GAO report adds Interior Department's oversight of oil and gas leases to high-risk list

By Ed O'Keefe
Washington Post Staff Writer
Wednesday, February 16, 2011; A17

Concerns about how the Interior Department manages the nation's oil and gas resources have earned it a spot on a closely watched list of the government's most at-risk offices and programs.

After last year's Gulf Coast oil spill, the department might be unable to manage oil and gas leases while overhauling the agencies and offices responsible for them, according to the Government Accountability Office's biennial "High-Risk Report."

The nonpartisan investigative agency's 177-page study is a way for federal watchdogs, lawmakers and the Obama administration to track the agencies and programs requiring special attention in the next two years.

The GAO publishes the report at the start of each new congressional session. Congress's main oversight panels, the Senate Homeland Security and Governmental Affairs Committee, and the House Oversight and Government Reform Committee, are to unveil the report Wednesday. The Washington Post obtained a copy from congressional aides.

Investigations published since the spill in April fault Interior's Bureau of Land Management and the former Minerals Management Service for failing to collect proper revenue from the sale of oil and gas leases and for not properly managing the agreements. The department has ignored many of the more than 50 recommendations issued by the GAO in recent years regarding BLM and MMS, according to the report.

Interior Secretary Ken Salazar dissolved the MMS last year and divided its responsibilities between the new Bureau of Ocean Energy Management, Regulation and Enforcement and the Office of Natural Resource Revenue. The offices will require new employees with specific knowledge of oil and gas issues who might find more lucrative offers in the private sector, the GAO said.

"It's better late than never, but it shouldn't haven't taken the worst ecological disaster in history for GAO to place this program onto the high risk list," said Darrell Issa (R-Calif.), chairman of the House Oversight Committee, who spent years tracking concerns with the MMS.

Interior Department spokeswoman Kendra Barkoff said the ongoing overhaul "has dramatically increased safety standards and oversight of the oil and gas industry." The reorganization has occurred "as planned and without disruption," she said.

In previous years, the GAO has warned of mismanagement of federal student aid programs, problems with the Environmental Protection Agency's Superfund program and the government's lack of preparation for the potential Y2K computer crisis. Auditors remove items from the list once they think Congress, the White House and the responsible agency have sufficiently addressed them.

Just two issues - planning for the 2010 Census and the Defense Department's personnel security clearance program - are being dropped from this year's list. Six programs or concerns - including the enforcement of tax laws, Medicare fraud, and oversight of NASA and Pentagon contracts - have appeared since the list was first published in 1990.

The report "is especially relevant at a time when our nation's budget deficits are at historic levels and we have to spend every taxpayer dollar as if it were our own," said Sen. Joseph I. Lieberman (I-Conn.), who chairs the Senate oversight panel.

His Republican counterpart, Sen. Susan Collins (Maine), called the report "a valuable road map that identifies areas where the government needs to improve."

Agencies and lawmakers are working to improve many items on the list. The report credits the Department of Homeland Security for addressing lingering management issues almost eight years after it was created but said it still faces problems with its finances and ability to recruit skilled workers.

Various agencies are in the early stages of implementing financial regulatory reforms enacted by Congress, but they won't be achieved "until these new structures, requirements and entities are in place, fully staffed and functioning effectively," the report says.

Auditors also said the nation's food safety efforts are fragmented and poorly funded. Legislation passed in January gives new enforcement powers to the Food and Drug Administration, but the GAO criticized lawmakers for saying nothing about the 14 other agencies that share responsibility for at least 30 food-related laws.

Concerns about the Pentagon's management of costly weapons programs is another staple of the report, but it says that the Defense Department is hiring more civilian personnel to manage costly defense contracts and is trying to cancel expensive, overdue weapons projects for the Army and Navy.

More information on the report will be available Wednesday at .

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