GENERAL MANAGEMENT: 

The Bureau of Engraving and Printing’s Controls 

Over Background Investigations Need to be Improved 

OIG-03-004 October 16, 2002 

This report has been reviewed for public dissemination by the Office of 

Counsel to the Inspector General. Information requiring protection from

public dissemination has been redacted from this report in accordance with 

the Freedom of Information Act, 5 U.S.C. section 552.

Office of Inspector General 

******* 

The Department of the Treasury 
Contents 

Audit Report.......................................................................................................2 

 Results in Brief...............................................................................................3 

 Background ...................................................................................................4 

Finding and Recommendations .........................................................................7 

 Oversight Over Background Investigations Needs to be Improved ............ 7 

 Recommendations ........................................................................................17 

 

Appendices

 Appendix 1: Objectives, Scope, and Methodology .......................................20 

 Appendix 2: Management Response ..........................................................21 

 Appendix 3: Major Contributors to this Report.............................................22 

 Appendix 4: Report Distribution............................................................... 23 

 

Abbreviations 

 ACD Advanced Counterfeit Deterrence 

 BI Background Investigation 

 ESS Employee Suitability System 

 FRN Federal Reserve Note 

 Ft. Worth Fort Worth 

 NAC National Agency Check 

 NACI National Agency Check with Inquiries 

 USSS United States Secret Service 

The Bureau of Engraving and Printing’s Controls Over Background 

Investigations Need to be Improved (OIG 03-004) 

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OIG Audit 

Report

The Department of the Treasury 

Office of Inspector General 

 

The Bureau of Engraving and Printing’s Controls Over Background 

Investigations Need to be Improved (OIG 03-004) 

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 Thomas A. Ferguson 

Director 

Bureau of Engraving and Printing 

On January 20, 1999, the Bureau of Engraving and Printing (the 

Bureau) implemented its Personnel Security Policy for Positions in 

Vulnerable Areas, No. 71-00.51, which superseded a 1996 policy. 

The 1996 policy limited full background investigations to persons 

who had access to finished products. The current (1999) policy 

sets forth an additional number of areas designated as vulnerable 

and applies to employees with access to vulnerable areas, to 

include finished and unfinished products. 

The Bureau’s Personnel Security Division has the responsibility of 

performing background investigations and maintaining data files. 

Since 1988, the Personnel Security Division has maintained its data 

of background investigations on a database called the Employee 

Suitability System (ESS). 

We examined the Bureau’s controls, policies, and procedures for 

conducting and updating background investigations. Specifically, 

we reviewed the controls currently in place within the Bureau’s 

Washington Personnel Security Division to determine whether the 

Bureau had adequate controls to ensure that initial and updated 

investigations were performed timely and efficiently; thus to 

prevent and/or deter theft of currency and other documents. 

Our overall audit objective was to review security over currency 

and other documents including a review of background 

investigations. The review of the controls over currency and other 

documents is pending and will be discussed in a future report. Our 

objective during this phase of our review was to determine the 
 

Bureau’s controls and procedures for conducting and updating 

background investigations. We performed our fieldwork primarily 

from April 2002 to September 2002, at the Washington, D.C. 

facility. A more detailed description of our objective, scope, and 

methodology is provided as Appendix 1. 

Results in Brief 

• At the time of our review, the ESS contained inaccurate data. 

In addition, it did not produce status reports to show the 

collective number of open cases, the number of employees who 

have certain levels of security clearances (high-risk, moderaterisk, low-risk), and the number of cases that are 

outstanding/pending investigations. We also observed that the 

Bureau’s database is not currently designed to permit easy 

reconciliation to the Bureau’s Office of Human Resources roster 

because of automation problems and incorrect data. The ESS 

had inaccurate data concerning Social Security numbers, 

contained multiple records, and Personnel Security did not

remove former employees from its current database timely. We

recommend that the ESS be enhanced to produce status reports

that we believe are needed by decision makers in measuring and 

determining how well and to what extent the 1999 Vulnerable 

Area Policy has been implemented, and to ensure accurate and 

reliable data is reported. Bureau management and the Personnel 

Security Division have agreed to work with the Bureau’s 

Information Technology Directorate to assess the ESS’ 

capabilities. We also recommend that Social Security numbers 

be corrected, the correct ones be used for background 

investigations, old records be archived appropriately, and 

multiple records be eliminated. 

