS AS WELL, WHATEVER THAT MIGHT BE.

I NEED TO GO BACK TO ONE THING THAT YOU GUYS MENTIONED BEFORE, I DIDN'T GET A CHANCE TO CHIME IN, THAT'S THE LEGISLATURE PART OF, I WANT TO PRESENT ON AY ONE A BILL WITH THE -- WITH COMBINED EFFORTS THAT WE AUTOMATICALLY MANDATE THAT ANY NEW PROGRAM, FUNDING OF ANY SORT THAT IS OBLIGATED FUNDS THROUGH THE LEGISLATURE IN ANY SORT OF WAY ALL THE WAY DOWN TO THE LOCAL GOVERNMENT TO MAKE SURE THAT THERE'S NO UNFUNDED MANDATES TO LOCAL GOVERNMENT, THAT THE STATE AUDITOR, LEGISLATIVE AUDITOR, INSPECTOR GENERAL, A.G., MMB, D.E.E.D., WHOEVER IS GOING TO BE IN CHARGE OF ALL OF THOSE PROGRAMS NEEDS TO BE INVOLVED FROM ITS INCEPTION THROUGH ITS IMPLEMENTATION TO ITS SUNSET.

WE CAN'T HAVE -- NO LONGER BE THIS ORGANIZATION, THIS LEGISLATURE OR STATE THAT JUST PUSHES BILLS THROUGH THE LEGISLATURE AND THEN SAYS, FIGURE OUT HOW TO FIX IT ON THE BACK END.

THAT'S NOT HOW WE'RE GOING TO DO IT.

WE'RE OING TO PRESENT IT IN A PROACTIVE APPROACH.

>> Cathy: Dr.

JENSEN BROUGHT UP THIS PLEDGE YOU SIGNED.

AND THANK YOU, I APPRECIATE THAT.

>> YOU AND PEGGY FLANAGAN BOTH SIGNED IT.

BECAUSE IT SURPRISED ME THAT YOU'D HIT YOUR WAGON SO PROMINENTLY TO PEGGY.

IN IT, IT TALKED ABOUT THE INVESTMENTS THAT ERE MADE NEED TO BE PARSED IN TERMS OF WHAT ARE THEY RELATED TO IN TERMS OF POLITICS.

IT SOUNDED LIKE YOU WERE POLITICIZING THE INVESTMENTS THAT WOULD BE MADE FOR TEACHERS AND PEOPLE -- PUBLIC EMPLOYEES.

>> NO.

THAT PLEDGE WAS MADE A WHILE BACK NOW.

>> BUT YOU DO REMEMBER IT?

>> YES.

>> OKAY.

>> AND THAT IS TO HELP MAKE SURE THAT WE'RE TAKING A HOLISTIC VIEW OF THESE INVESTMENTS, MAKING SURE THAT WE'RE LOOKING AT EVERY ASPECT, AS MUCH AS WE CAN, AND S WE TAKE ADVICE FROM THE PROFESSIONAL STAFF OF THE STATE BOARD OF INVESTMENT.

>> SHOULDN'T THE PRIORITY BE FINANCIAL PERFORMANCE?

>> ABSOLUTELY.

AND THE PRIORITY ALWAYS WILL BE.

>> Cathy: JAY REEVES, DO YOU WANT TO CHIME IN ON THIS AT ALL?

>> LEAVE IT TO THE PROFESSIONALS.

WE'LL TAKE THEIR ADVICE, THEY'RE THE PROFESSIONALS, THEY'RE THE ONES THAT DO IT.

WE CAN'T MAKE TASTY DECISIONS ON SOMETHING THAT'S HAPPENING RIGHT NOW IN THE MOMENT BECAUSE IT COULD NEGATIVE HGIVELY AFFECT THE FUTURE OF THEIR RETIREMENT FUNDS.

HASTY MANNER.

THIS IS A PROBLEM IN MINNESOTA.

WE CHANGE ON A DIME, MAKE DECISIONS TOO QUICKLY, COMPASSION GETS IN THE WAY OF COMPLIANCE, THAT'S A PROBLEM.

>> WE DIDN'T MAKE DECISIONS TOO QUICKLY WHEN IT CAME TO FRAUD.

THERE'S PLENTY OF BLAME TO GO AROUND.

WE THEY'D TO REMEMBER, THIS IS AN EXECUTIVE POSITION WE'RE RUNNING FOR.

