OIL AND GAS 

MANAGEMENT

Stronger Leadership 

Commitment Needed 

at Interior to Improve 

Offshore Oversight 

and Internal 

Management

Report to Congressional Addressees

March 2017

GAO-17-293

United States Government Accountability Office
United States Government Accountability Office

Highlights of GAO-17-293, a report to 

congressional addressees

March 2017

OIL AND GAS MANAGEMENT

Stronger Leadership Commitment Needed at 

Interior to Improve Offshore Oversight and 

Internal Management

What GAO Found

The Department of the Interior’s (Interior) Bureau of Safety and Environmental 

Enforcement (BSEE) leadership has started several key strategic initiatives to 

improve its offshore safety and environmental oversight, but its limited efforts to 

obtain and incorporate input from within the bureau have hindered its progress. 

For example, to supplement its mandatory annual regulatory compliance 

inspections, in 2012, BSEE leadership began developing a risk-based inspection 

initiative to identify high-risk production facilities and assess their safety systems 

and management controls. During pilot testing in 2016, several deficiencies—

including the usefulness of its facility risk-assessment model and unclear 

inspection protocols—caused BSEE to halt the pilot. According to bureau 

officials, during the development of the initiative, BSEE headquarters did not 

effectively obtain and incorporate input from regional personnel with longstanding experience in previous risk-based inspection efforts, who could have 

identified deficiencies earlier in the process. GAO previously found that when 

implementing large-scale management initiatives a key practice is involving 

employees to obtain their ideas by incorporating their feedback into new policies 

and procedures. Instead, BSEE leadership appears to have excluded the input of 

regional personnel by, for example, not incorporating input beyond the riskassessment tool when selecting the first pilot facility, even though it was 

prescribed to do so in the bureau’s inspection planning methodology. This 

undercut the pilot effort, raising questions about whether the bureau’s leadership 

has the commitment necessary to successfully implement its risk-based 

program. Without higher level leadership within Interior establishing a 

mechanism for BSEE to obtain and incorporate input from personnel within the 

bureau, BSEE’s risk-based inspection initiative could face continued delays.

Similarly, since 2013, BSEE leadership has started several key strategic 

initiatives to improve its internal management, but none have been successfully 

implemented, in part, because of limited leadership commitment. For example, 

BSEE’s leadership identified the importance of developing performance 

measures in its 2012-2015 strategic plan. BSEE began one of three attempts to 

develop performance measures in July 2014 by hiring a contractor to develop 

measures, but the bureau terminated this contract in January 2015 after 

determining a need to complete its internal reorganization before developing 

such measures. A second effort to develop performance measures started in 

December 2015, using the same consultant, and yielded 12 performance 

measures in March 2016, but BSEE did not implement them, in part, because 

data did not exist to use the measures. By the time BSEE received this 

consultant’s report, it had already begun a third effort to internally develop 

performance measures; as of November 2016 had identified 17 draft 

performance measures, but BSEE leadership missed repeated deadlines to 

review them. BSEE officials told GAO that after leadership approval, the bureau 

plans to pilot these measures and develop others. BSEE leadership has not 

demonstrated continuing oversight and accountability for implementing internal 

management initiatives, as evidenced by its limited progress implementing key 

strategic initiatives. Without higher-level oversight within Interior addressing 

leadership commitment deficiencies within BSEE, the bureau is unlikely to 

succeed in implementing internal management initiatives.

View GAO-17-293. For more information, 

contact Frank Rusco at (202) 512-3841 or 

ruscof@gao.gov.

Why GAO Did This Study

On April 20, 2010, the Deepwater 

Horizon drilling rig exploded in the Gulf 

of Mexico. The incident raised 

questions about Interior’s oversight of 

offshore oil and gas activities. In 

response, in May 2010, Interior 

reorganized its offshore oil and gas 

management activities, and in October 

2011, created BSEE to among other 

things, develop regulations, conduct 

inspections, and take enforcement 

actions. In February 2011, GAO added 

the management of federal oil and gas 

resources to its High-Risk List. In 

December 2015, BSEE issued a 

strategic plan outlining initiatives to 

improve offshore safety and 

environmental oversight as well as its 

internal management.

This report examines what efforts

BSEE leadership has made in 

implementing key strategic initiatives to 

improve its (1) offshore safety and 

environmental oversight and (2) 

internal management. GAO reviewed 

laws, regulations, policies, and other 

documents related to the development 

of BSEE’s strategic initiatives. GAO 

also interviewed BSEE officials.

What GAO Recommends

GAO is making four recommendations, 

including that higher-level leadership 

within Interior (1) establish a 

mechanism for BSEE management to 

obtain and incorporate input from 

bureau personnel that can affect the 

bureau’s ability to achieve its 

objectives and (2) address leadership 

commitment deficiencies within BSEE, 

including by implementing internal 

management initiatives and ongoing 

strategic initiatives in a timely manner.

Interior neither agreed nor disagreed 

with our recommendations.
Page i GAO-17-293 Oil and Gas Management

Letter 1

Background 4

BSEE Leadership Has Started Several Initiatives to Improve the 

Bureau’s Safety and Environmental Oversight Capabilities but 

Its Actions Have Hindered Progress 7

BSEE Leadership Has Made Limited Progress in Implementing 

Strategic Initiatives to Improve Its Internal Management 19

Conclusions 32

Recommendations for Executive Action 33

Agency Comments and Our Evaluation 34

Appendix I Comments from the Department of the Interior 40

Appendix II GAO Contact and Staff Acknowledgments 44

Abbreviations

Argonne Argonne National Laboratory

BOEM Bureau of Ocean Energy Management 

BOEMRE Bureau of Ocean Energy, Management, Regulation and

Enforcement 

BSEE Bureau of Safety and Environmental Enforcement 

ERM Enterprise Risk Management

IG Office of Inspector General 

INC incident of noncompliance 

Interior Department of the Interior 

IPRA Integrity and Professional Responsibility Advisor

IRU Investigations and Review Unit 

MMS Minerals Management Service 

NAPA National Academy of Public Administration

NEPA National Environmental Policy Act

OCS outer continental shelf

OCSLA Outer Continental Shelf Lands Act

SEMS Safety and Environmental Management System

Contents

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Page 1 GAO-17-293 Oil and Gas Management

441 G St. N.W.

Washington, DC 20548

March 21, 2017

The Honorable Jason Chaffetz

Chairman

Committee on Oversight and Government Reform

House of Representatives

The Honorable Rob Bishop

Chairman

The Honorable Raúl Grijalva

Ranking Member

Committee on Natural Resources

House of Representatives

The Honorable Blake Farenthold

Chairman

Subcommittee on the Interior, Energy, and Environment

Committee on Oversight and Government Reform

House of Representatives

On April 20, 2010, the Deepwater Horizon drilling rig exploded in the Gulf 

of Mexico, resulting in 11 deaths, serious injuries, and the largest marine 

oil spill in the history of the United States. The Deepwater Horizon 

incident raised questions about the Department of the Interior’s (Interior) 

oversight of offshore oil and gas activities in the Gulf of Mexico and led to 

investigations by Interior’s Office of Inspector General (IG)1 and Interior’s 

Outer Continental Shelf (OCS) Safety Oversight Board.2 In response to 

the Deepwater Horizon incident, Interior initiated a number of policy 

reforms intended to strengthen its oversight of offshore oil and gas 

production on the OCS. On May 19, 2010, Interior reorganized the 

 1

U.S. Department of the Interior, Office of Inspector General, A New Horizon: Looking to 

the Future of the Bureau of Ocean Energy Management, Regulation and Enforcement

(Washington, D.C.: Dec. 7, 2010).

2

The OCS refers to the submerged lands outside the territorial jurisdiction of all 50 states, 

but within U.S. jurisdiction and control. The portion of the North American continental edge 

that is federally designated as the OCS generally extends seaward 3 geographical miles 

off the coastline to at least 200 nautical miles. The OCS Safety Oversight Board was 

created by secretarial order to review and oversee Interior OCS operations to support 

reasoned and fact-based recommendations for potential improvement. See U.S. 

Department of the Interior Outer Continental Shelf Safety Oversight Board, Report to 

Secretary of the Interior Ken Salazar (Sept. 1, 2010).

Letter
Page 2 GAO-17-293 Oil and Gas Management

Minerals Management Service (MMS)—the agency responsible for 

managing oil and gas activities in federal waters and collecting revenues 

from oil and gas development on all federal lands and waters—to improve 

the management, oversight, and accountability of activities on the OCS.3

As an interim step, Interior restructured MMS into the Bureau of Ocean 

Energy, Management, Regulation and Enforcement (BOEMRE), 

responsible for offshore oil and gas management and the Office of 

Natural Resources Revenue responsible for revenue collections. On 

October 1, 2011, Interior completed the reorganization of MMS by 

splitting BOEMRE into the Bureau of Ocean Energy Management 

(BOEM), which is responsible for leasing and resource management, and 

the Bureau of Safety and Environmental Enforcement (BSEE), which is 

responsible for reviewing drilling permits, inspecting offshore drilling rigs 

and production platforms, and developing regulations and standards for 

offshore drilling.

Over the past several years, we have issued a number of reports 

identifying Interior’s challenges in managing federal oil and gas 

resources. The balance of our work has shown that management of 

federal oil and gas resources was a high risk area and we added it to the 

High Risk List in 2011.4 We identified challenges in Interior’s 

management of oil and gas on leased federal lands and waters. We found 

that Interior (1) did not have reasonable assurance that it was collecting 

its share of revenue from oil and gas produced on federal lands and 

waters; (2) continued to experience problems hiring, training, and 

retaining sufficient staff to provide oversight and management of oil and 

gas operations on federal lands and waters; and (3) was undertaking a 

major challenging reorganization of its oversight of both its offshore oil 

and gas management and revenue collection functions.

 3

Secretarial Order No. 3299 (May 19, 2010).

4

GAO, High-Risk Series: An Update, GAO-11-278 (Washington, D.C.: February 2011). In 

1990, we began a program to report on government operations that we identified as “high 

risk.” Since then, generally coinciding with the start of each new Congress, GAO has 

reported on the status of progress to address high-risk areas and to update the High Risk 

List. Overall, GAO’s high-risk program has served to identify and help resolve serious 

weaknesses in areas that involve substantial resources and provide critical services to the 

public. Our experience with the high-risk series over the past 25 years has shown that the 

key elements needed to make progress in high-risk areas are top-level attention by the 

administration and agency leaders grounded in the five criteria for removal from the High 

Risk List, as well as any needed congressional action. The five criteria for removal are: (1) 

leadership commitment, (2) capacity, (3) action plan, (4) monitoring, and (5) demonstrated 

progress.
Page 3 GAO-17-293 Oil and Gas Management

In February 2016, we reported that BSEE’s ongoing organizational 

restructuring—which it initiated in October 2013 to develop national 

programs—had not addressed long-standing deficiencies to its 

investigative, environmental compliance, and enforcement capabilities.5

To enhance its ability to effectively oversee offshore oil and gas 

development, we recommended that the Secretary of the Interior direct 

the Director of BSEE to take nine actions, including that BSEE complete 

policies outlining the responsibilities of its investigative, environmental 

compliance, and enforcement programs and update and develop 

procedures to guide them. Interior neither agreed nor disagreed with our 

recommendations. Simultaneous to our assessment of BSEE’s 

organizational restructuring, bureau leadership was developing its Fiscal 

Year 2016-2019 Strategic Plan, which identifies key initiatives to improve 

its safety and environmental oversight as well as its internal management. 

Some of these key strategic initiatives have been under way for several 

years.

