BUREAU OF LAND 

MANAGEMENT 

Improvements 

Needed in Internal 

Controls over Mining 

Law Administration 

Program Funds

Report to the Chairman, Committee on 

Natural Resources, House of 

Representatives

July 2015

GAO-15-562

United States Government Accountability Office
United States Government Accountability Office

Highlights of GAO-15-562, a report to the 

Chairman, Committee on Natural Resources, 

House of Representatives

July 2015

BUREAU OF LAND MANAGEMENT

Improvements Needed in Internal Controls over

Mining Law Administration Program Funds

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 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. 

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. 

Estimated Percentages of Control Deficiencies in Nonpayroll Expenditures of the Mining Law 

Administration Program (Mining Law Program) for Fiscal Year 2013

Note: All percentage estimates from the tests have margins of error at the 95 percent confidence level 

of plus or minus 9 percentage points or less.

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. 

View GAO-15-562. For more information, 

contact Beryl H. Davis at (202) 512-2623 or 

davisbh@gao.gov.
Page i GAO-15-562 BLM Mining Law Administration Program

Letter 1

Background 3

BLM’s Mining Law Program Was Appropriated and Expended 

Almost $40 Million Annually in Fiscal Years 2011 through 2013 7

BLM’s Deficiencies in the Design and Implementation of Internal 

Controls over Mining Law Program Expenditures Weaken 

Accountability for Program Resources 9

Conclusions 25

Recommendations for Executive Action 25

Agency Comments 26

Appendix I Objectives, Scope, and Methodology 27

Appendix II Comments from the Department of the Interior 31

Appendix III GAO Contact and Staff Acknowledgments 34

Tables

Table 1: Available Resources for the Bureau of Land 

Management’s (BLM) Mining Law Administration 

Program, Fiscal Years 2011 through 2013 7

Table 2: Reported Bureau of Land Management (BLM) Mining 

Law Administration Program Expenditures by Major 

Budget Category, Fiscal Years 2011 through 2013 8

Figures

Figure 1: Bureau of Land Management (BLM) State Offices and 

Their Administrative Jurisdictions 5

Figure 2: Estimated Percentages of Control Deficiencies in 

Nonpayroll Expenditures of the Mining Law 

Administration Program (Mining Law Program) for Fiscal 

Year 2013 14

Contents
Page ii GAO-15-562 BLM Mining Law Administration Program

Abbreviations

BLM Bureau of Land Management 

FBMS Financial and Business Management System

Interior Department of the Interior 

MLR Management of Land and Resources

This is a work of the U.S. government and is not subject to copyright protection in the 

United States. The published product may be reproduced and distributed in its entirety 

without further permission from GAO. However, because this work may contain 

copyrighted images or other material, permission from the copyright holder may be 

necessary if you wish to reproduce this material separately.
Page 1 GAO-15-562 BLM Mining Law Administration Program

441 G St. N.W.

Washington, DC 20548

July 23, 2015

The Honorable Rob Bishop

Chairman

Committee on Natural Resources

House of Representatives

Dear Mr. Chairman:

The Department of the Interior’s (Interior) Bureau of Land Management 

(BLM) is the nation’s largest land management agency and has 

responsibility for managing 13 percent of the nation’s surface land and 

about one-third of its mineral resources. BLM manages and conserves 

resources for multiple uses, including mineral resources development. 

Within BLM, the Mining Law Administration Program (mining law 

program) is responsible for managing the environmentally responsible 

exploration and development of locatable minerals on public land.1 This 

program is funded through mining claim fees collected from holders of 

mining claims and sites.2

In March 2001, we reported on improper personnel charges to BLM’s 

mining law program that resulted in a potential overcharge of about 

From fiscal years 2011 through 2014, BLM has 

reported collecting from $58 million to $66 million in mining claim fees 

annually while annual appropriations ranged from $37 million to 

$40 million. Specifically, BLM reported that it collected about $58.5 million 

in mining claim fees in fiscal year 2014, sufficient to fully offset the annual 

appropriation of approximately $39.7 million for mining law program 

operations in that fiscal year.

 

1

Locatable minerals include hardrock minerals, such as copper, lead, zinc, nickel, gold, 

and silver.

2

Annual appropriations acts establish an amount of BLM’s appropriation for Management 

of Land and Resources (MLR) to be used for mining law program operations. The 

appropriations acts require, however, that the mining claim fees that BLM collects be 

credited against the MLR appropriation until all MLR funds used for the mining law 

program are repaid. See, e.g., Department of the Interior, Environment, and Related 

Agencies Appropriations Act, 2014, Pub. L. No. 113-76, div. G, title I, 128 Stat. 5, 289-90 

(2014). To the extent that fees are insufficient to fully offset the MLR appropriation, the 

MLR appropriation absorbs the difference and therefore would partially fund the mining 

law program.

Letter
Page 2 GAO-15-562 BLM Mining Law Administration Program

$1.2 million for the nine BLM state offices and administrative offices 

included in the review.3 We were asked to provide an update to the March 

2001 report and to review the funding and spending related to mining law 

program operations.4 This report discusses (1) the funding amounts 

appropriated to and expended for BLM’s mining law program during fiscal 

years 2011, 2012, and 2013 and (2) the extent to which BLM has 

designed and implemented internal controls to reasonably assure that 

designated funds are spent only on mining law program operations.5

To determine the amounts appropriated to and expended for the program, 

we reviewed pertinent appropriations laws, Office of Management and 

Budget reports, BLM financial reports, and BLM’s calculation and 

explanation of the program’s fiscal year 2013 appropriated amount after 

sequestration.6

To assess the design of controls related to the use of the mining law 

program funds, we obtained, reviewed, and assessed relevant policies 

and procedures, using Standards for Internal Control in the Federal 

Government as criteria.

We also obtained and summarized detailed expenditure 

data extracted from BLM’s financial management system for fiscal years 

2011 through 2013. To assess the reliability of the data, we reviewed 

documentation, discussed the data with knowledgeable officials, and 

performed data reliability checks. Based on the results of the procedures 

performed, we determined that these data were sufficiently reliable to be 

used for our purposes.

7

 

3

GAO, Bureau of Land Management: Improper Charges Made to Mining Law 

Administration Program, 

We also reviewed selected transactions at 

GAO-01-356 (Washington, D.C.: Mar. 8, 2001).

4

This report was originally requested by former Chairman Doc Hastings, House

Committee on Natural Resources.

5

Data for fiscal year 2013 were the most recent available at the time of our review.

6

Sequestration is the cancellation of budgetary resources provided by discretionary 

appropriations or direct spending laws. Under the authority granted by section 251A of the 

Balanced Budget and Emergency Deficit Control Act of 1985, as amended, the Office of 

Management and Budget determined that the mining law program appropriation was to be 

included in the fiscal year 2013 base as discretionary spending that is subject to 

sequestration. See 2 U.S.C. § 901a; Office of Management and Budget, OMB Report to 

the Congress on the Joint Committee Sequestration for Fiscal Year 2013 (Washington, 

D.C.: Mar. 1, 2013), and GAO, March 1 Joint Committee Sequestration for Fiscal Year 

2013, B-324723 (Washington, D.C.: July 31, 2013).

7

GAO, Standards for Internal Control in the Federal Government, GAO/AIMD-00-21.3.1

(Washington, D.C.: November 1999).
Page 3 GAO-15-562 BLM Mining Law Administration Program

BLM’s Arizona and Nevada state offices to determine how controls were 

implemented, and we reviewed relevant supporting documentation. We 

interviewed BLM officials to clarify policies and procedures for using 

mining law program funds. We also interviewed officials from 8 of the 12 

BLM state offices to obtain an understanding of controls over employee 

time and attendance and how funds are allocated to the BLM state 

offices.

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 and projected the results of our probability sample tests. 

