MMS royalty auditing program gets high grade

Nick Snow
Washington Editor

WASHINGTON, DC, Dec. 16 -- An independent review of its royalty auditing program resulted in no significant findings, earning it the highest possible rating, the US Minerals Management Service said on Dec. 16.

The peer review by Thompson, Cobb, Bazilio, & Associates covered the Jan. 1, 2005, to May 31, 2008, period, and examined internal controls associated with audits MMS performed of energy industry payments to the federal government, MMS said. This was the second consecutive peer review resulting in the highest rating possible, it added.

"This review clearly shows that MMS has the process in place to ensure the nation receives fair value for its energy resources," said Randall B. Luthi, the agency's director. He noted that the US Department of the Interior agency closed 1,423 audits during fiscal 2005-08 and collected $432.6 million in additional revenues for all compliance activities, including late payment interest, from fiscal 2005 through 2007.

The latest review examined quality control procedures and policies in place within the agency's compliance and asset management organization, and whether those controls conformed to generally accepted government auditing standards, according to MMS.

It said that Thompson, Cobb, Bazilio & Associates reported in its written opinion that the quality control system for MMS's federal auditing function during the Jan. 1, 2005, to May 31, 2008, period "has been designed to meet the requirements of the quality control standards established by the [US comptroller general] for a federal government audit organization and was complied with during this period."

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