In light of the concerns we identified during our review of BSEE’s 

organizational restructuring, we initiated this review under the authority of 

the Comptroller General of the United States.6 This report examines 

efforts BSEE leadership has made in implementing key strategic 

initiatives to improve its (1) safety and environmental oversight and (2) 

internal management.7

To identify progress BSEE leadership has made in implementing key 

strategic initiatives to improve its (1) safety and environmental oversight 

and (2) internal management, we reviewed BSEE strategic planning and 

budget justification documentation as well as interviewed BSEE 

leadership to identify key bureau strategic initiatives. We then reviewed 

 5

GAO, Oil and Gas Management: Interior’s Bureau of Safety and Environmental 

Enforcement Has Not Addressed Long-Standing Oversight Deficiencies, GAO-16-245 

(Washington, D.C.: Feb. 10, 2016).

6

Based on our February 2016 report regarding BSEE’s oversight capabilities as well as 

ongoing work in support of this report, in February 2017, we expanded the High Risk List 

to incorporate the restructuring of offshore oil and gas oversight. See GAO, High-Risk 

Series: Progress on Many High-Risk Areas, While Substantial Effort Needed on Others, 

GAO-17-317 (Washington, D.C.: Feb. 15, 2017).

7

In August 2016, BSEE contracted with the National Academy of Public Administration 

(NAPA) for approximately $450,000 to assess the bureau’s progress in institutionalizing 

the systems, policies and process since its 2011 establishment and determine where 

areas of critical need remain to be addressed to ensure a functioning and sustainable 

organization. NAPA is scheduled to deliver its final report to BSEE in March 2017.
Page 4 GAO-17-293 Oil and Gas Management

BSEE’s strategic initiatives and focused on those that corresponded to 

our objectives and were topics that we have not reviewed in the last 2 

years.8 For each initiative, we collected and analyzed BSEE 

documentation of their purpose and history—including budget 

justifications, project plans, and contracts, among others—to determine 

their objectives, time frames, and status. We also interviewed BSEE 

officials at headquarters responsible for bureau and program leadership 

as well as officials in the regional and district offices responsible for 

implementing BSEE oversight activities. For each initiative, we analyzed 

any progress made and compared BSEE practices for implementing its 

initiatives to bureau criteria—such as strategic plans and initiative goals—

as well as Standards for Internal Control in the Federal Government.9

We conducted this performance audit from March 2016 to March 2017 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.

BSEE’s mission is to promote safety, protect the environment, and 

conserve resources offshore through vigorous regulatory oversight and 

enforcement. BSEE’s headquarters—located in Washington, D.C., and 

Sterling, Virginia—is responsible for setting national program policy to 

meet the bureau’s mission. BSEE’s three regional offices—the Gulf of 

Mexico regional office in New Orleans, Louisiana; the Pacific regional 

office in Camarillo, California; and the Alaska regional office in 

Anchorage, Alaska—are responsible for executing oversight of oil and 

gas activities, such as conducting inspections of all facilities on the OCS. 

The five district offices that the Gulf of Mexico regional office oversees 

 8

Within the past 2 years, GAO issued reports on several topics that could be considered 

BSEE key strategic initiatives, including its organizational restructuring (GAO-16-245), 

decommissioning (GAO, Offshore Oil and Gas Resources: Actions Needed to Better 

Protect Against Billions of Dollars in Federal Exposure to Decommissioning Liabilities,

GAO-16-40 (Washington, D.C.: Dec. 18, 2015)), and human capital challenges (GAO, Oil 

and Gas Oversight: Interior Has Taken Steps to Address Staff Hiring, Retention, and 

Training but Needs a More Evaluative and Collaborative Approach, GAO-16-742 

(Washington, D.C.: Sept. 29, 2016)). 

9

GAO, Standards for Internal Control in the Federal Government, GAO-14-704G 

(Washington, D.C.: September 2014).

Background
Page 5 GAO-17-293 Oil and Gas Management

are the Houma, Louisiana; Lake Jackson, Texas; Lafayette, Louisiana; 

Lake Charles, Louisiana; and New Orleans, Louisiana district offices.

The Outer Continental Shelf Lands Act of 1953, as amended, (OCSLA) 

requires Interior to inspect each offshore oil and gas facility at least once 

per year.10 OCSLA also authorizes Interior to conduct periodic 

unscheduled—unannounced—inspections of these facilities.11 BSEE 

carries out these inspections on behalf of the Secretary throughout 

America’s 1.7 billion acres of the OCS. BSEE’s Office of Offshore 

Regulatory Programs is responsible for overseeing the bureau’s national 

inspection program, which is carried out by the bureau’s regional offices. 

During inspections, BSEE inspectors scrutinize all safety system 

components designed to prevent or ameliorate blowouts, fires, spillages, 

or other major accidents. Additionally, inspectors check for compliance 

with current plans, lease terms, and appropriate stipulations. During 

inspections, BSEE inspectors check for installation, operation, and 

maintenance of all appropriate safety and antipollution devices. They 

perform the inspections, in part, by using a checklist derived from 

regulated safety and environmental requirements. If an inspector 

identifies a regulatory violation at an offshore facility, BSEE issues a 

citation to the operator known as an incident of noncompliance (INC) in 

response to operator violations of safety or environmental standards. An 

INC may be issued in the form of (1) a warning, (2) an order to shut down 

a particular component of the facility (when it can be shut down without 

affecting the overall safety of the facility or operations), or (3) an order to 

shut down an entire drilling rig or production platform in cases when the 

violation could result in serious consequences to the environment or 

human health and safety, such as a fire or spill.12 Operators generally 

 1043 U.S.C. § 1348(c)(1).

1143 U.S.C. § 1348(c)(2).

12Interior’s policy is to place operators with a history of poor performance on its increased 

oversight list, and inspect those operators more frequently until it determines that the 

operator’s performance has improved. BSEE can also place an operator on a 

performance improvement plan due to serious incidents, poor performance data, criminal 

referral, civil penalties assessed, or uncorrected deficiencies resulting in a probationary 

status. A performance improvement plan may result in more inspections or more frequent 

inspections, which may result in an increase in INCs issued and civil penalties assessed. 

Operators may also be required to provide increased information, and have operator 

employees working during certain activities such as construction and simultaneous 

operations to facilitate communications. 
Page 6 GAO-17-293 Oil and Gas Management

have 20 days to correct the violation and notify Interior that the violation 

was corrected.13

BSEE is responsible for ensuring compliance with OCSLA and provisions 

of other federal laws, including the National Environmental Policy Act 

(NEPA).14 BSEE’s Environmental Compliance Division establishes 

national strategic goals, programs, and procedures to increase the 

accuracy, effectiveness, and consistency of all bureau environmental 

compliance policies and initiatives. BSEE’s Office of Environmental 

Compliance, located in the Gulf of Mexico regional office, is staffed by 

environmental engineers, scientists, and specialists who are responsible 

for BSEE’s NEPA compliance program, as well as field and office 

environmental compliance verification.

We have previously reported on Interior’s challenges with managing 

federal oil and gas resources. In September 2008 and July 2009,15 we 

found shortcomings in Interior’s ability to ensure that royalty payment data 

were reasonable and complete. In addition, in March 2010,16 we found 

that Interior’s policies and practices did not provide reasonable assurance 

that oil and gas produced from federal leases was being accurately 

measured and that Interior experienced challenges hiring, training, and 

retaining qualified staff to provide oversight and management of oil and 

gas operations on federal lands and waters. Further, we have reported 

that organizational transformations are not simple endeavors and require 

the concentrated efforts of both leaders and employees to realize 

intended synergies and accomplish new organizational goals. We were 

also concerned about Interior’s ability to balance continued delivery of 

services with transformational activities in view of the department’s history 

of management problems and challenges in the human capital area.

 1330 C.F.R. § 250.1452.

1442 U.S.C. §§ 4321-4347. Under NEPA, federal agencies must assess the effects of 

major federal actions—those they propose to carry out or to permit—that significantly 

affect the environment. 

15GAO, Mineral Revenues: Data Management Problems and Reliance on Self-Reported 

Data for Compliance Efforts Put MMS Royalty Collections at Risk, GAO-08-893R 

(Washington, D.C.: Sept. 12, 2008) and Mineral Revenues: MMS Could Do More to 

Improve the Accuracy of Key Data Used to Collect and Verify Oil and Gas Royalties, 

GAO-09-549 (Washington, D.C.: July 15, 2009).

16GAO, Oil and Gas Management: Interior’s Oil and Gas Production Verification Efforts Do 

Not Provide Reasonable Assurance of Accurate Measurement Production Volumes, 

GAO-10-313 (Washington, D.C.: Mar. 15, 2010).
Page 7 GAO-17-293 Oil and Gas Management

In December 2015, BSEE issued its Fiscal Year 2016–2019 Strategic 

Plan. BSEE’s strategic plan identifies strategic goals to improve its 

operations—including safety and environmental oversight—as well as its 

internal management. BSEE’s key strategic initiatives to improve safety 

and environmental oversight include developing a risk-based inspections 

program and promoting environmental stewardship. BSEE’s key strategic 

initiatives to improve its internal management include enhancing decision 

making as well as communication and transparency.

BSEE leadership has started several initiatives to improve its safety and 

environmental oversight capabilities but its limited efforts to obtain and 

incorporate input from within the bureau have hindered its progress. 

Since 2012, BSEE has sought to augment its annual inspection program 

with a risk-based inspection program, but limited efforts to obtain and 

incorporate input from experienced regional personnel have hindered 

BSEE’s ability to develop and implement the risk-based program. 

Additionally, in 2016, BSEE conducted an environmental stewardship 

initiative comprised of two simultaneous environmental risk reduction 

efforts, but these efforts were overlapping, fragmented, and 

uncoordinated, which reduced the effectiveness of the initiative and 

hindered the implementation of identified improvements.

Since it was established as a separate bureau in 2011, BSEE leadership 

has continued an initiative begun by its predecessor to transition the 

bureau’s inspection program to a risk-based approach. In 2012, BSEE 

leadership started a new initiative that included the development of a risk 

model and an approach for inspecting production facilities based on the 

risk they pose. However, BSEE leadership’s limited efforts to obtain and 

incorporate input from regional staff and management during 

development of the program led to poor pilot results. As a result, BSEE 

has changed the focus of the program and reduced expectations for its 

initial approach to risk-based inspections.

BSEE Leadership 

Has Started Several 

Initiatives to Improve 

the Bureau’s Safety 

and Environmental 

Oversight Capabilities 

but Its Actions Have 

Hindered Progress

Limited Efforts to Obtain 

and Incorporate Input from 

Regional Personnel 

Hindered the Development 

and Implementation of 

Risk-Based Inspection 

Initiative
Page 8 GAO-17-293 Oil and Gas Management

Interior’s efforts to conduct oversight based on risk date back to the 

1990s.17 In 1998, MMS, BSEE’s predecessor organization, contracted for 

a study from Carnegie Mellon University to develop a model to target 

inspections of offshore facilities based on risk. MMS did not implement 

the model at the time because it was too complex, according to BSEE 

officials. In 2009, one year prior to the Deepwater Horizon incident and 

the dissolution of the MMS in 2010, the Gulf of Mexico Regional Office 

piloted a risk-based inspection strategy in the Houma, Louisiana and 

Lake Jackson, Texas districts that regional management recommended 

for immediate implementation. However, BSEE officials told us that the 

2010 Deepwater Horizon incident and Interior’s 2010 Safety and 

Environmental Management System (SEMS) regulation18 prompted the 

bureau to reconsider approaches to conducting risk-based inspections. 

