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Supporting Statement A

Accounts Receivable Confirmations Reporting

OMB Control Number 1012-0001

Terms of Clearance: None

General Instructions

A completed Supporting Statement A must accompany each request for approval of a collection of information. The Supporting Statement must be prepared in the format described below and must contain the information specified below. If an item is not applicable, provide a brief explanation. The Office of Management and Budget (“OMB”) reserves the right to require the submission of additional information with respect to any request for approval.

Specific Instructions

A. Justification

1. Explain the circumstances that make the collection of information necessary.

Identify any legal or administrative requirements that necessitate the collection.

The Secretary of the U.S. Department of the Interior (“Secretary”) is responsible for mineral resource development on Federal and Indian lands and the Outer Continental Shelf. Laws pertaining to Federal and Indian mineral leases are posted at http://www.onrr.gov/Laws_R_D/PubLaws/default.htm. Pursuant to the Federal Oil and Gas Royalty Management Act of 1982 (“FOGRMA”) and other laws, the Secretary’s responsibilities include maintaining a comprehensive inspection, collection, and fiscal and production accounting and auditing system that: (1) accurately determines mineral royalties, interest, and other payments owed, (2) collects and accounts for such amounts in a timely manner, and (3) disburses the funds collected. See 30 U.S.C. 1701 and 1711. ONRR performs these mineral revenue management responsibilities for the Secretary. See Secretarial Order No. 3306.

The Secretary also has a trust responsibility to manage Indian lands and seek advice and information from Indian beneficiaries. ONRR performs the minerals revenue management functions for the Secretary and assists the Secretary in carrying out the Department’s trust responsibility for Indian lands.

ONRR collects, audits, and disburses royalties, interest, and other payments owed by lessees on minerals produced from Federal and Indian lands. Such information is generally available within the records of the lessee of others involved in the development, transport, processing, purchase, or sale of such minerals. Specifically, companies submit financial information to ONRR on a monthly basis by submitting form ONRR-2014 (Report of Sales and Royalty Remittance reported in OMB Control Number 1012-0004), and form ONRR-4430 (Solid Minerals Production and Royalty Report reported in OMB Control Number 1012-0010). These royalty reports result in accounts receivables and capture most of the mineral revenues that ONRR collects.

The basis for the data that companies submit on forms ONRR-2014 and ONRR-4430 is generally available within the records of the lessee or others involved in developing, transporting, processing, purchasing, or selling such minerals. The information that ONRR collects under this ICR includes data necessary to ensure that ONRR’s accounts receivables are accurately based on the value of the mineral production, as reported to ONRR on forms ONRR-2014 and ONRR-4430.

ONRR has posted the following laws pertaining to mineral leases on Federal and Indian lands and the OCS at http://www.onrr.gov/Laws_R_D/PubLaws/default.htm:

• Mineral Leasing Act of 1920, as amended, 30 U.S.C. 181 et seq.

• Outer Continental Shelf Lands Act of 1953, as amended, 43 U.S.C. 1331 et seq.

• Federal Oil and Gas Royalty Management Act of 1982, as amended, 30 U.S.C. 1701 et seq.

• Indian Mineral Development Act of 1982, as amended, 25 U.S.C. 210-2108

• Chief Financial Officers Act of 1990, 31 U.S.C. 9106

Every year, under the Chief Financial Officers Act of 1990 (“CFO Act”), the Office of Inspector General (“OIG”) or its agent, audits the accounts receivable portions of the Department’s financial statements, which includes accounts receivables based on ONRR forms ONRR-2014 and ONRR-4430. Accounts receivable confirmations are a common practice in the audit business. Due to a continuous increase in scrutiny of financial audits, a third-party confirmation of the validity of ONRR’s financial records is necessary.

ONRR will request OMB approval to continue to collect this information. Not collecting this information would limit the Secretary's ability to discharge the duties of the office, could result in a violation of the Chief Financial Officers Act of 1990, and may also result in the inability to confirm the accuracy of ONRR’s accounts receivables which are based on the accurate reporting of forms ONRR-2014 and ONRR-4430. ONRR protects the proprietary information received and does not collect items of a sensitive nature.

2. Indicate how, by whom, and for what purpose the information is to be used. Except for a new collection, indicate the actual use the agency has made of the information received from the current collection. Be specific. If this collection is a form or a questionnaire, every question needs to be justified.

