Coast Guard:

Oil Spill Liability Trust Fund Not Being Used to Pay All Allowable Costs

RCED-91-204: Published: Aug 12, 1991. Publicly Released: Aug 12, 1991.

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Pursuant to a legislative requirement, GAO reported on the: (1) Oil Spill Liability Trust Fund's receipts and disbursements as of March 31, 1991; and (2) status of activities under way to fully implement Oil Pollution Act of 1990 (OPA) provisions regarding the fund.

GAO found that: (1) as of March 31, 1991, the Oil Spill Liability Trust Fund had reached more than half of its $1-billion limit and the Coast Guard had disbursed $14.3 million from the fund; (2) the Coast Guard has not made payments from the fund for costs other than federal spill removal costs because the executive order delegating authority for implementing other aspects of the fund had not been issued as of July 15, 1991; (3) federal agencies involved in oil spill removal may not be reimbursed for all allowable removal costs because the procedures the Coast Guard is using until it develops new regulations do not allow full response cost payments allowed under OPA; (4) the Coast Guard has not taken any steps, such as implementing interim regulations, to allow agencies reimbursement for their nonincremental costs; and (5) Coast Guard procedures do not provide adequate guidance on federal oil spill removal activities or cost calculations.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: Interim regulations implementing OPA, including its provisions for paying spill costs, have been implemented.

    Recommendation: The Secretary of Transportation should take steps to ensure that the Commandant of the Coast Guard implements the recommendations included in a previous GAO report concerning improvements needed to make certain that federal spill-related removal costs are appropriately paid.

    Agency Affected: Department of Transportation

  2. Status: Closed - Implemented

    Comments: Final regulations implementing OPA have been written and are undergoing internal agency review. In the interim, the Coast Guard has directed that full reimbursement be paid to federal agencies.

    Recommendation: The Secretary of Transportation should take steps to ensure that the Commandant of the Coast Guard establishes interim regulations incorporating the OPA provision for full reimbursement of all costs incurred by agencies and agency personnel not normally involved in spill response, including the cost of their salaries.

    Agency Affected: Department of Transportation

  3. Status: Closed - Implemented

    Comments: Final regulations implementing OPA, including third-party claims, have been written and are undergoing internal review. Internal guidance has been issued as GAO recommended.

    Recommendation: The Secretary of Transportation should take steps to ensure that the Commandant of the Coast Guard establishes, if delegated the authority by the President, interim procedures for the proper payment of damages to third-party claimants and the costs of initiating natural resource damage assessment studies.

    Agency Affected: Department of Transportation

 

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