Audit of Gulf Oil Spill Claims Fund Finds $64 Million in Underpayments

April 20, 2012

An audit of the $20 billion fund for paying victims of the 2010 Gulf of Mexico oil spill found “significant errors” that led to about 7,300 claimants who were underpaid receiving an extra $64 million, the U.S. Justice Department said on Thursday.

The Gulf Coast Claims Facility (GCCF) was set up to compensate fishermen, hotel owners, property owners and others for losses from explosion of the Deepwater Horizon drilling rig and subsequent oil spill from the BP Plc well.

The independent audit, conducted by BDO Consulting, also found that some claimants were overpaid, but that the GCCF was not seeking to recover that money, according to the Justice Department, which had sought the audit.

Attorney General Eric Holder last summer asked for the independent audit after hearing from some individuals and owners of small businesses in the region who were concerned about claims. The fund has paid out more than $6.2 billion to more than 220,000 people and businesses.

“The fact that this audit has resulted in tens of millions of dollars being made available to claimants who were wrongfully denied or short-changed underscores the importance of the audit,” said Tony West, acting associate attorney general under Holder.

A new process is being set up to allow more people and businesses collect some of their money immediately, and the head of the fund, lawyer Kenneth Feinberg, was relieved of his duties by a federal judge last month.

BP on Wednesday said it expects to take $7.8 billion from the fund to resolve economic, property and medical claims by more than 100,000 individuals and businesses.

Claimants with final offers from Feinberg can receive 60 percent of their money now, and if eligible under the new program may receive the remaining 40 percent or seek higher awards.

 

 

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