Our review of fiscal year 2013 expenditures showed that approximately 

24 percent of the transactions were adjustments.8 Therefore, we also 

selected a nonprobability sample of 30 adjustment transactions to 

examine supporting documentation and determine the nature and 

appropriateness of the adjustments. We also interviewed a nonprobability 

sample of 43 employees from BLM’s Arizona and Nevada state, district, 

and field offices to determine how time and attendance controls were 

operating at these offices.9

We conducted this performance audit from March 2014 to July 2015 in 

accordance with generally accepted government auditing standards. 

Those standards require that we plan and perform the audit to obtain 

sufficient, appropriate evidence to provide a reasonable basis for our 

findings and conclusions based on our audit objectives. We believe that 

the evidence obtained provides a reasonable basis for our findings and 

conclusions based on our audit objectives. Appendix I provides additional 

information on our scope and methodology.

BLM, a bureau of the Department of the Interior, administers millions of 

acres of public land for a variety of uses, including mineral resources 

development. BLM’s mining law program is responsible for managing the 

 

8

Adjustments to mining law program expenditures can be caused by reallocation of 

charge card purchases. These adjustments occur when BLM employees purchase goods 

or services for the benefit of a program other than the program to which their charge card 

accounts were assigned (i.e., the default program code to the charge card account).

9

These two BLM state offices had the highest amounts of personnel compensation 

expenditures charged to the mining law program in fiscal year 2013. 

Background
Page 4 GAO-15-562 BLM Mining Law Administration Program

environmentally responsible exploration and development of locatable 

minerals on public land under the General Mining Law of 187210 and the 

Federal Land Policy and Management Act of 1976.11 The General Mining 

Law allows individuals and corporations to prospect for mineral deposits 

on public lands and locate a claim on the deposits discovered. Since 

1993, claimants have been required to pay an annual maintenance fee for 

each mining claim and site in lieu of performing assessment work as 

previously required under the General Mining Law.12

BLM headquarters in Washington, D.C., and its 12 state offices manage 

and oversee mining law program operations. BLM headquarters provides 

guidance and oversight for the program. Specifically, within headquarters, 

the Energy, Minerals, and Realty Management group, Division of Solid 

Minerals, is responsible for overseeing the program. Each state office is 

headed by a state director who reports to the Director of BLM at 

headquarters. The state offices manage BLM programs and land in the 

geographic areas that generally conform to the boundary of one or more 

states. The state offices are Alaska, Arizona, California, Colorado, Idaho, 

Montana, Nevada, New Mexico, Oregon, Utah, Wyoming, and Eastern 

States. The state offices also provide oversight and program guidance to 

the district and field offices. Each BLM state office, with the exception of 

Eastern States, has several district offices and many field offices. The 

Mining claimants 

locating new claims or sites must pay a onetime location fee, processing 

fee, and initial maintenance fee. Thereafter, the maintenance fee is paid 

annually. Currently, the annual per-claim maintenance fee is $155, the 

per-claim location fee is $37, and the processing fee is $20. BLM has 

authority to use receipts from mining claim fees for mining law program 

operations, although the use of these fees cannot exceed the limits 

prescribed in BLM’s annual Management of Land and Resources 

appropriation.

 

1030 U.S.C. §§ 22-54, 611-615. 

1143 U.S.C. §§ 1701-1787. 

12The General Mining Law of 1872 required the claimant to perform a minimum amount of 

labor or make improvements worth $100 each year in order to keep a possessory interest 

in the claim or site. Assessment work is work or labor performed in good faith that tends to 

develop the claim and directly aids the extraction of minerals. See 30 U.S.C. § 28-28e. As 

of August 10, 1993, this requirement was replaced by the current annual claim 

maintenance fee. See 30 U.S.C. § 28f. Mining claimants who qualify for the small miner’s 

exemption (those who hold 10 or fewer mining claims) do not have to pay a maintenance 

fee but do have to perform annual assessment work. See 30 U.S.C. § 28f(d).
Page 5 GAO-15-562 BLM Mining Law Administration Program

state offices also record and adjudicate mining claims. The district and 

field offices perform program fieldwork, such as reviewing and approving 

plans and notices of mining operations, conducting inspections and 

mineral examinations, and taking enforcement actions. In addition to the 

state offices, BLM also operates its National Training Center, National 

Operations Center, and National Interagency Fire Center to provide 

support to all BLM programs. See figure 1 for a map of BLM state offices 

and their administrative jurisdictions.

Figure 1: Bureau of Land Management (BLM) State Offices and Their Administrative Jurisdictions

The mining law program includes the following activities:

• recording and adjudicating mining claims,

• collecting location and annual maintenance fees,

• processing notices for exploration, 

• processing and approving plans of operations for exploration and 

production,

• inspecting notices and plans of operations to ensure compliance with 

their terms and conditions,
Page 6 GAO-15-562 BLM Mining Law Administration Program

• taking enforcement actions when terms and conditions have been 

violated,

• identifying and eliminating cases of unauthorized occupancy of mining 

claims,

• reviewing reclamation plans and financial guarantees, and

• conducting mineral examinations to determine valid existing rights 

under the mining laws.

BLM is responsible under applicable appropriations laws to ensure that 

funds appropriated for a specified purpose—such as those funds that 

BLM’s annual appropriations provide for mining law program operations—

are used for that purpose only and are not augmented with funds 

appropriated for different purposes.13 As such, BLM issues annual budget 

directions for all programs, including the mining law program, to outline 

the importance of proper budget coding and accounting.14 BLM records 

all mining law program costs of activities under one subactivity code.15

“[c]harging work tasks, employee salaries, procurement items, or 

equipment purchases to any subactivity other than the benefitting 

subactivity violates the terms of the Appropriation Act. Similarly, when 

procurements are charged to a given subactivity simply because ‘money 

is available there’ but have no direct relationship to that subactivity’s 

program accomplishment, [it] is a violation of the integrity of managers’ 

financial management responsibility and both the specific policy decisions 

and the direction of proper authorities in setting those requirements. 

Future year program needs and requirements are based in part on the 

record of past years’ costs and accomplishments. Therefore, records of 

actual costs and accomplishments must be accurate as possible.”

BLM’s policy recognizes the importance of accountability for program 

funds. Specifically, its Fund Coding Handbook states the following:

16

 

13See 31 U.S.C. § 1301(a). 

14BLM’s budget directions are included in its Planning Target Allocations and Annual Work 

Plans.

15Subactivity is the term used by BLM to denote operational programs. The mining law 

program subactivity code used to record costs is L19900000. 

16Bureau of Land Management, Fund Coding Handbook, H-1684-1 (Mar. 4, 1985).
Page 7 GAO-15-562 BLM Mining Law Administration Program

To reasonably assure that designated funds are spent only on mining law 

program operations, BLM is responsible for designing and implementing 

an effective system of internal control. Internal control is an integral 

component of an organization’s management that when properly 

designed, implemented, and operating effectively, provides reasonable 

assurance that the following objectives are being achieved: 

(1) effectiveness and efficiency of operations, (2) reliability of financial 

reporting, and (3) compliance with laws and regulations. Internal control 

represents an agency’s plans, methods, and procedures used to meet its 

mission, goals, and objectives and serves as the first line of defense in 

safeguarding assets and preventing and detecting errors, fraud, waste, 

abuse, and mismanagement.17

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. These appropriated funds are available 

until expended, meaning that BLM may also carry over any unused 

amounts to subsequent years. Table 1 summarizes the resources 

available to the program for fiscal years 2011 through 2013.

Table 1: Available Resources for the Bureau of Land Management’s (BLM) Mining 

Law Administration Program, Fiscal Years 2011 through 2013

Dollars in thousands

Fiscal year

2011 2012 2013

Appropriation $36,696 $39,696 $37,677

Carryover from prior years

a

b

 2,160 1,914 2,631

Total $38,856 $41,610 $40,308

Source: GAO analysis of BLM data. | GAO-15-562

a

In fiscal year 2013, the program was originally appropriated $39.7 million, but the sequestration 

reduced funding by $2 million, resulting in a $37.7 million funding amount.

b

 

17

Carryover from prior years represents the funds from prior years that were not obligated or expended 

and may be used for future obligations. For example, for fiscal year 2012, BLM had total resources of 

$41.6 million. It had obligations, expenditures, and adjustments to prior year obligations totaling 

$39 million, leaving $2.6 million to be carried over to fiscal year 2013.

