An Overview of the Federal Mineral Royalty Audit Process - Indian Tribal Audit Process
The Navajo Nation is one of eight Tribes that have entered into Cooperative Agreements with the U.S. Department of the Interior, Minerals Management Service (MMS) to conduct audits of their respective tribal mineral leases. The authority for the Cooperative Agreements is provided under Section 202 of the Federal Oil and Gas Royalty Management Act of 1982, as modified by the Enrolled 1992 Appropriation Bill, H.R. 2686-12 (FOGRMA). Specifically, Section 202 addresses Cooperative Agreements for Indian tribes, whereas Section 205 addresses Delegation to States. Although FOGRMA was signed into law on January 12, 1983, the states and tribes began exercising their audit authorities under FOGRMA in different years. The Navajo Nation has been performing compliance reviews of its mineral leases since 1984.
There are two types of Indian leases, those that belong to individual Indian tribal members, which are generally referred to as “allotted leases”, and those leases that belong to an Indian tribe. For Indian leases, the Individual “allottee” or Indian tribe is the lessor and is a signatory party to the lease contract. The Secretary of the Interior (Secretary) is obligated to act as a fiduciary in the administration of Indian oil and gas leases. 1
Whereas FOGRMA provides the authority for the Indian tribes to perform audits of its respective tribal mineral leases, the a
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