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Oil Fund Reports Inaccurate Accounting

Oil Fund Reports Inaccurate Accounting

Sunday, Jun, 3, 2018 01:57PM

A recent report released on August 14 reveals loose accounting of the Oil Spill Prevention and Administration Fund may lead to inaccurate reports, false alarms or misguided policies. It was uncovered that an accountant with little training and not enough experience in the field was handling the account, which reiterates the importance of earning an online degree in finance or online accounting degree program when seeking a job in the field.

The fund collects money for potential environmental disasters, and for at least the past four years the governor’s office may have overestimated the amount of funds available by the millions. Lawmakers found that funds for the oil spill prevention could run the organization $5.2 million into the ground, which would leave the organization without enough funds to support its workload.

Last June, a law was passed that increased the required fee of each barrel of oil delivered to California to to be taxed after the state auditor found the inaccurate balance. The legislature increased fees from 5-cents to 7-cents a barrel through 2015. The decision was reached after determining the fund would end up with negative $17.7 million by June 2014.

The audit found the analysts in charge of the Department of Fish and Game to have had little experience preparing financial documents, which lead to the inaccuracy. The lack of money in the funds was also partly because it was not receiving the amount of federal money it was supposed to get. According to The Associated Press, the office undercharged the federal government by $27.2 million for administrative costs.

"These misstatements were, in part, a result of fish and game's budget branch not having written procedures directing staff to reconcile the spill fund's financial condition to the state controller's office records," State Auditor Elaine Howle wrote. "Moreover, the analysts in fish and game's budget branch lacked experience and training regarding the preparation of fund condition statements."

Richard Stapler, a spokesman for the California Natural Resources Agency, which oversees the Department of Fish and Game, told the Los Angeles Times that the fund is now in a sound place, and all concerns over the audit have been cleared. The federal government gave California a three fiscal year deadline to recover from the money lost. 

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