• The Bureau performs full background investigations on high-risk 

or critical sensitive positions. However, since the 1999 policy 

change, we noted employees with moderate-risk background 

investigations working in high-risk areas. We recommend that

Bureau management assess employees in moderate and low risk

positions to determine whether their security clearances are 

commensurate with their job positions and accessibility to 

vulnerable areas. 

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• The Bureau has a backlog of “no issue” cases (cases in which 

no issues were identified during the field investigation), but the 

cases have not been adjudicated1

. As a general rule, the 

Personnel Security Division first processes those cases where 

issues were identified, while deferring the processing of no 

issues cases. This practice has created a backlog of cases 

being opened as far back as 1999. We recommend that the 

Bureau ascertain whether procedures are in place in the 

Personnel Security Division to ensure background investigations 

are closed and adjudicated timely to reduce or eliminate 

backlogs. 

• We also noted that similar problems existed at the Fort Worth 

(Ft. Worth) facility concerning multiple records, the need for 

reinvestigations, and the need to upgrade positions. We 

recommend that the Bureau perform a self-assessment of the 

magnitude of these issues, provide continuous bureau-wide

oversight, and take the appropriate corrective actions. 

Bureau management agreed with our finding and 

recommendations. As a result, a project team of senior 

personnel has been established to perform a self–assessment of 

the Bureau’s background investigations program to determine 

what actions need to be taken to implement the 

recommendations and to determine the extent of problems at 

Ft. Worth. The self-assessment is due to be completed in midDecember 2002. At that point, Bureau management is to 

establish timeframes for implementing the recommendations. 

With regard to continuous oversight, the Chief, Office of 

Security, has been designated the responsibility to plan, 

administer, and monitor the Bureau’s various security programs 

on a bureau-wide basis, including background investigations. 

Background

The Bureau began printing all United States currency in 1877. 

Today, it produces U.S. currency, postage stamps, and many other 

security documents. Accordingly, the Bureau designs, prints, and 

 

The Bureau of Engraving and Printing’s Controls Over Background 

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1

 An assessment of conduct and character as it impacts on a person’s suitability for any position in the Federal 

government. 
 

furnishes Federal Reserve Notes (FRNs), most U.S. postage 

stamps, Treasury securities, identification cards, naturalization 

certificates, and other special security documents. All products are 

designed and manufactured with advanced counterfeit deterrence 

features to ensure product integrity, and the Bureau advises other 

Federal agencies on document security matters. The Bureau also 

processes claims for the redemption of mutilated currency. The 

Bureau's research and development efforts focus on the continued 

use of automation in the production process and counterfeit 

deterrent technologies for use in security documents, especially 

U.S. currency. 

The Bureau occupies three Government-owned facilities. The Main 

and Annex buildings, located in Washington, D.C., produces FRNs, 

postage stamps, and other security documents. The Western 

Currency Facility, located in Ft. Worth, Texas, produces only FRNs. 

In 2001, approximately 2,500 Bureau staff members produced 7 

billion FRNs and 15.9 billion postage stamps. As of May 2002, 

there were a total of 2,549 employees: 1,910 at the Washington, 

D.C. facility and 639 in Ft. Worth. 

The Bureau’s executive structure includes the Bureau Director, 

Deputy Director, and six Associate Directors. Three of these six 

directorates have a role in controlling and safeguarding sensitive 

property. This includes the Management Directorate, which 

through its Office of Security is responsible for physical and 

operational security, theft reports, and other incidents. The 

Personnel Security Division is responsible for conducting 

background investigations. 

Vulnerable Areas

The security aspects of the Bureau’s mission require that areas of 

greatest vulnerability receive the greatest scrutiny. Vulnerable 

areas are work locations determined to be most vulnerable to theft 

during the production of, currency, stamps, or other Bureau 

securities. ------------------------------------------------------------------------------

------------------------------------------- ------------------------------------------

-----------------------------------------------------------------------------------------

--------------------------------------------------------------------------

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The Bureau of Engraving and Printing Manual No. 71-00, dated 

February 1, 2001, outlines the Bureau’s security program. The 

Bureau Personnel Security Policy for Positions in Vulnerable Areas, 

No. 71-00.51, dated January 20, 1999, describes the personnel 

security policy regarding positions with access to vulnerable areas. 

