Oklahoma Auditor and Inspector Gary A. Jones on Thursday accused the state Marginal Well Commission of failing to correct internal control deficiencies and of negligence that has allowed for “widespread abuse and potential fraud.”
“In addition, the Legislature should consider evaluating whether this agency might be consolidated with another agency to provide better oversight or whether their mission could be accomplished without being a part of state government,” Jones said in the report on the Oklahoma Commission on Marginally Producing Oil and Gas Wells.
Jim Revard, the marginal well commission's executive director, did not return phone calls to his office and cellphone Thursday.
The audit covered a period from Jan. 1, 2010, through March 31, 2012. It found that the agency did not properly address negative findings in its previous two audits dating to Jan. 1, 2006.
The most recent investigation also found “potential fraud, resulting in questioned costs of $10,028.”
The marginal well commission was created by the Legislature in 1992 to identify factors that affect the state's marginal wells and encourage producers to keep the wells operational.
Marginal wells, also known as stripper wells, are defined as those that produce less than 10 barrels of oil or 60,000 cubic feet of natural gas per day.
The audit includes claims that purchase-card charges were reimbursed for prohibited purchases and for lodging more than 24 hours before or after a business event “on at least three occasions.”
In once instance, an extra day of lodging was reported because of a “flight cancellation due to weather” even though the auditor's report found that “an American Airlines representative verified the flight operated as scheduled.”
The report also found three occasions where parking receipt dates did not match travel claim dates.
The auditor's report recommends increased monitoring of the marginal well commission's activities and called for a more active role from its nine commissioners. The auditor also recommended that the attorney general's office evaluate the agency's activities “to determine if further investigation is warranted.”