Examination of Funds Received by the Federal Government Under Leases of Mineral Rights on the Bullhook Gas Unit

RCED-85-52: Published: May 3, 1985. Publicly Released: May 3, 1985.

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In response to a congressional request, GAO determined if the Chippewa Cree Tribe of the Rocky Boy's Reservation in Montana had received funds the Department of the Interior collected from leases of mineral rights on the Bullhook Gas Unit, Montana, which includes federal, state, and private land.

GAO found that Interior has transferred to the tribe all the royalties it received from Bureau of Land Management (BLM) leases as required by P.L. 93-285. Royalties collected from four leases were transferred in 1980, and royalties from a fifth lease were transferred in 1983. However, GAO found that, in computing the royalty payments, Interior withheld a net amount of $19,000 from the tribe. Because BLM overlooked certain leases affected by the legislation, the royalties collected from the leases were treated as federal rather than Indian funds. When the funds were appropriately identified and processed as Indian royalties, the Minerals Management Service incorrectly computed the amount due to the tribe, and the Bureau of Indian Affairs did not properly recognize some royalties in the tribe's accounting records. However, the tribe has not received any interest on royalties BLM collected from the leases. GAO believes that the tribe is entitled to the interest that might have accrued had the royalties been credited to the tribe's account since 1974 as directed law. The tribe has not received the revenues collected from BLM leases between 1968 and 1974; however, any claim which the tribe had to these funds is barred by statutory limitations, and the only remedy available to the tribe is private relief legislation.

Recommendation for Executive Action

  1. Status: Closed - Implemented

    Comments: GAO has been advised that the $88,431 in interest was appropriated and disbursed to the tribe in August 1985. Interior also reimbursed the tribe about $6,000 for interest incurred between January and September 1985.

    Recommendation: The Secretary of the Interior should pay the Chippewa Cree Tribe interest on royalties collected by BLM between 1974 and 1980 from four BLM leases and between 1974 and 1983 from a fifth BLM lease, which GAO estimates to be $88,431 through January 31, 1985.

    Agency Affected: Department of the Interior


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