Crude oil accountability at the Strategic Petroleum Reserve
The Strategic Petroleum Reserve (SPR) is responsible for purchasing and storing crude oil to mitigate the impact of future disruptions of crude oil imports. The audit objective was to determine whether the SPR Project Management office`s (SPRPMO) policies, procedures, and practices provided reasonable assurance of the adequacy and correctness of the data and documentation pertaining to the SPR`s crude oil receipts, transfers, and sales for Fiscal Years (FY) 1989, 1990, and 1991. Our audit disclosed that SPRPMO`S: (1) Accounting records for crude oil inventories did not provide for capitalizing all significant and identifiable costs, and (2) crude oil transactions were not supported by adequate documentation. These conditions occurred because: (a) SPRPMO had not complied with US Department of Energy (DOE) accounting guidance, (b) its supervisory personnel were not adequately reviewing the work of subordinates, and (c) its managers were unaware that procedures on documenting adjustments to delivery reports did not comply with the General Accounting Office`s internal control standards. As a result, while all costs were recorded in the general ledger, the category for capitalized cost of crude oil inventories was understated by at least $131.7 million. We recommend that SPRPMO adjust its accounting records to more accurately reflect the actual cost of crude oil inventories, and strengthen documentary controls. SPRPMO`s management generally concurred with the findings and associated recommendations. However, they were of the opinion that existing DOE accounting guidance did not adequately recognize the unique issues relating to crude oil inventories.
- Research Organization:
- USDOE Office of Inspector General, Oak Ridge, TN (United States). Eastern Regional Audit Office
- Sponsoring Organization:
- USDOE, Washington, DC (United States)
- OSTI ID:
- 10177596
- Report Number(s):
- ER-BC--92-02; ON: TI92041225; NC: NONE
- Country of Publication:
- United States
- Language:
- English
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