GAO told a House panel recently that the stronger oversight is needed of federal oil and gas resource management and revenue collection, going so far as to call for a comprehensive reassessment of oil and gas management.
Last September GAO reported that neither Interior Department’s Bureau of Land Management or its Minerals Management Service were meeting statutory obligations or agency targets for conducting inspections of certain leases and metering equipment used to measure oil and gas production.
It said in fiscal 2008 Interior collected over $22 billion in royalties and other fees related to oil and gas, but that MMS’s royalty IT system and processes lack several important capabilities, including monitoring adjustments made by companies to their self-reported production and royalty data and identifying missing royalty reports in a timely manner.
According to GAO-09-556T, MMS’s use of compliance reviews, which are more limited in scope than audits, lead to an inconsistent use of third-party documents to verify that self-reported industry data are correct.
Further, GAO said that MMS’s annual reports to the Congress do not fully describe the performance of the royalty-in-kind program and, in some instances, may have overstated the benefits of the program.