GAO/AIMD-00-21.3.1. 

Importance of Internal 

Controls

BLM’s Mining Law 

Program Was 

Appropriated and 

Expended Almost 

$40 Million Annually 

in Fiscal Years 2011 

through 2013
Page 8 GAO-15-562 BLM Mining Law Administration Program

Interior’s appropriation laws require that amounts appropriated to BLM for 

its mining law program be reduced (i.e., repaid) using mining claim fees 

that BLM collects. In recent years, BLM has collected funds through its 

claim fees that more than fully repay its appropriated amounts. For 

example, according to BLM’s budget documents, it reported mining claim 

fee collections of approximately $64 million each in fiscal years 2011 and 

2012 and $66 million in fiscal year 2013. At the end of the fiscal year, 

BLM deposits the amount of fees collected into the Department of the 

Treasury’s General Fund. BLM recorded mining law program 

expenditures of about $38 million annually for fiscal years 2011, 2012, 

and 2013. The program’s largest expenditure was for personnel 

compensation and benefits, ranging from 76 to 80 percent of the 

program’s total expenditures, over the 3 fiscal years. Its second largest 

expenditure was for contractual services and supplies, ranging from 17 to 

20 percent of the program’s total expenditures. This category includes 

many types of expenditures, such as travel, communications, utilities, and 

training. Overall, total reported expenditure trends appeared consistent 

from year to year. Table 2 summarizes BLM’s reported expenditure 

amounts for its mining law program by major budget category.

Table 2: Reported Bureau of Land Management (BLM) Mining Law Administration Program Expenditures by Major Budget 

Category, Fiscal Years 2011 through 2013

Dollars in thousands

Major budget category

Fiscal year 

2011

Percentage

of total

Fiscal year 

2012

Percentage

of total

Fiscal year 

2013

Percentage

of total

Personnel compensation and 

benefits $28,926 77 $30,631 80 $29,208 76

Contractual services and supplies 7,351 a 20 6,396 17 7,653 20

Acquisition of assets 918 b 2 947 2 960 3 

Grants and fixed charges 416 c 1 132 0 394 1 

Total $37,611 100 $38,106 100 $38,215 100

Source: GAO analysis of BLM data. | GAO-15-562

Note: Percentages may not add to 100 percent because of rounding.

a

The contractual services and supplies category includes expenditures for travel, transportation, rent, 

communications, utilities, printing, training, supplies, and materials. Training-related expenditures, 

such as tuition, training conferences, and training contracts, were about $107,000, $154,000, and 

$182,000 for fiscal years 2011, 2012, and 2013, respectively. Travel-related expenditures were about 

$897,000, $814,000, and $701,000 for fiscal years 2011, 2012, and 2013, respectively.

b

The acquisition of assets category includes expenditures for equipment, information technology and 

software, furniture, and building improvements.

c

The grants and fixed charges category includes expenditures for cooperative agreements, each of 

which is a legal instrument reflecting BLM’s relationship with a state, a local government, a higher 

education institution, a nonprofit organization, or other recipient. It also includes charges such as 

indemnities and claims.
Page 9 GAO-15-562 BLM Mining Law Administration Program

BLM has designed internal controls, including policies and procedures, 

over mining law program funds. However, some of BLM’s policies and 

procedures are outdated, inconsistent, and not effectively communicated. 

Our review of transactions also showed that BLM did not effectively 

implement controls to reasonably assure that mining law program 

expenditures were properly recorded and supported. Furthermore, our 

interviews with employees indicated that some employees were not 

recording hours worked consistent with BLM policy.

BLM has a directives system that includes permanent and temporary 

policies and procedures. Permanent BLM policies and detailed 

instructions needed to carry out those policies are contained in BLM’s 

manuals and handbooks and have continuing application to BLM 

programs. These include the Fund Coding Handbook and the Charge 

Cards and Convenience Checks for Travel, Purchase, Fleet, and 

Uniforms section of the BLM Manual, which provide policies related to 

charging the mining law program as well as other BLM programs. To 

update its policies, BLM issues instruction memorandums, which are 

intended to be temporary new policy or instructions that must reach BLM 

employees quickly.18 In addition to instruction memorandums, BLM may 

transmit supplemental information through information bulletins.19

 

18BLM’s Directives Manual section states that temporary directives, such as instruction 

memorandums and information bulletins, should be used only to transmit interim 

instructions and information. The manual also states that directives must be evaluated 

regularly to ensure that they are current and up-to-date. Assistant directors are 

responsible for keeping their directives current and converting an instruction memorandum 

that contains long-term policy or procedural information promptly into a BLM manual 

section or handbook. At the end of the third fiscal year after it is issued, an instruction 

memorandum must be reviewed to determine whether it should be incorporated into a 

BLM manual section or handbook, allowed to expire, or renewed. While instruction 

memorandums provide additional guidance for charging expenditures to the mining 

program, BLM’s Fund Coding Handbook is BLM’s permanent policy, but it has not been 

updated since 1985 to include policy and procedure updates included in these instruction 

memorandums. 

BLM 

has policies and procedures that have been updated or revised through 

19Information bulletins are intended to call attention to existing policies and procedures 

rather than introduce new policies. 

BLM’s Deficiencies in 

the Design and 

Implementation of 

Internal Controls over 

Mining Law Program 

Expenditures Weaken 

Accountability for 

Program Resources

Selected BLM Policies and 

Procedures on Mining Law 

Program Expenditures Are 

Outdated, Inconsistent, 

and Not Effectively 

Communicated
Page 10 GAO-15-562 BLM Mining Law Administration Program

these temporary directives. They contain specific policies and procedures 

for the use and coding of mining law program expenditures and other 

financial and business processes. However, some of these policies and 

procedures are outdated, inconsistent, and not effectively communicated.

Two instruction memorandums that alert employees to the importance of 

appropriately charging expenditures to the mining law program include 

important coding information and provide guidance about charging 

operational expenditures to the correct account or subactivity. However, 

these instruction memorandums exclude key information and have not 

been updated.

• Instruction Memorandum 2001-144, Obligations from the Mining Law 

Administration Program, is intended to convey coding policies for 

charging expenditures to mining law program-related activities, but it 

does not include updated coding instructions for charges related to 

reviewing reclamation plans and financial guarantees or an updated 

expiration date. BLM amended regulations in 2001 to require all 

mining operations to provide bonds or other financial assurances 

before beginning exploration or mining operations on BLM land. This 

is an important mining law program activity because having adequate 

financial guarantees to pay reclamation costs is critical to ensuring 

that the land is reclaimed if the mining operators fail to do so.20 The 

memorandum was reissued in March 2003, but was not updated to 

include coding instructions for charging expenditures related to this 

activity. In addition, Instruction Memorandum 2001-144 also contained 

inconsistencies in its expiration date information, which could be 

confusing to users of this guidance. Specifically, the memorandum 

was reissued in fiscal year 2003 but showed a fiscal year 2002 

expiration date.

• Instruction Memorandum 2004-047, Proper Coding within the Solid 

Minerals Subactivities, was issued to provide additional guidance on

proper coding but lists a priority program element code that is no 

 

20The process of reclamation involves returning mining lands to their natural or 

undisturbed condition as much as is reasonably practical. 
Page 11 GAO-15-562 BLM Mining Law Administration Program

longer used by BLM for the mining law program.21

In addition to the deficiencies identified in these mining law program 

instruction memorandums, policies and procedures used for the review 

and approval of charge card purchases are also inconsistent. BLM issues 

government charge cards to its employees for travel and purchases of 

supplies and services. Many of the mining law program expenditures 

were paid using charge cards as they are required for travel transactions 

and preferred for micro-purchases.

