Evaluation of Department of the Interior Comments on GAO's Report on the Powder River Basin Coal Sale

GAO presented its evaluation of the Department of the Interior's comments on a GAO report which analyzed the Powder River Basin federal coal lease sale.

Although Interior agreed with a number of the GAO recommendations as well as other parts of the report, it raised strong objections to the contention by GAO that Powder River leases sold for about $100 million less than their fair market value and disagreed with the recommendation to postpone scheduled lease sales until deficiencies in its fair market value determination procedures are corrected. Interior has made progress toward procedural improvements as recommended by GAO and is committed to other changes as recommended by the Commission on Fair Market Value Policy for Federal Coal Leasing. GAO stated that, while it used Interior's appraisal method for valuing coal tracts, it did eliminate certain adjustments from Interior's analysis which yielded the $100 million figure. Furthermore, Congress has decreed that sales will be postponed until after the commission issues its report. GAO emphasized that there is a need to develop the best possible procedures to ensure receipt of fair market value without improper influence by Interior.