[Survey Report on Oversight Activities of the Trans-Alaska
Pipeline System,  Bureau of Land Management ]
[From the U.S. Government Printing Office, www.gpo.gov]

Report No. 01-I-206

Title: Survey Report on Oversight Activities of the Trans-Alaska
       Pipeline System,  Bureau of Land Management 

 
  Date: February 7, 2001

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  U.S. Department of the Interior   Office of Inspector General
  
  EXECUTIVE SUMMARY
  
  Oversight Activities of the Trans-Alaska Pipeline System,
  Bureau of Land Management
  Report No.  01-I-206
  February 2001
  
  The 800-mile Trans-Alaska Pipeline System (TAPS), which is operated by the Alyeska
  Pipeline Service Company, transports almost 20 percent of the Nation s domestically
  produced oil.  Federal and State of Alaska agencies are required to ensure that TAPS
  operates safely, that oil spills are responded to timely, and that the environment is
  protected.  One of these agencies, the Bureau of Land Management (BLM), enforces a
  Federal right-of-way Agreement on Federal lands, and another agency, the Alaska
  Department of Natural Resources, enforces the State s lease on State-owned and private
  land.  In 1990, BLM and the Alaska Department of Natural Resources created the Joint
  Pipeline Office (JPO) to better coordinate Federal and State pipeline regulatory efforts.
  
  The objective of the survey was to determine whether BLM  adequately resolved
  deficiencies previously identified in TAPS.
  
  We found that JPO took action to close all but 4  of 4,920 previously identified
  deficiencies, and after completion of our audit fieldwork, JPO reported that 1of the
  remaining 4 items was closed. We also noted that JPO was developing a centralized data
  base to document its oversight activities, such as inspections conducted and deficiencies
  cited; JPO needs to take steps to ensure that information presented in its reports is
  accurate and supported; and JPO  access to information from an Alyeska data base that
  identified TAPS maintenance records would aid in scheduling its monitoring of activities. 
  Also, in July 1999, a private interest group made 44 allegations against JPO and Alyeska 
  regarding the mismanagement of TAPS, which included electrical violations, materials
  that could not be traced to authorized suppliers, and improper inspector certifications. 
  Based on our analyses of a matrix of these allegations prepared by JPO and a report
  prepared by Alyeska s consultant, we determined that the allegations were not supported,
  were already known, or were being addressed by JPO or Alyeska.
  
  We recommended that JPO (1) complete implementation of the centralized data base, (2)
  implement an internal quality control review process, and (3) obtain better access to
  maintenance data in  Alyeska s data base. 
  
  AUDITEE COMMENTS AND OFFICE OF INSPECTOR GENERAL
  EVALUATION
  
  BLM concurred with the report s three recommendations and agreed to take the
  recommended corrective actions.  Based on the response, the recommendations were
  considered resolved but not implemented.    
  

  C-IN-BLM-002-99-R
  
  SURVEY REPORT
  
  February 7, 2001
  
  Memorandum
  
  To:  Director, Bureau of Land Management
  
  From:  Roger La Rouche
  Acting Assistant Inspector General for Audits
  
  Subject:  Survey Report on Oversight Activities of the Trans-Alaska Pipeline System, 
  Bureau of Land Management  (No. 01-I-206)
  
  INTRODUCTION
  
  This  report presents the results of our survey of the Bureau of Land Management's (BLM)
  oversight activities of the Trans-Alaska Pipeline System (TAPS).  The objective of the
  survey was to determine whether BLM  adequately resolved deficiencies previously
  identified in TAPS.
  
  BACKGROUND   
  
  TAPS, which is operated by the Alyeska Pipeline Service Company, transports almost
  20 percent of the Nation's domestically produced oil.  The 800-mile pipeline extends from
  Prudhoe Bay, north of the Arctic Circle, over Federal, State of Alaska, and private lands, to
  the Port of Valdez on Prince William Sound.  It crosses permafrost, 3 mountain ranges, 
  about 800 rivers and streams, and 3  seismic fault zones.  Alyeska operates the pipeline for
  seven owner companies. 
  
