Financial Management:

Improvements Needed in OSMRE's Method of Allocating Obligations

AFMD-89-89: Published: Jul 28, 1989. Publicly Released: Aug 29, 1989.

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Pursuant to a congressional request, GAO reviewed the propriety of the Office of Surface Mining Reclamation and Enforcement's (OSMRE) fiscal years (FY) 1987 and 1988 charges to the Abandoned Mine Reclamation (AML) Fund.

GAO found that OSMRE charged its two primary appropriation accounts, the AML fund and a regulation and technology program, by dividing its obligations into direct regulation and technology activities, direct AML activities, and administrative activities. GAO also found that, although a review of sample transactions indicated that OSMRE charged the appropriate appropriation accounts, it did not use supportable methodologies to make those allocations, since it: (1) accumulated administrative-related obligations throughout the year in various accounts and then allocated them at yearend based on the approved budget; (2) decided at the beginning of the year the portion of each of certain invoices it would charge to each account through the year; and (3) lacked documentation to support its allocation of some obligations to the AML fund. GAO believes that, while the OSMRE accounting system has the capability to properly account for and allocate its two programs' obligations, OSMRE instead uses a methodology which allows its budget to become a self-fulfilling prophecy and impedes congressional and agency oversight of its activities.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: Interior agreed with this recommendation and plans to implement it in FY 1990. Interior plans to issue an order which will address this recommendation.

    Recommendation: To provide the needed assurances to Congress and other interested parties that funds are being obligated as authorized, the Secretary of the Interior should require the Director, OSMRE, to develop and use a supportable methodology for the allocation of obligations for administrative activities between its AML and regulation and technology programs.

    Agency Affected: Department of the Interior

  2. Status: Closed - Implemented

    Comments: Interior agreed with this recommendation and plans to implement it in FY 1990. Interior plans to issue an order that will address this recommendation.

    Recommendation: To provide the needed assurances to Congress and other interested parties that funds are being obligated as authorized, the Secretary of the Interior should require the Director, OSMRE, to issue written procedures requiring that when contracts support multiple offices and appropriations, such as those for computer services, the allocation basis is adequately supported and documented.

    Agency Affected: Department of the Interior

 

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