Posthearing Questions:

Major Management Challenges at the Department of the Interior

GAO-07-659R: Published: Mar 28, 2007. Publicly Released: Mar 28, 2007.

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On February 16, 2007, GAO testified at the Committee on Natural Resources' oversight hearing on "Reports, Audits, and Investigations by the Government Accountability Office and the Office of Inspector General Regarding the Department of the Interior." This letter responds to the February 26, 2007 congressional request, in which members of the Committee asked additional questions about GAO's past reports. To answer these questions, we relied primarily on a number of GAO reports, as well as our body of knowledge in these areas. We prepared this letter during March 2007 in accordance with generally accepted government auditing standards. Because this letter was primarily based on previously issued reports, we did not seek agency comments on a draft of this letter.

Past GAO reports have identified a number of areas in which the Department of the Interior (Interior) has not collected all revenue authorized. The most significant source of forgone revenue owing to mismanagement is the department's implementation of the Outer Continental Shelf Deep Water Royalty Relief Act enacted in 1995--amounting to at least $1 billion--because of the failure to include price thresholds in leases issued in 1998 and 1999. All other sources of potential lost revenue from Interior programs that we have reported on pale in comparison with this amount. In June 2005, we reported that the increased permitting activity between 1999 and 2004 had occurred at the expense of environmental mitigation activities owing to a lack of resources available to conduct mitigation activities. The effect of a continued increase in permit approvals on surrounding communities and the environment will depend on (1) the environmental stipulations in the leases, (2) the conditions of approval in the permits, and (3) the Bureau of Land Management's (BLM) level of monitoring and enforcement of the lease stipulations and permit conditions. If BLM is required to process even more permits without receiving any additional resources, it is likely that the agency's ability to perform the necessary environmental mitigation activities would continue to be eroded. While we have long recommended consideration of a legislated process for settlement of Indian tribe claims before litigation is filed, we do not have a position on legislated settlement of the existing lawsuits or extension of the statute of limitations for tribal trust fund claims. As early as 1992, we recommended to Interior that it consider alternatives to account reconciliation including, if other options were unsuccessful, seeking a legislated settlement process. Since 1997, many tribes have initiated lawsuits with claims related to account balances. The Congress, in its review of Interior's timetable, may disagree with the duration of the trust reforms and choose an alternative completion and termination date. The Office of the Special Trustee (OST) plans to complete almost all of its key trust fund management reforms by November 2007. OST told us that after November 2007 it will still need to verify the data in the Bureau of Indian Affair's trust asset and accountability management system for (1) Indian lands with recurring income for which the land and leasing records in the management system matched with the information in the legacy realty system and (2) Indian lands without recurring income. Having adequate financial assurances to pay reclamation costs for BLM land disturbed by hardrock operations is critical to ensuring that the land is reclaimed if operators fail to complete reclamation as required. Financial assurances must be based on sound reclamation plans and current cost estimates so that BLM can be confident that financial assurances will fully cover reclamation costs.

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