  Pursuant to the provisions of the Trans-Alaska Pipeline Authorization Act of 1973 (43
  U.S.C. 1651), the United States, acting through the Secretary of the Interior, executed the
  Agreement and Grant of Right-of-Way for Federal land on January 23, 1974 with the seven
  oil companies.  The Agreement expires on January 22, 2004.  In addition, the State executed
  a lease with the original seven oil companies for a right-of-way on State lands.  The
  rights-of-way were granted for the purpose of constructing, operating, and maintaining an
  oil transportation pipeline consisting of one line of 48-inch-diameter pipe and related
  facilities.  In addition, the Agreement for TAPS identifies the responsibilities, authorities,
  and requirements of all of the parties.   According to the Agreement, the oil companies are
  required to ensure full compliance with all Federal laws and regulations and all provisions
  of the Agreement, including 47 stipulations that address areas such as fire prevention and
  suppression, health and safety, and contingency plans.  Federal and State agencies are
  required to monitor and enforce the laws, requirements, and regulations intended to ensure
  that TAPS operates safely, that oil spills are responded to timely, and that the environment
  is protected.  These agencies include BLM, which is responsible for enforcing the Federal
  right-of-way Agreement on Federal lands, and Alaska's Department of Natural Resources,
  which enforces the State's lease on State-owned and private land.  The  Department of
  Transportation's Office of Pipeline Safety is responsible for overseeing the operational safety
  of the entire pipeline under the Hazardous Liquid Pipeline Safety Act (49 U.S.C.  60108). 
  In addition, the Environmental Protection Agency and the Alaska Department of
  Environmental Conservation are responsible for enforcing environmental regulations such
  as the Clean Water Act (33 U.S.C. 1251) along the pipeline and at the Valdez Marine
  Terminal in Valdez, Alaska.  In 1990, BLM and the Alaska Department of Natural Resources
  created the JPO to better coordinate Federal and State pipeline regulatory efforts.  JPO is
  funded primarily by BLM and the Alaska Department of Natural Resources.  Alyeska is
  required, however, to reimburse BLM for all reasonable costs related to overseeing the
  pipeline, and by agreement, Alyeska began in 1990 to reimburse Alaska for part of its costs. 
  Staff are provided by BLM, other Federal agencies, and several State agencies.  JPO's costs
  were $2.7 million in 1997 and $3.3 million in 1998  (Federal and State agencies that have
  responsibilities regarding TAPS are in Appendix 1). 
  
  Previously Identified Pipeline Deficiencies 
  
  The July 1991 General Accounting Office report titled "Trans-Alaska Pipeline Regulators
  Have Not Ensured That Government Requirements Are Being Met" ( No. GAO/RCED-91-
  89)  stated that the grounding of the Exxon Valdez in March 1989 and its resultant oil spill
  and discovery of corrosion along the pipeline focused more attention and concern on the
  risks associated with transporting oil.  The report also stated:
  
            To successfully fulfill their oversight responsibilities, the five regulatory
       agencies can no longer be content with relying on Alyeska to police itself. 
       The complacency that has existed in the past must be replaced with a
       systematic, disciplined, coordinated approach that will ensure TAPS'
       operational safety, oil spill response, and environmental protection.  The
       formation of the joint office as well as recent increases in staffing levels by
       BLM and other agencies are encouraging signs that more oversight attention
       will be paid to TAPS' activities in the future.
  
   
  In 1993, Alyeska and JPO each hired consultants to provide audits of the operations of the
  pipeline.  These audit reports and subsequent technical reports (see Appendix 2) presented
  4,920 audit action items that identified deficiencies in pipeline operations.  In 1994, one 
  consultant categorized the audit deficiencies based on priority levels and entered the
  information into the audit compliance tracking system, which was used by both Alyeska and
  JPO to track the audit findings.  JPO uses definitions for the priority levels as follows:
  
            Priority 1 (P-1) - Those structures, systems, and components which prevent
       or mitigate the consequences of an accident or natural event which could
       cause significant harm to the health and safety of the public, significant harm
       to the environment, or significant loss of pipeline integrity.
  
            Priority 2 (P-2) - Those structures, systems, and components that do not meet
       the definition of P-1, but which are important for compliance with regulations
       regarding safety and the environment, and for the reliable transport of oil. 
       This level requires selected application of quality program elements.
  
            Priority 3 (P-3) - Those structures, systems, and components that by
       themselves would have minimal impact on safety and the environment, and
       for the reliable transport of oil, but to which Alyeska elects to apply selected
       quality program elements.
  
