Welcome to Politically Speaking.

I'm Elizabeth Bennion, chancellor's professor of political science and director of Community Engagement at Indiana University, South Bend.

Indiana's auditor, Tera Klutz, is serving her final term since being appointed to the position in 2017, the first state auditor to hold a CPA.

She has campaigned on transparency with the public and is leading the charge to change the title of her office, a title that she says is misleading.

Joining us today to discuss her role, accomplishments and future plans is Indiana State auditor Tera Klutz.

Thanks so much for being here.

Hi, how are you?

I'm happy to be here.

Well, it is great to see you.

And I want to start with that first point about the title of the office itself.

You'd actually like to change the name.

Why is that?

Right now, my title, my constitutional title is State Auditor.

And when the state was created 200 years ago, that meant that when agencies like the governor, the attorney general or the attorney general actually wasn't around it was a statutory office.

So let's go back to the Treasurer or the Secretary of State.

They submitted bills for payment.

We would audit the invoice and then pay the bill.

Well, we still do that today and we think of that as like a chief financial officer.

And we also do all the payroll for the entire state.

200 years later, when we think of auditor, we think of either a tax auditor coming in to audit your tax return or we think of a financial statement auditor coming in to verify your financial statements for bank creditors with all the compliance that we do now as a nation, auditor just means something completely different to people.

So we're trying to quell some of that confusion by changing our name to State Comptroller.

I'm not going to pretend like people will know exactly what that means.

I do know that it will keep them from thinking we audit and then people who are familiar with financial terms will know that a state comptroller is similar to a comptroller or a chief financial officer for an entity.

And so we're we're going to try to do it.

My team decided that we were going to try to change the Constitution, and so we were prepared with a resolution to try.

We took it to a couple of legislators and they indicated that because it has to pass two separately elected legislators and then go to the people in a referendum that they were going to have trouble wording it in such a way that wouldn't seem like we were taking away a state auditor position and that it would be hard to get the message out.

So they proposed putting it in as like a doing business as in state statute.

So we will still maintain our constitutional state auditor title for now and that the current legislation in the budget bill is that we shall also be known as State Comptroller.

Okay.

So yeah, there is something that viewers should realize when you want to change the state constitution.

It's not a quick process two successive legislatures, an election between and then to the people for their decision about whether or not to approve it.

So, Comptroller, as you mentioned, a lot of people won't know what that means either.

Can you talk a little bit more about what responsibilities you have as the state's auditor?

So as the state's auditor, hopefully soon to be comptroller.

We are in charge of paying all 30,000 employees for the state of Indiana.

We pay all the bills, over 80,000 vendors.

We also produce the financial reports that get audited by the State Board of Accounts and we produce the financial reports that the legislature uses for making decisions.

And so those are our primary duties.

We have a lot of smaller duties.

My office is in charge of doing the Hoosier Start, which is the state's supplemental 457 plan, and all state employees are automatically enrolled in that.

And local governments can also participate in that just as a way to cost save if they want to offer their employees a low cost supplemental retirement plan.

And so that's what the state controller does is very, very similar to a chief financial officer.

Illinois changed their office of state auditor to state comptroller a few decades ago, and so now they're state comptroller.

We started at the same time and her name is Susan Mendoza and or yes, I believe or she actually may just have termed out.

But I just remember thinking, I wonder if I'll be able to do that when I started six years ago.

And so now we're actually trying it and I'm a little nervous.

So that is a lot to deal with if you're handling all of that payroll, plus giving reports that the policymakers can use.

How many people do you have to help you in your office?

Our team is small but mighty.

We have about 50 people, but they love the work.

We have people in there that have been there 30 years and obviously we have new people coming in all the time.

But it's such a great team atmosphere because payroll can't stop.

Even if the leader changes, they know the importance of getting that paycheck out every two weeks.

And it's not easy because, you know, we're dealing with people that work 24/7 who run, who run prisons, and we work with the people that work on the roads.

We we work with the legislators who get this this pay, but then they also get per diem, depending on how far away from the state house they live.

And so I would say that that's probably the most important thing we do is is producing the paychecks.

But because we also pay the bills, we turn child support payments around in two days.

So you pay child support.

It's in the recipient's bank account within two days, which is no other state does that in the state of Indiana.

We also pay all the tax refund checks from the IRS, including the automatic taxpayer refunds that were just issued last year.

So it is a lot of work, but the team loves the work and I love the team.

Now, that sounds like a lot of things that really affect people's lives and people really care about.

And yet probably not too many of them think much about the folks behind making those things happen.

It sounds almost like if your office is doing a good job, you're fairly anonymous.

