Surface Mining: Interior Is Acting to Improve Its Applicant Violator System

Published by the Government Accountability Office on 1990-06-22.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

IJnit,cvl   States   General   Accounting   Office

RepGt to the Chairman, Comilittee on
Interior and Insular Affairs, House of

Interior Is Acting to
Improve Its Applicant
Violator System

GAO                General Accounting Office
                   Washington, D.C. 20548

                   Accounting and Financial
                   Management Division


                   June 22,199O

                   The Honorable Morris K. Udall
                   Chairman, Committee on Interior
                     and Insular Affairs
                   House of Representatives

                   Dear Mr. Chairman:

                   Your June 27,1989, letter requested that we evaluate what the Office of
                   Surface Mining Reclamation and Enforcement (OGMRE)has done in
                   response to our report entitled Surface Mining: Operation of the Appli-
                   cant Violator System Can Be Improved (GAO/AFMIHXM, January 24,
                   1989). This letter provides a summary of actions taken by OSMREsince
                   the completion of our last review and also provides information on the
                   preliminary Department of the Interior-National Wildlife Federation
                   agreement for improving the permit review process.

                   OSMREinitiated a number of actions to improve the permit review pro
Results in Brief   cess, some of which have not yet been completed. While we see progress,
                   the Applicant Violator System (AM) still is not reliable for determining
                   whether applicants should be issued coal mining permits. Although the
                   system’s accuracy rate increased from 64 percent at the time of our last
                   review to 63 percent for the first 10 months of 1989, the present accu-
                   racy rate still necessitates manual verification. To address the data
                   accuracy problem, OSMREimplemented a redesigned system on May 1,
                   1990. While we did not assess the system, we were told that preliminary
                   results of the first 2 weeks of its operations showed a 77-percent accu-
                   racy rate.

                   Subsequent to completion of our review work, a preliminary legal agree-
                   ment was reached between the Department of the Interior and the
                   National Wildlife Federation. (See appendix I.) The agreement called for
                   various improvements to the permit review process, It has not yet been
                   approved by the cognizant court.

                   The Congress enacted the Surface Mining Control and Reclamation Act
Background         of 1977 to protect society and the environment from the adverse effects
                   of surface coal mining operations. Section 610, a key provision of the
                   act, requires denial of mining permits to applicants who have out-
                   standing violations of mining regulations unless the applicant submits

                   Page1                                         GAO/AFMD-9083SurfaceMining
                        proof, to the satisfaction of the regulatory authority, that the violation
                        has been or is in the process of being corrected.

                        Interior has been criticized in GAOand congressional committee reports
                        for not fulfilling this legislative mandate. A list of our prior reports is on
                        the last page of this report. In addition, a 1986 court order provided for
                        more effective implementation of the congressional mandate. In
                        response, OSMREdeveloped the Applicant Violator System which is
                        designed to link current applicants to outstanding violations, thus
                        forming a basis for recommending permit issuance or denial.

                        In a January 1989 report, we discussed fundamental problems we had
                        identified in the system’s operations. The report said that subsequent
                        manual verifications by OSMREhad reversed 46 percent of the AVS-
                        generated recommendations. The high reversal rate was due primarily
                        to inadequate and outdated information in the system’s data base.

                        Our objectives were to (1) identify and assess actions taken to improve
Objectives, Scope,and   AVSoperations since completion of our previous review work in July
Methodology              1988, (2) evaluate the system’s current ability to generate reliable
                        permit issue and deny recommendations, and (3) provide a description
                        of the legal agreement between Interior and National Wildlife on
                        improving the permit review process.

                        Cur work was conducted in the Washington, D.C., area. We interviewed
                        OSMREofficials to identify actions taken to improve AVSoperations and
                        reviewed the records supporting those actions. We reviewed the OSMRE
                        Clearinghouse operations as well as the guidance it provided to the
                        states to clarify their role in the permit process. We also reviewed oper-
                        ating procedures, applications, violation records, and rules governing
                        the issuance of permits.