Since 2011, when it was established as the successor to MMS, BSEE 

has highlighted in every Interior budget justification for the bureau its 

ongoing efforts to identify and increase oversight of the highest-risk 

facilities and operators. Additionally, BSEE affirmed its intentions in its 

2016-2019 Strategic Plan to develop this risk-based inspection capability 

as part of its National Inspection Program.19

Beginning in 2012, BSEE began an initiative to develop an approach for 

conducting inspections of offshore facilities based on the level of risks 

they posed. Specifically, BSEE engaged Argonne National Laboratory 

(Argonne) to develop a quantitative model to serve as the foundation of 

 17For example, in the 1990s, the policy of MMS was to conduct inspections of safety 

devices using a risk-based sampling procedure.

1830 C.F.R. Part 250, subpart S. BSEE requires operators to have a SEMS program to 

identify, address, and manage safety, environmental hazards, and impacts during the 

design, construction, start-up, operation, inspection, and maintenance of all new and 

existing OCS facilities. The focus of the Safety and Environmental Management System 

program is on promoting an operator-driven system that continually improves safety 

culture and safety practices within the industry.

19BSEE’s long-term transition to a risk-based approach to safety inspection aligns with a 

2016 recommendation made by the National Research Council’s Transportation Research 

Board in Strengthening the Safety Culture of the Offshore Oil and Gas Industry on 

October 1, 2016. Specifically, the Board recommended that BSEE make greater use of 

risk principles in determining inspection frequencies and methods, such that operators 

with good performance records are subject to less frequent or less details inspections. In 

addition, inspectors should consider shifting from traditional compliance inspections to 

inspections that follow the safety management approach outlined in the SEMS regulation.

BSEE Leadership Began a 

New Initiative to Develop a 

Risk-Based Inspection 

Program, but the Initial 

Approach Had Several 

Deficiencies
Page 9 GAO-17-293 Oil and Gas Management

BSEE’s risk-based inspection capability.20 The model ranks offshore 

production platforms according to five indicator factors:21 (1) whether the 

facility is a major complex, 22 (2) whether the facility’s slot count is 15 or 

greater,23 (3) the number of inspections resulting in an INC in the previous 

year,24 (4) whether the facility experienced an incident—such as an 

explosion, fire, fatality, or injury—in the previous year, and (5) whether the 

facility experienced an incident in the previous 2 years.25 BSEE intended 

to use risk-based inspections to augment the required annual inspections 

by using the results of the Argonne model to identify facilities for 

supplemental multi-day inspections focusing on each facility’s risk 

management strategies. According to 2015 BSEE documentation on its 

risk-based approach, the bureau planned to eventually shift inspection 

resources from lower-risk facilities to higher-risk facilities and transition 

the overall inspection program from annual compliance inspections to a 

risk-based approach to more effectively use BSEE’s available inspection 

resources.26

However, to date, BSEE has not successfully implemented this 

supplemental risk-based inspection capability in the 5 years since taking 

over the initiative from MMS. BSEE leadership led the development of the 

risk-based program; however, according to officials, leadership developed 

the program with little input from regional personnel. Officials in the Gulf 

of Mexico region with knowledge and experience conducting previous 

 20Argonne is a Department of Energy laboratory in Illinois. To develop the formula, 

Argonne analyzed platform characteristics and past performance data to identify 

correlations with platform incidents. Argonne developed this model as part of an 

approximately $16.5 million interagency agreement between BSEE and the Department of 

Energy that included other technical assistance projects.

21The model adds these factors together and multiples the sum by the consequence 

factor, which is the number of components on the facility.

22Argonne defined a major complex as a facility containing at least one major structure.

23A facility’s slot count is the total number of drilling slots that the facility was designed to 

handle. In Argonne’s study, the count varied between a maximum of 83 and a minimum of 

zero.

24BSEE can issue a notice of an INC in response to operator violations of safety or 

environmental standards. 

25Argonne defines risk as the likelihood of an incident occurring relative to the severity of 

its consequence.

26Implementing an inspection program that does not include annual inspections would 

require a legislative change.
Page 10 GAO-17-293 Oil and Gas Management

risk-based inspection efforts told us they were not apprised of key 

program products until those products were well under development and 

were given little opportunity to provide comment on them. As a result, 

BSEE first identified deficiencies with its risk-based program during pilot 

testing in 2015,

27 rather than working closely with experienced regional 

personnel earlier in the process to obtain their input to identify potential 

deficiencies and remediate them during program development. For 

example, BSEE identified deficiencies in three components of its 

proposed inspection program: (1) an underlying risk model for ranking all 

production platforms, (2) the annual inspection planning methodology, 

and (3) the facility-specific inspection protocol.

Risk Model. BSEE regional officials who have longstanding 

experience evaluating offshore risk told us that the model is not 

sophisticated enough to identify platforms for risk-based inspection 

planning, and that they could have identified its deficiencies earlier in 

the program development process. Specifically, they said that the 

model does not contain sufficient information to target facilities for 

additional risk-based inspections. For example, Argonne’s model does 

not incorporate risk factors such as a facility’s change in ownership 

status or operator bankruptcy—factors that BSEE regional officials 

told us can be correlated with higher risk, as operators tend to reduce 

expenditures on maintenance at these times. Additionally, the model 

does not account for the severity of incidents of noncompliance—for 

example, whether an incident results in shutting down a facility or a 

warning—or the quantity assessed—such as whether a facility was 

cited many times or once in a single inspection. Some BSEE regional 

officials considered these types of operator performance and riskrelated intelligence to be as, or more, important for identifying highrisk facilities than the five factors assessed by the model.

BSEE headquarters worked directly with Argonne on the risk model, 

and although headquarters officials said they included regional 

personnel, they did not provide us with evidence of efforts they made 

to include those personnel or obtain their input on the risk model’s 

initial development. BSEE headquarters officials told us that Argonne 

reached out periodically to senior regional personnel, but they did not 

specify when the laboratory conducted such outreach, what 

contributions regional personnel made, or whether regional personnel 

raised concerns during Argonne’s outreach. Conversely, BSEE 

 27Although the bureau initially intended to conduct pilots in fiscal year 2014, BSEE officials 

told us they instead spent September 2013 to February 2015 testing Argonne’s model.
Page 11 GAO-17-293 Oil and Gas Management

regional personnel told us that BSEE headquarters did not inform 

them of the development of a risk model or ask them for input leading 

up to the pilot.

Inspection Planning Methodology. In 2015, BSEE outlined an 

inspection planning methodology founded on Argonne’s quantitative 

risk model that describes how BSEE would target and plan 

supplemental safety inspections for offshore production platforms. 

BSEE’s inspection planning methodology prescribes the use of two 

additional categories of information, alongside Argonne’s model, to 

select production platforms for supplemental risk-based inspections. 

Specifically, it states that BSEE would use the model’s ranking to 

identify the 20 percent of platforms that pose the highest risk. BSEE 

would then consider information on operator performance—reported 

hydrocarbon releases, number of incidents of noncompliance 

assessed in each category, and the quality of SEMS audit reports—

and other risk-related intelligence—including proximity to shore, 

production rates, and inspector assessment of overall safety—to 

further narrow the selection of high-risk facilities.

BSEE planned to test its inspection planning methodology by 

selecting and conducting five pilot inspections in late 2015 and early 

2016. According to BSEE’s program deployment and implementation 

plan, the bureau applied Argonne’s model to identify the pilot 

inspections in the Lafayette district.28 However, although BSEE’s 

inspection planning methodology prescribed the incorporation of 

additional information on operator performance and other risk-related 

intelligence in its selection of pilot facilities, a BSEE regional official 

told us that during the Risk Based Oversight Team’s discussions, 

BSEE leadership relied heavily on the risk model alone. Furthermore, 

although regional personnel participated on the Risk Based Oversight 

Team when it selected the pilots, a regional official told us they were 

largely sidelined during the discussions. As a result, regional officials 

told us the pilot selections were not among the highest risk facilities. 

For example, three of the top five facilities BSEE selected were idle 

and not producing and therefore were not inspected as part of the 

pilot. By going against BSEE’s inspection planning methodology, 

BSEE leadership appears to have excluded the input of regional 

personnel, undercutting the pilot effort and raising questions about 

 28BSEE officials told us they selected Lafayette, Louisiana due to the availability of 

inspector resources and the diversity of operators and facilities in that district that were 

representative of the region. They said that they determined that a pilot in one district 

would allow BSEE to better train staff and develop the inspection protocols.
Page 12 GAO-17-293 Oil and Gas Management

whether the bureau’s leadership has the commitment necessary to 

enable the successful implementation of its risk-based program.

Inspection Protocol. BSEE’s inspection planning methodology also 

specified that the Risk-Based Oversight Team should develop an 

inspection protocol in advance of conducting risk-based inspections 

that is tailored to each facility and describes the roles and 

responsibilities of personnel, including what components and safety 

systems will be reviewed or tested. Additionally, BSEE’s program 

methodology describes the protocol for deliverables and the 

dissemination of the inspection results.29

However, BSEE did not establish a clear pilot inspection protocol for 

the inspection team and operator for the first pilot, which led to 

confusion for BSEE personnel and the operator. Specifically, BSEE 

officials involved in the inspection told us that headquarters did not 

inform inspection team members of their responsibilities, resulting in 

ineffective use of time. In turn, for the second pilot inspection, BSEE 

officials told us that BSEE leadership asked regional personnel to 

develop the inspection protocol. Officials told us that the second pilot 

inspection was an improvement over the first because personnel were 

better prepared to carry out their responsibilities. However, officials 

said the inspection proved to be more time consuming than BSEE 

expected, particularly when compared to the time required to conduct 

a typical annual inspection. Specifically, according to one official, the 

inspection team needed between 500 and 600 total work hours to 

complete the pilot inspection, in part due to the time required in 

developing a facility-specific protocol. For comparison, the official told 

us that a typical annual inspection of a deep water platform requires 

about 100 total work hours. In addition, the official told us that annual 

inspections are a more comprehensive review of a facility’s safety 

systems because inspectors test and validate all necessary 

components, whereas a risk-based inspection considers only specific 

aspects of safety performance culture. Therefore, it is not clear 

whether risk-based inspections, as performed during the pilot, have 

proven to be a more effective method for evaluating safety relative to 

annual inspections.

Additionally, BSEE’s inspection planning methodology prescribes that 

the Risk-Based Oversight Team provide final pilot reports to the 

 29According to BSEE’s program documentation, the Risk-Based Oversight Team is 

composed of representatives from BSEE’s Office of Offshore Regulatory Programs, and 

Gulf of Mexico regional and district level staff.
Page 13 GAO-17-293 Oil and Gas Management

operators of the facilities at the earliest opportunity. However, 

according to officials, BSEE did not provide the operator of the first 

pilot facility with a report of its findings. Similarly, they said BSEE did 

not provide a report to the operator of the second pilot facility, only a 

verbal debrief until the operator requested a report through BSEE’s 

regional office. Because BSEE did not provide formal reports to 

operators included in the both pilots in a timely manner, a BSEE 

debrief noted that one of the operators was confused about the final 

results of the inspection. The purpose of the risk-based inspection 

initiative is to provide operators with the opportunity to address issues 

and improve their safety management systems, for which they need 

timely access to inspection results.

BSEE headquarters led the development of the inspection planning 

methodology and the facility-specific inspection protocol without 

obtaining and incorporating input from regional personnel who had 

knowledge and experience conducting risk-based inspection efforts. 