Specifically, in 

fiscal year 2012, BLM changed the code that was used to capture the 

cost for mining law program work activity related to trespass and 

unauthorized occupancy cases. The memorandum shows an 

expiration date of fiscal year-end 2005.

22

To supplement Interior’s policy, BLM issued Information Bulletin 2011-

073, which states that (1) cardholders must reconcile their records of 

expenditures with monthly bank statements within 14 business days and 

(2) the approving officials must review and certify the cardholders’ 

reconciled statements within 14 business days of receipt from the 

cardholders.

In 2008, Interior issued its Integrated 

Charge Card Program Policy Manual, which states that within 30 calendar 

days of the charge card statement, the approving official must review, 

sign, and date the statements and supporting documentation.

23

 

21BLM uses program elements to gather cost and performance information and describe 

the work it performed. They are to be used on time sheets, requisitions, travel documents, 

and every financial transaction to gather costs by specific workload measure or work 

description. According to BLM, program element definitions can also be found in its 

Activity-Based Costing system.

However, while this bulletin was created to provide 

guidance related to Interior’s charge card policies, it does not make clear 

for the cardholder whether the 14 business days is counted from receipt 

of the charge card statement or the statement date. Also, this bulletin still 

references BLM Manual Section 1512, the previous guidance, which has 

5-day requirements for both cardholder reconciliation and supervisory 

22Micro-purchases are purchases of up to $3,000 for supplies and $2,500 for services. 

23Bureau of Land Management, Integrated Charge Card Program Management – 

Purchase Business Line, Information Bulletin No. 2011-073 (June 23, 2011). 
Page 12 GAO-15-562 BLM Mining Law Administration Program

review.24

Further, issues in communicating BLM policies and procedures on 

properly coding mining law program funds also contributed to employees 

not following such procedures. For example, while instruction 

memorandums clarifying the proper coding of BLM activities can be 

accessed through BLM’s intranet, BLM officials said that these 

memorandums, which are over 10 years old, may be difficult to locate 

because they are stored in reverse chronological order by issuance date, 

and BLM’s online repository does not include an effective search function. 

During our interviews at the Arizona and Nevada state offices, we spoke 

with BLM employees who charged the mining law program, and some 

employees stated that they were not aware of program-specific policies 

for use of mining law program funds.

 This inconsistency can create further confusion. Standards for 

Internal Control in the Federal Government states that internal control and 

all transactions and other significant events need to be clearly 

documented, and that all documentation and records should be properly 

managed and maintained.

BLM officials told us that instruction memorandums on properly coding 

mining law program funds were not updated because BLM determined it 

was more advantageous to use directives included in its annual budget 

process to communicate updates on the coding of costs to subactivities 

and program elements rather than incorporate these interim policies into 

formal policy. However, such directives, which are mainly used by budget 

and managerial employees, may not be reviewed closely by specialists in 

the field who carry out BLM activities and charge the related codes. 

Standards for Internal Control in the Federal Government states that 

information should be recorded and communicated to management and 

others within the entity who need it and in a form and within a time frame 

that enables them to carry out their internal control and other 

responsibilities.

 

24BLM Manual Section 1512, Charge Cards and Convenience Checks for Travel, 

Purchase, Fleet, and Uniforms, which was issued in 2005, states that (1) the cardholder 

must give the signed and dated statement and supporting documentation to the approving 

official for review and approval within 5 business days of receiving it and (2) the approving 

official must review and certify reconciled statements within 5 business days of receipt of 

the charge card statement from the cardholder. 
Page 13 GAO-15-562 BLM Mining Law Administration Program

Without consistent and up-to-date policies and procedures on the use of 

mining law program funds that are readily accessible and communicated 

to all employees, BLM lacks adequate controls to reasonably assure that 

expenditures are properly recorded to the mining law program. BLM 

officials said that they plan to (1) issue a new instruction memorandum 

that incorporates the policies set forth in both instruction memorandums 

on the importance of appropriately charging the mining law program and 

properly coding labor and operational expenditures, (2) clarify information 

about the 14-day time frame for the charge cardholder to ensure timely 

reviews of the reconciliation, and (3) improve BLM’s capabilities to enable 

employees to effectively search policies and guidance on its intranet. In 

addition, BLM officials told us that officials from the mining law program 

will work with BLM’s Division of Budget to determine how to best update 

the Fund Coding Handbook to include the mining law program policies. 

BLM plans to issue the revised handbook by December 31, 2015.

BLM did not effectively implement key control activities to reasonably 

assure that mining law program expenditures were properly recorded and 

supported. Specifically, we tested a random probability sample of 100 

nonpayroll expenditure transactions for fiscal year 2013 for evidence that 

each expenditure (1) was accurately recorded to the correct fund, 

subactivity, fiscal year, and budget category; (2) was related to or was 

reasonably allocated to the mining law program; (3) was authorized; and 

(4) underwent supervisory review and approval of supporting 

documentation. We found exceptions during each test.

We also found control deficiencies through testing of a nonprobability 

sample of 30 accounting adjustment transactions for fiscal year 2013, 

including (1) lack of timely supervisory review and therefore delayed 

recording of adjustments and (2) inadequate documentation to support 

the adjustments.

Figure 2 summarizes the estimated percentages of control deficiencies 

found in our nonpayroll expenditures testing.

BLM Did Not Effectively 

Implement Controls to 

Reasonably Assure That 

Mining Law Program 

Nonpayroll Expenditures 

Were Properly Recorded 

and Supported
Page 14 GAO-15-562 BLM Mining Law Administration Program

Figure 2: Estimated Percentages of Control Deficiencies in Nonpayroll 

Expenditures of the Mining Law Administration Program (Mining Law Program) for 

Fiscal Year 2013

Note: The percentages in the figure represent point estimate percentages in the population based on 

our probability sample tests. All percentage estimates from the tests have margins of error at the 95 

percent confidence level plus or minus 9 percentage points or less. All estimates and associated 

confidence intervals are rounded to the nearest percentage point.

On the basis of our testing of controls for the random probability sample 

of 100 nonpayroll mining law program expenditure transactions, an 

estimated 13 percent of the 15,829 fiscal year 2013 mining law program 

nonpayroll expenditure transactions were either not recorded accurately 

or did not have sufficient documentation for determining whether each 

expenditure was accurately recorded to the correct fund, subactivity, 

fiscal year, or budget category.25

 

25The 95 percent confidence interval for this estimate is from 7 to 21 percent. This means 

that we are 95 percent confident that from 7 to 21 percent of transactions were either not 

recorded accurately or lacked evidence of accurate recording. 

For these exceptions, we took into 

consideration whether (1) supporting documentation or BLM officials’ 

explanations clearly showed another subactivity should have been 

charged or (2) BLM did not provide any documentation or the 

documentation provided was insufficient. Specifically, in the instances 

where evidence or documentation was provided by BLM, the information 

showed that the transaction was intended to be recorded to another 

subactivity outside of the mining law program. The majority of these were 

charge card transactions in which recording errors may have occurred 

because the mining law program code was assigned as the default code 

to the charge card account, and BLM did not reallocate or adjust the 

Transactions Were Not 

Recorded Accurately or 

Lacked Sufficient Evidence for 

Determining Accurate 

Recording
Page 15 GAO-15-562 BLM Mining Law Administration Program

charge to the correct benefitting subactivity. The following examples 

illustrate the problems we found.

• BLM-provided electronic travel data showed that an employee’s travel 

was conducted under the subactivity code for oil and gas 

management activities. However, travel costs of $1,069 were 

erroneously recorded to the mining law program.

• An expenditure for $348 under a contract for mail services was 

recorded to the mining law program. However, the contract order did 

not contain the mining law program as the chargeable subactivity.

