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An Overview of the Federal Mineral Royalty Audit Process

Pamela L. Williams, Federal and Indian Oil & Gas Royalty Valuation and Management (2004)

The Minerals Management Service (MMS) has the right to audit the records of a company's federal and Indian oil and gas royalty payments. 1 This paper will address the industry perspective on the federal oil and gas royalty audit as it pertains to MMS resident audit staffs located onsite at the company's offices based on the experience of this author over the last 15 year period in the handling of the federal audit for a major oil company. Federal royalty payments are due the month following the month of production. 2 Later on in time as it gets into the MMS audit cycle these royalty payments are subject to audit.