As part of the CFO Act audits, the OIG or its agent selects a sample of accounts receivable items based on forms ONRR-2014 and ONRR-4430 and provides the sample items to ONRR. ONRR then identifies the company names and addresses for the sample items selected and creates accounts receivable confirmation letters. In order to meet the CFO Act’s requirements, the letters must be on ONRR letterhead and the Deputy Director for ONRR, or his or her designee, must sign the letters. The letter requests third-party confirmation responses by a specified date on whether or not ONRR’s accounts receivable records agree with royalty payor records for the following items: (1) customer identification; (2) royalty invoice number; (3) payor assigned document number; (4) date of ONRR receipt; (5) original amount the payor reported; and (6) remaining balance due to ONRR. The OIG or its agent mails the letters to the payors, instructing them to respond directly to the agent to confirm the accuracy and validity of selected royalty receivable items and amounts. In turn, it is the responsibility of the payors to verify, research, and analyze the amounts and balances reported on their respective forms ONRR-2014 and ONRR-4430.

3. Describe whether, and to what extent, the collection of information involves the use of automated, electronic, mechanical, or other technological collection techniques or other forms of information technology, e.g., permitting electronic submission of responses, and the basis for the decision for adopting this means of collection. Also describe any consideration of using information technology to reduce burden and specifically how this collection meets GPEA requirements

ONRR continues to strive for full implementation of the Government Paperwork Reduction Act of 1995. ONRR collects most of the original information electronically on forms ONRR-2014 and ONRR-4430. However, an electronic response to this request for information is not appropriate because CFO audits require certification by the lessee that ONRR’s accounts receivable, generated from these forms, are accurate.

4. Describe efforts to identify duplication. Show specifically why any similar information already available cannot be used or modified for use for the purposes described in Item 2 above.

The information collection requested for the CFO Act audits is not available from any other source. No other Federal or state agency collects the same or similar information. The primary information is available only within the records of the payors, and the use of such data is unique to ONRR’s mission.

5. If the collection of information impacts small businesses or other small entities, describe any methods used to minimize burden.

Small businesses are among potential respondents. ONRR carefully analyzed its requirements to ensure the information requested is the minimum necessary to accomplish its mission and place the least burden on industry. Detailed transactional information is provided to the company for confirmation to minimize their burden in collecting and verifying the information.

6. Describe the consequence to Federal program or policy activities if the collection is not conducted or is conducted less frequently, as well as any technical or legal obstacles to reducing burden.

Not collecting this information would limit the Secretary's ability to discharge the duties of the office, could result in a violation of the Chief Financial Officers Act of 1990, and may also result in the inability to confirm the accuracy of ONRR’s accounts receivables.

7. Explain any special circumstances that would cause an information collection to be conducted in a manner:

*requiring respondents to report information to the agency more often than quarterly.

There are no special circumstances with respect to 5 CFR 1320.5(d)(2)(i).

*requiring respondents to prepare a written response to a collection of information in fewer than 30 days after receipt of it.

There are no special circumstances with respect to 5 CFR 1320.5(d)(2)(ii).

*requiring respondents to submit more than an original and two copies of any document.

There are no special circumstances with respect to 5 CFR 1320.5(d)(2)(iii).

*requiring respondents to retain records, other than health, medical, government contract, grant-in-aid, or tax records, for more than 3 years.

Indian Oil and Gas Records: Under 30 U.S.C. 1713(b), Indian oil and gas records must be maintained for six years after the records are generated unless the Secretary notifies the record holder that such records must be maintained for a longer period due to an ongoing audit or investigation.

Federal Records: Under 30 U.S.C. 1724(f), Federal records must be maintained for seven years after the records are generated unless the Secretary notifies the record holder that such records must be maintained for a longer period due to an ongoing audit or investigation or the records related to an ongoing judicial proceeding or appeal of a demand.

*in connection with a statistical survey, that is not designed to produce valid and reliable results that can be generalized to the universe of study.

There are no special circumstances with respect to 5 CFR 1320.5(d)(2)(v).

*requiring the use of statistical data classification that has not been reviewed and approved by OMB.

There are no special circumstances with respect to 5 CFR 1320.5(d)(2)(vi) because this collection is not a statistical survey and does not use statistical data classification.

*that includes a pledge of confidentiality that is not supported by authority established in statute or regulation, that is not supported by disclosure and data security policies that are consistent with the pledge, or which unnecessarily impedes sharing of data with other agencies for compatible confidential use.

There are no special circumstances with respect to 5 CFR 1320.5(d)(2)(vii) as this collection does not include a pledge of confidentiality not supported by statute or regulation.

*requiring respondents to submit proprietary trade secrets or other confidential information unless the agency can demonstrate that it has instituted procedures to protect the information’s confidentiality to the extent permitted by law.