• An expenditure for $460 was recorded as office supplies and 

materials to the mining law program. BLM provided screenshots from 

its financial management system but was unable to provide any 

supporting documentation, such as invoices or receipts for the items 

purchased.

BLM’s policy is that procurement items, including travel, and equipment 

purchases should be charged to the benefiting subactivity. In addition, for 

charge card transactions, the cardholder is required to reconcile charge 

card statements, annotate the correct accounting code on the charge 

card statement, and include supporting documentation. Supervisors are 

required to review and approve the charge card statements. BLM also 

requires that supporting documentation for transactions be retained.

We identified the lack of training to reinforce policies as a contributing 

factor in the implementation issues found in our control tests. BLM 

officials told us that they developed a general online course for managers 

in January 2013 to provide an overview of the BLM budget process. 

Among other objectives, the course was created to help managers plan 

and execute the BLM budget and provide guidance on spending 

operating funds correctly and using appropriate cost structures and 

funding codes. According to BLM officials, the training is not mandatory 

but is encouraged for managers and is available to all employees. 

However, this course does not address procedures and related controls 

specific to the coding and supervision of mining law program expenditure 

charges. Additionally, BLM training records showed that only 14 of 128 

BLM employees who enrolled in the course had completed it as of 

March 10, 2015.
Page 16 GAO-15-562 BLM Mining Law Administration Program

An estimated 14 percent of fiscal year 2013 mining law program 

nonpayroll expenditure transactions either (1) lacked evidence to 

demonstrate that an expenditure was related to or reasonably allocated to 

the mining law program or (2) contained evidence suggesting that other 

subactivities should have been charged.26

• An expenditure of $6,525 for patrolling services on all BLM lands was 

charged to the mining law program. While reviewing this item, we 

noted that the entire $25,000 contract was fully obligated to the mining 

law program although it included specific nonmining locations, such 

as campgrounds and recreational areas.

The following examples 

illustrate the charges to mining law program that were not related to or 

reasonably allocated to the program.

27

• An employee who did not perform work for the mining law program 

and is employed at a BLM office that does not conduct any mining law 

program activities charged the program for travel expenses in the 

amount of $260. The purpose of travel was to attend nonmining 

training on producing educational exhibits related to environmental 

sustainability.

• An employee charged the mining law program $539 for a vehicle 

rental during the employee’s travel to conduct land surveys in support 

of the BLM Legacy Well Program. This program encompasses the 

plugging of oil and gas wells in Alaska that are currently not 

operational and is not related to the mining law program.

• Legal services of $673 were charged to the mining law program. 

These services were for legal mediation of administrative grievances 

from BLM employees who did not perform work on the mining law 

program.

BLM’s policy, in accordance with applicable appropriations laws, is to 

assure that mining law program funds are properly expended and that 

 

26The 95 percent confidence interval for this estimate is from 8 to 22 percent. This means 

that we are 95 percent confident that the percentage of transactions that lacked evidence 

to demonstrate that an expenditure was related to or reasonably allocated to the mining 

law program was from 8 to 22 percent. 

27According to BLM, the charges made to the mining law program were the result of 

assessing support costs to the program. However, BLM could not provide information that 

the charges were reasonably allocated to the program.

Transactions Lacked Evidence 

That Expenditures Were 

Related to or Reasonably 

Allocated to the Mining Law 

Program
Page 17 GAO-15-562 BLM Mining Law Administration Program

any costs charged to the program directly relate to or benefit the mining 

law program. Also, its Instruction Memorandum 2001-144 states that 

overhead support costs and shared service costs must be shared 

equitably among benefitting subactivities.28

We estimate that 16 percent of fiscal year 2013 mining law program 

nonpayroll expenditure transactions lacked evidence that a supervisor or 

other approving official authorized the transactions in accordance with 

prescribed BLM policies.

Therefore, costs of shared 

services that include the mining law program must be equitably allocated 

to the mining law program along with other subactivities. As previously 

mentioned, BLM did not offer training that addressed procedures and 

related controls specific to the coding and supervision of mining law 

program expenditure charges.

29

• For 11 travel transactions, authorization was not approved by a 

supervisor or approving official before travel commenced. These 

included 5 instances where travel was completed before the 

authorization was approved. The Federal Travel Regulation requires 

that an authorization be obtained prior to travel unless it is not 

practicable or possible to obtain such authorization.

The majority of the expenditure transactions 

lacking evidence of authorization were travel transactions recorded using 

GovTrip, BLM’s travel system in fiscal year 2013. The following examples 

illustrate mining law program nonpayroll transactions that lacked proper 

authorization.

30 However, these 

trips appeared to have been for nonemergency activities, such as 

training and site visits.

• A transaction for lodging costs totaling $161 was incurred, but the 

costs were not included in the trip authorization to provide evidence of 

prior approval.

 

28Bureau of Land Management, Obligations from the Mining Law Administration Program, 

Instruction Memorandum No. 2001-144, Change 2 (Mar. 28, 2003). 

29The 95 percent confidence interval for this estimate is from 9 to 25 percent. This means 

that we are 95 percent confident that from 9 to 25 percent of transactions lacked evidence 

of authorization. 

3041 C.F.R. § 301-2.1. 

Transactions Lacked 

Authorization
Page 18 GAO-15-562 BLM Mining Law Administration Program

• BLM did not provide supporting documentation for one of the selected 

travel transactions to demonstrate that the travel was authorized.

Standards for Internal Control in the Federal Government states that 

qualified and continued supervision should be provided to ensure that 

internal control objectives are achieved. In its May 2013 audit report, 

Interior’s Office of Inspector General also reported similar findings with 

travel transactions recorded in GovTrip.31

We found that an estimated 31 percent of fiscal year 2013 mining law 

program nonpayroll expenditure transactions lacked evidence that a 

supervisor or approving official timely and adequately reviewed required 

transaction support in accordance with BLM’s policy.

In fiscal year 2014, Interior 

implemented a new electronic travel system and also issued new travel 

guidance, which BLM officials said they expected would improve its 

processes for the approval, processing, and payment of authorized travel 

expenditures. However, as noted in the next section, BLM did not have a 

monitoring process to evaluate employee and supervisory compliance 

with mining law program policies.

32

• In four sampled transactions, supervisory review of charge card 

transactions’ supporting documentation was inadequate. For example, 

supporting documentation lacked a description of goods purchased, 

and in one instance, the charge card statement was not signed by the 

cardholder or the supervisor, as required by BLM policy.

Examples follow:

• We found six instances of charge card statements that were not 

approved in a timely manner. For example, one charge card 

statement was not approved until 3 months after the statement date.33

 

31Department of the Interior, Office of Inspector General, GovTrip Use and Monitoring by 

the U.S. Department of the Interior—Bureau of Land Management, WR-IN-BLM-0013-

2012 (Washington, D.C.: May 2013). 

32The 95 percent confidence interval for this estimate is from 22 to 40 percent. This 

means that we are 95 percent confident that from 22 to 40 percent of transactions lacked 

evidence of effective supervisory review of supporting documentation. 

33As previously noted, BLM policies do not clarify the dates by which charge card 

statements must be reconciled and approved. Therefore, we chose to use Interior’s 

charge card manual as our criteria. Interior’s timeliness standards for supervisory review 

require charge card statements to be reviewed by the cardholder and approved by the 

supervisor within 30 calendar days of the charge card statement date. 

Transactions Lacked Evidence 

of Timely and Adequate 

Supervisory Review of 

Supporting Documentation
Page 19 GAO-15-562 BLM Mining Law Administration Program

• Our travel sample included eight travel vouchers that were not 

submitted for review promptly after the traveler’s return. In two such 

cases, vouchers were submitted 57 and 76 business days, 

respectively, following trip completion. The Federal Travel Regulation, 

which BLM follows, requires that a travel voucher be submitted within 

5 working days after completion of trip or period of travel.34

• For eight transactions, we could not verify whether there was 

adequate supervisory review of supporting documentation because 

BLM could not locate the supporting documentation, such as receipts, 

credit card statements, and travel vouchers, that should be 

maintained for these transactions, as required by its policies and 

procedures.

