Department of the Interior Organizational Effectiveness for Management of Federal Energy and Mineral Resources

On several occasions, GAO has reported that hundreds of millions of dollars in royalties due from Federal Government and Indian leases are not being collected annually. Since 1959, GAO has been reporting on the need for major improvements in the U.S. Geological Survey's (USGS) oil and gas royalty accounting system. The Secretary of the Interior has established a Commission on Fiscal Accountability of the Nation's Energy Resources to report on necessary improvements in this system by the end of January 1982. The energy and minerals resource management function is split between several offices in Interior. USGS is responsible for royalty and rental rates, evaluations, and all other terms and conditions relating to mineral operations under leases and permits. After the lease is issued, USGS supervises conservation and management of mineral resources operations, including the collection of royalties. The Bureau of Land Management issues leases and permits and is the office of record in mineral leasing matters. Thus, responsibility for making many of the mineral management decisions is split between USGS and the Bureau, as is the revenue collection responsibility resulting from leasing. Any effort to examine total revenues generated from leasing energy and mineral resources would require looking at both agency's activities, and the split responsibility creates a possible problem in budget requests and cost reporting. Budget requests for leasing compete with other activities in both agencies for limited funding and personnel. GAO believes that a business-like management of Federal energy and mineral resources may be enhanced by consolidation of lease issuance and management under a single assistant at the Department of the Interior. The potential benefits include: (1) budget visibility; (2) fewer layers of review and revision of decisions between Congress and the executive agency offices responsible for implementing the leasing laws; and (3) a focal point for reporting and analyzing all costs and revenues associated with leasing activities.