Compliance Management

SMCRA requires OSMRE to conduct audits to ensure full compliance with the law’s reclamation fee requirements, so funds are available for state, tribal, and federal reclamation efforts. To meet that mandate, OSMRE’s Compliance Management program is designed to promote timely and accurate reporting of coal and to ensure correct fee payments. In addition to conducting a comprehensive audit program, the audit staff also performs other activities to promote compliance; this includes identifying responsible parties for reclamation fee liability on new and transferred permits, providing the information and assistance operators need to comply, and taking appropriate enforcement action when non-compliance occurs.

The Compliance Management Program performs audits in compliance with Generally Accepted Government Auditing Standards. It has consistently received the highest possible ratings following independent peer reviews that closely examine the agency’s reclamation fee audit program. The results not only demonstrate a diligent effort to ensure accurate fee reporting and payments for all coal produced, but also a remarkable collection and compliance rate that consistently exceeds 99%. This rating is in line with OSMRE’s audit program’s history.

As a pioneer in automated auditing in the government, the “in-house” development of an automated paperless work paper package allowed the program to reduce staff and overhead costs while continuing to produce the same results. The program has been recognized for its achievements multiple times, receiving the prestigious DOI Green Innovation Award and the OPM Pillar Award for Effective Performance Management.

To request a copy of our most recent peer review visit: www.foia.gov/

An OSMRE compliance audit is an examination of records and other competent evidential matter to determine if the tonnage reported to OSM on a Coal Reclamation Fee Report (OSM-1 Form) is fairly presented and to determine compliance with the reclamation fee provisions. The permittee, operator or both must maintain records and books for a period of at least six years from the end of the calendar quarter in which the fee was due or paid, whichever is later, and make these records available to the auditors. These books and records should be current and should substantiate the tonnages, moisture deductions, and fee calculations reported on the OSMRE-1 Form.

A Compliance Management program auditor will notify you of the audit engagement. An audit appointment letter will be sent to the company selected for audit that describes the purpose and scope for the audit. Specifically, the appointment letter describes the company(s) and reporting period under audit, records required, and the scope of the fieldwork.  The auditor will ask the company to complete an Audit Survey Form as well as a Management Representation Letter. On the agreed upon start date, the audit begins with an entrance conference held with a company representative.  General company information, accounting records/controls, and operations will be discussed. The auditor gathers sufficient and appropriate audit evidence to serve as a basis for conclusions reached during the course of the audit.  The evidence is gathered generally through:

1. Records Requests — The primary method of obtaining data is through data requests to the audited company.  Depending on the circumstances, the company can provide this data electronically or as paper documents.
2. Site Visits — Site visits help ensure the auditor correctly interprets records provided by the company and offers an opportunity to collect relevant records, observe processes, conduct interviews and provide face-to-face outreach, among other things.
3. Interviews — The auditor conducts interviews to enhance understanding of the records, policies, processes, procedures and operations of the company.
4. Other available information — Through the course of the audit the auditor will analyze information from multiple sources, this could include records from other governmental agencies or other industry resources.  Additionally, if records are not maintained/made available this could include an estimated fee through use of average production figures based on the nature and acreage of the operation.  

At the conclusion of the audit, an exit conference will be held to discuss any preliminary findings and recommendations with the company. The auditor will also provide the company an opportunity to comment on the results of the audit. A detailed review by a reviewing auditor and final quality control review is performed for each audit prior to the issuance of a final audit report. If a company disagrees with the audit findings, the procedures to appeal the findings are provided in the audit report.