And honestly, that's the way it should be.

Because don't we have a lot more important things to be dealing with?

Like these are things we expect.

We pay taxes, so we expect these things to run and we expect them to be done well.

There are things out of our control that happen all the time that we have to spend, whether it's our families, our jobs, our children, COVID, you name it.

There are things that we need to be concentrating on, but we pay taxes and we should expect government to operate like that.

Now you have a CPA, previous occupants of the office have not.

Do you think that's important?

Should it be a qualification or is it just something that's helpful?

What is your thought?

I think it doesn't need to be a qualification.

I think that every auditor that I state auditor that I've known in the past has added tremendous value to the office.

I think it's great to have an opportunity to have a CPA and work there as the leader, because I'm very familiar with all of the pieces of the office.

And then I also happen to have a background in local government which at the county level.

So the county auditor's do very similar things that the state auditor did.

And so I had worked in public accounting before working at local government, so I worked at PWC, PricewaterhouseCoopers, and then they sold our office to Crowe and then I moved into county government.

And that full picture makes me a very unique person sitting in this chair right now, which I have four years left and I am excited and excited about what we can do.

But I think the next hopefully State comptroller because we may still decide to slide in the next four years, a constitutional amendment if it the state controller goes through and it goes well.

But I think they will have a lot to add to everybody brings something different.

So this is my time and trying to going to set it up to succeed in the long term in the future.

I want to follow up and both of those.

Okay.

Points, your county experience and also what you hope to do.

Well, you are in the office to set it up for a really productive future.

Allen County Auditor in that position, how was it different from what you're doing now at the state level and how big of an adjustment was that.

Coming from the public sector?

It's funny, I worked in public accounting, so it's really hard for me to say now I'm going to go work for the public because I just work for the public.

So I used to say, I know this is so cheesy, but I'm working for the public, for the public as the county auditor.

So I think the biggest surprise that people don't realize your county auditor doesn't audit.

Okay, same.

A lot of people who don't know what's going on and don't realize that.

And then when they do, they realize that they calculate your property tax bill.

And I just want to tell you that is one of the most important things to talk to our residents in the state of Indiana, because when I started in '03 we changed the way we assessed property in Indiana because of the town of St John's case, which said we couldn't do cost less depreciation, meaning an old home that's in a beautiful historic area worth a million wasn't taxed the same as a new home, maybe on a lake.

But they both sold on the open market for a million.

So the law switched to say we have to property, tax them the same.

And so there wasn't an on time property tax bill in the state of Indiana that year.

That's when the school general fund was still on the property tax rolls.

And so I got to come in and just learn the new way, be very helpful in helping.

We have 20 townships, four large school districts in Allen County, helping them cash flow.

But I learned public service is very rewarding.

As an accountant, you're like, I want to feel good about my work.

And sometimes it's hard.

I found it hard working for public accounting because I was auditing financial statements great and I was helping shareholders and all of that.

In private.

In private, yes, but working on the public side, it was so much more rewarding.

Maybe not financially lucrative.

Very rewarding.

Right.

You can really see the people whose lives you're in.

People come into government and they're intimidated.

And if they have a problem or they don't understand why they've got a bill in their hand or and they're already thinking they're going to get the runaround.

So if you can just settle them down, have real answers for them and where they can go, whether it's their legislator, their county council, their commissioners, where they can go to voice their concern, who who can make the decisions on these things.

They've they just felt better about the process, which made us feel better in Allen County.

We were able we were able to explain those changes.

And one of the things that you are very interested in is this issue of transparency, not just helping people one on one, but making it transparent to the public what is happening with the state's money.

Can you talk a little bit about that?

Right.

Transparency.

I think it's fiscally responsible to be transparent, but I think it's vise versa.

Transparency is fiscal responsibility.

It's recognizing that you are trusted with money that is not your own, that is compelled to be paid.

The taxpayers only have a choice to live here, but then they must pay.

Or they can lose their house or they can get in trouble for not paying.

And so then you have this money and what are you going to do with it?

Well, you can decide what to do with it, but everybody should get to see what you do with it, how you do with it, and then they can judge whether they agree with you or not.

But but not showing them where you spend the money or what contracts you have.

You maybe don't have to tell them why, but I think you should tell them why if they can't tell.

So we part of our jobs responsibility, thanks to the legislature, is standing up the Indiana Transparency portal and so on that portal, taxpayers can see how much not only state employees made, but how much government government employees across the state get paid because we link local government data.

There you can see how much we spend on lobbyist.

You can see how much we spend on big contracts.