BLM’s charge card policies require that cardholders (1) verify that all 

transactions are valid and correct by matching each transaction to 

receipts and invoices; (2) reconcile their statements and include a 

concise, detailed description for each transaction; (3) annotate the 

applicable accounting code if the code associated with the cardholder’s 

account (default code) is not applicable for the transaction; and (4) sign 

and date the statement and include supporting documentation in the 

package. Policies also state that supervisors must review and certify 

reconciled statements. However, while BLM’s policies include controls for 

documenting and reviewing purchase card transactions, these policies 

are not consistent on the required deadline for statement reconciliation by 

the cardholder. In addition, updates to charge card policies were 

transmitted to BLM headquarters, state office, and district office officials 

rather than to all BLM employees who are cardholders.35

 

3441 C.F.R. § 301–52.7. 

Since charge 

card purchases are paid automatically, it is critical that all cardholders and 

approving officials promptly reconcile and review charge card 

transactions so that erroneous charges can be quickly disputed with the 

vendor, and fraudulent, improper, or wasteful purchases can be quickly 

detected and acted upon. These reviews are also critical to ensuring that 

the correct program codes have been charged if the code assigned to the 

cardholder’s account differs from the code benefiting from the 

expenditure.

35Bureau of Land Management, Integrated Charge Card Program Management – 

Purchase Business Line. 
Page 20 GAO-15-562 BLM Mining Law Administration Program

Standards for Internal Control in the Federal Government states that 

(1) internal control and all transactions and other significant events need 

to be clearly documented and the documentation should be readily 

available for examination and (2) all documentation and records should 

be properly managed and maintained. These standards also state that 

qualified and continued supervision should be provided to ensure that 

internal control objectives are achieved. Supervisors are a key control in 

approving and reviewing transactions to reasonably assure that the 

transactions are properly supported and that appropriate codes are used.

However, BLM did not have a monitoring process to evaluate employee 

and supervisory compliance with mining law program policies. While BLM 

has procedures in place to periodically review purchase card transactions 

and check for charge card reconciliations, these reviews are not intended 

to identify expenditures that do not relate to the mining law program. BLM 

officials told us that they performed a review of contracts charged to the 

mining law program in 2000, but they have not since performed any other 

similar reviews. Given the significant percentage of transactions that we 

estimated (1) lacked evidence of adequate supervisory review of 

supporting documentation, (2) were erroneously charged to the program, 

and (3) lacked supporting documentation, monitoring compliance with 

policies is especially important.

Our review of the mining law program’s fiscal year 2013 total nonpayroll 

expenditures showed that approximately 24 percent of these transactions 

were adjustments to the expenditure accounts. Given the large number of 

adjustments to expenditures coupled with the large number of 

transactions lacking adequate supervisory reviews, as previously 

discussed, we randomly selected a nonprobability sample of 30 

accounting adjustments and examined supporting documentation to 

determine the nature and appropriateness of these adjustments. The 

adjustments consisted of reductions to the expenditures charged to the 

program. Many adjustments to mining law program expenditures are 

caused by the reallocation of charge card purchases, which occurs when 

a BLM employee makes a purchase for the benefit of a program other 

than the program to which his or her charge card account was assigned 

(i.e., the default program code to the charge card account). Per BLM 

policies, BLM employees are required to reconcile their charge card 

statements each month and annotate the correct accounting code for 

each item. Supervisors are required to review supporting documentation 

and approve the individual transactions and the statement reconciliations.

Selected Adjustments to 

Mining Law Program 

Nonpayroll Expenditure 

Transactions Were Not 

Supported or Promptly 

Recorded
Page 21 GAO-15-562 BLM Mining Law Administration Program

We found issues with 12 of the 30 adjustment transactions selected. 

These problems largely involved (1) failure to record the adjustment in a 

timely manner because of delays in supervisory review and 

(2) inadequate documentation to support the adjustment. Examples 

follow:

• A charge card statement with charges totaling over $1,100 was not 

reconciled by the cardholder and reviewed by the approving official 

until 7 months after the statement date.

• BLM did not provide documentation to support an adjustment for 

$2,257 recorded as supplies transferred out of mining law program 

expenditures. Therefore, it was unclear what the charge was for and 

what subactivity the expenditure benefited.

• Although one non-mining law program expenditure for freight costs 

was correctly adjusted, our review of the transaction data showed that 

it was charged to the mining law program twice and only adjusted 

once, resulting in the freight cost of about $3,000 being paid by the 

mining law program.

Standards for Internal Control in the Federal Government states that 

internal control activities help ensure that management directives are 

carried out and that control activities, which include management and 

supervisory reviews, proper documentation, and recording of 

transactions, are effective and efficient in accomplishing the agency’s 

objectives. Given the large number of accounting adjustments recorded, 

effective supervisory review of transactions is key to reasonably assuring 

proper accounting of mining law program funds. As discussed previously, 

the lack of monitoring was a contributing factor in the issues we found 

with the adjustments.

Our interviews of a nonprobability sample of 43 employees from two BLM 

state office jurisdictions—Arizona and Nevada—indicated that some 

employees were not accurately charging their hours to the mining law 

program.36

 

36We interviewed employees at the Arizona and Nevada state offices, Phoenix and 

Carson City district offices, and field offices located at these district offices. 

These two BLM state offices had the highest amounts of 

personnel compensation charged to the mining law program in fiscal year 

Interviews Indicate Hours 

Worked Were Not 

Recorded Consistent with 

BLM Policy
Page 22 GAO-15-562 BLM Mining Law Administration Program

2013, totaling about $9.3 million, or 32 percent of total personnel 

compensation charges. BLM’s policy, in accordance with applicable 

appropriations law, states that transactions should be charged to the 

benefitting subactivity. BLM’s Instruction Memorandum 2001-144 also 

emphasizes the importance of charging the mining law program only for 

mining law-related transactions. It assigns supervisors the responsibility 

to ensure that employee charges to the mining law program are the result 

of work that is directly related to program activities.37

In particular, 18 of the 43 employees interviewed stated that they were 

charging time to the mining law program on their time cards based on 

work plans developed for budgetary purposes or supervisor instructions 

rather than work as it was actually performed.

However, over half 

of the employees interviewed indicated that they were not aware of the 

BLM mining law program policy for recording work hours.

38

• Eleven direct-labor employees stated that they charged their hours to 

the mining law program based on the work plans provided or 

instructions from their supervisors and not in accordance with work 

actually performed.

This method for charging 

time was also confirmed at another state office we interviewed. Work 

plans are designed to aid the funding allocation process for personnel 

compensation and are based on factors such as (1) the funds 

appropriated and allocated to each BLM state office and (2) an estimate 

of the work needed to accomplish program objectives. Although these 

plans provide an amount budgeted for labor to each subactivity, the 

amounts are estimates of hours to be worked and are likely to be different 

from hours actually worked. Examples follow:

39 Seven of these employees also stated that they 

were not familiar with the instruction memorandums that discuss 

mining law program charges and coding or did not know the correct 

codes for charging certain mining law activities.

 

37Bureau of Land Management, Obligations from the Mining Law Administration Program, 

Change 2. 

38The work plans are developed to plan costs based on available budgeted amounts and 

provide guidance to employees on codes to charge. 

39Direct-labor employees for the mining law program are program specialists who perform 

work directly related to mining law activities, such as administering mining claims, 

collecting mining claim fees, and processing and approving notices for exploration.
Page 23 GAO-15-562 BLM Mining Law Administration Program

• Labor data for one BLM employee in which she self-identified that she 

was not working on the mining law program showed over 100 hours 

charged to the program in fiscal year 2013. The employee stated that 

she did not know the mining law program codes and did not

remember charging them.