The Gulf of Mexico region was to evaluate risk routinely when 

planning inspections since at least the year 2000, because BSEE’s 

inspection policy stipulates that the region is to conduct supplemental 

unannounced inspections based on a quantitative and qualitative 

assessment of risk.30 In addition, BSEE’s inspection policy states that 

the bureau is to evaluate quantitative and qualitative risk assessment 

criteria to determine whether a facility’s annual scheduled inspection 

should be a complete inspection or an inspection of a selected sample 

of safety components. Furthermore, personnel from that region 

conducted a risk-based inspection pilot in 2009 in the Houma, 

Louisiana, and Lake Jackson, Texas, districts that regional 

management recommended for immediate implementation.31

Nevertheless, regional officials who had knowledge of the 2009 pilot 

 30According to BSEE officials, the Gulf of Mexico region conducted 541 unannounced 

inspections in fiscal year 2016, as of August 2016.

31According to officials, prior to the Deepwater Horizon incident, MMS had difficulty 

meeting the annual inspection mandate as laid out in OCSLA because of the small size of 

the inspection force relative to the facilities operating offshore. Over the years, various 

attempts were made to ensure that MMS successfully met its annual mandate of 

inspecting every facility at least once annually. One of these efforts involved only 

inspecting a set of predetermined mandatory components, as well as a representative 

sample of other components. The goal of the 2009 risk-based pilot was to identify the 

lowest risk facilities (e.g., small unmanned platforms, shut-in platforms, low gas 

producers) for which a full inspection would not be required so that very limited resources 

could be diverted to higher-risk facilities. Eventually, Interior’s Office of the Solicitor 

determined that inspections using the component sampling technique would not suffice to 

meet the OCSLA mandate. 
Page 14 GAO-17-293 Oil and Gas Management

said that BSEE headquarters led and developed the first facilityspecific inspection protocol without their input.

According to officials, BSEE headquarters proceeded with pilot 

inspections before regional personnel had the opportunity to raise 

concerns about the risk model, the inspection planning methodology, and 

the facility-specific inspection protocol. As a result of these deficiencies, 

officials involved in the first pilot inspection described it as a failure that 

produced few, if any, results. Only after the first pilot did BSEE leadership 

begin to engage regional personnel and incorporate their input on the 

program, according to officials. In response to the deficiencies BSEE 

identified during the first two risk-based pilot inspections, in July 2016, 

BSEE revised the risk-based inspection program based on a proposal 

that regional personnel told us they developed, which incorporates a riskbased methodology that they had previously used in the Gulf of Mexico. 

Specifically, to supplement the facility-based approach that BSEE 

leadership had been developing since 2012 based on Argonne’s risk 

model, BSEE regional personnel proposed reconstituting an inspection 

methodology that MMS used prior to the Deepwater Horizon incident 

called “blitz” inspections. Blitz inspections focus on specific facility 

components—such as compressors, generators, or cranes—that the 

bureau determines are high-risk based on analyses of trends in incidents. 

Officials told us that they added this tier of inspections because it allowed 

them to target risk across more facilities in less time than is required for 

comprehensive risk-based facility inspections. Specifically, BSEE intends 

for a typical round of blitz inspections to encompass approximately 50 

facilities for 2 to 3 hours each. Under the initial program methodology 

developed by BSEE leadership, BSEE stated that it would be able to use 

the facility-based methodology as a systematic way of deciding where to 

commit annual inspection resources. However, officials said the bureau 

now anticipates using the risk-based methodology to target no more than 

five facilities per year, instead of the more than 20 per year officials 

originally estimated. Instead, BSEE’s revised program methodology will 

use both blitz inspections and facility-based inspections based on 

Argonne’s model. BSEE’s current plans are to conduct additional pilots 

under the revised program methodology prior to implementation in fiscal 

year 2017.
Page 15 GAO-17-293 Oil and Gas Management

In July 2003, we found that when implementing large-scale management 

initiatives, a key practice is involving employees to obtain their ideas and 

gain their ownership by incorporating employee feedback into new 

policies and procedures.32 We found that employee involvement 

strengthens the process and allows them to share their experiences and 

shape policies, and that in leading organizations, management and 

employee representatives work collaboratively to gain ownership for 

these changes. Further, management’s responsibility to develop policy 

and programs in a collaborative manner is established in both BSEE’s 

internal policy and federal internal control standards. BSEE’s inspection 

policy states that headquarters is responsible for coordinating the 

development of national inspection policy, including taking into account 

region-specific circumstances. BSEE regional leadership is responsible 

for administering and implementing the inspection policy; therefore, 

logically, regional leadership would be a key contributor to helping 

develop BSEE inspection policy. In addition, under the Standards for 

Internal Control in the Federal Government, management should 

internally communicate the necessary quality information to achieve its 

objectives.33 For example, quality information is communicated down, 

across, up, and around reporting lines to all levels of the entity, and 

management receives such information about the entity’s operational 

processes that flows up the reporting lines from personnel to help 

management achieve the entity’s objectives. Therefore, systematic input 

from within the entity would help it achieve its objectives.

However, BSEE management made limited efforts to obtain and 

incorporate input from regional personnel in developing the three 

components of the risk-based inspection program, which contributed to 

deficiencies that led to an unsuccessful pilot, and ultimately, BSEE has 

been unable to achieve its goal of implementing a systematic risk-based 

inspection program. Without an Interior organizational unit at a higher 

level than BSEE (i.e., higher level oversight independent from BSEE) 

establishing a mechanism for BSEE management to obtain and 

incorporate input from personnel within the bureau, BSEE’s risk-based 

inspection program could experience continued delays and 

implementation problems.

 32GAO, Results-Oriented Cultures: Implementation Steps to Assist Mergers and 

Organizational Transformations, GAO-03-669 (Washington, D.C.: July 2, 2003).

33GAO-14-704G.

Limited Efforts to Obtain and 

Incorporate Input Hindered 

BSEE’s Ability to Identify and 

Remediate Deficiencies in Its 

Risk-Based Inspection 

Program
Page 16 GAO-17-293 Oil and Gas Management

BSEE leadership initiated two simultaneous Environmental Stewardship 

efforts to reduce environmental risks related to U.S. offshore oil and gas 

operations, but the efforts were partially overlapping, fragmented, and 

uncoordinated, which reduced the value of the outputs. In 2015, BSEE 

leadership sought to establish a baseline for environmental risks 

associated with U.S. offshore oil and gas operations and measure the 

effectiveness of its environmental protection functions and environmental 

stewardship priorities to better implement BSEE’s mission. These efforts 

included (1) identifying potential environmental risks associated with 

offshore oil and gas operations; (2) identifying current BSEE functions 

meant to regulate and manage those risks; (3) linking BSEE 

environmental stewardship priorities to specific industry activities and 

associated risks; and (4) identifying potential environmental stewardship 

gaps where BSEE functions might not be fully addressing industry 

activities with high environmental risk. These efforts were led and 

coordinated by BSEE leadership in the Environmental Compliance 

Division at headquarters, which BSEE created in 2015 to establish 

national strategic goals and procedures for the bureau’s environmental 

compliance activities.34

As part of the Environmental Stewardship initiative, BSEE conducted two 

environmental risk reduction efforts. Specifically, in December 2015, 

BSEE headquarters engaged Argonne to conduct an Environmental Risk 

Assessment, and in February 2016, established an internal 

Environmental Stewardship Collaboration Core Group (Core Group) 

comprised of BSEE personnel.35 In July 2016, both Argonne and the Core 

Group produced final reports summarizing their findings. Both reports 

found that some of BSEE’s activities, such as those focused on safety 

oversight, were not clearly linked to environmental stewardship. 

Additionally, Argonne also reported that some environmental protection 

and stewardship activities are not described in sufficient detail in BSEE 

regulations, policies, and interagency agreements. Argonne 

recommended that BSEE clarify functions that primarily focus on safety to 

explicitly identify environmental protection as an aspect of safe 

operations. Likewise, the Core Group found that some programs’

 34BSEE also identified environmental stewardship as one of its operational excellence 

goals in its Fiscal Year 2016-2019 Strategic Plan.

35BSEE funded Argonne’s effort via an interagency agreement with the Department of 

Energy for approximately $600,000.

Coordination Problems 

Hindered BSEE’s 

Environmental 

Stewardship Efforts
Page 17 GAO-17-293 Oil and Gas Management

relationships to environmental stewardship might not always be readily 

apparent to program staff or more broadly within BSEE.

The efforts were overlapping because BSEE leadership tasked both 

Argonne and the Core Group with the same five objectives to identify: (1) 

linkages and gaps in BSEE’s environmental stewardship of offshore oil 

and gas operations, (2) all environmental risks in offshore oil and gas 

operations, (3) mitigations already in place to reduce the identified 

environmental risks, (4) stewardship priorities for the Environmental 

Compliance Division; and (5) opportunities for improvement of BSEE 

environmental stewardship.

However, the efforts were also fragmented because BSEE leadership did 

not effectively coordinate the execution of these efforts, which hindered 

information sharing between Argonne and the Core Group that could 

have enhanced the value of each effort’s report. Instead, both efforts 

were executed simultaneously with little evidence of information sharing 

or communication. For example, Argonne presented its work at the Core 

Group’s initial meeting in February 2016; however, at that time, Argonne 

had not yet completed the majority of its contracted tasks. BSEE officials 

involved in the Core Group also told us that Argonne did not contribute to 

the Core Group activities throughout the effort. According to BSEE 

officials, Argonne’s findings were added to the Core Group report by 

bureau leadership following the completion of the Core Group’s 

assessment and without discussion or assessment by Core Group team 

members. Similarly, some officials involved in the Core Group said that 

BSEE headquarters did not communicate the objectives of the Argonne 

effort, thereby limiting the ability of the Core Group to coordinate with 

Argonne to maximize its results.

Furthermore, Argonne did not have access to bureau information and 

personnel that could have enhanced its efforts. Argonne’s report stated 

that BSEE regional experts had information and technical knowledge that 

could be used to review their assumptions and to identify additional 

industry activities for analysis. Argonne also stated that it may have overor underestimated potential risks, and did not determine the effectiveness 

of BSEE’s environmental stewardship activities.36 In turn, Argonne 

 36Argonne’s report stated that identification of possible stewardship gaps does not 

necessarily mean that the associated environmental impacts are occurring or are not 

sufficiently limited or mitigated by current BSEE environmental protection and stewardship 

activities. The Statement of Work did not specify whether BSEE asked Argonne to 

determine the effectiveness of the bureau’s activities.
Page 18 GAO-17-293 Oil and Gas Management

recommended BSEE regional subject matter experts review its analysis 

regarding the assumptions used in the risk evaluation and repeat the risk 

characterization using parameters that regional experts determine to be 

more appropriate. Because Argonne was aware of the limitations of its 

assessments, Argonne recommended that BSEE regional experts redo 

and validate these assessments. In addition to its report, Argonne 

provided the bureau with a spreadsheet-based risk assessment tool for 

BSEE to use during office verification and field monitoring. However, 

given Argonne’s concern about the accuracy of its analysis, BSEE plans 

to review and verify Argonne’s work.

In addition to its report, the Core Group established a bureau-wide 

definition for environmental stewardship and BSEE leadership drafted 

three work plans. The work plans include one plan to promote 

environmental stewardship on a continuous basis, 37 one work plan to 

redo Argonne’s analysis, and another to create a manual with 

environmental compliance standard operating procedures for several of 

its core functions. BSEE anticipates that this work will be ready for 

management review in January 2017.

BSEE headquarters was responsible for coordinating with Argonne 

officials to ensure they had access to BSEE subject matter experts during 

the assessment, especially for the risk characterization and ranking task. 