                        We reviewed agency statistics regarding the agreement rates between
                        Avs-generated and manually verified recommendations, and an informal
                        OGMREreport on the reasons for invalid AVSrecommendations. To deter-
                        mine the system’s reliability, we also reviewed a selected judgmental
                        sample of 30 of a total of 626 permit applications processed by the
                        system in June and July 1989. Twenty of these were randomly selected.
                        In order to more fully research the reasons for differing recommenda-
                        tions, the remaining 10 were specifically selected because the AVSand
                        Clearinghouse recommendations disagreed. We discussed the 30 cases

                        Page2                                             GAO/AFMD-90-63   Surface Mining

                      with OGMREofficials and reviewed the documentation used to support its
                      final issue or denial recommendations.

                      In our earlier report, we recommended that OSMREcompare the AVSand
                      National Wildlife permit review systems to identify improvement oppor-
                      tunities, OSMREsuspended its comparison efforts pending settlement of a
                      lawsuit filed by National Wildlife in April 1989 concerning Interior’s
                      enforcement of the act and the operation of AVS.After a preliminary
                      agreement was reached between Interior and National Wildlife on Jan-
                      uary 24, 1990, OGMREadvised us it plans to study the National Wildlife
                      system. Accordingly, we did not review this issue. As of May 21, 1990,
                      the agreement had not been approved by the U.S. District Court for the
                      District of Columbia, which is responsible for the case. Details are in
                      appendix I. We also did not evaluate a recently implemented redesign of
                      AVS,because system operations began after our review was completed.

                      We discussed a draft of this report with OSMREofficials to confirm its
                      accuracy and completeness and have incorporated any appropriate com-
                      ments. We performed our review in accordance with generally accepted
                      government auditing standards.

                      OSMREhas taken several actions to improve its permit review process.
Actions Taken to      The major accomplishment was upgrading the data base primarily by
Improve Application   adding the Department of Labor’s Mine Safety and Health Administra-
Processing            tion mine identification numbers and, as recommended in our prior
                      report, the Administration’s mine ownership and control data. OSMRE
                      also solicited updated ownership and control information from the com-
                      panies in its data base.

                      Other actions include eliminating a backlog of unverified Avs-generated
                      recommendations through productivity initiatives and providing more
                      timely recommendations to states. In response to our prior report recom-
                      mendation, rules defining ownership and control and requiring updating
                      of the information on applications prior to permit issuance have been
                      issued. In addition, OSMREimplemented a redesign of AVSon May 1, 1990.

                      Details on each of these actions are in appendix II.


                     While OSMREhas acted to strengthen AVS,the system is still not pro-
AVSDoes Not Yet      ducing reliable permit issuance or denial recommendations. Therefore,
Provide Reliable     OGMREcontinues to manually verify the Ass-generated recommendations.
Recommendationsfor   During the first 10 months of 1989, the manual verifications agreed
Issuing Permits      with about 63 percent of the ASS-generated recommendations. This was a
                     g-percent improvement over the agreement rate GAOfound during the
                     first 6 months of AVSoperations in 1987 and 1988. To address the data
                     accuracy problem, OSMREimplemented a redesigned system on May 1,
                     1990. While we did not assess the system, we were told that preliminary
                     results of the first 2 weeks of its operations showed a 77-percent accu-
                     racy rate.

                     In addition to continuing data quality problems, we found that a major
                     factor affecting the reliability of AVSrecommendations is the large
                     number of incorrect links, i.e., the inability to correctly identify current
                     applicants with outstanding violations. Although OGMREhas not deter-
                     mined what is causing the problem, it stems at least in part from a
                     potential weakness in the AVScomputer program.

                     Appendix III provides a detailed discussion of our analysis of the relia-
                     bility of AVSrecommendations.

                     OSMREhas acted to improve AVSoperations. Nevertheless, data quality
Conclusions          problems, combined with a potential programming problem, continue to
                     undermine its initiatives. While the accuracy of Avs-generated recom-
                     mendations was 9 percent better than during the first 5 months of oper-
                     ation, OSMRE'Smanual verifications reversed 37 percent of the AVS
                     recommendations between January and October 1989.

                     OSMREimplemented a redesigned AVSon May 1, 1990. Because system
                     operations were initiated after our review work was completed, we were
                     unable to assess its performance. However, a contractor study com-
                     pleted during November 1989 endorsed the overall redesign concept and
                     recommended several actions OSMREshould take to improve its develop-
                     ment and implementation process.