I think all of that is important because the reason why transparency helps with fiscal responsibility, because if everybody remembers that every dollar they spend is available on our transparency portal, they may just continue to make the best and better decisions.

Knowing the public will see where this money is going.

Will you be able to defend those decisions and justifying to the public, knowing that those tax dollars could have gone elsewhere?

Right.

So I think what it does is it causes people to have another meeting, understand why we're doing what we're doing.

Make sure you're going out for bid on your contracts, making sure you're crossing your T's and dotting your I's.

Now, as you think about the future, you talked about wanting to do whatever you can to really make the office run smoothly.

And I wonder if you could talk a little bit about a few of those specific goals that you have for the next four years.

Well, similarly, private sector, there is an accountant shortage across the nation.

People are not going into the field of accounting as they have in the past.

It's not as lucrative, It's not as appreciated.

People.

We've always been the backbone.

And like you said, we happen behind the scenes with nobody knowing.

So until something goes wrong, do people really want to concentrate and invest in accounting?

But it is the backbone and it can be your Achilles heel.

So I am currently with my whole team, am trying to grow our accounting and reporting division right now.

We are very we are amongst our amongst all 50 states.

We are 45th in the number of people we have on reporting on the financial statements.

But the people that are lower than us have significantly less population revenue and full time employees.

And so if you take our top ten peers and if we're in the average in the middle of all of those top ten, we are the very last in those of our peers that we spend on employees that are working that reporting.

Why is that important?

I know this is super boring, but the more accurate your reporting is, the better decisions will be made that will be able to impact taxpayers and residents for the future.

If you're making decisions on bad data or if you can't meet federal requirements for grants and they withhold grant funding that impacts us all.

And so it's so boring.

But that's what we're trying to do these next four years.

We're trying to make sure we increase transparency.

We are the bill payers for the state.

So you want your bill payer to pay on time.

So we try to pay an agency bill within ten days of when it gets to our office.

And we implemented that when I started.

Getting things out on time, making sure that you have accurate data, as you said, this does affect us all as we think about state policymakers.

Whenever the members of the state House and the state Senate appear, we often talk about budget and what they want to do with the money.

And there are a lot of cost projections involved and a lot of discussion about whether we can or can't afford something.

It seems like what your office is doing and really having a handle on what exactly is happening to state finances affects all of those decisions and whether or not they can actually make database decisions.

Yeah, So, you know, we talked about my local government experience and what I do now as state auditor.

I will say I miss the amount of budget involvement at the local level the county auditor has compared to the state auditor.

So I get to report on all the financials, but I don't get to do the forecasting like we did at the local level.

So Indiana has an Office of Management and Budget that gets to have a front seat along with the Budget Committee and they have a bipartisan forecasting group that will put another forecast out in April.

And then they will tell the legislature how much money is predicted to have over the next several years so they can make a budget.

I do miss that.

It's fun to see how close you can get.

But at the end of the day, the legislators are the policymakers.

You have so much money and they decide the priorities of the state.

With that budget, they are making statements every single time they adopt a budget and it would be fun to be in their shoes sometimes.

And other times I'm happy doing my job that I have right now.

It sounds like the state OMB basically functions very similarly to the federal.

Yes, in making those recommendations.

Similar in that we have a balanced budget.

Similar and dissimilar.

Oh my goodness.

Well, before you were the state auditor, the current lieutenant governor, Suzanne Crouch, was the auditor and you actually were appointed rather than elected.

What was that like to be appointed by Governor Holcomb?

And also, you know, what were you thinking in terms of your decision to say, yes.

Wow.

Well, that would take 3 hours, probably, but I'm going to give you the short version.

I didn't know Governor Holcomb.

I don't believe I had ever even met him before I got this appointment.

And I had so I had went into local government to put my husband through law school, just to be fair.

And so when I found out my boss was going to be term limited, she could run two, four year terms and I ended up running 4 to 4 year terms.

So I was in the county auditor's office from 2003 and then I ran in 2010 for my first term and then 2014 for my second as county auditor.

I was going to be retiring after that.

But then '16, 2016 was a crazy year in politics in America.

And who would have thought our governor would get picked to be a vice president running mate and win?

Governor Pence.

Yes.

And so a lot of things happen again.

We won't get into why.

I ended up submitting my resume two days after the election.

I actually got a call from the real state auditor, which is Paul Joyce, who's the state examiner, saying, hey, you should consider this Suzzane, you know, really thinks, you know, you would be good for it.

And I was like, thank you, but no thank you, you know, but then other things happen.

I'm a Christian and I felt like there were so many things happening that summer in that year that I should at least be open to it.

And so I told him I would ask my family after after I emailed them.

