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Oklahoma agency — Commission on Marginally Producing Oil and Gas Wells — faces criticism

Roughly $10,000 in expenditures questioned at the Oklahoma Commission on Marginally Producing Oil and Gas Wells that had four employees and a $600,000 budget.
BY MEGAN ROLLAND Published: November 19, 2012

A state audit questions more than $10,000 in costs incurred by a small state agency focused on Oklahoma's marginal oil and gas wells.

The Commission on Marginally Producing Oil and Gas Wells supports and promotes some of Oklahoma's small oil and natural gas producers with a focus on wells that are producing small amounts of oil and gas, called stripper wells.

The agency is funded by a voluntary fee assessed on oil and gas gross production. Those in the industry not wishing to fund the agency can file for reimbursement of the extra tax on their gross production.

‘Widespread abuse'

State Auditor and Inspector Gary Jones released an audit of the agency in mid-October finding that negligent management has “allowed for widespread abuse and potential fraud, resulting in questioned costs of $10,028.”

The audit suggests a number of controls that could help prevent future abuses at the agency, but also suggests possible consolidation of the agency with another state entity.

“We're trying to maximize resources,” Jones said.

Senate President Pro Tem Brian Bingman said the audit caught his eye.

“What's been disturbing is there's been a previous audit raising concerns and nothing was done,” Bingman said. “That's what gets the Legislature's attention, is it doesn't seem to be cleaned up.”

Bingman said the agency provides an important service to Oklahoma's small oil and gas companies, but said lawmakers are always looking for ways to make government more efficient.

“We're trying to do more with less, less people, less commissions … it's always an issue for the Senate,” he said.

Questionable purchases

The agency itself operates on roughly $700,000 a year in revenues from taxes on the gross production of oil and gas, and spent about $600,000 in fiscal year 2011.

Of that. it found that the public information officer had made questionable purchases on her state credit card of almost $3,000 including a $1,300 charge to Orbitz, the online travel site, and more than $500 at Hertz Rental Car and Walmart. The employee resigned in May and state records indicate the position was held by Crystal R. Townsend up to that date.

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