Three oversight groups Wednesday called on Congress to restore the level of the Department of Interior’s (DOI) audit and compliance staff responsible for recovering oil and natural gas royalties to the same level it was at in fiscal year (FY) 2000.

“We urge your committee, at the very least, to restore the number of audit and compliance staff to their FY 2000 level, and to consider further increases commensurate with the DOI’s expanded leasing and drilling activities. Doing so will undoubtedly increase revenue recoveries by tens and even hundreds of millions of dollars annually at a time of fiscal constraint,” wrote Project On Government Oversight, Taxpayers for Common Sense and Friends of the Earth in a letter to the House Appropriations’ Subcommittee on Interior, Environment and Related Agencies.

The groups cited a December 2006 report by the DOI inspector general that said Interior’s Minerals Management Service (MMS) has made “deep cuts” in the number of oil and gas auditors since 2000, with the total number of auditors dropping to 242 from 287.

“A variety of increasingly troubled reports have pointed to the need for more accountability. For instance, auditors have come forward to blow the whistle, complaining that their efforts to collect from oil companies have been ignored by DOI higher ups. In addition, criminal investigations are under way into conflicts of interest with the oil companies,” the trio of groups said.

“MMS auditors function in the same ways that IRS [Internal Revenue Service] employees do; they ensure that oil companies pay what they owe. With fewer watchdogs minding the store, oil and gas companies have fewer incentives to pay up.”

The letter came on the heels of MMS’ FY 2009 budget request that, according to the groups, seeks a “paltry increase of four additional audit staff.” The proposed budget “demonstrates a continued pattern of doing the least amount possible to address what are now widely confirmed shortcomings in the government’s efforts to hold oil companies accountable for royalty payments.” The agency requested only four additional audit staff in FY 2008.

While “we applaud the DOI’s announced increase of deepwater royalty rates to 18.75%…this announced rate increase is an empty promise without effective auditing and enforcement functions to ensure that oil companies pay these royalties,” the groups said.

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