                     While all of OSMRE'Simprovement initiatives have merit, the only real
                     measure of success is whether or not they substantially improve the
                     accuracy of the Avs-generated recommendations. In the final analysis,
                     making AVSa dependable performer will be contingent on successfully

                     Page4                                             GAO/AFMD-90-63

upgrading data quality and ensuring that it can accurately link appli-
cants and permittees to outstanding violations. OSMREbelieves that the
revisions made to the system during its recent redesign project will
improve its effectiveness and efficiency.

Since (1) following the completion of our review, OSMREimplemented a
redesigned AVSand (2) the legal agreement between National Wildlife
and Interior has not yet been approved by the Court, we are not making
any recommendations at this time.

As agreed with your office, unless you publicly announce the contents
of this report earlier, we will not distribute it until 30 days from its date.
At that time, we will send copies of the report to the Secretary of the
Interior, the Department of the Interior’s Director of the Office of Sur-
face Mining Reclamation and Enforcement, and other interested parties.
We will also make copies available to others upon request.

Please contact me on 2759464 if you or your staff have any questions.
Major contributors to this report are listed in appendix IV.

Sincerely yours,

Jeffrey C. Steinhoff
Director, Financial Management
  Systems and Audit Oversight

Page6                                             GAO/~9083      SurfaceMining


Appendix I                                                                                    8
Preliminary Interior-
National Wildlife
Agreement on AVS
Appendix II
OSMREActions to
Improve Application
Appendix III
Analysis of the
Reliability of AVS
Appendix IV                                                                                  17
Major Contributors to
This Report
Tables                  Table II. 1: Company Profile Project-Status as of                    11
                            December 3 1,1989
                        Table III. 1: AVS and Clearinghouse Recommendation
                            Agreement Rates, lo-Month Period Ending
                            October 31,1989

Related GAO Products


                        AVS       Applicant Violator System
                        GAO       General Accounting Office
                        OSMRE     Office of Surface Mining Reclamation and Enforcement

                        Page6                                        GAO/~9083     SurfaceMining
Page7   GAO/AFMD-BM3SurfaceMining
Appendix I

l?relmunary Interior-National Wildlife

Agreementon AVS

                     On January 24,1990, a preliminary agreement was reached between
                     Interior and National Wildlife. In exchange for National Wildlife drop-
                     ping its legal action against Interior over enforcement of the surface
                     mining law, Interior agreed to major changes to AVS. As of May 21,1990,
                     the agreement had not been approved by the U.S. District Court for the
                     District of Columbia.

                     The preliminary agreement calls for OSMREto

                 l complete, correct, and refine the AVS data base of potential ownership
                   and control links between permit applicants and violators;
                 l interface with data bases maintained by the Mine Safety and Health
                   Administration, the Energy Information Administration, and the states;
                 l augment and verify AVS data by reviewing federal inspection and legal
                   files, company records, and audit information and by conducting field
                 l formalize agreements with state surface mine regulators on screening
                   permit applicants and verifying AVS information;
                 . work with the Tennessee Valley Authority to block purchase of coal
                   from violators of the surface mining law;
                 l review permits already in force, and suspend or revoke any that should
                   not have been issued because of uncorrected violations or ownership
                   and control links with violators;
                 l propose formal sanctions against people who intentionally give incom-
                   plete or incorrect ownership and control information on coal mine
                   permit applications; and
                 l develop standards, through rule-making if necessary, for determining
                   how AVS ownership and control links may be judged erroneous and for
                   updating ownership and control information,

                     Page8                                         GAO/AFMD-90-63
. Ap&ndix   II

 OSMREActions to improve Application

                          In our January 1989 report, we stated that OSMREhad not incorporated
 The System’s Data        all of the relevant sources of mine ownership and control information
 Base Has Been            into AVS. Instead, Mine Safety and Health Administration data was
 Upgraded                 obtained by the Clearinghouse during its manual verification process.
                          Thus, we recommended that data sources, including the Administration,
                          used during the manual verification process should be incorporated into
                          AVS to improve the quality of the data available for the system-generated

                          OSMREhas acted to upgrade AVS, including entering Administration infor-
                          mation into the AVS data base. The information added includes more
                          Administration identification numbers that the Administration assigns
                          to each mining activity and the related information regarding who
                          owned or controlled the mine activities on specific dates. It also
                          requested the 22,000 applicants and permittees in its data base to volun-
                          tarily provide current data for updating the AVS data.