Because effective coordination did not occur, the resources used to do 

these two simultaneous analyses were not used efficiently. BSEE’s 

National Environmental Compliance Policy calls for coordination within 

the bureau when developing national policies and procedures. When 

BSEE initiated these efforts, bureau policy stated that communication and 

coordination within the Bureau and with external stakeholders is an 

essential component of success for its environmental division. In April 

2016, BSEE updated its national policy but maintained an emphasis on 

good coordination across the bureau. Specifically, the current policy 

states that the Environmental Compliance Division collaborates within the 

bureau on national efforts to develop goals and policies. Furthermore, 

communication is an element of good federal internal controls. Under the 

Standards for Internal Control in the Federal Government management 

should internally and externally communicate the necessary quality 

 37The Core Group defined environmental stewardship as the responsibility of all BSEE 

employees to carry out to the highest standards all duties that contribute, directly or 

indirectly, to the management, protection and care of the coastal, marine, and human 

environments.
Page 19 GAO-17-293 Oil and Gas Management

information to achieve the entity’s objectives.38 Because BSEE 

management tasked both environmental risk response efforts with the 

same objectives and did not effectively communicate information to 

coordinate the efforts, the efforts overlapped and ultimately delivered few 

results that BSEE can implement immediately. Without higher level 

oversight within Interior establishing a mechanism for BSEE management 

to obtain and incorporate input from personnel within the bureau and any 

external parties, such as Argonne, that can affect the bureau’s ability to 

achieve its objectives, BSEE’s Environmental Stewardship efforts are 

likely to experience continued implementation and efficacy problems.

Since 2013, BSEE began four strategic initiatives to improve its internal 

management, but their successful implementation has been hindered by 

limited leadership commitment and not addressing factors contributing to 

trust concerns. In 2013 and 2014, BSEE leadership began initiatives—

development of an enterprise risk management framework and 

performance measures, respectively—to improve its decision making 

capabilities—but has not fully implemented them. By not fully 

implementing internal management initiatives, BSEE management 

demonstrates limited leadership commitment. In 2016, BSEE conducted 

initiatives—an employee engagement effort and an assessment of its 

Integrity and Professional Responsibility Advisor—to enhance 

communication and transparency, but these do not address key factors 

that contribute to long-standing trust concerns within the bureau.

BSEE leadership began initiatives to improve bureau internal 

management capabilities but has not fully implemented them. In 2013, 

BSEE began an initiative to develop an ERM framework but has not fully 

implemented it as a management tool. In 2014, BSEE began an initiative 

to develop performance measures for its programs but has not 

implemented any measures.

BSEE has made some progress over the past 3 years in implementing an 

ERM framework but has not completed the actions necessary to fully 

implement it. In 2013, BSEE began an initiative to develop and implement 

 38GAO-14-704G.

BSEE Leadership 

Has Made Limited 

Progress in 

Implementing 

Strategic Initiatives to 

Improve Its Internal 

Management

BSEE Leadership Began 

Initiatives to Improve 

Bureau Internal 

Management Capabilities 

but Has Not Fully 

Implemented Them

BSEE Has Not Fully 

Implemented Its Enterprise 

Risk Management Framework
Page 20 GAO-17-293 Oil and Gas Management

an ERM framework to provide enduring management of internal and 

external risks that threaten achievement of BSEE’s mission. The Office of 

Management and Budget defines ERM as an effective agency-wide 

approach to addressing the full spectrum of the organization’s risks by 

understanding the combined impacts of risks as an interrelated portfolio, 

rather than addressing risks only within silos (i.e., viewing problems in 

isolation).39 BSEE’s Fiscal Year 2016-2019 Strategic Plan identifies the 

integration of enterprise risk management into bureau-wide decision 

making as a key initiative to meet BSEE’s strategic goal to enhance 

decision making through the collection, management, and analysis of 

high-quality information.40 In conjunction with a contracted ERM support 

consultant, BSEE developed an iterative ERM cycle that includes six 

steps: (1) establish an ERM program, (2) identify individual risks and 

group them into strategic risks, (3) prioritize risks, (4) develop risk 

treatments, (5) implement selected risk treatments, and (6) monitor 

performance.41

BSEE completed the first three of these six steps in its iterative ERM 

cycle. BSEE officials told us that they had taken actions on the other 

three steps. Specifically:

1. Establish an ERM program: BSEE established an ERM charter in 

2014 and drafted an ERM Handbook and Bureau Manual Chapter to 

guide ERM activities in April 2016 but has not finalized or distributed 

them throughout the bureau.

2. Identify individual risks and group them into strategic risks: In 2014, 

BSEE identified 12 strategic risks that cover the lifecycle of BSEE 

operations.

3. Prioritize risks: In 2014, the bureau prioritized its strategic risks, 

according to BSEE ERM planning documentation. BSEE assessed 

 39Office of Management and Budget, Cir. No. A-11, at § 270.24. In addition, the Office of 

Management and Budget issued new policy for agency implementation of Enterprise Risk 

Management in July 2016. Office of Management and Budget, Cir. No. A-123.

40BSEE’s fiscal year 2016 and 2017 Budget justifications highlighted its ERM initiative as 

key to implementing its strategic plan.

41Since 2013, BSEE has spent approximately $1.5 million on contracted consultant 

support to develop and implement its ERM framework.
Page 21 GAO-17-293 Oil and Gas Management

each strategic risk by evaluating the potential severity and likelihood 

of a failure event occurring and ranked them based on the results.42

4. Develop risk treatments: BSEE planned to verify the prioritization of its 

top several strategic risk treatments by July 2016 but did not do so. 

BSEE officials told us that the bureau halted ERM implementation 

while it acquired automated ERM software. However, in November 

2016, BSEE determined that it would reinitiate ERM implementation 

simultaneous to the implementation of software. BSEE now plans to 

complete evaluation of risk treatments in March 2017.

5. Implement selected risk treatments: BSEE planned to finalize a plan 

for its prioritized risk treatments by August 2016 but did not do so 

because of the aforementioned temporary halt to ERM 

implementation. BSEE officials told us that the bureau has 

implemented some risk treatments. BSEE now plans to finalize its risk 

treatment plan in March 2017.

6. Monitor performance: BSEE plans to begin monitoring the 

performance of its risk treatments following their implementation. 

BSEE intended to promulgate a monitoring plan by October 2016 but 

did not do so because of the aforementioned temporary halt to ERM 

implementation. BSEE now plans to complete its monitoring plan in 

March 2017.

As part of its ERM initiative, BSEE is assessing the risks posed by its 

relationships with other agencies. BSEE’s Fiscal Year 2016-2019 

Strategic Plan identified reviewing the efficacy and implementation of 

current interagency relationships as a key initiative to support its strategic 

goal of maintaining productive relationships with external entities.43 In 

2015, BSEE’s ERM support consultant assessed existing interagency 

relationships by prioritizing the 35 known memorandums of agreement, 

understanding, and collaboration based on the risk exposure they pose to 

the bureau. Of these 35 interagency memorandums, BSEE’s consultant 

determined that 11 created a significant or moderate increase in risk 

exposure to the bureau. For example, the consultant determined that a 

 42BSEE’s assessment of severity is based on four factors: (1) number of deaths, (2) 

barrels of oil spilled, (3) dollar value of economic damage, and (4) impact to internal 

bureau structure. BSEE’s assessment of likelihood is based on the frequency of 

occurrence over a given time period.

43Other BSEE efforts also recommended updating the bureau’s interagency relationships. 

A 2013 internal BSEE internal evaluation recommended improvements to relationships 

with other agencies. Brian Salerno, Building Stronger Connections: An independent look 

at BSSE’s [sic] interagency partnerships and their regulatory effectiveness (July 5, 2013). 
Page 22 GAO-17-293 Oil and Gas Management

memorandum of understanding with BOEM to carry out assigned 

responsibilities under the agreement between the U.S. and Mexico 

concerning transboundary hydrocarbon reservoirs in the Gulf of Mexico 

created the greatest risk exposure to BSEE. BSEE has developed a plan 

to update one of these agreements but has not developed any specific 

plans to complete revisions for the other 10.44

In 2016, BSEE began developing a systematic process for lifecycle 

management of interagency agreements and to improve the bureau’s 

awareness of existing agreements and their implementation status, 

among other things. For example, BSEE has developed four criteria for 

prioritizing interagency agreements in need of update. BSEE also 

identified additional interagency agreements not identified by the bureau’s 

ERM consultant. BSEE planned to assess and prioritize the risks posed 

by these newly discovered agreements by October 2016, but the bureau 

now plans to do so in March 2017. BSEE also plans to implement a 

bureau manual chapter and handbook that outlines a lifecycle interagency 

agreement management process in June 2017.

Since 2012, BSEE has highlighted the need to develop and implement 

performance measures to inform management decision making. 

Specifically, BSEE’s October 2012 Strategic Plan - Fiscal Years 2012-

2015 stated that the bureau must develop performance measures to 

assess the results of its programmatic efforts as well as its ability to 

reduce the risks of environmental damage and accidents. Additionally, the 

October 2013 Director’s Intent message—which outlined the BSEE 

Director’s multi-year priorities—reaffirmed this need, stating that BSEE 

must measure to make informed management decisions and that to do so 

it must set key performance targets and measures, consistent with its 

strategic plan, and use them to guide its actions and decisions.45

BSEE’s initiative to develop performance measures has been comprised 

of three sequential efforts, none of which have resulted in the 

implementation of performance measures. In July 2014, the bureau 

initiated the first of three formal efforts to develop performance measures. 

Specifically, BSEE contracted with a consultant to reassess its existing 

 44BSEE plans to complete implementations of its updated memorandum of understanding 

with the Environmental Protection Agency by the end of March 2017.

45Each of BSEE’s last four annual budget justifications—fiscal years 2014 through 2017—

highlighted ongoing efforts to develop performance measures to improve program 

performance.

BSEE Has Not Implemented 

Program Performance 

Measures
Page 23 GAO-17-293 Oil and Gas Management

performance management system and update it as needed to ensure 

managers can make informed data-driven decisions.46 However, BSEE 

terminated the contract in January 2015 because, according to BSEE 

officials, leadership determined that the bureau needed to complete its 

ongoing internal organizational restructuring prior to developing 

programmatic performance measures.47

In December 2015, BSEE began its second effort, using the same 

consultant under a separate contract to develop performance measures 

for the national programs it established during its organizational 

restructuring—investigations, environmental compliance, and 

enforcement, as well as its Integrity and Professional Responsibility 

Advisor (IPRA).48 Specifically, the contract stipulated that the consultant 

analyze program objectives and components, develop potential 

performance measures, identify data sources and data collection 

requirements, and coordinate with BSEE officials to establish objectives 

for each measure. In March 2016, the consultant delivered a report to 

BSEE that identified 12 performance measures—5 for investigations, 3 

for environmental compliance, 2 for enforcement, and 2 for the IPRA.49

However, BSEE headquarters officials told us that they are not 

implementing the measures and plans developed by the consultant due to 

a variety of factors, such as data availability limitations. For example, one 

proposed measure included a methodology to assess the effectiveness of 

issuing civil penalties to operators for safety or environmental infractions 

as a deterrent to committing future infractions. However, BSEE 

headquarters officials stated that the bureau does not issue enough civil 

penalties to conduct such an assessment—that is, the universe of 

available data to assess is too small. BSEE headquarters officials told us 

that the bureau did not implement the consultant-developed measures, 

 46The total value of this contract, including all options, was approximately $875,000.

47BSEE paid the consultant approximately $195,000 prior to its termination.

