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Audit urges update, MOU renewal and cost review for Mine Subsidence Protection Program
Summary
The state audit found an expired federal MOU, low enrollment and rising engineering inspection costs in Colorado's Mine Subsidence Protection Program and recommended updating rules, re-evaluating eligibility, and documenting procedures to sustain the trust fund.
The Legislative Audit Committee released a performance audit of Colorado's Mine Subsidence Protection Program on May 27, finding administrative gaps, an expired memorandum of understanding with the Office of Surface Mining Reclamation and Enforcement (OSMRE), low program enrollment and rising inspection costs.
Auditors told the committee the program's original MOU with OSMRE (established in 1988) expired after its 10-year review window and was never renewed; division staff did not realize the MOU had expired. The report also notes the program last updated board rules in February 2002 and lacks written operational procedures, which has led staff to make administration decisions inconsistent with existing rules.
The audit found only about 14% enrollment of eligible homes (approximately 860 of about 6,300 eligible properties) and that the program approved just two claims in the past 11 years. Inspectors' costs rose significantly after a 2019 change in engineering contractors: an enrollment inspection averaged about $3,500 in 2024 and an initial claim inspection averaged about $5,500.
Auditors recommended the Department of Natural Resources and the Mine Land Reclamation Board (trustees of a program trust) renew the federal MOU, update program rules and establish written operational procedures; they also suggested evaluating expanding eligibility (for example, structures built after 1989), reassessing inspection requirements and contractor use to reduce costs, and considering structural changes (including private insurer options) to increase participation.
Division leadership signaled agreement with the recommendations, said it anticipates a new MOU with OSMRE by year-end, and described planned rulemaking and consultant-supported documentation of standard operating procedures. The division also said it will evaluate circumstances under which costly additional investigations are warranted so the trust fund remains solvent while maximizing participation.
The committee heard questions about outreach and why participation is low; staff described past and ongoing outreach (mailings, door hangers, HOA and realtor talks) and said more outreach is planned. The division acknowledged the program's inspectors and investigations can be expensive and that policy changes should balance benefit to homeowners with fund sustainability.
The audit will be used to inform rulemaking by the Mine Land Reclamation Board and future legislative or administrative changes to the program.