 Administration Numbers   A March 1988 review of the AVS data base by OSMREdisclosed that only
                          5,000 of about 18,600 valid permits, or 27 percent, had Administration
                          identification numbers. Because these numbers facilitate matching
                          applicants to violators, OSMREtried to obtain additional numbers which
                          would be incorporated in the system’s data base. At the conclusion of
                          that effort, 16,228, or 88 percent, of the permits in the AVS data base had
                          Administration numbers.

 Mine Ownership and       Administration mine ownership and control information is now being
 Control Data             entered in AVS, thereby improving the system’s ability to link applicants
                          to violators. However, its usefulness is somewhat diminished because
                          OSMREhas been slow in entering updated quarterly data.

                          During our previous review, we found that the Administration owner-
                          ship and control data was obtained and used by OSMREduring its manual
                          verification process. As recommended in our prior report, OSMREhas
                          incorporated Administration data in the AVS data base. This data, which
                          the Labor Department requires to be updated quarterly, includes the
                          dates that each owner, operator, and controller relationship existed.
                          Such information enables AVS to determine who owned or controlled the
                          violator at the time of the violation and thereby permits links of appli-
                          cants to violators. At the conclusion of our prior review, ~SMRE informed
                          us that it planned to enter the ownership and control data into AVS soon.
                          In April 1989, OSMREentered the data as of October 1988 into AVS. While

                          Page9                                           GAO/V          Surf’aceMining
                          Appendix II
                          OSMRE Actions   to Improve   Application

                          OSMREhas continued to enter the quarterly updates it receives from the
                          Administration, it has not done so promptly. For example, the Sep-
                          tember 1989 quarterly data was not entered until January 6,199O.

Company Profile Project   In another effort to improve the quality of AVS data, OSMREinitiated a
                          onetime “Company Profile” project in May 1988 to update the informa-
                          tion it had on the 22,000 applicants and permittees in its data base.
                          However, as of December 1989, only 3,181 of 8,462 responses received
                          have been reviewed for updating the AVS data base.

                          The 22,000 applicants and permittees were provided copies of the cur-
                          rent ownership and control information in the AVS data base. The recipi-
                          ents were requested to voluntarily update and correct the information
                          and return it with supporting documentation by June 1,1988. As of
                          December 31, 1989, OSMREhad received 8,452 responses.

                          OGMREforwarded the 8,462 responses as they were received to the state
                          regulatory authorities and instructed them to review and enter the
                          changes in AVS. OGMREofficials advised us that, as of December 31, 1989,
                          the states had reviewed 3,181, or 38 percent, of the 8,452 responses to
                          update the AVS data base. However, as table II.1 shows, the degree of
                          participation varies significantly. Some states processed all the
                          responses, while others have processed few, if any. For example, while
                          4,253 responses were received from companies operating in Kentucky
                          and Pennsylvania, only 10 have been used by the two states to update
                          the AVS data base. OSMREofficials advised us that Kentucky updated AVS
                          using its own ownership and control data base rather than the company-
                          provided data. It attributed the slow progress in Pennsylvania to limited
                          staffing but noted that a data entry staff member had been subse-
                          quently added by the state to its AVS support staff.

