'Royalty-in-Kind' To Get Extra Scrutiny

February 15, 2007
03:07 PM
Given the existing, widely reported and well documented problems that the Mineral Management Services (MMS) has had with its royalty collection programs, the Senate Energy Committee has asked the Government Accountability Office to assess the current state of the Royalty-in-Kind (RIK) Program. That program allows MMS, a part of the Department of the Interior, to collect royalty payments in the form of oil and gas instead of cash.   
Energy Committee Chairman Jeff Bingaman and Public Lands and Forest Subcommittee Chairman Ron Wyden (D-OR) made the request in a letter to Comptroller General David Walker.  Two previous GAO studies of the RIK program, in 2003 and 2004, were unsuccessful because MMS was unable to provide complete and accurate records.
“Given the growth of this program because of the Energy Bill, its impact on the Treasury and the problems that MMS has had with recordkeeping, we think it’s just good government to have GAO take a closer look at this program,” said Bingaman. 
“The royalty-in-kind program raised flags during GAO’s last review and now the Inspector General tells us that a criminal investigation is underway,” said Sen. Wyden.  “The fact that the Interior Department would now take steps to expand this program defies logic.  Chairman Bingaman and I believe that it is essential that Congress conduct a thorough review of the program to ensure that taxpayer dollars are not being wasted.”