Mineral Revenues: Options to Accelerate Royalty Payment Audits Need Further Consideration
RCED-89-167
Published: Jun 05, 1989. Publicly Released: Jul 06, 1989.
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Highlights
Pursuant to a congressional request, GAO provided information on the Minerals Management Service's (MMS) audits of oil and gas royalty payments, focusing on the: (1) status of the MMS audit program; (2) effect of a 3-year audit acceleration effort by MMS; (3) MMS cost-benefit analysis that it used to support its proposal to hire contract auditors; and (4) possibility of auditor conflicts of interest and steps MMS has taken to address that issue.
Recommendations
Matter for Congressional Consideration
| Matter | Status | Comments |
|---|---|---|
| Because MMS has not adequately considered all the options available to accelerate its audits of royalty payors, Congress should not approve the funds Interior has requested for hiring contractor auditors in FY 1990 until Interior considers all options and adequately justifies whatever option it selects. |
Closed – Implemented
|
Although Interior requested $5 million in its FY 1990 budget submission to implement the first year of a 3-year effort to hire contractor auditors, Congress only appropriated $3.6 million and stipulated that one half can be used to fund cooperative agreements with states and Indian tribes to provide audit resources. Otherwise, the funds are to be used to hire additional MMS auditors. |
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Topics
Auditing proceduresAuditing standardsConflict of interestsCost effectiveness analysisGas leasesGovernment collectionsOil leasesPetroleum industryRoyalty paymentsTemporary employment