48BSEE’s fiscal year 2016 and 2017 budget justifications state that one of the goals of the 

bureau’s organizational restructuring was to develop performance measures for major 

program functional areas. Developing performance measures for the established national 

programs was part of a contract to provide support services for an organizational 

restructuring. The total value of the contract was approximately $1.23 million, of which 

$43,500 was designated for the development of performance measures. 

49Some measures were classified as “informational” because they do not include 

performance targets and were developed to provide insight into programmatic function 

and establish baseline data on activities.
Page 24 GAO-17-293 Oil and Gas Management

but rather that those measures are informing BSEE’s third effort to 

develop performance measures.

In 2016, BSEE initiated a third effort to develop performance measures by 

providing a framework for considering performance management. 

Specifically, in January 2016—simultaneous to the aforementioned 

consultant’s performance measure development effort—BSEE finalized a 

fiscal year 2016 work plan for the implementation of a revised 

performance management framework to include the identification of 

performance measures to help leadership gauge progress against the 

bureau’s strategic plan.50 BSEE headquarters officials told us that this 

initiative, which is being conducted internally by BSEE personnel, 

represents the beginning of a multi-year effort to implement a 

performance management system. BSEE initially planned to finalize its 

internally-developed list of performance measures in February 2016, but 

did not meet this deadline. Additionally, BSEE headquarters officials told 

us that in June 2016, the bureau narrowed the scope of the initiative from 

a comprehensive set of performance measures to no more than three 

performances measures per program. These officials explained that this 

was a more feasible scope given the difficulties in obtaining management 

commitment as well as the technical complexity of the initiative. As of 

August 2016, BSEE had developed 17 draft performance measures, but 

bureau leadership has repeatedly missed deadlines to review them. 

BSEE headquarters officials told us that, subsequent to leadership 

approval, the bureau plans to pilot these measures and develop others in 

upcoming years. In December 2016, BSEE completed a fiscal year 2016 

Baseline Performance Measure Report that discusses these 17 measures 

and the bureau’s plans for future iterations of their development.

We have previously reported on BSEE’s struggles to effectively 

implement internal management initiatives. Specifically, in February 2016, 

we found that since its inception in 2011, BSEE had made limited 

progress in enhancing the bureau’s investigative, environmental 

compliance, and enforcement capabilities.51 More than 2 years into its 

restructuring effort—and more than 5 years after the Deepwater Horizon 

incident—the bureau had not completed the underlying policies and 

 50BSEE contracted with its restructuring support consultant to compile the bureau’s 23 

fiscal year 2016 program work plans in a February 2016 report for $64,000.

51GAO-16-245.

By Not Fully Implementing 

Internal Management 

Initiatives, BSEE 

Management 

Demonstrates Limited 

Leadership Commitment
Page 25 GAO-17-293 Oil and Gas Management

procedures to facilitate the implementation of its national programs for 

these three capabilities. Moreover, we found that BSEE continues to face 

deficiencies in each of these capabilities that undermine its ability to 

effectively oversee offshore oil and gas development. As a result, among 

other things, we recommended that Interior direct BSEE to complete the 

policies and procedures for these three capabilities. Interior agreed that 

additional reforms—such as documented policies and procedures—are 

needed to address offshore oil and gas oversight deficiencies, but Interior 

neither agreed nor disagreed with our recommendation.

Likewise, with regard to its ongoing strategic initiatives, more than 3 years 

have passed since BSEE initiated the development of its ERM 

framework, and more than 2 years have passed since BSEE prioritized 

the strategic risks it faces. However, BSEE has yet to develop, 

implement, and monitor risk treatments to even the highest priority risks. 

Moreover, more than 4 years have passed since BSEE identified the 

development and implementation of performance measures as an 

organizational need. In that time, BSEE initiated several efforts to develop 

and implement such measures, and although BSEE has developed 

measures, it has yet to fully implement any.

In our 2013 High-Risk update, because progress had been made in one 

of the three segments we identified in Interior’s Management of Federal 

Oil and Gas Resources on our 2011 High-Risk List—reorganization of its 

oversight of offshore oil and gas activities—we narrowed the scope of the 

high-risk area to focus on the remaining two segments (revenue collection 

and human capital).52 One of our five criteria for assessing whether an 

area can be removed from our high-risk list is leadership commitment—

that is, demonstrated strong commitment and top leadership support.53

An example of leadership commitment is continuing oversight and 

accountability. In our 2015 High-Risk update, we determined that Interior 

had met our criteria for leadership commitment because Interior had 

implemented a number of strategies and corrective measures to help 

ensure the department collects its share of revenue from oil and gas 

produced on federal lands and waters and was developing a 

comprehensive approach to address its ongoing human capital 

challenges. However, BSEE leadership has not demonstrated continuing 

 52GAO-13-283.

53The five criteria for removal are (1) leadership commitment, (2) agency capacity, (3) an 

action plan, (4) monitoring efforts, and (5) demonstrated progress. GAO-15-290.
Page 26 GAO-17-293 Oil and Gas Management

oversight and accountability for implementing internal management 

initiatives, as evidenced by its limited progress implementing key strategic 

initiatives as well as its inability to address long-standing oversight 

deficiencies. BSEE leadership has consistently stated that it prioritized 

internal management initiatives by citing their importance in strategic 

plans and budget justifications. For example, BSEE’s fiscal year 2017 

budget justification states that three key initiatives will inform the 

implementation of the bureau’s Fiscal Year 2016-2019 Strategic Plan: (1) 

refinement of a comprehensive set of output and outcome based 

performance measures; (2) implementation of an ERM framework to 

facilitate information sharing and identify the risk relationships among and 

within programs; and (3) implementation of its national program manager 

model to ensure consistency across regions. According to the budget 

justification, these initiatives support both effective decision making and 

assessment of BSEE’s progress in meeting its priorities. However, BSEE 

leadership has not fully implemented actions to demonstrate the 

commitment necessary to enable the successful implementation of such 

initiatives. Without higher-level oversight within Interior addressing 

leadership commitment deficiencies within BSEE—including by 

implementing internal management initiatives and ongoing strategic 

initiatives (e.g., ERM and performance measure initiatives)—in a timely 

manner, the bureau is unlikely to succeed in implementing internal 

management initiatives, including its key strategic initiatives for ERM and 

performance measures, in a timely manner.

In 2016, BSEE conducted two initiatives—one on employee engagement 

and an assessment of its IPRA—to enhance communication and 

transparency, but these initiatives have not achieved results or addressed 

factors that contribute to trust concerns within the bureau.

BSEE’s Fiscal Year 2016-2019 Strategic Plan discusses improving 

employee engagement—generally defined as the sense of purpose and 

commitment employees feel toward their employer and its mission—to 

foster a culture of collaboration within BSEE by, among other things, 

BSEE Employee 

Engagement Initiative and 

IPRA Process Assessment 

Have Not Addressed 

Factors Contributing to 

Long-Standing Trust 

Concerns between 

Headquarters and the 

Regions

BSEE Has Not Developed an 

Employee Engagement 

Strategy
Page 27 GAO-17-293 Oil and Gas Management

enhancing trust and implementing an internal communications approach 

that encourages dialogue and sets expectations for sharing accurate and 

timely information. A 2015 bureau strategic planning summary document 

stated that there is a lack of trust and respect between and among

headquarters, regions, and the districts. Additionally, a 2013 BSEE 

internal evaluation found that some outside the bureau commented that 

BSEE does not appear to trust its own personnel.54 We have previously 

found that communication from management—as reflected by employee 

responses in the Federal Employee Viewpoint Survey55—is one of the six 

strongest drivers of employee engagement.56 BSEE Federal Employee 

Viewpoint Survey data for 2013, 2014, and 2015 indicate that 

approximately one-third of BSEE respondents were not satisfied with 

information received from management regarding organizational activities 

(32.9, 31.1, and 32.9 percent, respectively).57 Likewise, less than half 

were satisfied with information received from management regarding 

organizational activities (41.7, 46.1, and 43.7 percent, respectively).58

According to some BSEE officials from across the bureau, the need to 

improve trust and communication are interconnected. Some senior BSEE 

officials throughout the organization told us that poor communication from 

headquarters has exacerbated trust issues between headquarters and 

the regions (including districts) that have existed since the 2010 

Deepwater Horizon incident. As previously discussed, BSEE leadership’s 

safety and environmental stewardship initiatives have had limited 

success, largely due to poor communication and coordination between 

headquarters and the regions. BSEE officials from across the bureau told 

us that the poor communication between headquarters and the regions 

 54Brian Salerno, Building Stronger Connections: An independent look at BSSE’s [sic] 

interagency partnerships and their regulatory effectiveness (July 5, 2013).

55The Federal Employee Viewpoint Survey is a tool that measures employees’

perceptions of whether, and to what extent, conditions characterizing successful 

organizations are present in their agencies. Survey results provide valuable insight into 

the challenges agency leaders face in ensuring the federal government has an effective 

civilian workforce and how well they are responding.

56GAO, Federal Workforce: Additional Analysis and Sharing of Promising Practices Could 

Improve Employee Engagement and Performance, GAO-15-585 (Washington, D.C.: July 

14, 2015).

57The government-wide averages during fiscal years 2013 through 2015 were 28.5, 29.9, 

and 29.2 percent, respectively.

58The government-wide averages during fiscal years 2013 through 2015 were 47.6, 45.6, 

and 46.8 percent, respectively.
Page 28 GAO-17-293 Oil and Gas Management

led to a deficit of trust vertically throughout the bureau. They also told us 

that because BSEE headquarters was newly established as part of the 

reorganization of MMS in 2010 following the Deepwater Horizon incident, 

there were not many existing relationships between headquarters and 

regional personnel. BSEE regional officials told us of specific examples in 

which BSEE headquarters did not communicate certain information to the 

regions, which has exacerbated the existing trust concerns, including the 

following examples:

• BSEE leadership reorganized its Pacific region with a structure that 

does not align directly with the bureau’s national program manager 

model and did not communicate the reasons why. One of the guiding 

principles of BSEE’s organizational restructuring was consistency, but 

limited communication regarding BSEE’s reorganization of its regions 

led some to believe that BSEE headquarters was not abiding by this 

principle. According to senior BSEE officials, the bureau restructured 

the Pacific Region—which includes 42 permanent full time equivalent 

positions—due to management problems with some personnel. They 

told us that to maintain an appearance of impartiality during the 

reorganization of the Pacific Region, BSEE contracted with a 

consultant to recommend a new organizational structure. 59 In turn, 

the consultant recommended changes to address a lack of leadership 

and ineffective communication in the region, which BSEE officials told 

us influenced the new regional structure. However, this new structure 

does not include offices that correspond to the new national programs 

established during BSEE’s organizational restructuring—

investigations, environmental compliance, and enforcement. BSEE 

leadership officials told us that the small relative size of the Pacific 

Region necessitated a unique structure. Conversely, the Gulf of 

Mexico region—an organization more than 10 times as large, with 454 

full time equivalent positions—was restructured internally by BSEE 

personnel without relying on a consultant. Additionally, the Gulf of 

Mexico Region’s revised organizational structure aligns with the 

national program manager model implemented at BSEE headquarters 

(i.e., it has offices dedicated to the new national programs—

investigations, environmental compliance, and enforcement). Some 

BSEE officials told us that they were unaware of leadership’s rationale 

for the differences in office structures because it was not 

communicated across the bureau. In turn, this lack of communication 

from headquarters led to confusion because regional personnel 

 59The value of this contract was approximately $410,000.
Page 29 GAO-17-293 Oil and Gas Management

viewed it as inconsistent with the Director’s Intent for the restructuring, 

which contributed to trust concerns.

