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Dept. of Interior releases scathing report on Osage Agency

The Office of Inspector General recognizes changes need to be made at the Osage Agency in Pawhuska.

In the 75-page report, “BIA Needs Sweeping Changes to Manage the Osage Nation’s Energy Resources,” released in October, the Deputy Inspector General Mary Kendall sent a memorandum to Kevin Washburn, Asst. Secretary of Indian Affairs and Mike Black, BIA director. In the memorandum she writes the OIG found the Agency’s oil and gas management program to be “fundamentally flawed” and it prevented the Osage Agency from effectively managing the Osage Minerals Estate.

“Specifically, we found weaknesses in the Agency’s oil and gas policies and procedures that guide critical activities affecting royalty payments. In addition, we determined that the Agency’s system for accounting and leasing activities is inadequate and, as a result, Agency staff conducts many activities manually,” she wrote. “Finally, we identified many competing interests in the Agency’s oil and gas operations, including tribal beneficiaries, the Osage Nation Minerals Council, leaseholders and operators, and surface owners. These interests contribute to the complexity of managing the Osage Nation’s mineral estate and put significant pressures on Agency staff.”

The report provides 33 recommendations for the Agency, five of which have been resolved and implemented, 27 of which have been resolved but not implemented, according to Kendall.  

“We will refer this recommendation to the Assistant Secretary for Policy, Management and Budget for resolution. We are encouraged by early reports of agency action toward hiring key personnel and working with the Office of Natural Resource Revenue to explore implementing some of our recommendations,” she wrote in the memorandum. “We believe that if BIA implements all of our recommendations, the Agency’s management of the Osage Nation’s oil and gas program will become more effective.”

Kendall closes the memorandum by stating the OIG is required to report to the U.S. Congress semiannually on all audits, inspections and evaluation reports issued and all actions taken or not taken to implement recommendations.

To download the full report, visit




Osage News

Original Publish Date: 2014-12-02 00:00:00


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