The Department of Energy Should Improve Its Management of Oil Overcharge Funds

Gao ID: RCED-85-46 February 14, 1985

Pursuant to a congressional request, GAO examined the adequacy of the Department of Energy (DOE) Economic Regulatory Administration's (ERA) management of funds distributed to states resulting from the collection of overcharges found in audits of oil companies' compliance with regulations controlling the allocation and pricing of crude oil and refined petroleum products.

GAO found that ERA chose to resolve alleged violations by negotiating settlements with the oil companies and, where the parties injured by overcharges were not identifiable, the oil companies were to make the payments either to an escrow account at the U.S. Treasury or directly to the individual states where the companies did business. DOE redistributes the escrow account funds through: (1) regulations that establish procedures for determining the proper recipients; and (2) section 155 of P.L. 97-377, which provides for the direct distribution of funds to the states for use in four energy conservation programs and the Low-Income Home Energy Assistance Program. GAO found that DOE could improve its management of these funds in: (1) the states' use of interest earned on the funds; (2) the states' proposals to demonstrate energy conservation techniques; and (3) ERA computation of the states' shares of the funds. GAO also found that some states, which received direct payments as a result of direct settlements between ERA and the oil companies, may not be using their refunds for restitution to the injured parties. However, DOE maintained that it has the authority to take any action necessary to eliminate or compensate for a violation of its petroleum regulations, including approval of direct payments to the states, instead of referring such matters to the Office of Hearings and Appeals.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

Director: John W. Sprague Team: General Accounting Office: Resources, Community, and Economic Development Division Phone: (202) 512-7783


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