A legislative audit report released Tuesday recommends significant changes in the way the state handles regulation of its coal industry.

The performance audit of Utah's Coal Regulatory Program, conducted by the Office of the Utah Legislative Auditor General, focused on the regulation of the coal program within the state Division of Oil, Gas and Mining.

"Management over the coal program is lacking good management practice in a few key governing areas," the report states.

The report targets the regulatory operation of the agency, which monitors and controls the impacts of surface coal mining.

Auditors recommended that division managers develop clear policies and procedures for regulating, monitoring and enforcing established rules, and suggested that the division should consistently adhere to those policies. In addition, the division should more accurately interpret governing regulatory definitions and consistently enforce its regulatory authority, the report said.

"My attitude toward the recommendations of this audit is that we accept them," said DOGM director John Baza. "We will use this (audit) as a positive catalyst for change in the Division of Oil, Gas and Mining.

"We will look to improve our efficiency and our procedures in order to accomplish the mission set forth to us," he added.

Baza said his agency "will work hard to bring the changes to pass in the coming months."

"We feel that the audit recommendations are things that we can implement and should implement in order to become more efficient as an agency," he said.

He said part of DOGM's problems stem from the coal program's early development when it was modeled after a federal government program that had processes that were slow to change over the years.

According to the report, another priority for the division should be to change permitting practices for underground mining. Currently, those practices are not clearly defined, the auditors said.

Baza said issues such as the permit changes can be made in short order, and he expected it to be done in a matter of a few weeks.

The report also recommended exploring additional funding options for the state's coal program, including requesting federal funding based on workload and collecting fees directly from entities that benefit from the coal program's services.

"I would like to stay away from any fees if possible," said Michael R. Styler, executive director of the Utah Department of Natural Resources. "I'd hope that we could be efficient enough so that we don't have to ask for fees."

Styler added DOGM will study the idea of a fee structure and forward the results to lawmakers for their input.