AND THAT MEANS THAT WE NEED TO BE READY TO LEAD.

SO I THINK WHEN IT COMES -- >> I'M READY.

>> WHEN YOU HAVE REPORTS GIVEN TO OU, IF YOU'RE ON THAT EXECUTIVE COUNCIL ITH THE FOUR OTHER EXECUTIVE OFFICERS IN MINNESOTA, YOU CAN'T DODGE AND WEAVE AND SAY, WELL, I'M NOT GONNA, I'M NOT GONNA MAKE A DECISION, I'M GOING TO LEAVE IT TO THE PROFESSIONALS, YOU GET THEIR REPORTS, YOU MAKE A DECISION.

>> 'VE BEEN IN THE MILITARY, MILITARY ERVICE, 7 YEARS, RETIRED R MAJOR, I CAN MAKE A DECISION WHEN I NEED TO.

>> GOOD.

>> I DON'T NEED SOMEONE TO TELL ME ONE OR ANOTHER.

I'LL MAKE AN EDUCATED DECISION, IT'S GO TO BE RIGHT FOR THE MISSION, MOVING FORWARD OR EVERYBODY, ALL MINNESOTANS, NOT FOR ANY SPECIFIC INDIVIDUAL.

>> Eric: LAND EXCHANGE BOARD IS ALSO FOR THE AUDITOR.

I WONDER WHAT YOU'RE GOING TO BE THINKING ABOUT AS YOU LOOK AT THE MINING VERSUS WATER ISSUES IN THE NORTHEAST.

>> YEAH, WE'RE GOING TO FOLLOW THE SCIENCE ON THAT.

THERE ARE FANTASTIC FOLKS WORKING AT THE MINNESOTA DNR AND MPCA.

WE'RE GOING O LOOK AT THE SCIENCE AND MAKE SURE THAT THINGS ARE RIGHT FOR EVERY PROJECT ACROSS MINNESOTA.

>> Eric: WHAT WOULD YOU SAY, YOU'RE PRO MINING, PRO ENVIRONMENT, A COMBINATION?

>> THERE'S A COMBINATION, THERE'S A FINE BALANCE THAT WE HAVE TO HAVE THERE.

I THINK FOR ME, YOU KNOW, I GREW UP N DULUTH.

MY FAMILY'S FROM THE IRON RANGE.

MY GRANDMOTHER, SHE WAS THE VALEDICTORIAN OF CHERRY HIGH SCHOOL, AND, SO, -- >> Cathy: VERY SMALL PLACE.

>> VERY SMALL PLACE, YES.

MY GRANDFATHER IS FROM EVELETH.

SO WE NEED TO MAKE SURE THAT THOSE FOLKS UP THERE HAVE THE ECONOMY AND THE JOBS THAT THEY NEED TO LIVE A FANTASTIC LIFE.

WE ALSO NEED TO PROTECT OUR ENVIRONMENT.

>> BUT YOU'RE TALKING OUT BOTH SIDES OF YOUR MOUTH, ZACK.

WE'VE GOT TO MAKE SURE HAT THE PEOPLE UP NORTH CAN HAVE A FANTASTIC LIFE.

YOUR PARTY, PEGGY FLANAGAN, YOU GUYS HAVE BEEN SHUTTING DOWN A TRILLION-DOLLAR ECONOMY THAT'S JUST SITTING THERE.

WE'VE BEEN DOING MINING FOR HUNDREDS OF YEARS IN THIS STATE.

AND NOW YOU'RE SORT OF SAYING, WELL, WE HAVE TO MAKE SURE THAT THEY HAVE A FANTASTIC LIFE, WELL, HOW ARE YOU GOING TO GET THAT FOR THEM?

>> > I MEAN, A LOT OF THOSE PEOPLE ARE SCRAPING BY TRYING TO AFFORD GAS AND GROCERIES.

WE NEED TO UNLEASH THEIR ECONOMY, TOO.

>> YOU BRING UP A GOOD POINT, Dr.

JENSEN, COSTS HAVE BEEN GOING UP FOR EVERYBODY IN THIS COUNTRY, THANKS IN LARGE PART TO ALL OF THE TARIFFS THAT WE SEE COME OUT OF THE WHITE HOUSE.

>> I DON'T THINK YOU CAN BLAME IT ON TARIFFS.