                          Page 10                                        GAO/AFMD-9083   Surface Mining
                                      Appendix II
                                      CBMRE Actlona      to Improve   Application

Table 11.1:Company Profile Project-
Status as of Dqcember 31,1969         State or federal                              Responses       Responses            Percent
                                      field office                                    received      processed         processed
                                      Alabama                                               190             170                89.5
                                      Arizona                                                11              10                90.9
                                      Colorado                                               30              20                66.7
                                      Iowa                                                    1               1               100.0
                                      Illinois                                              146             127                87.0
                                      Indiana                                               121              82                67.8
                                      Kansas                                                  6               5                83.3
                                      Kentucky                                            2,728               0                 0.0
                                      Louisiana                                               1               0                 0.0
                                      Missouri                                               68              63                92.7
                                      Maryland                                               84              77                91.7
                                      Montana                                                35               0                 0.0
                                      North Dakota                                           34              34               100.0
                                      New Mexico                                              7               0                 0.0
                                      Ohio                                                  587             540                92.0
                                      Oklahoma                                               75              66                88.0
                                      OSMRE Western Field Office                             55              21                38.2
                                      Pennsylvania                                        1,525              10                 0.7
                                      Tennessee and OSMRE Eastern
                                          Field Office                                      208                4                1.9
                                      Texas                                                   3                3              100.0
                                      Utah                                                   20               20              100.0
                                      Virginia                                              612              204               33.3
                                      West Virginia                                       1,851            1,695               91.6
                                      Wvomina                                                54               29               53.7

                                          Total                                          8,452            3,181               37.6

                                      In our prior report, we noted that many of the manually verified recom-
Clearinghouse Backlog                 mendations had not been communicated to states in time to meet their
Eliminated and                        planned permit issuance date. The Clearinghouse, a unit within OSMRE'S
Verifications                         Division of Debt Management, is responsible for performing the manual
                                      Our current work showed that the manual verification process has been
                                      streamlined. In October 1988, the Clearinghouse revised its manual ver-
                                      ification process and was able to eliminate a backlog of 1400 unverified
                                      Avs-generated recommendations by December 1988. OSMREofficials told

                                      Page 11                                                     GAO/Al?MD90-63   Surf’ace Mlnlng
                        Appendix II
                        OSMRE Actions   to Improve   Application

                        us that it would have taken 9 months to eliminate the verification
                        backlog if OSMREhad not revised its procedures.

                        While manual verifications of all Avs-generated recommendations are
                        still being performed, the current process makes more efficient use of
                        existing data, thus reducing redundant research. Since our January
                        1989 report, the Clearinghouse has changed its verification process by
                        reviewing applications from the same or related companies as one sub-
                        mission rather than as individual submissions. In addition, the Clearing-
                        house began to use the information it had accumulated on those
                        applicants who had submitted previous applications rather than to com-
                        pletely redo all research from scratch.

                         Reducing its redundant manual research has enabled the Clearinghouse
                         to provide more prompt recommendations to the states. During our
                         review, the Clearinghouse recommendations were being provided to the
                         states within an average of 1 week after the Avs-generated recommenda-
                         tion. The revised procedures have also enabled the Clearinghouse to
                         phase out 16 contractor personnel.

Status of Operating      era1 critical data requirements or the roles and responsibilities of the
Rules and Procedures     system operators and users. In the report, we recommended that OSMRE
                         expedite issuance of the Clearinghouse procedures and a rule for
                         updating applicant information prior to permit issuance. We also called
                         for monitoring state adherence to the recently issued ownership and
                         control rule and the information update rule when it was published.

                         OSMREhas published three new permit issuance rules, notified the states
                         and federal field offices of the new rules, and requested and received
                         the proposed amendments to their OSMRE-approvedprograms. No date
                         has been established for issuance of the Clearinghouse procedures. The
                         current draft procedures will have to be modified due to the recent rede-
                         sign of AVS and the Interior-National Wildlife preliminary agreement.

Redesignof AVS           system was completed in September 1989, and testing began in January
                         1990. Major features of the system include:

                       . States will have on-line system access, thereby allowing them to make
                         permit issuance or denial decisions.

                         Page 12                                        GAO/AFMD-3043   Surface Mining
                              Appendix II
                              OSMRE Actions   to Improve   Application

                          l The two basic files within the system’s data base will be an entity direc-
                            tory and a violation file with related entities.
                          . Changes in the automated operations will reduce the system processing
                            time needed to establish business relationships between mining entities
                            before matching to the violator file.
                          . Quarterly updated Administration data will be accessible by users but
                            will no longer be used to link applicants and violators.