This policy superseded a 1996 policy that required full background 

investigations be conducted solely for persons who had access to 

finished products. The current (1999) policy sets forth an 

additional number of areas designated as vulnerable and applies to 

employees occupying positions in vulnerable areas, employees with 

unescorted access to vulnerable areas, and applicants for positions 

in, or with access to vulnerable areas --------------------------------

----------------------------- 

-

Security Designations

High-risk is a designation for a position having potential for 

exceptionally serious impact on the mission of the Bureau, or the 

overall efficiency of service. Other designations are moderate-risk 

and low-risk, all of which are defined by the Office of Human 

Resources Management. 

All Bureau employees are given a National Agency Check (NAC), 

which consists of fingerprint check, name check, and check for 

prior investigations. A low-risk position (which needs escorted 

access to vulnerable areas) requires a NAC with Inquiries (NACI) 

i.e. written questions sent to neighbors, previous employers, and 

others. ---- ----------------------------- ------------------------------------ 

--------------------------------------------------------------------------------- A 

-------------------------------------- ------------------------------------------

vulnerable areas requires a personal interview of the subject, record 

checks and source interviews at current and previous employers 

and residences, and record searches covering a specific area of the 

subject’s background that goes back 3 years. No reinvestigation is 

required for the moderate-risk clearance. 

High-risk designations, (people with positions that allow them 

unlimited access to vulnerable areas) require that background 

investigations and 5-year periodic reinvestigations be conducted on 

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employees occupying positions with unescorted access to 

vulnerable areas. A full field investigation consists of the same 

checks performed at the moderate-risk level except the scope 

covers a 5-year period. Issues that are identified may cause the 

scope of the investigation to be expanded to resolve those issues. 

In addition, annual criminal history and credit checks are initiated to 

determine whether suitability issues exist. The policy also includes 

contractors and other individuals with a need for access to Bureau 

premises and/or products to assure that they meet the minimum 

standards. 

A 1994 United States Secret Service report made 

recommendations to improve security as well as an Office of 

Inspector General report titled Opportunities for the Bureau of 

Engraving and Printing to Improve the Processing of Mutilated 

Currency, dated February 1, 2000 (OIG-00-047). Our follow-up of 

these issues is discussed in the ESS reconciliation section and the 

backlog section of the following finding. 

Finding and Recommendations 

Finding 1 Oversight over Background Investigations Needs to be Improved 

The Bureau’s monitoring of background investigations does not

provide management consistent and continuous oversight over the 

status of background investigations. This has occurred because

the system for maintaining and updating personnel security records 

needs to be enhanced to provide accurate reports on the status of 

employee security levels, to allow for easy reconciliation with the 

bureau’s personnel database, and to reflect only employees 

currently working at the Bureau. Although in 1999 the Bureau 

issued an updated policy to identify more vulnerable areas and to 

require more high-risk designations, the Personnel Security 

Division’s database could not provide collective data on the number 

and status of persons who have been re-evaluated and reinvestigated as a result of the updated policy. Notwithstanding, 

the Bureau cannot determine whether its policy has been 

effectively implemented to ensure persons were given the proper 

security designations on a timely basis. As a result, the Bureau 

The Bureau of Engraving and Printing’s Controls Over Background 

Investigations Need to be Improved (OIG 03-004) 

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may not identify instances on a timely basis where employee 

suitability issues exist. 

 The Government Performance and Results Act of 1993 (the Results 

Act) holds Federal agencies accountable for achieving program 

results. Accordingly, the Results Act requires Federal agencies to

more effectively plan, budget, execute, evaluate, and account for 

their programs and activities. Federal managers are required to

establish performance-based management systems to accomplish 

goals and measure results. The goals are to be expressed in an 

objective, quantifiable, and measurable form. The Bureau’s 

 2000-2005 Strategic Plan lays out its mission, goal, and strategy 

for achieving goals and objectives. In November 1999, the General 

Accounting Office issued Standards for Internal Control that 

referenced the Office of Management and Budget (OMB Circular 

No. A-123). The Circular states that Federal employees develop 

and implement management controls that cover all aspects of an 

agency’s programs and operations. The Circular further states, 

among other things, that management controls are used to 

reasonably ensure (i) programs achieve their intended results; (ii) 

resources are used consistently with agency mission; (iii) programs 

and resources are protected from waste, fraud, and 

mismanagement; (iv) laws and regulations are followed; and, (v) 

reliable and timely information is obtained, maintained, reported, 

and used for decision making. 