• BSEE headquarters did not notify the Gulf of Mexico Region when it 

advertised for two field-based positions located in the region to 

manage its SEMS program.60 According to BSEE regional officials, 

these positions would replicate functions that already existed in the 

Gulf of Mexico Region’s Office of Safety Management. Further, the 

reporting chain of these positions did not align with other actions 

taken during organizational restructuring, which emphasized 

consistency across the bureau. Specifically, these field-based 

positions would report to headquarters rather than regional leadership 

even though the Gulf of Mexico Region recently had undergone a 

restructuring to ensure that regional program offices report to regional 

leadership rather than headquarters. As a result, BSEE regional 

officials told us that headquarters’ actions to create new positions that 

would affect the region without notifying it contributed to the trust 

concerns of regional personnel.

• BSEE headquarters did not disseminate the final 2016 Environmental 

Stewardship Collaboration Core Group report to all group members, 

including representatives from the Office of Environmental 

Compliance, which is BSEE’s primary organization for conducting 

environmentally-focused oversight. As a result, BSEE operational 

personnel who could potentially benefit from the results of the working 

group were not advised of its final findings.

In February 2016, BSEE announced an initiative to assess internal 

communications and develop an employee engagement strategy. The 

data collection plan for this employee engagement initiative focused on 

conducting outreach across the bureau to identify the means by which 

BSEE personnel prefer to receive information—for example, town hall 

meetings, BSEE’s website, or e-mail. BSEE conducted this outreach but 

as of November 2016 had not developed an employee engagement 

strategy—although its original target completion date was April 2016—

and it is unclear when it will do so. In September 2016, BSEE decided to 

conduct a second round of outreach across the organization by spring 

2017 to review feedback from the initial outreach, discuss next steps, and 

provide guidance on existing communications resources. Additionally, 

based on its initial outreach efforts, BSEE identified numerous interim 

projects to undertake while it develops its employee engagement 

 60One of the goals of BSEE’s Fiscal Year 2016-2019 Strategic Plan is to better define and 

communicate the roles of all BSEE offices.
Page 30 GAO-17-293 Oil and Gas Management

strategy: redesigning the bureau’s intranet website, updating its online 

employee directory, briefing employees on employee engagement project 

findings, training on BSEE’s e-mail system, building staff interaction, and 

streamlining its staff onboarding process. However, BSEE headquarters 

officials told us that the bureau has not identified a plan with time frames 

for completion of these efforts.

BSEE employee engagement initiative documentation identifies the need 

to enhance communication vertically and horizontally across the bureau,

but it is unclear whether its employee engagement initiative will address 

the lack of quality information that BSEE officials told us undermines trust 

across the organization or set expectations for sharing accurate and 

timely information as called for by BSEE’s Fiscal Year 2016-2019 

Strategic Plan. Under Standards for Internal Control in the Federal 

Government, management should internally communicate the necessary 

quality information to achieve the entity’s objectives.61 For example, 

management communicates such quality information down, across, up, 

and around reporting lines to all levels of the entity. However, it is unclear 

whether BSEE’s employee engagement initiative will do so because the 

scope of the effort has focused on means of communication rather than 

quality of information. Without expanding the scope of its employee 

engagement initiative to incorporate the need to communicate quality 

information throughout the bureau, BSEE’s employee engagement 

initiative might not address the lack of quality information being 

communicated throughout the bureau that is exacerbating trust concerns.

The bureau’s IPRA is responsible for promptly and credibly responding to 

allegations or evidence of misconduct and unethical behavior by BSEE 

employees and coordinating its activities with other entities, such as the 

IG.62 Senior BSEE officials from across the bureau stated that the IPRA 

function is critical to bolstering trust within the bureau because personnel 

need to have a functioning mechanism to which they can report potential 

misconduct by other employees. However, some BSEE officials from 

across the bureau expressed concern regarding the IPRA’s process for 

 61GAO-14-704G.

62As part of BSEE’s restructuring of its investigative capabilities in 2015, the bureau 

established an IPRA within the Office of the Director to investigate allegations of serious 

misconduct involving any employee not accepted for investigation by the IG The IPRA 

function had previously been located in BSEE’s Investigations and Review Unit (IRU), 

which was dissolved as part of BSEE’s organizational restructuring in 2015 and split into 

two new programs: the Safety and Incident Investigation Division and the IPRA. 

BSEE’s IPRA Pilot 

Assessment Did Not Address 

Unclear and Conflicting 

Guidance
Page 31 GAO-17-293 Oil and Gas Management

adjudicating allegations of misconduct. To increase transparency and 

consistency in how IPRA cases are handled following the completion of 

an investigation report, BSEE conducted a pilot initiative in 2016 to 

assess the types of allegations of misconduct being reported to the IPRA 

as well as the frequency with which the IPRA referred such allegations to 

other entities. In August 2016, BSEE determined that the majority of 

incoming allegations are being directed to the appropriate office for 

action.

However, BSEE’s pilot initiative did not address unclear and conflicting 

guidance that could undermine organizational trust in how the IPRA 

addresses allegations of misconduct. Specifically, the Interior Department 

Manual states that IPRA responsibilities include working with the IG on 

internal matters the IPRA investigates, pursuing certain administrative 

investigations with the IG’s consent and knowledge, and advising the IG 

of the status and results of IPRA investigations, as requested.63

Additionally, IPRA guidance stipulates that once an allegation is received, 

the IPRA Board—composed of the IPRA, the head of Human Resources, 

and the Deputy Director—will assess whether the allegation should be 

referred to the IG or other appropriate entity, investigated by the IPRA, or 

closed for no further action. Further, the IPRA told us that the IG has first 

right of refusal to investigate all allegations of misconduct within the 

bureau. However, the Interior Department Manual and IPRA guidance do 

not specify criteria for the severity thresholds for allegations that are to be 

referred to the IG. As a result, the boundaries of IPRA responsibility are 

unclear.

Additionally, BSEE’s pilot initiative did not address IPRA guidance that 

conflicts with the reporting chain established by the Interior Department 

Manual and BSEE’s organization chart. Specifically, the Interior 

Department Manual and BSEE’s organization chart indicate that the IPRA 

reports to the BSEE Director.64 However, IPRA guidance also states that, 

for cases that are not accepted by the IG, an IPRA Board composed of 

the IPRA, the head of Human Resources, and the Deputy Director will 

assess whether the allegation should be referred, investigated by the 

 63The IPRA Internal Investigations Log includes internal investigations conducted by the 

IRU prior to the creation of the IPRA and its associated guidance. BSEE’s IPRA pilot 

report stated that 1 of the 12 allegations (8 percent) it received during the pilot period were 

forwarded to the IG.

64The IPRA’s predecessor organization, the IRU, was also tasked with reporting to the 

BSEE Director.
Page 32 GAO-17-293 Oil and Gas Management

IPRA, or closed for no further action. BSEE officials told us that, in 

practice, the IPRA makes determinations as stipulated by the IPRA 

guidance. In turn, this reporting structure—in which the IPRA Board 

determines how to proceed without consultation with the Director—does 

not align with the Interior Department Manual and BSEE organization 

chart. Some BSEE regional officials told us that the uncertainty of how the 

IPRA reports allegations to the IG as well as its reporting structure led 

them to question the independence of IPRA activities and expressed 

concern that the IPRA could be used to retaliate against employees, 

which has undermined organizational trust in its activities.65

Under the federal standards of internal control, management should 

design control activities to achieve objectives and respond to risks.66 For 

example, agencies are to clearly document internal controls, and the 

documentation may appear in management directives, administrative 

policies, or operating manuals. While BSEE has documented its policies, 

they are not clear, because (1) neither the IPRA guidance nor the Interior 

Department Manual specifies criteria for the severity thresholds for 

allegations that are to be referred to the IG and (2) the IPRA guidance 

does not align with the Interior Department Manual and BSEE 

organization chart concerning the IPRA reporting chain. Moreover,

BSEE’s IPRA pilot initiative did not address the unclear and conflicting 

guidance regarding IPRA’s referral criteria and reporting chain, 

respectively. Without assessing and amending its IPRA guidance to 

clarify (1) the severity threshold criteria for referring allegations and (2) 

the IPRA reporting chain, BSEE risks further eroding organizational trust 

in the IPRA to carry out its mission to promptly and credibly respond to 

allegations or evidence of misconduct by BSEE employees.

Since 2012, BSEE has begun several key strategic initiatives to improve 

its safety and environmental oversight. However, the bureau has made 

limited progress in implementing them. For example, BSEE’s 

Environmental Stewardship Initiative encompassed two simultaneous 

efforts to reduce environmental risks related to U.S. offshore oil and gas 

operations, but the efforts were partially overlapping, had ineffective 

 65Some IPRA investigations are initiated at the direction of BSEE leadership. 8 of the 34 

BSEE internal investigations recorded in the IPRA Internal Investigations Log were 

initiated by the Director (1) or Deputy Director (7) since 2013. Of these 8, 3 were not 

referred to the IG, according to the IPRA Internal Investigations Log.

66GAO-14-704G.

Conclusions
Page 33 GAO-17-293 Oil and Gas Management

coordination and communication, and produced few results. Without 

establishing a mechanism for BSEE management to obtain and 

incorporate input from bureau personnel and any external parties, such 

as Argonne, that can affect the bureau’s ability to achieve its objectives, 

BSEE’s risk-based inspection program is likely to experience continued 

delays and implementation problems. Likewise, since 2013 BSEE has 

begun several strategic initiatives to improve its internal management but 

has made limited progress in implementing them. Without a higher-level 

organization within Interior addressing leadership commitment 

deficiencies within BSEE, including by implementing internal 

management initiatives and ongoing strategic initiatives (e.g., ERM and 

performance measure initiatives) in a timely manner, the bureau is 

unlikely to succeed in implementing internal management initiatives, 

including its key strategic initiatives for ERM and performance measures, 

in a timely manner. Additionally, BSEE documentation identifies the need 

to enhance communication vertically and horizontally across the bureau, 

but it is unclear whether the bureau’s employee engagement initiative will 

address the lack of quality information that BSEE officials told us 

undermines trust across the organization or set expectations for sharing 

accurate and timely information as called for by BSEE’s Fiscal Year 2016-

2019 Strategic Plan. Without expanding the scope of its employee 

engagement strategy to incorporate the need to communicate quality 

information throughout the bureau, BSEE’s employee engagement 

initiative might not address the lack of quality information being 

communicated throughout the bureau that is exacerbating trust concerns. 

Further, BSEE’s IPRA pilot initiative did not address unclear and 

conflicting guidance that could undermine organizational trust in how the 

IPRA addresses allegations of misconduct. Without assessing and 

amending IPRA guidance to clarify (1) severity threshold criteria for 

referring allegations of misconduct to the IG and (2) its reporting chain, 

BSEE risks further eroding organizational trust in the IPRA to carry out its 

mission to promptly and credibly respond to allegations or evidence of 

misconduct by BSEE employees.

In this report, we are making four recommendations. We recommend that 

the Secretary of the Interior direct the Assistant Secretary for Land and 

Minerals Management, who oversees BSEE, take the following two 

actions:

• Establish a mechanism for BSEE management to obtain and 

incorporate input from bureau personnel and any external parties, 

Recommendations for 

Executive Action
Page 34 GAO-17-293 Oil and Gas Management

such as Argonne, that can affect the bureau’s ability to achieve its 

objectives.

• Address leadership commitment deficiencies within BSEE, including 

by implementing internal management initiatives and ongoing 

strategic initiatives (e.g., ERM and performance measure initiatives) in 

a timely manner.

We also recommend that the Secretary of the Interior direct the BSEE 

Director take the following two actions:

• To address trust concerns that exist between headquarters and the 

field, BSEE should expand the scope of its employee engagement 

strategy to incorporate the need to communicate quality information 

throughout the bureau.