>> YOU ARE RIGHT.

THE WAR IN RAN.

THESE AFFECT ALL OF US LOCALLY.

AND THEY AFFECT OUR LOCAL UNITS OF GOVERNMENT.

WHICH IS WHAT THIS JOB IS ABOUT.

LOCAL UNITS OF GOVERNMENT ARE UNDER MORE STRAIN NOW THAN EVER BECAUSE OF THESE RISING COSTS.

AND THIS OFFICE IS HERE TO PROTECT LOCAL TAXPAYERS.

CAN I ASK -- >> THAT'S WHAT I WILL DO AS THE ONLY ACCOUNTANT IN THIS RACE.

>> Cathy: THANKS FOR BRINGING UP LOCAL GOVERNMENTS.

THERE ARE SOME SMART PEOPLE IN ACADEMIA WHO THINK THAT THERE SHOULD BE LOCAL OVERNMENT PERFORMANCE AUDITS, NOT ONLY OF FINANCES, BUT CYBERSECURITY, FISCAL STRESS, INFRASTRUCTURE.

DO YOU SEE LIKE THE STATE AUDITOR MAYBE DIVING INTO SOMETHING LIKE THIS?

LOCAL GOVERNMENT PERFORMANCE AUDITS.

>> I CAN ANSWER THAT.

BECAUSE I'M THE TECHNICAL GUY HERE.

>> Cathy: YEAH.

>> SO THAT WOULD HAVE TO EXPAND THAT OFFICE SIGNIFICANTLY.

WE'RE GOING TO LEAVE THAT TO MNIT.

MINNESOTA I.T.

SYSTEM.

>> Cathy: SO THE STATUS, STAY IN THEIR LANE.

>> I BELIEVE THAT THE STATE AUDITOR NEEDS TO REMAIN THERE, WE'RE NOT GOING TO EXPAND THAT OFFICE TO INCLUDE A WHOLE BUNCH OF OTHER THINGS.

WE NEED TO GET WITH MINN I.T., WORK COLLABORATIVELY WITH THEM, WE NEED TO CONCENTRATE ON WHAT'S GOING WRONG WITH THAT OFFICE NOW.

WE DON'T NEED TO EXPAND THE OFFICE INTO M OTHER DETAIL THAT WE DON'T NEED, THAT WE DON'T HAVE ANY BUSINESS IN RIGHT NOW.

WE HAVE PROFESSIONALS AT MNIT THAT NEED TO DO THAT, THEY'RE ON A 24/7 BASIS, WE NEED TO RELY ON THEIR EXPERTISE, WE DON'T NEED TO CREATE ANY MORE PEOPLE IN THAT OFFICE DOING WHO KNOWS WHAT.

>> Eric: YOU'RE PART OF THE EXECUTIVE COUNCIL AS A STATE AUDITOR.

THAT WAS THE GROUP THAT SIGNED OFF ON GOVERNOR WALZ'S POWERS DURING COVID.

>> OVER AND OVER AGAIN, THEY DID.

FIVE OUT OF FIVE.

>> Eric: HOW WOULD YOU HAVE HAND -- HANDLED THAT AS STATE AUDITOR?

>> I CERTAINLY WOULD HAVE SAID, WE'RE GOING TO FOLLOW THE SCIENCE, BECAUSE IF WE LEARNED ONE THING, THE SCIENCE IS NEVER SETTLED.

IF YOU LOOK AT THE ISSUES, WE KNOW NOW WITHOUT QUESTION, NATURAL IMMUNITY IS REAL.

>> Eric: WHAT ABOUT THE GOVERNOR'S POWERS?

>> THE BOTTOM LINE, FIVE OUT OF FIVE PEOPLE VOTE TO EXTEND GOVERNOR WALZ'S POWERS OVER AND OVER AGAIN.

I THINK MINNESOTANS ARE GETTING TIRED OF ONE JUGGERNAUT PARTY RUNNING EVERYTHING.

PEOPLE ARE SAYING, WE NEED TO HAVE SOME DIVISION, WE NEED TO HAVE SOME SHARED SEATS AT THE TABLE.

AND I THINK THAT'S WHY PEOPLE ARE SAYING, SCOTT JENSEN, YOU NEED TO RUN FOR STATE AUDITOR, BECAUSE I THINK THAT I CAN BRING THAT TO THE TABLE.

