Over $230 Million in Federal Royalty Payments Verified by State Auditor’s Office for State and Federal Funding

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The State Auditor’s Office over the past two years has reviewed over $230 million in federal royalty and revenue payments made by energy companies during calendar years 2015 and 2016. These payments provide revenue to the State of North Dakota and the federal government.

The Mineral Royalty Division of the State Auditor’s Office conducts compliance reviews and audits of federal royalty payments and revenue from oil, gas, and coal leases across North Dakota. The Mineral Royalty Division of the State Auditor’s Office is fully funded by the federal government.

“It is crucial to be monitoring and reviewing the lease royalty money that North Dakota and the federal government receives,” said North Dakota State Auditor Josh Gallion. “Without this function, North Dakota would not have verification that state and local entities are receiving correct mineral royalty payments.”

The three main types of federal leases that exist include flood control, public domain, and acquired lands. The percentage of federal royalty dollars that are paid to North Dakota depends on the lease type. North Dakota law requires distribution to individual counties, as well as disbursement to the state general fund.

“Across North Dakota, there are over 2,500 federal leases for oil and gas alone,” said Mineral Royalties Audit Manager Dennis Roller. “With so many leases and royalties, there is potential for incorrect payments made to the federal government and shared with the state. Our team works to make sure that federal royalty obligations are paid correctly in accordance with the lease terms and federal laws and regulations.”

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