Interior Owes Oil and Gas Royalty Audit Costs to California

The U.S. government owes California costs related to their cooperative agreement under which the state conducted audit services related to oil and gas royalties, a federal appeals court ruled.

The U.S. Department of the Interior breached the agreement by not paying California nearly $300,000 for salary, fringe benefits, and other labor-related costs, the U.S. Court of Appeals for the Federal Circuit said June 12 in a nonprecedential decision.

The decision reverses a December 2017 decision by the U.S. Court of Federal Claims which said California couldn’t recover the costs under the billing method the department preferred.

California’s billing method, which ...