BLM’s mining law program is responsible for managing the  environmentally responsible exploration and development of locatable  minerals on public land under the General Mining Law of 1872 and the  Federal Land Policy and Management Act of 1976. BLM’s Mining Law Program Was Appropriated and Expended Almost $40 Million Annually in Fiscal Years 2011 through 2013

According to our review of BLM’s data, reports, and relevant  appropriations laws, BLM was appropriated for its mining law program  approximately $37 million, $40 million, and $38 million for fiscal years  2011 through 2013, respectively. At the end of the fiscal year,  BLM deposits the amount of fees collected into the Department of the  Treasury’s General Fund. BLM’s Deficiencies in the Design and Implementation of Internal Controls over Mining Law Program Expenditures Weaken Accountability for Program Resources

BLM has designed internal controls, including policies and procedures,  over mining law program funds. However, some of these policies and  procedures are outdated, inconsistent, and not effectively communicated. BLM Did Not Effectively Implement Controls to Reasonably Assure That Mining Law Program Nonpayroll Expenditures Were Properly Recorded and Supported

BLM did not effectively implement key control activities to reasonably  assure that mining law program expenditures were properly recorded and  supported. Although these examples cannot be generalized to all BLM employees,  they illustrate control deficiencies that increase the risk that BLM  employees are not charging their hours to the programs for which they  actually performed work. Until BLM updates  its policies and procedures and properly implements them through  effective communication, training, and monitoring, there is increased risk  that the mining law program may be charged for future transactions that  do not benefit the program and that its reported information will not  accurately reflect the actual costs of the program or reasonably assure  accountability of program funds. Recommendations for Executive Action

To strengthen BLM’s controls and reasonably assure accountability over  mining law program expenditures, both payroll and nonpayroll, we  recommend that the Secretary of the Interior direct the Director of the  Bureau of Land Management to take the following four actions:
Perform a comprehensive review of applicable temporary directives,  including instruction memorandums, related to mining law program  expenditures and update or incorporate them into permanent policies  in BLM’s Fund Coding Handbook or relevant manuals, as appropriate. Develop and implement internal control activities for regularly  monitoring compliance with expenditure-related policies and  procedures in the mining law program. In  written comments, reprinted in appendix II, Interior generally agreed with  our findings, concurred with our recommendations, and described actions  taken or planned to address each recommendation. Appendix I: Objectives, Scope, and Methodology

Our objectives were to determine (1) the funding amounts appropriated to  and expended for the Mining Law Administration Program (mining law  program) during fiscal years 2011, 2012, and 2013 and (2) the extent to  which the Bureau of Land Management (BLM) has designed and  implemented internal controls to reasonably assure that designated funds  are spent only on mining law program operations. To test the implementation of controls over the use of mining law program  funds, we conducted tests on a random probability sample of 100  nonpayroll transactions from the mining law program’s fiscal year 2013  expenditures.
Why GAO Did This Study

BLM's mining law program is responsible for managing the exploration and development of minerals, such as gold, silver, and copper, on federal land. The program is funded through fees collected from holders of mining claims and sites, subject to limits in annual appropriations acts, and is appropriated funds from the Department of the Treasury to the extent that the actual fees collected fall short of such limits.
GAO was asked to review the funding and spending of the mining law program. This report discusses (1) the amounts appropriated and expended for the program and (2) the extent to which BLM designed and implemented internal controls to reasonably assure that designated funds are spent only on mining law program operations. To address these objectives, GAO (1) reviewed relevant BLM policies and procedures and financial data, (2) conducted tests on a statistical random sample of fiscal year 2013 nonpayroll expenditures, and (3) interviewed BLM officials and employees.

What GAO Found

The Department of the Interior's (Interior) Bureau of Land Management's (BLM) Mining Law Administration Program (mining law program) was appropriated and expended almost $40 million annually from fiscal years 2011 through 2013. Funds are to be used for mining law program activities such as administering mining claims and processing notices for mineral exploration. The mining law program's largest expenditures include personnel compensation and contractual services and supplies, which account for over 96 percent of its expenditures.
BLM has designed internal controls, including policies and procedures over mining law program funds, but some of them are inconsistent, outdated, and not effectively communicated. GAO's statistical tests of fiscal year 2013 nonpayroll mining law program expenditures showed that BLM did not effectively implement controls to reasonably assure that such mining law program transactions were properly recorded and supported.
In addition, in interviews conducted at selected BLM offices, GAO found that some employees were charging hours of work to the mining law program based on funding allocations or supervisor instructions rather than the actual work performed, as required by BLM policies. While these examples cannot be generalized to all BLM employees, they illustrate control deficiencies that increase the risk that BLM employees are not charging the program correctly.
GAO found that internal control implementation deficiencies were the result of design flaws in BLM's policies and procedures as well as the lack of training and monitoring to reinforce them. Because of these deficiencies, BLM does not have reasonable assurance that mining law program expenditures relate to or are reasonably allocated to the program. As a result, the information in BLM's financial records may be at risk of not reflecting the actual cost of the mining law program.

What GAO Recommends

GAO recommends that BLM (1) review and update its mining law program policies and procedures, as necessary; (2) establish procedures for communicating such changes; (3) develop and implement a related training program; and (4) regularly monitor compliance with its policies and procedures. Interior generally agreed with the findings, concurred with GAO's recommendations, and described actions taken or planned to address each recommendation.