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Tracking Minnesota’s political scene and keeping you up-to-date on those elected to serve you

Escalating battle between Clinton, Sanders to hit Twin Cities

Hillary Clinton and Bernie Sanders are swinging through the Twin Cities on Friday just as their fight for the Democratic presidential nomination is intensifying both nationally and in Minnesota. 

Both the former Secretary of State and the Vermont senator will speak at a DFL fundraising dinner at St. Paul's RiverCentre. Clinton and Sanders are not sharing a stage in Minnesota; they are debating on Thursday night in Milwaukee. 

Sanders is also billed as guest of honor at a "Community Forum on Black America" on Friday afternoon at Patrick Henry High School in Minneapolis. Ticket information can be found here. Clinton is not attending. As of Thursday morning, Sanders' campaign had not yet officially confirmed to the Star Tribune that he'll be at the event sponsored by Neighborhoods Organizing for Change. 

Clinton's spokeswoman in Minnesota said the DFL dinner would be her only stop in the state.

Clinton and Sanders both agreed weeks ago to speak at the DFL's yearly fundraising blowout, the "Fifth Annual Minnesota DFL Humphrey-Mondale Dinner." Party chairman Ken Martin said he expects the dinner to raise over a million dollars for the party.

The Democratic presidential race has escalated since Clinton's narrow win in Iowa, followed by Sanders' big win on Tuesday in New Hampshire. With Clinton's status as frontrunner looking more shaky, both campaigns are expanding efforts in a wider network of later-voting states. 

That includes Minnesota, with its March 1 caucus. Clinton and Sanders both have paid operatives working in the state, charged with ramping up get-out-the-vote efforts like phone banks and door-knocking campaigns.

Thursday also saw the first airings of a TV ad that the Sanders campaign is running on Minnesota stations. 

MMB lacked internal controls leading to omission of $537K tax penalty, report says

The state's budget agency lacked "adequate" internal safeguards to prevent the omission in financial statements of a $537,000 tax penalty paid to the Internal Revenue Service, according to a report released Thursday by the legislative auditor.

The report of the statewide financial reporting practices found that the Minnesota Management and Budget (MMB) office should have discussed with auditors whether to disclose the tax settlement paid to the IRS. The penalty was for the purchase of state bonds in 2010 and 2011 by the state investment board, a violation of federal tax rules. Budget officials noticed the transactions in 2012 and reported them to federal tax authorities.

The payment and lack of disclosure were first reported by the Star Tribune.

"When we reviewed the settlement, we concluded the violations and resulting settlement were significant enough, based on qualitative considerations, to warrant disclosure in the notes, since the municipal bond community... are primary users of the state's financial statements," the report by Legislative Auditor Jim Nobles said.

MMB Commissioner Myron Frans in a response included with the report said his agency has developed new procedures to prevent the accidental purchase of state debt by state agencies. State agencies will be required to certify they did not purchase state bonds, and MMB will also notify legislators and others when penalties or other uncommon payments are made from the state's general fund.

"We continue to place a high emphasis on ensuring that our notes to the financial statements present all required disclosures," Frans wrote.

Frans in his response noted that the decision not to disclose the tax penalty was deliberate. He said such a disclosure is not typically included unless the terms of a settlement require one or if there are other legal obligations for disclosure.

"Based on input from bond counsel, financial advisors, and industry best practices, we concluded the settlement with the IRS was not a required disclosure in the notes to the financial statements," Frans said.

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