            Priority 4 (P-4) - Those structures, systems, and components not designated
       P-1, P-2 or P-3 and for which application of normal industry practices results
       in acceptable quality.
  
  The General Accounting Office issued the report in August 1995 titled "Trans-Alaska
  Pipeline Actions to Improve Safety Are Under Way" (No. GAO/RCED-95-162) (see Prior
  Audit Coverage section of this report).  The report stated that Alyeska had made progress in
  resolving the audit action items but that it was taking longer than originally planned.  By the
  end of April 1995, Alyeska  had corrected about 3,030 (62 percent) of the 4,920 audit action
  items identified.
  
  As of March 2000, JPO had cleared all but 4, 1 of which consolidated 14 prior audit
  deficiencies, of the 4,920 audit deficiencies.  The remaining four audit deficiencies consisted
  of two Priority 1 and two Priority 2 deficiencies.
  
  Comprehensive Monitoring Program  
  
  Since 1995, JPO has been providing oversight of TAPS as part of the Comprehensive
  Monitoring Program developed by Booz-Allen & Hamilton, Inc., a consultant to improve the
  effectiveness of JPO's operation.  The consultant determined that to address risk effectively,
  JPO needed to focus more on Alyeska's management of pipeline operations and maintenance
  activities.  The Program has a three-tier approach to oversight.  Surveillance, the first tier,
  is where the most basic monitoring occurs through observations in the field by verifying
  compliance with (1) grant and lease stipulations, (2) plans to correct pipeline deficiencies
  identified by audit, and (3) Alyeska's established procedures for specific TAPS activities. 
  Tier two involves assessments that capture trends and identify findings from related
  surveillances and engineering reports.  Assessments are the primary method JPO uses to
  issue findings to Alyeska that require corrective action.  These assessments are more
  technical in nature and are designed primarily to communicate findings to Alyeska.  Tier
  three is reporting.  That is, assessment findings, as well as Alyeska's responses to findings,
  trends, and conditions, are included in Comprehensive Monitoring Program reports, which
  normally cover an 18-month period.
  
  The results of the Comprehensive Monitoring reports issued during the year are rolled up
  into JPO's annual report.  The annual report presents JPO's work plan objectives and its
  accomplishments for the previous year, as well as the upcoming year's work program goals.
  
  SCOPE OF SURVEY
  
  The survey was performed during September 1999 through May 2000 at JPO's and
  Alyeska's offices in Anchorage and Fairbanks, Alaska, and at the Valdez Marine Terminal. 
  To accomplish our stated objective, we interviewed JPO agency personnel, Alyeska
  personnel,  members of the Regional Citizens' Advisory Council,and personnel associated
  with recent allegations of TAPS mismanagement.  We also observed JPO's surveillances of
  slope stability on Treasure Creek north of Fairbanks and  observed operations at the Valdez
  Marine Terminal Operations Control Center during scheduled pipeline repairs.  As part of
  our review, we followed up on allegations concerning TAPS mismanagement (see section
  "Allegations" in this report) made in July 1999 related to the falsification of records, the
  harassment of employees, deficiencies in electrical systems, and deficiencies in Alyeska's
  quality assurance program and in the Valdez Marine Terminal Vapor Control System.  The
  Acting Assistant Secretary for Land and Minerals Management responded to these
  allegations in an August 12, 1999 letter.
  
  We also reviewed JPO's files on prior pipeline deficiencies that were classified as closed. 
  We selected 28 audit action items (13 Priority 1 and 15 Priority 2) that were cleared by JPO
  from 1994 through 1998 to determine whether the closures were adequately supported.  We
  selected  closed audit action items that pertained to the allegations regarding TAPS,
  including those related to the Valdez Marine Terminal.
   
  Our survey was conducted in accordance with the "Government Auditing Standards," issued
  by the Comptroller General of the United States.  Accordingly, we included such tests of
  records and other auditing procedures that were considered necessary under the
  circumstances.  As part of our review, we assessed JPO's systems of internal controls
  applicable to inspecting and tracking prior pipeline deficiencies and monitoring compliance
  with Federal and State regulations and found weaknesses relating to tracking and reporting
  compliance issues.  These weaknesses are discussed in the Results of Survey section of this
  report.  Our recommendations, if implemented, should improve the internal controls in these
  areas.
  