• One BLM employee noted that managers have instructed employees 

to charge one of the codes listed on the work plan first until it is 

exhausted. This employee discussed relying on the plan to charge 

work hours even though program codes charged do not always align 

with the work actually performed.

• A temporary BLM employee, who subsequently became a permanent 

employee and whose work directly benefitted the mining law program, 

stated that he did not charge time to the program in fiscal year 2013 

because funds were not allocated for his position. The employee was 

instructed to charge hours to another subactivity. The employee 

stated that mining law program funds were allocated for his position in 

fiscal year 2015 after he brought this situation to the attention of 

management.

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. These findings are similar to the findings in our 

March 2001 report.40

Of the 18 employees who stated that they were charging the mining law 

program based on work plans developed for budgetary purposes or 

supervisor instructions rather than work as it was actually performed, 11 

conducted work directly related to the mining law program, which included 

positions such as environmental coordinator, land law examiner, surface 

specialist, and cartographic technician. For employees who perform direct 

work for the mining law program, accurate recording of actual hours is 

especially important to BLM ensuring that its records are as accurate as 

possible and that it is able to use past year records as a basis for 

estimating future program needs. The other 7 employees performed 

support functions, such as office personnel, information technology, and 

finance, which provided services across multiple BLM programs. BLM 

 

40GAO-01-356. 
Page 24 GAO-15-562 BLM Mining Law Administration Program

allocates the costs of employees who perform support functions across 

several subactivities using either of two alternative methods to assess 

support costs: (1) actual labor expenditures or (2) base funding.41

As noted previously for the issues we identified in our tests of nonpayroll 

expenditures, our interviews with sampled employees also indicated that 

the lack of training to reinforce policies may have contributed to the errors 

in charging the mining law program. For example, over half of the 43 

employees interviewed at the two largest BLM state offices said that they 

were not aware of the policies and procedures related to BLM’s guidance 

for charging expenditures to the mining law program.

However, because the actual labor expenditures method relies on actual 

charges, it is also important for support employees to properly charge 

their time to the activities they supported.

42 In addition, the 

BLM Nevada state office conducted a budget review of the mining law 

program in 2012 and recommended training on budget use and coding to 

address issues related to mining law program charges identified through

its budget review. However, this training was not conducted for the state 

office.43

Personnel compensation expenditures represent the majority of the 

mining law program recorded expenditures—about 76 percent in fiscal 

year 2013. Therefore, improperly charging work to the mining law 

program or not recording work to the mining law program could result in 

 

41BLM’s Budget Execution and Accounting Guidance specifies BLM’s policy for assessing 

support costs to each program, including the mining law program. This guidance 

describes indirect costs as the costs of performing work of a general nature that supports 

multiple program areas, such as administrative, information technology, and general office 

supplies. BLM’s policy allows the BLM state offices to use the more accurate of either of 

two methods to determine a percentage allocation of support costs among subactivities: 

(1) actual labor expenditures incurred during the previous fiscal year or (2) “base funding” 

provided for in the budget year. To use base funding as the means for assessing support 

costs, the state office must combine the total office base funding level for each subactivity 

and determine what percentage of the base each program consists of for the entire office. 

That percentage is then multiplied by the total support cost to determine the amount to be 

assessed, or taxed, to each program. 

42The two BLM state offices with the highest amounts of expenditures charged to the 

mining law program are Arizona and Nevada, including the district and field offices within 

their jurisdictions. 

43BLM’s Nevada state, district, and field offices accounted for over 20 percent of the total 

mining law program expenditures in fiscal year 2013. 
Page 25 GAO-15-562 BLM Mining Law Administration Program

program cost information that is inaccurate for making program 

management decisions and for accountability of public resources.

BLM has policies and procedures for the use and coding of mining law 

program charges and other financial and business processes that apply 

to all programs. Its policies recognize the importance of accurate cost 

records to reasonably assure compliance with applicable appropriations 

law and to enable informed decision making and program planning. 

However, our review showed that deficiencies in the design and 

implementation of BLM’s internal controls resulted in costs erroneously 

charged to the mining law program or other programs. 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.

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.

• Establish procedures for regular and timely communication to all BLM 

employees on policy and procedural changes affecting the mining law 

program’s expenditure-related processes.

• Develop and implement a training program that provides all BLM 

employees with an understanding of the use of the mining law 

program funds to reasonably assure uniform application and effective 

execution of BLM policies and procedures. This training, to be 

successful, should be provided to all BLM employees who charge the 

program and communicate clear instructions on how employees 

should charge, document, and review transactions related to mining 

law program expenditures.

Conclusions

Recommendations for 

Executive Action
Page 26 GAO-15-562 BLM Mining Law Administration Program

• Develop and implement internal control activities for regularly 

monitoring compliance with expenditure-related policies and 

procedures in the mining law program. These activities should, at a 

minimum, (1) determine whether transactions were recorded to the 

correct subactivity and verified by an approving official and (2) assure 

that documentary evidence of review is maintained, as required in 

BLM’s policies and procedures.

We provided Interior with a draft of this report for review and comment. 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. Interior also provided 

technical comments, which we incorporated as appropriate.

As agreed with your office, unless you publicly announce the contents of 

this report earlier, we plan no further distribution until seven days from the 

report date. At that time, we will send copies to the Secretary of the 

Interior, the Director of the Bureau of Land Management, appropriate 

congressional committees, and other interested parties. In addition, the 

report is available at no charge on the GAO website at 

http://www.gao.gov. 

If you or your staff have any questions about this report, please contact 

me at (202) 512-2623 or davisbh@gao.gov. Contact points for our Offices 

of Congressional Relations and Public Affairs may be found on the last 

page of this report. GAO staff members who made key contributions to 

this report are listed in appendix III.

Sincerely yours,

Beryl H. Davis

Director, Financial Management and Assurance

Agency Comments
Appendix I: Objectives, Scope, and 

Methodology

Page 27 GAO-15-562 BLM Mining Law Administration Program

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 determine the amounts appropriated to and expended for the mining 

law program, we reviewed pertinent appropriations laws, Office of 

Management and Budget reports, BLM financial reports, and BLM’s 

calculation and explanation of the program’s fiscal year 2013 

appropriated amount after sequestration. We also obtained detailed 

expenditure data for fiscal years 2011 through 2013 from BLM’s financial 

management system, the Financial and Business Management System 

(FBMS).1

To assess the design of controls related to the use of mining law program 

funds, we obtained, reviewed, and assessed relevant policies and 

procedures, using Standards for Internal Control in the Federal 

Government as criteria.

We analyzed expenditures by major budget object categories. 

To assess the reliability of the data extracted from FBMS, we reviewed 

available documentation and interviewed Department of the Interior and 

BLM officials on the procedures used to enter and verify information 

entered into FBMS. We also performed data reliability checks that 

included conducting electronic testing for obvious errors, such as 

duplicate entries and missing values. We found the FBMS data elements 

that we used to create our summaries to be sufficiently reliable for the 

purpose of reporting mining law program expenditures for fiscal years 

2011, 2012, and 2013.

2

 

1

Data for fiscal year 2013 were the most recent available at the time of our review.

We interviewed BLM officials to clarify policies 

and procedures for the use of mining law program funds. We also 

interviewed officials from 8 of the 12 BLM state offices to obtain an 

understanding of controls over employee time and attendance and how 

funds are allocated to the BLM state offices. The BLM state offices where 

we interviewed officials were Alaska, Arizona, California, Idaho, Nevada, 

Oregon, Utah, and Wyoming. We also reviewed documents from the BLM 

state offices to gather information about BLM’s policies and procedures 

2

GAO, Standards for Internal Control in the Federal Government, GAO/AIMD-00-21.3.1

(Washington, D.C.: November 1999).

