U.S. Department of the Interior Bureaus Must Improve Federal Oil and Gas Internal Controls To Ensure Oversight of Financial Risks to the Government From Bankruptcies

Date Issued

Monday, December 16, 2024

Submitting OIG

Department of the Interior OIG

Agencies Reviewed/Investigated

Department of the Interior

Components

Departmentwide

Report Number

2023-CR-003

Report Description

We found issues with inaccurate and incomplete bankruptcy data, outdated policies and procedures, and inconsistent internal control documentation.

Report Type

Audit

Agency Wide

Yes

Number of Recommendations

Questioned Costs

Funds for Better Use

Report updated under NDAA 5274

External Link

Open Recommendations

This report has 4 open recommendations.

Recommendation Number	Significant Recommendation	Recommended Questioned Costs	Recommended Funds for Better Use
2023-CR-003-06	No	$0	$0
We recommend that BLM develop and implement procedures to update its bankruptcy tracking tool to include claim amounts for each case and entity and other key bankruptcy information such as case status, mitigation steps taken, post-bankruptcy amounts, and outcomes of bankruptcy cases, including identifying wells orphaned due to a bankruptcy.
2023-CR-003-09	No	$0	$0
We recommend that BLM update, finalize, and implement bankruptcy policies and standard operating procedures to include all bankruptcy requirements for proofs of claims.
2023-CR-003-10	No	$0	$0
We recommend that BLM develop and implement a training program for all personnel involved in bankruptcy processes on the bankruptcy policies and standard operating procedures developed under Recommendation 9.
2023-CR-003-12	No	$0	$0
We recommend that BOEM identify existing or develop and implement new internal controls to address identified risks related to Federal oil and gas leaseholder bankruptcies.