  We also reviewed the Departmental Report on Accountability for fiscal year 1998, which
  includes information required by the Federal Managers' Financial Integrity Act of 1982, and
  BLM's annual assurance statements on management controls for fiscal years 1998 and 1999
  to determine whether any reported weaknesses were within the objective and scope of our
  review.  No reported weaknesses identified were within the scope of our review.
  
  We also reviewed  BLM's Annual Performance Plans for fiscal years1999 and 2000, which
  include information required by the Government Performance and Results Act of 1993, to
  determine whether any goals or objectives related to JPO were within the scope of our
  review.  We found that no goals or objectives related to JPO were identified in the Annual
  Performance Plans. 
  
  PRIOR AUDIT COVERAGE
  
  The Office of Inspector General has not issued any audit reports related to JPO.  During the
  past 5 years, however, the General Accounting Office has issued one audit report on TAPS. 
  The report, "Trans-Alaska Pipeline Actions to Improve Safety Are Under Way,"
  (GAO/RCED-95-162) dated August 1995, focused on determining whether the planned
  corrective actions would address deficiencies in the pipeline's electrical systems, quality, and
  preventive maintenance and whether regulators had  taken actions to improve oversight of
  the pipeline.  The report also discussed the root causes of pipeline deficiencies.  The report
  stated that Alyeska had corrected about 3,030 (62 percent) of the almost 4,920 deficiencies
  identified and that the root causes of the pipeline's deficiencies included Alyeska's
  philosophy of reacting to problems rather than conducting programs aimed at prevention and
  early detection and regulators' inadequate oversight of contractor operations.  The report did
  not contain any recommendations.
  
  RESULTS OF SURVEY
  
  The results of our review are summarized as follows:
    
                   JPO's actions to close all but 4 of the 4,920 previously identified audit action
          items were adequately supported.  
            
                  JPO was developing a centralized data base to document  its oversight activities,
          such as inspections conducted and deficiencies cited. Because the data base was
          not yet compiled, we did not attempt to determine whether JPO effectively
          accomplished its inspection and oversight duties.
              
                  JPO needs to establish an internal quality control review process  to ensure that
          information presented in its Comprehensive Monitoring Program reports and
          annual reports is accurate and supported.  
  
                  JPO could more effectively schedule its monitoring activities if it had better
          access to information from an Alyeska data base that identified TAPS
          maintenance records.
              
                  Allegations of  July 1999 concerning TAPS mismanagement were not supported, 
          were already known, or were being addressed by JPO or Alyeska.
  
  Previously Identified Pipeline Deficiencies
  
  We found that except for the four remaining open items, JPO's actions to close the 4,920 
  pipeline deficiencies identified previously were adequately supported.  We based our
  conclusion on a review of 28 Priority 1 and Priority 2 case files taken from JPO's Audit
  Compliance Tracking System data base.  The case files contained sufficient documentation
  to address the deficiencies cited.  For example, one audit action item identified 16 of 464
  locations where the pipeline was initially in contact with the vertical support member. 
  Alyeska had subsequently moved the pipeline away from the supports.  Alyeska, however,
  had not performed a technical review of the situation and did not have written procedures on
  how to involve engineering in analyzing the stresses put on the pipeline.  Alyeska revised
  its maintenance and repair manual to include engineering involvement in any future contact
  evaluation/repair.  Both the revised repair manual and the engineering analysis of the stresses
  involved were submitted to JPO for review.  JPO accepted the corrective action based upon
  the development of procedures and manuals.  In addition, JPO had conducted surveillances
  on 7 of the 28 cases.
      
  A JPO official said that JPO's approach to closing the audit action items was to confirm that
  a corrective action plan by Alyeska addressed the apparent cause of the finding.  Specifically,
  the official stated that JPO reviewed 100 percent of the corrective action plans and analyzed
  100 percent of the supporting documentation for the Priority 1 audit action items, reviewed
  100 percent of the corrective action plans and analyzed 20 percent of the supporting
  documentation for the Priority 2 audit action items, and reviewed 100 percent of the
  corrective action plans for the Priority 3 audit action items.  The official also said that any
  review of the corrective action plans for Priority 4 audit action items was left for Alyeska's
  internal audit function.  The JPO official also said that a verification of the effectiveness of
  these corrective actions would take place only as part of the surveillance process under the
  Comprehensive Monitoring Program.  The surveillances are scheduled as part of JPO's
  annual work plan and can be either active or passive.  An active surveillance consists of a site
  visit to confirm that a corrective action has been taken to monitor Alyeska's activities, or to
  follow up on a nonconformance report or corrective action request issued by Alyeska.  A
  passive surveillance is a review of engineering reports or other data submitted by Alyeska. 
  
