The War on Error

Inspector general's report finds problems with royalty-collection program at Interior

Posted at 6:57 AM on 26 Sep 2007

A new report by the U.S. Interior Department's inspector general points to a "profound failure" of the technology that the Minerals Management Service uses to monitor the roughly $10 billion in oil and gas royalty payments from energy companies each year. But it's not just the technology. Higher-ups in the agency apparently decided that even after catching oil companies underpaying by over $1 million, it would impose too much of a "hardship" on the companies to require them to calculate the royalties owed, despite the fact that MMS' own computers weren't capable of making the necessary calculations. The report was spurred by accusations from four auditors at Interior who said administration officials had blocked them from collecting money from oil and gas companies that underpaid the government. And while some of the auditors' claims were found to be unsubstantiated, the yearlong IG investigation did uncover mismanagement and other problems. The IG wrote of the royalty-collecting effort, "It demonstrates a Band-Aid approach to holding together one of the federal government's largest revenue-producing operations."

source:  The New York Times