U.S. Mint officials have written off more than $80,000 that was
lost or stolen from the public and employee coin exchange program at
Mint headquarters in the District of Columbia.
An audit report released Nov. 22 by the Treasury Department’s
Office of Inspector General attributes the losses to a failure of the
Mint’s Sales and Marketing Division to properly maintain the coin
exchange program. The losses date back to 2008.
The Mint operates change machines on the first floor of its
headquarters building that dispense at face value circulation strikes
of the latest commemorative quarter dollars, Presidential dollars and
Native American dollar. Each design is replaced when a new coin design
in the series is released. Both Denver Mint and Philadelphia Mint
strikes are available.
The 22 coin exchange programs operated during the period targeted
by the OIG investigation also included the four 2009 Abraham Lincoln
Bicentennial commemorative cents, distributed in 50-coin wrapped rolls
that were dispensed over the counter rather than through the change
machines. The Lincoln cent rolls were available at the sales center at
Mint headquarters only on the day of the official ceremonial release
of the coins.
Three machines are publicly accessible through the lobby at Mint
headquarters and three machines are located in the building’s interior
space accessible only to Mint employees.
U.S. Mint headquarters is located at 801 Ninth Ave. NW.
Mint investigation findings
According to the Nov. 22 audit report by the Office of Inspector
General, U.S. Mint officials contacted the OIG after financial
discrepancies totaling $9,264 were found in the coin exchange program
related to closing out the 2008 John Quincy Adams Presidential dollar
program. An internal review by the Mint’s Planning, Budget and
Internal Control Division was prompted by an inquiry by the Treasury
OIG following the Mint’s initial report to Treasury. The OIG, in turn,
undertook an audit, according to the OIG report, to determine whether
the Mint had taken appropriate actions following its internal review,
because the coin exchange program had operated for several years
without proper control and accountability.
During the Mint’s internal review, Mint investigators could not
determine whether the $9,264 discrepancy was caused by loss or theft,
according to an internal Mint report titled Review of Coin Exchange
Program Managed by Sales and Marketing (SAM). The Mint issued its
final report on Dec. 2, 2010.
The Mint internal report “identified 4 findings and 13
recommendations,” according to the OIG audit report.
The Mint’s internal review identified these four findings:
➤ No coin exchange program reconciliations were performed from
2005 through 2009.
➤ The program lacked a complete set of records/documents to
demonstrate that all coins exchanged, cash proceeds and unused coins
were accounted for in the records.
➤ Coin machine exchange program functions were not properly
segregated and the results were not reviewed and approved by management.
➤ The program had deficiencies related to the physical security of
the vault and the coin machines.
“In response to one of the findings,” according to the OIG audit
report, U.S. Mint officials attempted to reconcile the coin exchange
program activities, and wrote off in September 2010 a total
discrepancy “in the form of a loss, of $82,215 for unresolved
differences for coin programs dating back to 2008. That amount
represents differences the Mint identified from 22 coin programs in all.”
The 22 programs comprised 10 dollar coin releases, eight quarter
dollar releases and four Lincoln cent releases.
As a result of the Mint-identified deficiencies, “the report
recommended that the Mint restrict access and enhance security to the
vault and coin machines, finalize the [standard operating procedures],
establish controls and oversight of cash transactions, make timely
deposits, adopt reconciliation processes, and require reviews of
documents retained to support the program.”
The Mint had followed through with all corrective measures for
enhancing security but delayed implementation of one, according to the
Nov. 22 OIG audit.
The security measure delayed was the addition of a camera and
additional card readers to record employee access to the vault used to
store the new coins at its headquarters building and in a controlled
area outside the vault. U.S. Mint officials had committed to
fulfilling the recommendation by Dec. 31, 2010, but fulfillment was
delayed pending implementation of other security upgrades in 2011 to
the Treasury’s Personal Identity Verification system.
By the fall of 2011, the Mint’s Office of Protection had installed
an access card reader outside the fifth floor vault and a camera
inside the vault. The OIG audit verified installation of these final
The OIG audit also found additional weaknesses that needed to be
addressed, specifically deposit delays and the lack of regular reconciliations.
U.S. Mint officials attributed the deposit delays to the
unwillingness of local banks to accept large volumes of coins,
especially dollar coins, since the banks end up returning most of the
dollar coins to the Federal Reserve.
Following its internal review, the Mint adopted a standard
operating procedure with a targeted “deadline that all deposits of
unused coins are made within 15 days after a coin program ends.” The
Mint internal review found that for three quarter dollar programs and
one Presidential dollar program closed out in 2010, the time from the
end of a program to the time of bank deposit ranged from 25 to 137 days.
In one of its findings, the OIG recommended the Mint enhance its
procedure for meeting the 15-day deposit deadline. In response to the
OIG recommendation, the Mint purchased a coin rolling machine to
streamline the deposit process.
The Mint is now meeting the 15-day deadline because of implemented
enhancements, according to the OIG.
In addition, in response both to the establishment of an updated
standard operating procedure by the Mint following its internal review
and to OIG recommendations, the Mint implemented measures to monitor
and reconcile each of the coin releases offered under the coin
exchange program on a monthly basis.
The OIG audit found that the monthly reviews “were performed
through October 2011.”
The full OIG audit report released Nov. 22, 2011, can be found
online at www.treasury.gov, by
clicking on the link for “Inspectors General.” ■