 The Bureau’s Employee Suitability System Needs to be Enhanced

 

 The Personnel Security Division maintains its data of background 

investigations on a database called the Employee Suitability 

System. The ESS was put into use in 1988. The 1999 policy 

designated more areas as being vulnerable by including finished and 

unfinished product areas. However, our review showed that the 

ESS had inaccurate and unreliable data and did not produce status 

reports. As a result, the Bureau has not been able to rely on the 

ESS to determine whether its policy has been effectively 

implemented and to ensure persons were given the proper security 

designations on a timely basis. 

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 At the beginning of our review, we requested reports showing the 

status and number of background investigations that were open 

but not completed; the number of investigations pending 

(scheduled to be opened); the number of re-investigations (security 

clearance updates and upgrades) that were currently being 

performed and scheduled to be performed; and the number/ 

percentage of employees in high, moderate, or low-risk categories. 

The Personnel Security Division informed us that the ESS could not

produce such reports and there had not been a need for such 

reports. We believe because the ESS does not produce reports 

that could be useful to management, the Bureau’s controls over 

and monitoring of background investigations are hindered. This 

could put the Bureau at greater risk in that employees could have 

more access to vulnerable areas than needed. (The Personnel 

Security Division has agreed to work with the Bureau’s Information 

Technology Directorate to assess the ESS’ capabilities.) 

 Because the Bureau could not produce the type of reports we 

requested, we obtained a list from the Office of Human Resources 

of all persons currently employed at the Bureau. We also obtained 

a list from the ESS database of background investigations 

performed by the Bureau’s Personnel Security Division. In our

attempt to assess the Bureau’s progress and status over 

background investigations, we compared the two lists as of 

May 29, 2002. 

 Our first observation was that the Office of Human Resources’ 

listing contained 2,544 employee records and the Personnel 

Security Division’s listing contained 3,975 employee records. We 

inquired as to why Personnel Security’s listing had over 1400 more 

records than the Office of Human Resources. Management 

primarily attributed this to several factors. Each time Personnel 

Security does a reinvestigation, a new record is established and the 

previous record also remains in the ESS. This creates multiple 

records on the same person. Also, the Personnel Security Division 

supervisor informed us that persons no longer working at the 

Bureau are still on the ESS because of a 5-year data retention 

requirement. These two practices prevented accurate 

reconciliation with the Bureau’s personnel database and were

reported in the Secret Service report in October 2000 and an OIG 

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report in February 2000. We believe the Personnel Security 

Division should maintain an active database of current employees. 

Although we were aware that the Personnel Security Division’s 

database contained inaccurate data when compared with the Office 

of Human Resources’ database (as indicated above), we selected a 

sample of records using Social Security numbers. We found 704 

records that were non-matches, i.e., records on the Office of 

Human Resources’ database list that did not appear to be on the 

Personnel Security Division’s ESS database. 

Based on the 704 non-matching records, we selected a sample of 

140 records (See Appendix 1.) We then stratified this sample that 

resulted in 45 Washington, D.C. employee records and 95 from Ft. 

Worth, Texas. We tested the 45 Washington, D.C. records to

determine whether those records were actually in the ESS. We 

found all 45 were in the ESS, but we also found errors in the ESS 

database. For example, 5 of the 45 (11 percent) had inaccurate 

Social Security numbers, 1 of which had a Social Security number 

containing less than nine digits. Because of these errors and the 

importance of Social Security numbers, we queried the 704 nonmatches to determine how many other records had less than nine 

digits or non-numeric characters. This query resulted in 185 

records of persons at the Washington, DC facility. The Personnel 

Security Division supervisor attributed this, in part, to the computer 

not placing zeros in front of Social Security numbers. In other 

cases, the errors were attributed to data entry input. 