                              OSMREofficials believe that the revised system will permit quicker user
                              access and reduce computer processing costs and time. Also, they
                              believe that the redesigned system will eliminate the need for the
                              Clearinghouse to manually verify the system-generated

                              Because OSMREhad retained a consultant to assess the redesign effort
                              and system operations had not started prior to the completion of our
                              work, we did not attempt to evaluate the redesign.

Contractor Study of the       OSMREawarded a contract in September 1989 to Data Computer Corpora-
RedesignedAVS                 tion of America to perform an in-depth analysis of AVS and the National
                              Wildlife permit review system. The analysis of the National Wildlife
                              system was subsequently suspended until Interior-National Wildlife
                              negotiations to resolve the issues in a lawsuit filed by National Wildlife
                              in April 1989 were completed. National Wildlife and Interior reached a
                              preliminary agreement on the lawsuit in late January 1990. OSMRE
                              advised us that it plans to initiate a study of the National Wildlife
                              system in June 1990. (See appendix I.)

                              tract to Computech to assess the           AVS
                              Data Computer Corporation of America subsequently awarded a con-
                                                                  redesign. Computech’s report,
                              which was issued on November 6, 1989, said that, although it had found
                              some problems, the redesign effort presented a logical, cohesive concept
                              for improving AVS and concluded that OSMREshould proceed.

                              Page 13                                          GAO/AF’MD-fW63   SurPace Mining
Appendix III

Analysis of the Reliability of AVS

                                      In our January 1989 report, we stated that inaccurate and incomplete
                                      information prevented AVS from producing reliable permit issue and
                                      deny recommendations. At that time, we reported that, from the time of
                                      its implementation in October 1987 through March 3, 1988, about 46
                                      percent of the AVS recommendations were reversed after they were man-
                                      ually verified by the Clearinghouse.

                                      To assess the current reliability of AVS, we compared the agreement rate
                                      of the automated system output and the manual verifications for the lo-
                                      month period ending October 31, 1989. As shown in table 111.1,the
                                      agreement rate, which fluctuated from a high of 88 percent to a low of
                                      50 percent, averaged about 63 percent.
Table 111.1:AVS and Clearinghouse
Recommendation Agreement Rates, lo-                                                                    Percentage of
Month Period Ending October 31,1989                                                                recommendations
                                      Month                                                              that agreed
                                      January                                                                     88.4
                                      February                                                                    73.3
                                      March                                                                       73.5
                                      April and May (OSMRE combined data)                                         50.2
                                      June                                                                        64.8
                                      Julv                                                                        62.9
                                      Auaust                                                                      65.1
                                      September                                                                   69.6
                                      October                                                                     62.8
                                      Percentaae for lo-month period                                              63.4

                                      Preliminary results of the first 2 weeks of operation of the redesigned
                                      AVS showed a 77 percent accuracy rate.

                                      As part of its efforts to improve AVS operations, OSMREreviews the
Reasonsfor                            monthly AVS and Clearinghouse agreement rate to identify operational
Differences                           trends and results. Based on these reviews, OGMREhas identified several
                                      overall reasons for the continuing differences between Avs-generated
                                      recommendations and the Clearinghouse manual verifications. The dif-
                                      ferences are primarily the result of renewal application submissions
                                      which contain outdated information; information obtained by the
                                      Clearinghouse after the applications have been entered into AVS; and
                                      Clearinghouse conditional approval recommendations. Finally, GAO and
                                      OSMREreviews disclosed that AVS may have a programming problem that

                                      Page 14                                         GAO/~90-63       Surface Mining
                        Appendix M
                        Analysis of the Reliability   of AS%

                        precludes proper processing of the crucial Administration       ownership
                        and control data.

                        In addition, OSMREofficials told us that the primary reasons for the
                        sharp drop in the agreement rates during April and May 1989 were the

                    l   Between February and June 1989, one state submitted a large number of
                        renewal requests in addition to new permit applications. The renewals
                        contained large amounts of inaccurate data.
                    l   In April 1989, Administration ownership and control information was
                        incorporated in the AVS data base, which significantly expanded the
                        information available for linking applicants to violators. In so doing,
                        some of the data led to incorrect linkages.

