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Federal Royalty/BLM Audit Workshop

Explore the timeline, enforcement actions, compliance reviews, and statistics of the workshop in Tulsa, 2011. Learn about Data Mining Implementation Work Group projects and strategies for improved accuracy. Gain insights into royalties, adjustments, and enforcement.

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Federal Royalty/BLM Audit Workshop

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  1. Federal Royalty/BLM AuditWorkshop Tulsa, Oklahoma September 8, 2011

  2. Financial Management • Data Mining • Current projects • Data Mining Implementation Work Group • Re-organization • Specific PASO questions

  3. OGORS 2014S ONRR DATA ACCURACY EFFORTS Timeline Up-Front System Edits 1 Month 6-9 Months 2-3 Years 7 Years (Fed. oil & gas) Data Mining Missing Reports, Volume Comparisons, LVS/GVS, High Level Analyses of Sales Values, Royalty Values, Adjustments, etc. Enforcement Actions Enforcement Actions Precision Risk-based Approach Risk-based Approach Compliance Reviews Precision Enforcement Actions EnforcementActions Audits

  4. Data Mining • Compliance Strategy Council (CSC) • Agreement reporting • Missing reports • High Volume discrepancies • Net negatives • Same volume, value, Btu • Trending

  5. Data Mining • Statistics • Volume comparison team • $357,000 in FY 2010 • $573,000 in FY 2011 • Many amended 2014’s • Office of Enforcement involvement in future

  6. Data Mining • Adjustment Monitoring Team • $.5 million FY 2010 • $1.5 million FY 2011 • Numerous cases closed for valid adjustments • Just started to look at net negatives

  7. Data MiningImplementation Work Group • Cross organization representation • 116 reporting issues identified • Pricing • Volume • Adjustments • Allowances • Royalty Rates

  8. Data MiningImplementation Work Group • New edits (December estimate) • Indian net negative • Duplicate 2014 adjustments • Transportation exceeding 50% of RVPA or processing exceeding 66.66% of RVPA less transportation • Incorrect reporting of Transportation Allowances on Section 6 Leases • Invalid Agreement numbers (from warning edit to fatal)

  9. Data MiningImplementation Work Group • New edits (December estimate) • Lease is not producing (from warning edit to fatal) • Federal leases - STC APOP only with PC 04 • Missing API number on Southern Ute properties • Tracking of RSFA violation adjustments • Misreporting of DWRR Codes on OGOR • Multiple Royalty Rates - at least 1 must match • Allow TC for quality banks to be used for NGL banks.

  10. Data MiningImplementation Work Group • New edits (June 2012 estimate) • Do not allow TC 41 & TC 55 when price threshold is exceeded • Must have 4410 election form filed if PC 07, NARM and Federal, or if Indian and PC 07 • Remove internal Adjustment Reason Codes from ecommerce selection list • Ensure proper reporting of DWRR TCs • OINX - Do not allow allowances in index zone • Flag $/MMBtu values which significantly differ from the corresponding index zone price

  11. Data MiningImplementation Work Group • New edits (June 2012 estimate) • Don’t allow allowances on alt. dual accounting properties. • Pricing edits • Incorrect sales volumes on 2014- skewing price • Flag obvious decimal placing problem (56.7 compared to 5.67) • reject 2014 lines when the price submitted is below the published (index) price • Maintain tables of crude types, pricing, and dates (asset management) tied to an edit that identifies incorrect pricing; for onshore too

  12. Data MiningImplementation Work Group • New Data Mining dashboards • Reporting anomalies. • Approvals for venting and flaring. • Duplicate adjustments • Chronic over sufficient royalty estimates and other misreporting. • Net negatives across royalty equation • Overlapping agreements including the % of overlap • Repetitive reporting • Reported royalties later reversed to zero • Related properties with volumes for given time period • Adjustments after closed audit periods

  13. Data MiningImplementation Work Group • Future • Ongoing group to get input from all of ONRR and State and Tribal Royalty Audit Committee (STRAC) • Data Improvement Group (DIG) • Quarterly meetings • Outreach to field offices and STRAC

  14. Reorganization • Production becomes it’s own Division • Solid Mineral finance comes to FM • Combine with Royalty Reporting and Reference Data • Document Processing Section goes under Accounting Services

  15. Financial Management • Specific PASO questions • Adjustments after closed audit periods • Data requests • Debt Collection demands • Indian Over-Recoupment • Miscellaneous • EDI reporting • Fines for bad payment data

  16. Financial Management • Questions?

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