During May of 2015 the State of Michigan auctioned 77,000 acres and is auctioning off another 22,000 acres of State land to oil and gas companies on October 28, 2015. The auctions are occuring just as a Performance Audit Report was published in July of 2015 by the Office of the Auditor General (OAG). The audit outlines how the State of Michigan is doing in the area of tracking royalty revenues from oil and gas companies extracting gas from fracking. The results are not encouraging.
The 2015 audit’s primary finding (Finding #1) shows that the State “had not fully developed its revenue verification policies and procedures to maximize its identification of potentially under-reported or non-reported oil and gas rent and royalties due the State.” The report says that the State not been able to keep up with oil & gas company revenues over the past 6 years and are currently working to close one large company audit from 2014. The State is now developing a plan to sub-contract the "internal audit" responsibilities. How can an "internal audit" be contracted to an external auditing firm? Doesn't it then become an "external audit?" And does this get around being transparent?
In fact, there are only two published OAG performance audits regarding the issue of gas and oil royalties, one in 1998 and another in July of 2015. And, guess what? They both state the same findings that the State is not doing an effective job of capturing the gas and oil royalties. So, for 17 years the State has virtually the same performance record. Wow. Someone is making off with lots of cash and it isn't the taxpayers that's for sure.
QUESTIONS
Knowing the 17 year record of ineffective royalty tracking how will the State be able to keep track of the new fracking royalties from the auctioned land leases in 2015?
Will taxpayers, many of whom hunt, fish, hike, bike and kayak on State land, trust the State with these new leases?
If the State cannot even keep track of the money how can we trust the State to monitor the safety of our lakes, rivers, streams and the millions of acres of State land that may be impacted by big gas and oil companies?
How can the legislature propose $600,000,000 in cuts and/or tax increases to citizens and businesses when the State cannot even track their revenues from big gas and oil companies?
Please share on social media and with your State Reps.
The 2015 audit’s primary finding (Finding #1) shows that the State “had not fully developed its revenue verification policies and procedures to maximize its identification of potentially under-reported or non-reported oil and gas rent and royalties due the State.” The report says that the State not been able to keep up with oil & gas company revenues over the past 6 years and are currently working to close one large company audit from 2014. The State is now developing a plan to sub-contract the "internal audit" responsibilities. How can an "internal audit" be contracted to an external auditing firm? Doesn't it then become an "external audit?" And does this get around being transparent?
In fact, there are only two published OAG performance audits regarding the issue of gas and oil royalties, one in 1998 and another in July of 2015. And, guess what? They both state the same findings that the State is not doing an effective job of capturing the gas and oil royalties. So, for 17 years the State has virtually the same performance record. Wow. Someone is making off with lots of cash and it isn't the taxpayers that's for sure.
QUESTIONS
Knowing the 17 year record of ineffective royalty tracking how will the State be able to keep track of the new fracking royalties from the auctioned land leases in 2015?
Will taxpayers, many of whom hunt, fish, hike, bike and kayak on State land, trust the State with these new leases?
If the State cannot even keep track of the money how can we trust the State to monitor the safety of our lakes, rivers, streams and the millions of acres of State land that may be impacted by big gas and oil companies?
How can the legislature propose $600,000,000 in cuts and/or tax increases to citizens and businesses when the State cannot even track their revenues from big gas and oil companies?
Please share on social media and with your State Reps.
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