  The four remaining open audit action items are as follows:
  
       - Audit action item 1955 consolidated 14 action items (2 Priority 1, 10 Priority 2, 1
  Priority 3, and 1 Priority 4) that captured improvements to the change management process
  and the engineering drawing program.  The findings associated with this item discussed the
  as-built condition of TAPS, stating that TAPS drawings and data were not current and not
  representative of the installed facilities.  
  
       - Audit action item 2076 (Priority 1) said that the remote gate valve control system
  needed to be upgraded to improve security against unauthorized intrusion and to prove
  remote diagnostic ability to detect and correct system impairments.
  
       - Audit action item 2113 (Priority 2) said that the measurement of performance and
  the training of technicians and controllers needed to be upgraded.
  
       - Audit action item 50528 (Priority 2) said that workpad bridges had to have adequate
  clearance to accommodate the 50-year flood clearance requirements, adequate load capacity,
  seismic integrity, and use of non-low-temperature steel.
  
  We concluded that resolution of these four audit action items had not been accomplished 
  because of the long-term nature of the improvements needed and the complexity of the
  improvements.  For example, audit action item 50528 for improvements to workpad bridges
  resulted in Alyeska's removing one bridge in 1998 and replacing four bridges in 1997 and
  1998.  In addition, Alyeska said that it planned to replace one bridge and upgrade nine more
  bridges in 2000.  Alyeska estimated that the four open audit action items would be closed
  during 2000.  
  
  Inspection and Oversight
  
  JPO has been conducting surveillances since 1995 as part of the Comprehensive Monitoring
  Program.  JPO develops annual work plans to schedule planned work loads for the
  subsequent year by program area and to allocate personnel to perform its inspection and
  oversight activities of TAPS.  The work loads are based on a list of planned projects
  submitted by Alyeska, problems identified by JPO during prior surveillances, open audit
  deficiencies, and nonconformance reports submitted by Alyeska that identify pipeline-related
  problems.  In addition, JPO released seven Comprehensive Monitoring Program reports from
  1997 through 1999.  The issuance of these reports was recommended by a consultant, who
  said that JPO should focus its monitoring on 12 program areas.  In 1999, JPO consolidated
  the 12 areas into 4 areas: maintenance, operations, construction, and culture.  Comprehensive
  Monitoring Program reports are designed to provide information to concerned citizens and
  regulatory agencies on particular focus areas and discuss Alyeska's compliance with  grant
  and lease stipulations.  The reports are the bases for JPO's annual reports.  JPO did not,
  however, develop a comprehensive compliance tracking system to centrally record its
  inspection and oversight activities and  Alyeska's compliance with Agreement stipulations
  and Federal and State regulations along the pipeline and its related facilities until November
  1999. 
  
  JPO began development of a new Comprehensive Monitoring Program data base in 1999 that
  would identify all the Agreement stipulations and Federal and State regulations by pipeline
  facility and by regulatory agency.  As of November 1999, JPO had entered all of the 1999
  surveillances into the data base and was in the process of entering all prior years' data.  JPO
  estimated that 1997, 1998, and 2000 surveillances would be in the data base by  September
  30, 2000.  When fully operational, according to JPO officials, the new data base should be
  able to document all oversight work performed, including assessment and engineering
  reports,  from 1997 to 2000 by JPO and its related agencies and to provide JPO with
  sufficient information to effectively schedule future surveillances to determine whether all
  facilities are complying with the applicable stipulations and regulations. 
  
  Quality Control Over Reporting
  
  JPO needs to institute an internal quality control review process to verify that findings in its
  annual and comprehensive monitoring reports on TAPS are adequately supported by accurate
  and reliable source documentation.  Without such a process, JPO does not have assurance
  that information in its reports is accurate.  For example, we found that JPO's April 1998
  Comprehensive Monitoring Program report stated that Alyeska had complied with
  Agreement stipulations on both fire prevention and suppression and on health and safety at
  the Valdez Marine Terminal.  JPO's compliance finding should have been qualified,
  however, to clearly state that a review of the operability of the fire suppression system
  review had not been conducted.  In that regard, a 1999 JPO assessment found that sludge
  accumulations brought into question the operability of the subsurface fire suppression system
  and that, as a result, JPO ordered Alyeska to test the system. 
  
