Energy Conservation:

States' Use of Interest Earned on Oil Overcharge Funds

RCED-88-51: Published: Feb 4, 1988. Publicly Released: Feb 17, 1988.

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In response to a congressional request, GAO reviewed the Department of Energy's (DOE) compliance with a GAO recommendation that it implement a policy requiring states to use the interest earned on oil overcharges for energy assistance programs.

GAO found that: (1) DOE failed to adequately ensure that states implemented its policy requiring them to use oil overcharge interest only for energy assistance programs; (2) eight states stated that DOE failed to inform them of its policy on the use of oil overcharge interest; (3) four of the eight states did not use the interest for energy assistance programs; (4) a DOE survey of states' use of oil overcharge interest showed that some were using the funds for purposes other than energy assistance; and (5) in California, officials deposited oil overcharge interest to the state's general fund because they were unaware of DOE requirements. GAO believes that other states may be improperly using oil overcharge interest.

Recommendation for Executive Action

  1. Status: Closed - Implemented

    Comments: DOE obtained information from the states on their use of interest earned on oil overcharge funds made available by the Warner Amendment. Five states notified DOE that interest earned on Warner funds had been placed in their states general fund rather than the authorized energy conservation and assistance programs.

    Recommendation: The Secretary of Energy should formally notify states that interest earned on Warner funds must be used for the authorized energy assistance programs. As part of this notification, the Secretary should require states to: (1) report interest earned on Warner funds; and (2) certify that this interest has been or will be used for the authorized energy assistance programs.

    Agency Affected: Department of Energy


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