• To increase organizational trust in IPRA activities, BSEE should 

assess and amend IPRA guidance to clarify (1) severity threshold 

criteria for referring allegations of misconduct to the IG and (2) its 

reporting chain.

We provided a draft of this report to the Department of the Interior for 

review and comment. In its written comments, reproduced in appendix I, 

Interior neither agreed nor disagreed with our four recommendations. 

Interior stated that the recommendations reflect ongoing BSEE 

commitments and that BSEE and Interior agree with the concepts laid out 

in the first three recommendations. For the fourth recommendation, 

Interior stated that BSEE will examine the current guidance for the 

Integrity and Professional Responsibility Advisor. However, Interior also 

stated that the draft report neither fully describes the progress made 

within BSEE nor fully represents the current status of the programs, 

initiatives, and activities highlighted therein. Interior requested that we 

consider information that it stated provides status updates and 

corrections, while also laying out in more detail BSEE's continuing 

commitments in these areas. Interior also enclosed additional 

documentation. We reviewed the additional information and 

documentation that Interior provided and found no evidence to support 

the revision of any of our findings. In turn, we disagree with Interior’s 

characterization of the progress that BSEE has made and believe that 

actions to implement our recommendations are necessary. Specifically:

• Regarding our recommendation that Interior develop a mechanism for 

BSEE management to obtain and incorporate input from bureau 

personnel and any external parties that can affect the bureau’s ability 

Agency Comments 

and Our Evaluation
Page 35 GAO-17-293 Oil and Gas Management

to achieve its objectives, Interior’s comments do not discuss any 

specific actions taken or underway to do so. Additionally, in its 

comments, Interior stated that regional personnel, such as regional 

managers and district managers, were involved throughout the 

development of the risk model and the pilot testing. To support this 

statement, Interior provided documentation of electronic 

communications from BSEE headquarters to senior regional 

leadership informing them of certain aspects of the program and 

meeting documents showing that certain regional officials attended 

meetings regarding program development. However, instead of 

demonstrating that regional managers were involved in the 

development of the model and methodology, this documentation 

demonstrates that regional officials raised concerns about the model 

and methodology but that headquarters officials said they would not 

make any changes in response to these concerns. Specifically, 

Interior provided e-mails that indicate headquarters informed regional 

officials of the development of the model through the Strategic Plan 

Implementation Team in late 2012. However, e-mails from early 2015 

indicate that regional officials were not involved in the development of 

the risk model or risk-based inspection program methodology in the 

intervening more than 2 years, because they had to request 

information from headquarters about the underlying basis of the 

model and the methodology that they were being asked to comment 

on. After regional officials reviewed the methodology and the model, 

they e-mailed headquarters and raised concerns with the model. 

Headquarters officials replied that they validated the model and that 

changing the parameters of the model would decrease its 

effectiveness. Therefore, the e-mails that Interior provided support 

what regional personnel told us—that their input was not incorporated 

into the model and methodology prior to the first pilot. We found that 

regional personnel became more involved in the risk-based inspection 

initiative after the first pilot exposed deficiencies in headquarters’ 

approach. In its comments, Interior disagreed with our assessment of 

pilot test deficiencies and stated that BSEE expected to encounter 

issues while pilot testing. However, we believe that some of those 

issues may have been averted had BSEE included the input of 

regional officials earlier in the process. As described throughout the 

report across multiple initiatives, we have concerns about the 

fundamental working relationship between the region and 

headquarters, which are substantiated by the e-mails that Interior 

provided in response to our draft report. In turn, we continue to 

believe that Interior should develop a mechanism for BSEE 

management to obtain and incorporate input from bureau personnel 
Page 36 GAO-17-293 Oil and Gas Management

and any external parties that can affect the bureau’s ability to achieve 

its objectives in the next risk-based inspection pilot test, which will be 

conducted by a joint headquarters-regional team in March 2017. 

However, as we discussed in the report, the first pilot had deficiencies 

in identifying high-risk offshore facilities, so the extent to which BSEE 

will be able to apply lessons learned is uncertain.

• Regarding our recommendation that Interior address leadership

commitment deficiencies within BSEE, including implementing internal 

management initiatives (e.g., ERM and performance measure 

initiatives) in a timely manner, Interior’s comments do not discuss any 

specific actions taken to meet the intent of our recommendation. 

Interior states that BSEE's implementation of ERM is on target and 

that BSEE has an established ERM framework, completed its risk 

register, has a fully developed maturity model, has aligned enterprise 

and strategic risks with its strategic plan and has linked program risks 

with appropriate strategic risk categories, in addition to other activities. 

Interior also stated that BSEE is on schedule to complete its first full 

ERM cycle in March 2017. Additionally, Interior states that ERM is a 

relatively new program directed by a fall 2016 Office of Management 

and Budget Circular regarding ERM.67 However, while Circular No. A123 was revised in July 2016 with new ERM implementation 

requirements effective for fiscal year 2017, Interior’s statement is 

misleading because BSEE’s efforts have been ongoing since 2013. 

Additionally, Interior provided clarifications but does not dispute our 

findings on its efforts to develop performance measures. Specifically, 

Interior states that the November 2016 completion of a fiscal year 

2016 Baseline Performance Measure Report represented the first 

step of implementation of BSEE’s performance measure program and 

that the bureau anticipates having an initial performance dashboard in 

fiscal year 2018. By considering November 2016 as the first step 

toward a performance measures program, Interior appears to 

disregard BSEE’s efforts over the prior 4 years. If BSEE succeeds in 

fiscal year 2018, this will be the culmination of 6 years of attempting to 

develop performance measures to inform management decision 

making. Therefore, we continue to believe that Interior should address 

leadership commitment deficiencies within BSEE, including by 

implementing internal management initiatives, such as ERM and 

 67Office of Management and Budget Cir. No. A-123, Management’s Responsibility for 

Enterprise Risk Management and Internal Control (July 15, 2016).
Page 37 GAO-17-293 Oil and Gas Management

performance measures, in a timely manner rather than revising 

initiative start dates.

• Regarding our recommendation that BSEE expand the scope of its 

employee engagement strategy to incorporate the need to 

communicate quality information throughout the bureau, Interior 

stated that BSEE is committed to enhancing communication and 

collaboration among its personnel and agrees with the importance 

strengthening communication between headquarters and the regions. 

Interior asserts that, since receiving our draft report, BSEE has 

completed assessment and analysis of employee feedback, and 

developed an engagement plan. However, Interior did not provide 

documentary evidence of this plan or what it entails. Moreover, in our 

report we identified a long history of poor communication between 

headquarters and regional officials, leading to a widespread lack of 

trust across the bureau. Without providing evidence of BSEE’s 

activities—and in light of the bureau’s documented struggles to 

effectively implement organizational change—we cannot confirm that 

any action has been taken and continue to believe that BSEE should 

expand the scope of its employee engagement strategy to incorporate 

the need to communicate quality information throughout the bureau.

• Regarding our recommendation that BSEE assess and amend IPRA 

guidance to clarify (1) severity threshold criteria for referring 

allegations of misconduct to the IG and (2) its reporting chain, Interior 

stated that the creation of the IPRA directly impacts trust concerns 

within BSEE and that the bureau will examine current guidance for the 

IPRA. However, Interior stated that contrary to our draft report, the 

Interior Department Manual already includes severity threshold criteria 

for referring allegations of misconduct to the IG. We believe that the 

language in the Interior Department Manual, which states that 

“serious allegations” and “serious complaints” should be referred to 

the IG, does not provide the specificity needed to adequately define 

the boundaries of IPRA responsibility. Additionally, Interior stated that 

the IPRA reports to the BSEE Director, consistent with the reporting 

chain established in the bureau’s organizational chart and the Interior 

Department Manual. However, the BSEE Director told us that, in 

practice, the IPRA often reports to the BSEE Deputy Director rather 

than the Director. Moreover, our work found that the decision making 

process of the IPRA Board—whereby the IPRA Board determines 

how to respond to an investigation without consultation with the 

Director—does not align with the IPRA’s prescribed reporting chain. 

As a result, we continue to believe that BSEE should assess and 
Page 38 GAO-17-293 Oil and Gas Management

amend IPRA guidance to clarify (1) severity threshold criteria for 

referring allegations of misconduct to the IG and (2) its reporting 

chain. 

Interior’s comments on our draft report underscore our concerns 

regarding deficiencies in BSEE leadership commitment and support the 

decision to incorporate the restructuring of offshore oil and gas oversight 

into our High-Risk List in February 2017. Specifically:

• In its comments, Interior highlighted BSEE’s decision to contract with 

NAPA to evaluate the bureau—at a cost of approximately $450,000—

as an example of the bureau’s commitment to maturing the 

organization. However, the timing, scope, and methodology cause us 

to question its value. Specifically, BSEE issued the contract five 

months after we began our review, and its scope—which includes 

identifying BSEE strategic and organizational initiatives and assessing 

their progress—mirrors our work already underway. Further, the 

contract stipulates that all work “shall be developed in a collaborative 

manner with BSEE leadership, but with a focus on document review 

rather than in-depth interviews with bureau personnel.” This calls into 

question the independence of the NAPA evaluation. Additionally,

when we met with the NAPA team, they indicated that their 

instructions were to focus on BSEE headquarters and not conduct 

outreach to the bureau’s operational components in the regions. In 

our experience working with BSEE, we have found extensive outreach 

to the field to be essential to understanding the operations of the 

bureau. As a cumulative result of these factors, it is uncertain whether 

BSEE’s decision to engage in this evaluation will produce the 

organizational improvement advertised by Interior. 

• Interior’s written comments contain factual errors that are contradicted 

by the evidence we collected in our work, further heightening our 

concerns regarding BSEE leadership’s commitment to taking the 

steps needed to improve the bureau. For example, Interior states that 

environmental risk was not a consideration in the Core Group 

objectives or final report. However, the Core Group’s final report 

states that the purpose of the report was “to assist in determining 

current and emerging environmental risks and whether BSEE has the 

best mitigation strategies in place.” Likewise, Interior states that 

BSEE’s Environmental Stewardship Collaboration Core Group and 

Argonne Environmental Risk Assessment were not simultaneous 

efforts. On the contrary, according to its final report, the Core Group 

convened from February 2016 to May 2016. The Statement of Work 
Page 39 GAO-17-293 Oil and Gas Management

for the Argonne environmental risk assessment contract was issued in 

December 2015, and Argonne delivered its final report in July 2016.

Interior also provided technical comments that we incorporated into the 

report, as appropriate.

We are sending copies of this report to the appropriate congressional 

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Frank Rusco

Director, Natural Resources and Environment
Appendix I: Comments from the Department of 

the Interior

Page 40 GAO-17-293 Oil and Gas Management

Appendix I: Comments from the Department 

of the Interior
Appendix I: Comments from the Department of 

the Interior

Page 41 GAO-17-293 Oil and Gas Management
Appendix I: Comments from the Department of 

the Interior

Page 42 GAO-17-293 Oil and Gas Management
Appendix I: Comments from the Department of 

the Interior

Page 43 GAO-17-293 Oil and Gas Management
Appendix II: GAO Contact and Staff 

Acknowledgments

Page 44 GAO-17-293 Oil and Gas Management

Frank Rusco, (202) 512-3841 or ruscof@gao.gov

In addition to the individual named above, Christine Kehr, Assistant 

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made significant contributions to this report.

Appendix II: GAO Contact and Staff 

Acknowledgments

GAO Contact

Staff 

Acknowledgments

(100736)
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