>> YOU MAKE A GOOD POINT, Dr.

JENSEN, BECAUSE IN ORDER FOR MINNESOTANS TO TRULY BE REPRESENTED, DOES IT HAVE TO BE RIGHT OR LEFT?

WHAT ABOUT TEAM MINNESOTA?

THE GUY THAT'S TRULY INDEPENDENT.- I DEPENDENT.- I DOPENDENT.- I DON'NDENT.- I DON'T ENT.- I DON'T UNT.- I DON'T UNDE- I DON'T UNDERSTAND WHY IT ALWAYS HAS TO BE ONE SIDE OR THE OTHER.

WHY CAN'T MINNESOTANS HAVE A REPRESENTATIVE AT HE TABLE THAT TRULY REPRESENTS THEM, THAT HAS THEIR VOICE, THAT THEY FELT THAT THEY HAVEN'T HAD?

AND WHAT WE MISSED IN MINNESOTA, I WASN'T HERE, I WAS DOWN IN D.C., WHERE WE WERE LOCKED DOWN TIGHT IN D.C., TOO.

BUT MY ORDERS CAME FROM THE COMMANDER IN CHIEF.

RIGHT?

AND, SO, I WON'T -- I ALWAYS MAKE SURE THAT IS IT.

BUT I WOULDN'T AL HOUR OUR MINNESOTANS TO GO THROUGH THAT.

ALLOW OUR MINNESOTANS TO GO THROUGH THAT.

I'M A SCIENTIST, TOO.

DATA ANALYTICS BUT I'M ALSO A CLINICAL SCIENTIST SO I UNDERSTAND THAT PIECE, TOO.

>> YOU KNOW, I'M SO PROUD OF MY NONPARTISAN PUBLIC SERVICE ON THE DULUTH CITY COUNCIL.

BECAUSE WE WENT THROUGH COVID AS WELL.

WE BROUGHT EVERYTHING ONLINE.

EVERYONE REMEMBERS HOW STRESSFUL OF A TIME THAT WAS FOR EVERYBODY.

HOW WE WEREN'T SURE WHAT WAS GOING TO HAPPEN NEXT.

AND THIS IS AN IMPORTANT QUESTION TO MAKE SURE THAT WE THINK ABOUT EVERYBODY ACROSS MINNESOTA.

I'M NOT SURE THAT A ONE-SIZE-FITS-ALL POLICY ACROSS THE SPECTRUM IS ALWAYS THE RIGHT WAY TO GO.

>> SO ARE YOU AGAINST IT?

>> BUT WE NEED TO MAKE SURE THAT OUR PEOPLE IN THIS TATE ARE SAFE, RIGHT?

THAT IS THE JOB OF US GOVERNMENT FOLKS.

>> SO, ARE YOU AGAINST IT?

>> AGAINST -- >> WERE YOU AGAINST THE SIGNING OF THE ORDER FOR PEOPLE TO BE LOCKED DOWN IN THE STATE OF MINNESOTA?

WERE YOU AGAINST IT OR WERE YOU FOR IT?

>> I WAS FOR IT.

>> YOU WANTED TO LOCK THE BUSINESSES DOWN, THE KIDS OUT OF SCHOOL.

>> BECAUSE WE NEED TO MAKE SURE THAT PEOPLE ARE SAFE AND GET THROUGH THIS TUMULTUOUS TIME AND I'M VERY VERY GLAD -- >> WE HAVE A GENERATIONAL PROBLEM NOW BECAUSE OF THE LOCKDOWNS IN THE STATE OF MINNESOTA.

>> IN THE LAST FIVE YEARS, YOU WERE ON CITY COUNCIL, YOU AS AN ACCOUNTANT LED THE CHARGE, THE PROPERTY TAX WENT UP OVER 60% YOU WERE ON THE COUNCIL.

THAT TRANSLATES TO PEOPLE'S HOMES, PEOPLE ARE BEING PRICED OUT OF THEIR HOMES.

WE SAW THAT FFECT THE SCHOOL DISTRICT IT IS, HE -- THE COUNTIES -- >> Cathy: DID TAXES GO UP 60% IN DULUTH?

>> THAT WAS 2016, 2021, AND YOU WERE ON THAT THEN.

>> YEAH.

WE DID RAISE PROPERTY TAXES BECAUSE WE HAVE SOME SIGNIFICANT CHALLENGES IN DULUTH.