Appendix I: Objectives, Scope, and 

Methodology
Appendix I: Objectives, Scope, and 

Methodology

Page 28 GAO-15-562 BLM Mining Law Administration Program

and controls over mining law program spending. We conducted site visits 

at two BLM state offices—Arizona and Nevada—to interview officials and 

examine documents on BLM’s processes and controls related to mining 

law program spending. We selected transactions at BLM’s Arizona and 

Nevada state offices to obtain an understanding of how controls were 

implemented and reviewed relevant supporting documentation. These 

two BLM state offices had large amounts of total expenditures charged to 

the mining law program in fiscal year 2013. The BLM Nevada state office, 

including its district and field offices, had $8.2 million, or 22 percent, of the 

total mining law program expenditures in fiscal year 2013. The BLM 

Arizona state office, including its district and field offices, had about 

$3.6 million, or 9 percent, of the total mining law program expenditures in 

fiscal year 2013.

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. With this probability sample, each record in the population 

had a nonzero probability of being included, and that probability could be 

computed for any record. To select the expenditures for review, we used 

BLM’s detailed listing of fiscal year 2013 mining law program 

expenditures as discussed for our first objective. The total nonpayroll 

expenditures population from which we sampled contained 15,829 

records totaling $11.6 million in credits (expenditures) and 5,133 records 

totaling $2.6 million in debits (adjustments). Since the adjustments 

constituted about 24 percent of the records, we also selected a 

nonprobability random sample of 30 adjustment transactions to examine 

documentation and determine the nature and appropriateness of the 

adjustments. To assess the reliability of the information, we reviewed 

available documentation and interviewed knowledgeable Department of 

the Interior and BLM officials about the data. We also conducted 

electronic testing, for example, looking for duplicate entries and missing 

values. We found that the data elements we used were sufficiently 

reliable for selecting samples of mining law program nonpayroll 

expenditures for review.

Because we followed a probability procedure based on random 

selections, our sample of 100 nonpayroll expenditures is only one of a 

large number of samples that we might have drawn. Since each sample 

could have provided different estimates, we express our confidence in the

precision of our particular sample’s results as a 95 percent confidence 

interval (e.g., plus or minus 9 percentage points). This is the interval that 

would contain the actual population value for 95 percent of the samples 
Appendix I: Objectives, Scope, and 

Methodology

Page 29 GAO-15-562 BLM Mining Law Administration Program

we could have drawn. Confidence intervals are provided along with each 

sample estimate in the report. We used a tolerable error rate of 5 percent 

to test internal controls. If the lower bound of the 95 percent confidence 

interval was greater than 5 percent, then we considered the control to not 

be implemented effectively. The results from our sample apply to the 

universe of nonpayroll mining law program expenditures recorded from 

October 1, 2012, to September 30, 2013.

With regard to implementation of controls over labor charges, we selected 

for interview a nonprobability sample of employees from the two BLM 

state offices with the highest amounts of personnel compensation 

charged to the mining law program in fiscal year 2013. These two BLM 

state offices—Arizona and Nevada, including district offices and field 

offices within their jurisdictions—had personnel compensation costs 

totaling about $9.3 million, or 32 percent, of the total personnel 

compensation costs in fiscal year 2013. We interviewed employees from 

the following BLM offices: Arizona and Nevada state offices; Phoenix and 

Carson City district offices; and Hassayampa, Lower Sonoran, Sierra 

Front, and Stillwater field offices. We obtained BLM data on hours 

charged to the mining law program for fiscal years 2011, 2012, and 2013. 

We performed analyses of the labor data, including comparing hours from 

year to year and by state office. We used the fiscal year 2013 data to 

select employees to interview from the selected offices. We selected the 

employees based on several factors, including (1) large total number of 

hours charged to the program, (2) high average hours charged per pay 

period, (3) different grade levels, (4) varying job titles, and (5) varying 

suboffices. We conducted face-to-face interviews with 43 BLM employees 

to determine how time and attendance controls were operating at these 

state offices using a standard set of questions that were developed based 

on GAO’s internal control guide, Maintaining Effective Control over 

Employee Time and Attendance Reporting.

3

We conducted this performance audit from March 2014 to July 2015 in 

accordance with generally accepted government auditing standards. 

Those standards require that we plan and perform the audit to obtain 

sufficient, appropriate evidence to provide a reasonable basis for our

findings and conclusions based on our audit objectives. We believe that 

 

3

GAO, Internal Control: Maintaining Effective Control over Employee Time and 

Attendance Reporting, GAO-03-352G (Washington, D.C.: January 2003). 
Appendix I: Objectives, Scope, and 

Methodology

Page 30 GAO-15-562 BLM Mining Law Administration Program

the evidence obtained provides a reasonable basis for our findings and 

conclusions based on our audit objectives.
Appendix II: Comments from the Department 

of the Interior

Page 31 GAO-15-562 BLM Mining Law Administration Program

Appendix II: Comments from the Department 

of the Interior 
Appendix II: Comments from the Department 

of the Interior

Page 32 GAO-15-562 BLM Mining Law Administration Program
Appendix II: Comments from the Department 

of the Interior

Page 33 GAO-15-562 BLM Mining Law Administration Program
Appendix III: GAO Contact and Staff 

Acknowledgments

Page 34 GAO-15-562 BLM Mining Law Administration Program

Beryl H. Davis, (202) 512-2623 or davisbh@gao.gov

In addition to the contact named above, Elizabeth Martinez (Assistant 

Director), Mai Nguyen (Auditor-in-Charge), Laura Bednar, Carl Barden, 

Maxine Hattery, Jason Kelly, Diana Lee, Jerome Sandau, and Sam Slater 

made key contributions to this report.

Appendix III: GAO Contact and Staff 

Acknowledgments

GAO Contact

Staff 

Acknowledgments

(197240)
The Government Accountability Office, the audit, evaluation, and 

investigative arm of Congress, exists to support Congress in meeting its 

constitutional responsibilities and to help improve the performance and 

accountability of the federal government for the American people. GAO 

examines the use of public funds; evaluates federal programs and 

policies; and provides analyses, recommendations, and other assistance 

to help Congress make informed oversight, policy, and funding decisions. 

GAO’s commitment to good government is reflected in its core values of 

accountability, integrity, and reliability.

The fastest and easiest way to obtain copies of GAO documents at no 

cost is through GAO’s website (http://www.gao.gov). Each weekday 

afternoon, GAO posts on its website newly released reports, testimony, 

and correspondence. To have GAO e-mail you a list of newly posted 

products, go to http://www.gao.gov and select “E-mail Updates.”

The price of each GAO publication reflects GAO’s actual cost of 

production and distribution and depends on the number of pages in the 

publication and whether the publication is printed in color or black and 

white. Pricing and ordering information is posted on GAO’s website, 

http://www.gao.gov/ordering.htm. 

Place orders by calling (202) 512-6000, toll free (866) 801-7077, or 

TDD (202) 512-2537. 

Orders may be paid for using American Express, Discover Card, 

MasterCard, Visa, check, or money order. Call for additional information.

Connect with GAO on Facebook, Flickr, Twitter, and YouTube. 

Subscribe to our RSS Feeds or E-mail Updates. Listen to our Podcasts. 

Visit GAO on the web at www.gao.gov. 

Contact:

Website: http://www.gao.gov/fraudnet/fraudnet.htm

E-mail: fraudnet@gao.gov

Automated answering system: (800) 424-5454 or (202) 512-7470

Katherine Siggerud, Managing Director, siggerudk@gao.gov, (202) 512-

4400, U.S. Government Accountability Office, 441 G Street NW, Room 

7125, Washington, DC 20548

Chuck Young, Managing Director, youngc1@gao.gov, (202) 512-4800

U.S. Government Accountability Office, 441 G Street NW, Room 7149 

Washington, DC 20548

GAO’s Mission

Obtaining Copies of 

GAO Reports and 

Testimony

Order by Phone

Connect with GAO

To Report Fraud, 

Waste, and Abuse in 

Federal Programs

Congressional 

Relations

Public Affairs

Please Print on Recycled Paper.