No, He emailed me back and I forgot I was going to be more open to it.

So I asked my daughter on the way home and middle.

She was in eighth grade.

My youngest was in eighth grade.

She had some middle school drama going on.

You know, girls.

Anyways, you never know how that's going to go.

But I said, Well, how do you feel about moving to Indy?

And she said, I'm ready to go right now.

I'm like, okay, well, I'm going to ask your dad, but you can't be in the room because she had a wrapped around her finger.

So I asked him later that night.

And so he had been involved in politics in college.

He volunteered on the Helmke for Senate campaign when he ran against John Price and Peter Rusthoven, and then later lost to Evan Bayh.

But so he kind of, you know, kind of liked politics, so he knew what an honor this would be.

So we said, okay, we'll put my resume in.

And I didn't hear anything for six weeks.

I didn't think I was going to get it.

And then I ended up getting an interview on December 30th at The Olive Garden in Noblesville.

And a couple of days later they announced it in Fort Wayne.

And then seven days I was sworn in on stage with them.

And it was a whirlwind that we moved down that night, stayed in a friend's basement for two months, and then rented a house for two months and then bought a house.

So.

Wow.

And now we're here.

It sounds like things aligned.

You almost feel like it was meant to be.

I do.

For now.

Yeah.

It's.

It's good to be in the space.

Now of course, the lieutenant governor is running for governor.

She clearly has additional political plans.

Yeah.

What about you?

Once you finish this term, are you do you think you will retire, as you said, in terms of Allen County from politics, or do you have future plans?

I've been telling people I'm going to hopefully be taking care of aging parents and grandchildren, if I have any, by then.

So I have my my children are 27 and 20, and so you never know.

I could and I have no more political plans.

I like having a line in the sand to just to get things done.

But I know never say never.

Now.

So we'll see.

Now, as you think about collaboration, what type of collaboration does your office need to do with other elected and appointed officials?

We have to have a lot of collaboration because we pay all of the bills.

A lot of times we're like, we have to be strategic partners with all the large agencies for sure.

The other elected officials, I would say the Treasurer, state Treasurer is the one we worked closely with because they are known as the Chief investment officer in Indiana law and they are in charge of all the cash and I have zero access to that cash, but they can't use any of the cash unless our office writes a check and initiates a payment.

So it's a constitutional check and balance that our forefathers thought of.

I kind of love it.

So we have to really be working with them all the time.

But we work with all the large agencies.

We meet with them every other month because we need to know what each other is doing so that we can work better and smarter and faster.

And so and all.

Of course, all the agencies love our office because we give them their paycheck.

I mean, we can't mess that up, right?

So I think that our relationship is really good because we they understand that we are just trying to be their partner.

Like when the Department of Natural Resources needs to run a park and IN-DOT needs to build a road or they they need to ice all the highways like they have to have a partner to pay their employees so that they know they're going to they're going to have somebody respond so that they can operate.

Child of Department Services, Department of Health, FSSA.

We are their bill payer, we are their employee, We pay their employees.

So we have to be their partner.

Now, in terms of that over $6 billion surplus, it sounds like you couldn't actually spend that money.

The Treasury couldn't spend it without you either.

So that's the kind of checks and balances that you're talking about.

Yes.

So and then no one can spend it unless it's appropriated by the legislature.

All right.

So more collaboration.

And that way that that's how the public also gets involved, Right, in picking those legislators and deciding if they are spending that money right correctly.

Or even if they didn't pick them, calling them, emailing them, telling them and don't use a form letter like do it, they'll read them.

And worried about with that portal, portal that you mentioned, where can people find that if they are interested in where the state's money is going and they want to be able to actually check that out?

So it's the Indiana Transparency Portal and they can just Google that if they want to and the link will pop up.

But it's itp dot gov.

I t p dot gov so folks can check it out and learn more than they ever thought possible about where that money is going.

You know.

It's so funny.

So if you really do do it because you can't sleep at night or you're stuck in bed rest for some reason you will probably have more questions.

Usually that's how it works.

Please contact our office.

You can email us.

You can call us.

We'll be happy to be that liaison to get you the more questions.

I always have more questions.

When I look at that, I'm like, Well, who said that?

Or How did that work?

Oh, okay.

And if you have questions, we are certain they will, but they can contact you and your office.

Well, unfortunately, that's all the time we have for this episode of Politically Speaking.

I want to thank our guest, Indiana State Auditor or Comptroller, Tera Klutz.

I'm Elizabeth Bennion and reminding you that it takes all of us to make democracy work.

We'll see you next time.

This WNIT Local production has been made possible in part by viewers like you.

Thank you.