                        Finally, only the Clearinghouse staff is able to recommend that a permit
                        be issued conditionally. It can do this based on its research indicating
                        that an outstanding debt payment plan has been established or a settle-
                        ment agreement is in place for the correction of an outstanding viola-
                        tion. AVS does not have access to this information and accordingly would
                        recommend denial based on an outstanding violation. Our review dis-
                        closed that over the 10 months ended October 31,1989, the conditional
                        issuance category reduced the agreement rate by about 6 percent.

                        An OSMREanalysis and our test of AVS operations has identified auto-
System Processing       mated system programming problems. These problems have caused
Problems                incorrect linking of applicants to outstanding violations, thus reducing
                        the accuracy of the Avs-generated recommendations.

                        We selected a sample of 30 AVS recommendations to assess the reliability
                        of the AVS operation. Our test identified 11 cases in which AVS made
                        incorrect links between applicants and outstanding violations. For six
                        cases, the Clearinghouse advised us that the incorrect linkages were
                        caused by the system’s inability to accurately read the Administration
                        identification numbers and ownership and control data. However, the
                        Clearinghouse could not pinpoint the exact cause for the incorrect

                        The Clearinghouse staff offered more specific causes for the other five
                        cases. These incorrect linkages appeared to be due to problems in AVS
                        identifying starting and ending dates for when specific individuals or
                        companies owned or controlled specific mining operations. During our

                        Page 15                                         GAO/AFMD-3083     Surface Mining
Appendix III
Aualysia of the Reliability   of AVS

detailed discussions with Clearinghouse staff on these five cases, they
pointed out instances where the owner or operator of a mine had
changed. As discussed earlier, Administration numbers identify the
mine, not those operating or controlling it. Because the Administration
ownership and control data showed that the current applicant was not
involved at the time of the violation, the Clearinghouse staff concluded
there was no basis for the system-generated recommendation to deny
the permit and, accordingly, reversed it. Unless the system can precisely
read and process information reflecting periods of mine ownership and
control, any weaknesses in this ability to process Administration data
increases the risk of arriving at the wrong decision.

In June 1989, Clearinghouse officials conducted an informal review of
applications received in April and May in which the AVS and Clearing-
house recommendations disagreed. Of the 479 cases where the recom-
mendations disagreed, the Clearinghouse determined that incorrect links
of applicants to violators caused about 400 disagreements. Clearing-
house personnel said that the incorrect links were due to AVS computer
program logic problems, renewal applications with old data, and other
reasons. They said that about half of the 400 disagreements were prob-
ably attributable to weaknesses related to AVS'S use of ownership and
control data, including the incorrect reading of ownership periods.

Because the Clearinghouse could not identify the exact cause for the
incorrect links, in June 1989, it initiated an effort to determine why AVS
is making the incorrect links of applicants to violators and to make
appropriate modifications. OSMREshortly thereafter deferred further
analysis until receipt of renewal applications had decreased and current
Administration ownership and control information had been entered
into the system. As of the completion of our review, the analysis had not
been resumed, even though AVS continued to experience the same

Page 16                                         GAO/AFMD90-63   Surface Mining
Appendix IV

Major Contributors to This Report

                       John S. Reifsnyder, Assistant Director, (202) 634-5217
Accounting and         Jack Pichney, Senior Accountant-in-Charge
Financial Management   Gary I? Chupka, Senior Accountant
                       Dianne Langston, Staff Accountant
Division,              Christine E. Cirullo, Staff Accountant
Washington, DC.

                       Page 17                                       GAO/AFMD-9083   Surface Mining
Page 18   GAO/AFMD-90.63   Surf&e   Mining
 * .

       Page 19
RelatedGAO Products

             Debt Collection: Interior Is Acting to Improve Its Collection of Civil Pen-
             alty Fees (GAo/AFww-i’3, August 16, 1989).

             Surface Mining: Operation of the Applicant Violator System Can Be
             Improved (GAO/AFND-~Q-31, January 24,1989).

             Debt Collection: Interior’s Efforts to Collect Delinquent Royalties, Fines,
             and Assessments (GAo/AFMD~~-~~BR, June 18,1987).

(Bo6124)     Page 20                                         GAO/AFlWD-It042   Surface Mining
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