AND WE NEED TO MAKE SURE THAT, JUST LIKE OTHER PLACES, THAT WE ARE PROVIDING THE PUBLIC SERVICES, POLICE AND FIRE AND UTILITIES ACROSS THE CITY THAT PEOPLE NEED.

THESE ARE THE TAX DOLLARS THAT ARE CLOSEST TO EACH AND EVERY ONE OF US.

>> Cathy: SAY, GENTLEMEN, I HAVE WHAT MIGHT BE A STRANGE QUESTION BUT I WAS THINKING ABOUT THIS.

SO YOU'RE RUNNING FOR STATE AUDITOR.

TWO GOVERNORS WERE STATE AUDITORS PRIOR TO BEING ELEVATED TO BEING GOVERNOR, GOVERN ARNE CARLSON AND GOVERNOR MARK DAYTON.

WOULD YOU THINK OF USING THE AUDITOR'S OFFICE AS A SPRINGBOARD FOR HIGHER OFFICE?

JAY REEVES?

>> I CAN TAKE A CRACK AT THAT ONE.

AT MY AGE, I'M NOT LOOKING FOR A NEW CAREER PATH.

I MEAN, I'M A FAMILY DOCTOR.

NOW THESE TWO GUYS TOGETHER ADDED UP MIGHT NOT EQUAL MY YEARS BUT I'M NOT GOING TO HOLD YOUR INEXPERIENCE AGAINST YOU AS RONALD REAGAN ONCE SAID.

>> Cathy: Mr.

REEVES?

>> FOR ME, THIS IS A ROLE THAT WAS MADE FOR ME, TO BE HONEST.

I DON'T HAVE A VISION RIGHT NOW AS IT RITZ SITS.

I'M A -- AS IT SITS.

I'M A DATA ANALYST, I DIG IN, I ASK HARD QUESTIONS, I'M A MILITARY LEADER, I'M MINNESOTAN, I'M AN EAST SIDER.

I'M HARD WORKING FOR MINNESOTANS, THAT'S WHERE MY DEDICATION IS.

WHEREVER THAT LEADS ME IS THE FUTURE.

I'M NOT GOING TO PONTIFICATE ABOUT WHAT MIGHT BE IN FOUR, EIGHT YEARS, BUT I KNOW THAT IN FOUR YEARS I WANT TO E IN THAT OFFICE MAKING THE BEST DECISIONS FOR ALL OF MINNESOTA.

>> Cathy: THANK YOU.

>> I WANT TO HELP LOCAL UNITS OF GOVERNMENT.

THAT IS WHAT THIS JOB IS REALLY ALL ABOUT.

MY EXPERIENCE AS THE ONLY ACCOUNTANT WHO HAS EEN WORKING IN A LOCAL GOVERNMENT FINANCE OFFICE, I'VE SEEN THE STRUGGLES, I'VE SEEN THE CHALLENGES, AS A CITY COUNCILOR FOR A NONPARTISAN OFFICE, I'VE SEEN THOSE CHALLENGES AS WELL.

I WANT TO HELP LOCAL UNITS OF GOVERNMENT DO WHAT THEY DO BEST AND PROVIDE THE SERVICES FOR THEIR LOCAL CONSTITUENTS.

>> Cathy: YOU'D BE HAPPY TO BE AN AUDITOR, NOT BEING A SPRINGBOARD -- >> I WOULD LOVE TO BE AN AUDITOR.

>> IT'S INTERESTING YOU SAID THAT.

YOU MENTION AS AN ACCOUNTANT SEVERAL TIMES, BUT, YET, YOU WERE THE ONLY ONE OF THE THREE OF US THAT FAILED TO MEET THE DEADLINE IN SUBMITTING YOUR AFFIDAVIT FOR THE PUBLIC SUBSIDY PROGRAM.

AND MY UNDERSTANDING NOW IS THAT YOUR ATTORNEY IS NOW GOING TO THE CAMPAIGN FINANCE BOARD ASKING FOR AN EXTENSION.

AND I GUESS THAT IS WHAT ACCOUNTANTS DO.

>> Eric: REAL QUICK.

>> WE TRIED TO FILE THAT ON TIME.

THEIR SYSTEM WAS DOWN.

AND THAT WILL BE RESOLVED.

>> ALL YOU HAD TO DO WAS FAX