RD376 - Review of the Virginia Gas and Oil Board - November 18, 2010


Executive Summary:
We completed our review of the Virginia Gas and Oil Board’s policies and procedures over the management of escrow funds arising from the pooling of coal-bed methane gas. We conducted this review to determine if the Virginia Gas and Oil Board follows best practices in the management of escrow accounts as compared to their current policies and procedures.

We recommend the Board do the following.

• Obtain Deposit and Revenue Details for Escrow Accounts to gather key information from all Gas Companies on a recurring basis so the Board can perform reasonableness tests of amounts received.

• Develop Data Standards for the electronic receipt of information from the Gas Companies and the transfer of information from the custodian’s system. Having information provided electronically will eliminate staff time for data entry and increase their ability to analyze the information.

• Set Time Frames for Escrow Deposits that establish an allowable timeframe for a deposit into an escrow account after the sale of gas.

• Periodically Review the Escrow Accounts by testing the balances of escrow accounts and the management of the funds.

• Document Policies and Procedures for the management of escrow accounts and include these documents in the periodic review mentioned above.