There are no special circumstances with respect to 5 CFR 1320.5(d)(2)(viii) as this collection does not require proprietary, trade secret, or other confidential information not protected by agency procedures. ONRR protects this information under the standards identified in Item 10 below.

8. If applicable, provide a copy and identify the date and page number of publication in the Federal Register of the agency’s notice, required by 5 CFR 1320.8(d), soliciting comments on the information collection prior to submission to OMB. Summarize public comments received in response to that notice [and in response to the PRA statement associated with the collection over the past 3 years] and describe actions taken by the agency in response to these comments. Specifically address comments received on cost and hour burden.

Describe efforts to consult with persons outside the agency to obtain their views on the availability of data, frequency of collection, the clarity of instructions and recordkeeping, disclosure, or reporting format (if any), and on the data elements to be recorded, disclosed, or reported. [Please list the names, titles, addresses, and phone numbers of persons contacted.] Consultation with representatives of those from whom information is to be obtained or those who must compile records should occur at least once every 3 years – even if the collection of information activity is the same as in prior periods. There may be circumstances that may preclude consultation in a specific situation. These circumstances should be explained.

As required in 5 CFR 1320.8(d), ONRR published a 60-day review and comment notice in the Federal Register on April 21, 2021 (86 FR 20710). ONRR did not receive any comments in response to the Federal Register notice available at www.regulations.gov.

ONRR reached out to members of industry soliciting comments for this information collection request renewal. Four members of industry provided comments as follows:

Contacts made / comments received:

1. Company: Chevron North America Exploration and Production, a Division of Chevron U.S.A. Inc.

Comment: I agree with the content of this Information Collection Request.

ONRR Response: We appreciate your response to our inquiry.

2. Company: Peabody Energy

Comment: I read this Information Collection Request and agree with the proposed time that takes our company to file our information with ONRR.

ONRR Response: We appreciate your response to our inquiry.

3. Company: Cox Operating LLC

Comment: We agree with the content of this Information Collection Request

ONRR Response: We appreciate your response to our inquiry.

4. Company: Devon Energy Corporation

Comment: I read this Information Collection Request and disagree with the proposed time that it takes our company to file our information with ONRR. This request typically takes about an hour to collect, confirm, and respond.

ONRR Response: Thank you for taking the time to review the 60-Day Federal Register Notice. ONRR will take into consideration your comment for further evaluation of the burden hours.

9. Explain any decision to provide any payment or gift to respondents, other than remuneration of contractors or grantees.

ONRR will not provide any payment or gift to respondents in this collection.

10. Describe any assurance of confidentiality provided to respondents and the basis for the assurance in statute, regulation, or agency policy.

Commercial or financial information provided to ONRR, relative to minerals removed from Federal and Indian leases, may be proprietary. FOGRMA, as amended, (30 U.S.C. 1701 et seq.), and the Freedom of Information Act (5 U.S.C 552 (b)(4)), and their implementing regulations establish standards to protect trade secrets and other proprietary information.

In addition, the Indian Mineral Development Act of 1982 (25 U.S.C. 2103) provides that all information related to any Indian minerals agreement covered by the Act, in the possession of the Department, shall be held as privileged proprietary information. ONRR has strict security measures in place for storage and access of proprietary information.

11. Provide additional justification for any questions of a sensitive nature, such as sexual behavior and attitudes, religious beliefs, and other matters that are commonly considered private. This justification should include the reasons why the agency considers the questions necessary, the specific uses to be made of the information, the explanation to be given to persons from whom the information is requested, and any steps to be taken to obtain their consent.

This information collection does not include sensitive or private questions.

12. Provide estimates of the hour burden of the collection of information. The statement should:

*Indicate the number of respondents, frequency of response, annual hour burden, and an explanation of how the burden was estimated. Unless directed to do so, agencies should not conduct special surveys to obtain information on which to base hour burden estimates. Consultation with a sample (fewer than 10) of potential respondents is desirable. If the hour burden on respondents is expected to vary widely because of differences in activity, size, or complexity, show the range of estimated hour burden, and explain the reasons for the variance. Generally, estimates should not include burden hours for customary and usual business practices.

*If this request for approval covers more than one form, provide separate hour burden estimates for each form and aggregate the hour burdens.

*Provide estimates of annualized cost to respondents for the hour burdens for collections of information, identifying and using appropriate wage rate categories. The cost of contracting out or paying outside parties for information collection activities should not be included here. Instead, this cost should be included in Item 14.

