We audited the Bureau of Land Management's (BLM) mineral materials sales program to determine whether the U.S. Department of the Interior obtained market value for materials removed from Federal lands. BLM sells mineral materials— which consist of common types of sand and gravel, stone, pumice, or other materials used mainly in construction and landscaping—under the authority of the Materials Act of 1947, as amended. The United States uses about 2 billion tons of mineral materials annually, and in fiscal year 2011, BLM issued about 2,800 contracts and permits to sell mineral materials, including 2,616 sales valued at approximately $17 million, as well as instances of free use for public purposes such as State and local roadway projects.
We found that BLM's management of the program is hindered by outdated regulations and policies; does not always recover the processing costs for mineral materials contracts, resulting in $846,117 of lost revenue to the Government; or verify production volumes reported for sales. In addition, we noted concerns that BLM may not be collecting fees for minerals used on lands that have been sold under the Southern Nevada Public Land Management Act of 1998 because we found an instance where a private developer used tons of mineral materials without paying for them.
We made 15 recommendations to BLM that focus on updating program guidance and collaborating with the Department's Office of Valuation Services to ensure that the mineral materials program operates more efficiently and obtains adequate compensation for mineral materials sold from Federal land.