The Pennsylvania Game Commission failed to make sure that energy companies paid what they owed in royalties from oil and gas production on state hunting lands, according to an audit released Thursday.

Auditor General Eugene DePasquale’s audit also faulted the agency for sitting on a huge and growing pile of cash — it totaled nearly $73 million in 2018 — and failing to take those reserves into account when developing an annual budget.

“The Game Commission must take a careful look at how it manages all of its finances,” DePasquale said in a release. “Beyond the nearly $73 million balance in the Game Fund, we found there was an additional $6.5 million in various escrow accounts — which the commission’s financial officer didn’t even have knowledge of the specific accounts, balances, or purposes until my audit.”

State Rep. Jim Gregory, R-Hollidaysburg, called for additional oversight of the commission.

“Criticism of lack of transparency of accounts is absolutely warranted. To not even know what accounts exist, let alone not know how much is in each account, is a recipe for disaster. Open opportunity for theft and malfeasance of funds must be ended,” Gregory said in a release.

“Checks sitting for weeks before being deposited is clearly a sign that this organization does not view these funds as important, while it was continuing to ask the General Assembly for increases in funding,” Gregory said.

The Auditor General’s Office found that the commission relied on the drillers’ own data and didn’t confirm their royalty calculations were accurate or that they actually paid the money.

The game commission, which manages state-owned hunting lands, permits drillers to extract natural gas from the vast Marcellus Shale formation in exchange for royalties, which rose from $9.3 million in 2015 to $19.2 million in 2017. About 133,700 acres of game lands are under lease.

“Essentially, the commission is relying on gas and oil companies to say how much money they owe,” DePasquale said in a statement. “I find the lack of fiscal controls to be particularly troubling at a time when oil and gas royalty revenues doubled.”

The commission acknowledged it failed to adequately track royalties, attributing the problem to a lack of staff but said it has improved its accounting practices.

DePasquale’s audit also faulted the agency for not taking its nearly $73 million in 2018 into account when developing an annual budget. Auditors said the commission should consider its “full financial position” when making a budget or considering an increase in hunting license fees.

The audit, which covered fiscal years 2014-2017, looked at the commission’s overall fiscal management and made a total of 40 recommendations.

The Game Commission said in a statement that it has either already implemented the auditor general’s recommendations or is in the process if doing so.

“To do our best for Pennsylvania’s wildlife and citizens, we must work as efficiently and effectively as possible,” said the commission’s executive director, Bryan Burhans. “Nearly all the recommendations offered by the auditor general’s office will further improve the Game Commission’s operations.”

In assessing how the game commission was managing its oil and gas windfall, state auditors looked at royalty payments from 18 of the 66 energy companies that extracted gas from state game lands.

Auditors found the commission did not charge interest on delinquent payments nor did agency staff force gas companies to submit annual production reports that “could have provided an extra layer of accountability,” DePasquale said.

The agency also let royalty checks sit around. In one case, agency staff waited 63 days to deposit a check.

Gregory said the report provides a clear view into the workings of the Game Commission and how it values the hunters it is supposed to represent.

Gregory thanked his colleague, Rep. Dave Maloney, R-Berks, and DePasquale for their work on the audit. He encouraged all hunting enthusiasts to watch the press conference and read the report, which are linked from www.Rep Gregory.com.

“I want hunters to understand the magnitude of how this audit brings to light many of the concerns those in my district have been voicing for years,” he said.