GSA Chief Seeks to Cut Budget For Audits

Report Says Oil Royalties Go Unpaid

By EDMUND L. ANDREWS
Published: December 7, 2006
WASHINGTON, Dec. 6 ?- An eight-month investigation by the Interior Department's chief watchdog has found pervasive problems in the government's program for ensuring that companies pay the royalties they owe on billions of dollars of oil and gas pumped on federal land and in coastal waters.

In a scathing report to Congress, the Interior Department's inspector general says the agency's data are often inaccurate, that its officials rely too heavily on statements by oil companies rather than actual records and that only about 9 percent of all oil and gas leases are being reviewed.

The report undermines claims by top Interior officials that the department is aggressively pursuing underpayments and outright cheating by companies that drill on property owned by the American public.