[Verification Report on Recommendations Considered Implemented from Audit Report No. 99-I-782 Titled "Processing Notifications for the Stripper Oil Well Property Royalty Rate Reduction Program, MMS" (No.C-FL-MOA-0093-2004)]
[From the U.S. Government Printing Office, www.gpo.gov]

Title: Verification Report on Recommendations Considered Implemented
       from Audit Report No. 99-I-782 Titled "Processing Notifications
       for the Stripper Oil Well Property Royalty Rate Reduction
       Program, MMS" (No.C-FL-MOA-0093-2004) 



Date:  November 03, 2004

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Subject: Verification Report on Recommendations Considered Implemented from Audit Report No. 99-I-782 Titled "Processing Notifications for the Stripper Oil Well Property Royalty Rate Reduction Program, MMS" (No.C-FL-MOA-0093-2004)



...that MMS had provided sufficient documentation to consider the recommendation implemented.  

Scope and Methodology 

      The scope of our review was limited to determining whether MMS took adequate action to address the recommendations.   We reviewed the supporting documentation that MMS submitted to close the recommendations.  We also interviewed and requested information from MMS personnel as appropriate.
      
      We did not perform any site visits or conduct any detailed audit fieldwork to determine whether the underlying deficiencies identified have been corrected.  As a result, this review was not conducted in accordance with the Government Auditing Standards issued by the Comptroller General of the United States. 

Results of Review

      We determined that both recommendations in the subject audit report have been fully implemented by MMS. 

Recommendation 1:  Develop, using the draft strategy paper, and implement a plan to eliminate the Stripper Oil Well Property Royalty Rate Reduction Program notification processing and data entry backlog and to approve future notifications for the Program in a timely manner. 

	In response to our 1999 report, MMS stated that, based on the strategy paper, it had hired three technicians for the Stripper Oil Well Project Team and made system enhancements to improve the efficiency of notification processing.  We obtained chronological documentation of the stripper project team staffing and changes made in the systems.  The actions taken by MMS are sufficient for us to consider the recommendation implemented.  
  
Recommendation 2:  Develop and implement a plan to review program exceptions generated by the automated matching process and collect underpaid royalties from operators.  

	MMS provided a history of the Process for Generating and Reviewing Stripper Royalty Rate Reduction Exceptions.  MMS developed an Access database in 2000-2001 which generated royalty rate reduction exceptions for October 1992 through December 1997.  This database was sent to the Office of Financial Management as support for considering the recommendation implemented.  Although the Office of Financial Management accepted the documentation, the support was insufficient because MMS was not able to verify that a review of this database was completed.  MMS developed and implemented an alternative plan in 2003 that did satisfy the recommendation.  The actions taken by MMS are sufficient for us to consider the recommendation implemented. 

Conclusion 
	
	We informed MMS officials at a September 27, 2004 exit conference that we were reporting both recommendations in the subject audit report as implemented. 

      If you have any questions regarding this report, please contact Keith Clark, Deputy Regional Audit Manager, or me at (303) 236-9243. 

cc:	Audit Liaison Officer, Minerals Management Service				
	Audit Liaison Officer, Assistant Secretary for Land and Minerals Management
     
     

bcc: 	AIGA/DAIGA
	HQ Chron.
	IG Subject/Reading 
	CRO:  Clark/Hyatt/Farley/Chron.

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