  Access to Alyeska Maintenance Records
  
  We believe that direct access to Alyeska's passport system, a data base system that identifies
  all Alyeska maintenance work orders by facility, would enable JPO to more effectively plan
  its surveillances and evaluate Alyeska's compliance with the Agreement.  In that regard, we
  noted that the system had a backlog of 3,345 uncompleted work orders as of November
  1999.  According to a JPO official, JPO can request Alyeska to provide JPO with
  maintenance data from Alyeska's passport system.  We believe, however,  that it would be
  more effective for JPO to have "read only" access for use in planning its inspection and
  oversight activities.
  
  Allegations
  
  Our review of the July 1999 allegations made against JPO and Alyeska consisted of our
  analyses of a matrix prepared by JPO that addressed each of the 44 allegations and a report
  prepared by Alyeska's consultant on the allegations.  In addition, we had discussions with
  a representative of the personnel who initiated the allegations.  Our review of JPO's matrix
  found that 2 allegations were not supported; 13 allegations had been previously identified
  as a pipeline deficiency by JPO, Alyeska, or a consultant; or Alyeska had corrected the
  problem for 10 allegations and had issued a plan for addressing the problem for 19
  allegations.  In addition, we reviewed documentation for JPO's matrix conclusions on a
  sample of 10 of the 44 allegations and determined that JPO had adequately addressed the 10
  allegations.  The report by Alyeska's consultant and JPO also identified recurring issues
  resulting from improper change management procedures, which is open audit action item
  1955.  In addition, the report identified recurring issues that are undergoing evaluation as
  follows:
  
                  National Electrical Code violations for electrical components of the Valdez
          Marine Terminal.
  
                  Use of project materials that, because of the lack of purchase order numbers,
          could not be traced to authorized suppliers.
       
                  Supplies and materials not being inspected for quality by engineering personnel.
  
                  Improper inspector certifications.
  
  Other recurring allegations against Alyeska management by Alyeska's employees were those
  of "harassment," "intimidation," and "discrimination."  A JPO comprehensive monitoring
  report on Alyeska's Employee Concerns Program and JPO's monitoring of the Program
  identified problems that resulted in 23 recommendations, which, according to a JPO official,
  had been reported as implemented.  Additionally, the official stated that JPO intends to
  conduct another review of Alyeska's Employee Concerns Program in 2000 to confirm that
  the recommendations have been implemented and to assess the effectiveness of the Program.
   
  Recommendations
  
  We recommend that the Director, BLM, require the JPO to:
  
       1.  Complete implementation of the comprehensive monitoring program data base
  to ensure effective monitoring of TAPS before the Agreement and Grant of Right-of-Way
  is renewed.
  
       2.  Implement an internal quality control review process to ensure that all external
  JPO reports on TAPS are supported by accurate and reliable source documentation.  
  
       3.  Obtain better access to maintenance data in Alyeska's passport system to assist
  in effectively scheduling JPO surveillances.  For example, JPO could obtain this information 
  by obtaining "read only"  access at either Alyeska's computer terminals or by an on-line link
  from JPO's computer system.
  
  On August 11, 2000, we held an exit conference with BLM and JPO officials.  Overall, the
  officials agreed with the report's three recommendations.  The officials, however, suggested
  changes to the report, which we considered and incorporated as appropriate.
  
  
  BLM  Response and Office of Inspector General Reply.
  
  In the November 3, 2000 response the (Appendix 3 ) to the draft report the Director, BLM,
  stated that the "report is factually correct and well written" and they concurred with the  three
  recommendations.  In subsequent communications, BLM officials informed us that the target
  date for implementation of the three recommendations was March 31, 2001.
  
  Based on the responses, we consider the three recommendations resolved but not
  implemented.  Accordingly, the recommendations will be referred to the Assistant Secretary
  for Policy, Management and Budget for tracking of implementation.
  
  No further response to the Office of Inspector General is required (see Appendix 5).
  