Based on OIG requirements, ONRR estimates that there will be 24 respondents (Federal and Indian lessees). ONRR estimates that each response will take 15 minutes leading to the total annual burden of 6 reporting hours (there are no recordkeeping hours). ONRR used tables from the Bureau of Labor Statistics (BLS) for May 2020 located at https://www.bls.gov/oes/current/oes132011.htm to estimate the hourly cost for industry accountants in a metropolitan area. ONRR added a multiplier of 2.1 (based on BLS News Release USDL-21-0126 dated January 29, 2021, at https://www.bls.gov/news.release/eci.nr0.htm) for benefits for private industry workers. Based on this information, ONRR estimates the hourly cost for an industry accountant would be $86, calculated as follows:

$40.89 [mean hourly wage] x 2.1 [benefits cost factor] = $85.87 [rounded to $86/hr.]

The estimated annual cost to industry would be $516 calculated as follows:

6 [reporting hours] x $86 hr. [for industry accountants] = $516

13. Provide an estimate of the total annual [non-hour] cost burden to respondents or recordkeepers resulting from the collection of information. (Do not include the cost of any hour burden shown in Items 12 and 14).

*The cost estimate should be split into two components: (1) a total capital and start-up cost component (annualized over its expected useful life) and (2) a total operation and maintenance and purchase of services component. The estimates should take into account costs associated with generating, maintaining, and disclosing or providing the information [including filing fees paid]. Include descriptions of methods used to estimate major cost factors including system and technology acquisition, expected useful life of capital equipment, the discount rate(s), and the time period over which costs will be incurred. Capital and start-up costs include, among other items, preparations for collecting information such as purchasing computers and software; monitoring, sampling, drilling and testing equipment; and record storage facilities.

*If cost estimates are expected to vary widely, agencies should present ranges of cost burden and explain the reasons for the variance. The cost of purchasing or contracting out information collection services should be a part of this cost burden estimate. In developing cost burden estimates, agencies may consult with a sample of respondents (fewer than 10), utilize the 60-day pre-OMB submission public comment process and use existing economic or regulatory impact analysis associated with the rulemaking containing the information collection, as appropriate.

*Generally, estimates should not include purchases of equipment or services, or portions thereof, made: (1) prior to October 1, 1995, (2) to achieve regulatory compliance with requirements not associated with the information collection, (3) for reasons other than to provide information or keep records for the government, or (4) as part of customary and usual business or private practices.

ONRR has identified no non-hour cost burdens for this collection of information.

14. Provide estimates of annualized cost to the Federal Government. Also, provide a

description of the method used to estimate cost, which should include quantification of hours, operational expenses (such as equipment, overhead, printing, and support staff), and any

other expense that would not have been incurred without this collection of information.

Agencies also may aggregate cost estimates from Items 12, 13, and 14 in a single table.

ONRR estimates that a Federal employee will spend approximately 6 hours per year to perform this task; this task requires only filing. An employee paid at the United States 2021 General Schedule, Grade 7/Step 5 pay-scale level currently performs the work. The 2021 salary table for the Denver, Colorado area is located on page 20 at https://www.opm.gov/policy-data-oversight/pay-leave/salaries-wages/salary-tables/pdf/2021/salhrl.pdf. Based on the United States Office of Personnel Management 2021 General Schedule, Grade 7, Step 5, pay scale for a government auditor in the Denver, Colorado metropolitan area, the estimated hourly labor cost is $49 per hour [$26.01 x 1.9 benefit cost factor = $49.42 rounded to $49]. ONRR added a multiplier of 1.9 [based on BLS News Release USDL-21-0126 dated January 29, 2021, at https://www.bls.gov/news.release/eci.nr0.htm] for benefits.

$26.01 [GS-7/5] x 1.9 [benefits cost factor] = $49.42 [rounded to $49/hr.]

The estimated annual cost to the Federal Government is $270, calculated as follows:

5.5 hrs. /year [estimated time] x $49/hr. [for Federal employee] = $269.50 [rounded to $270]

15. Explain the reasons for any program changes or adjustments.

There are no program changes or adjustments for this information collection at this time.

16. For collections of information whose results will be published, outline plans for tabulation and publication. Address any complex analytical techniques that will be used. Provide the time schedule for the entire project, including beginning and ending dates of the collection of information, completion of report, publication dates, and other actions.

ONRR will not publish the data.

17. If seeking approval to not display the expiration date for OMB approval of the information collection, explain the reasons that display would be inappropriate.

Not applicable to this collection.

18. Explain each exception to the certification statement identified in Item 19, “Certification for Paperwork Reduction Act Submission.”

To the extent that the topics apply to this collection of information, ONRR is not making any exceptions to the “Certification for Paperwork Reduction Act Submissions.”

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