DOI's royalty computer system under investigation

Thursday, September 27, 2007  

The Interior Department's Inspector General said on Wednesday he has launched an investigation into a $149 million computer system that could be considered a "profound failure."

In a 131-page report, Inspector General Earl E. Devaney said he became aware of the problems associated with the system while investigating the Minerals Management Service. The agency commissioned the system in 1999 to handle over $8 billion in oil and gas payments on federal and Indian lands.

But eight years and $149 million later, the Minerals Revenue Management (MRM) Support System doesn't appear to be living up to its goals. Interior employees -- including an Indian trust manager who was ousted by the Bush administration -- have complained that the government, tribes and individual Indians have lost millions of dollars because the system doesn't work as promised.

"Consequently, many Indian people lost their homes, automobiles and livestock," Kevin Gambrell, the former director of the Farmington Indian Minerals Office, which oversees 8,000 Navajo landowners, said in Congressional testimony this past March.

In his report, Devaney lists some of the complaints against the system, which was developed by Accenture, a spin-off of the former Arthur Andersen accounting firm. Employees said it took twice as long to complete common tasks and that the system failed to bill and collect interest from energy companies who drill on federal and Indian lands.

MMS managers offered a reason for the system's failure to bill and collect interest: the Cobell trust fund litigation. In December 2001, a month after the MRM Support System went online, a federal judge ordered Interior to remove its Indian trust systems from the Internet due to inadequate security.

The disconnect kept the MRM Support System offline for three months. But in interview with the Inspector General, MMS managers repeatedly blamed the litigation for creating a "backlog" of interest bills owed by energy companies.

Even after MMS got back on the Internet in March 2002, the Bush administration waited more than four years -- until September 2006 -- to address the backlog. Gambrell, in his Congressional testimony, said the Cobell litigation was wrongly blamed for the true failures of the MRM Support System.

"Tribes and Indian individual stopped receiving royalties for almost five months and MMS management was able to save themselves from a congressional and public flogging," he told the House Natural Resources Committee.

In an interview with the Inspector General, Lucy Querques Denett, the associate director of the MRM program at MMS, said the system "generally works."s." When asked whether energy companies were getting a "free ride" because they weren't being billed for interest, she replied: "I never looked at it like that."

The Interior Department has a troubled history with computer systems. In the 1990s, the Bureau of Land Management scrapped a $400 million records system because it never worked properly.

The Bureau of Indian Affairs has spent more than $40 million on the Trust Asset Accounting and Management System (TAAMS) but it doesn't appear to be working well either. In a separate investigation, the Inspector General found that employees in Palm Springs, California, were unable to use the system to account for and track millions in lease payments for members of the Agua Caliente Band of Cahuilla Indians.

The department's overall computer system has been rated one of the worst in the government due to lax security. The Bush administration said it has spent over $100 million to improve the Indian trust systems but they remain off the Internet to this day.

Inspector General Report:
Minerals Management Service: False Claim Allegations (September 2006)

Another Inspector General Report:
Indian Trust Investigative Review (July 2007)

House Hearing:
Royalties At Risk (March 28, 2007)

Relevant Links:
Minerals Management Service - http://www.mms.gov
Indian Trust: Cobell v. Kempthorne - http://www.indiantrust.com