  Section 5(a) of the Inspector General Act (5 U.S.C. app. 3) requires the Office of Inspector
  General to list this report in its semiannual report to the Congress.  In addition, the Office of
  Inspector General provides audit reports to the Congress.
  
                                                    APPENDIX 1
                              
                              
                   JOINT PIPELINE OFFICE
                              
                              
           FEDERAL AND STATE AGENCIES LOCATED AT 
                 THE JOINT PIPELINE OFFICE 
                              
  Federal Agencies
  
  Department of the Interior, Bureau of Land Management
  Environmental Protection Agency
  
  State of Alaska Agencies
  
  Department of Natural Resources
  Department of Environmental Conservation
  Department of Fish and Game
  Department of Labor
  Office of Management and Budget, Division of Government Coordination
  
  
        COOPERATING FEDERAL AGENCIES NOT LOCATED AT 
                 THE JOINT PIPELINE OFFICE 
  
  Department of Transportation, Office of Pipeline Safety
  U.S. Coast Guard
  U.S. Army Corp of Engineers                                                  APPENDIX 2
                                                           
  
  
  
             REPORTS AND KEY EVENTS SINCE 1993
     CONCERNING TRANS-ALASKA PIPELINE SYSTEM ACTIVITIES
  
  
               July 1993    Hearing on Trans-Alaska Pipeline System (TAPS), House Committee on
Energy
               and Commerce.  (Hearings held to examine Alyeska Pipeline Service Company's
               ability to manage and operate TAPS safely and the effectiveness of the Federal
               Government's oversight of Alyeska.)
  
               August 1993  BLM contracts with Quality Technology Company (QTC) to audit TAPS
               operations. 
  
                    September 1993    TAPS owners contract with Arthur D. Little, Inc., to perform an
independent
                    assessment of TAPS operations.   
  
                    November 1993     BLM issues Phase I audit report by QTC, which reports
numerous problems with
                    TAPS electrical systems.
  
                    November 1993     House of Representatives Committee on Energy and Commerce,
Subcommittee
                    on Oversight and Investigations, holds hearing on TAPS as followup to July
                    hearings. 
  
                    December 1993     Arthur D. Little, Inc., issues its Phase I interim report on the
assessment of TAPS
                    operations. (The report identified 1,132 action items of the 4,920 action items.)
  
               January 1994 QTC completes Phase II report for the BLM audit.  (The QTC audit
identified 22
               overall deficiencies, and Alyeska translated the 22 deficiencies into 208 audit
               action items.)
  
                    February 1994     Joint Pipeline Office (JPO) hires Stone & Webster Engineering
Corporation to
                    assist with providing oversight of the pipeline system.  
  
                    February 1994     JPO hires Booz-Allen Hamilton to review JPO organization. 
  
               June 1994    Booz-Allen Hamilton issues the "Final Report - Comprehensive
Monitoring
               Program for JPO" and the "Final Report - Organization and Staffing for JPO."
  
               July 1994    Arthur D. Little, Inc., issues its final report on TAPS. (The report identified
an
               additional 3,100 audit action items.  With these items and with additional findings
               from other audits, the audit action items totaled 4,920.)
  
               August 1995  The General Accounting Office issues the report "Trans-Alaska Pipeline:
Actions
               to Improve Safety Are Underway."  (Report states that Alyeska corrected 3,030 of
               4,920 identified audit action items.) 
  
  
             July 1999  Declaration letter dated July 9 to the Congress and the Secretary of the
Interior
             transmits allegations concerning the integrity of TAPS.
  
               August 1999  Alyeska hires Little Harbor Consultants to review the allegations in the
               declaration letter to the Congress.
  
                    September 1999    Little Harbor Consultants issue a report on TAPS that addresses
the allegations
                    in the declaration letter to the Congress.
                                                        APPENDIX 3
  
  
                RESPONSE TO DRAFT REPORT FROM BLM                                                      APPENDIX 4
  
  
  
              STATUS OF AUDIT REPORT RECOMMENDATIONS
  
  
                   Finding/Recommendation
                         Reference
                                                             
                           Status
                                                             
                      Action Required
     
                        A.1, A.2, and A.3   Resolved; not
  implemented.   No further response to the Office
  of Inspector General is required. 
  The recommendations will be
  referred to the Assistant Secretary
  for Policy, Management and
  Budget for tracking of
  implementation.