 

Even though we were aware that the Personnel Security Division’s 

database had errors, we compared the list of 185 records (less 

than nine digit Social Security numbers or non-numeric characters), 

with the Office of Human Resources’ list. This comparison 

produced 103 records that appeared to be on the Office Human 

Resources’ list, but not on the Personnel Security Division’s list. 

We selected a total of ten employees whose Social Security 

numbers were incorrect, seven records from the list of 103 and 3 

from the sample of 45. Seven of the 10 records, according to the 

Office of Human Resources’ database, did not begin with zero; 

therefore, we concluded there were errors other than computer

glitches of dropping zeros, as was indicated previously. We 

The Bureau of Engraving and Printing’s Controls Over Background 

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reviewed the manual files in the Personnel Security Division to 

determine what Social Security numbers were used during the

employees’ background investigations. We found that 5 of the 10 

had the wrong Social Security number in the ESS. These 5 also 

had the wrong Social Security numbers on some of the documents 

in the manually maintained files. These files contained the actual 

reports that resulted from inquiries made during background 

investigations. Therefore, some of the background investigations 

may have contained the wrong Social Security numbers in 

obtaining information used to grant a clearance. Some examples 

follow. 

---------------------------------------had an incorrect Social Security 

---------------------------- - --------, th is person was given a low-risk 

clearance. -------------------- had two incorrect Social Security 

numbers, o------------------- I and another on the Report of 

Investigation2

. This person’s reinvestigation was in 1997 at the 

high-risk clearance level. On two separate background 

investigations,--------------------had different incorrect Social Security 

numbers on th--------------------ility Report3

, and credit report. This 

person was given a low-risk clearance in 1999. -------------

---------------------------------------------credit report con-------------incorrect 

Social Security number. In 2002, this person was reinvestigated at 

a high-risk critical sensitive clearance level. --------------------- had a 

wrong Social Security number on a Report of Investigation. This 

person was reinvestigated in 2001 at the high-risk clearance level. 

Because of errors like these, the Bureau does not have assurance 

that all critical background data about employees was identified. 

The Personnel Security Division’s manager told us that requests, 

such as credit checks and other inquiries, are requested 

electronically from the Personnel Security Division. Social Security 

numbers are entered on inquires by Personnel Security Division 

employees. In addition to the 10 employee records with incorrect 

 2 Report of Investigation is a document prepared in the Personnel Security Division that consists of a collection 

of data gathered during the background investigation. 

3 Suitability Report is a document also prepared in the Personnel Security Division that states the determination

made as to whether or not an applicant is suitable for employment. 

The Bureau of Engraving and Printing’s Controls Over Background 

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Social Security numbers, and based on our visual scan of the ESS 

database, we believe there is a possibility that more cases of 

incorrect Social Security numbers exists. We immediately brought 

this to management’s attention in July 2002. In mid-August 2002, 

the Personnel Security Division’s manager told us these issues are 

in process of being addressed. 

In addition, to the incorrect Social Security numbers, we found 

several other errors in the ESS database. For example, we found 

16 of the 45 (36 percent) had multiple records because the 

previous record of investigation was not deleted or archived when 

the reinvestigation occurred. One of the 45 employee’s position 

description was different on both lists. On the Office of Human 

Resources’ list the employee was listed as ----------------and on t he 

Personnel Security’s list the employee was--------------------------

-------------------------------------------------- which would re-------------gher 

------------------------------------------------ --he 45 employee’s record did 

not reflect a name change because the employee got married. We 

also found 1 of the 45 persons in the ESS was no longer employed 

at the Bureau. 

We determined that the 16 employees with multiple records in the 

ESS were the result of the Personnel Security Division performing 

reinvestigations and not deleting or archiving the previous record of 

investigation. We questioned the Manager of the Personnel 

Security Division and reviewed the Bureau Security Manual to 

determine whether procedures exist to determine what to do with 

the previous record of investigation when a reinvestigation is 

performed. There were none. The Manager of Personnel Security

stated that they archive the records when they get the opportunity. 

We believe that a consistent and continuous process of archiving 

previous records should be established. This would also assist in 

reconciling the Personnel Security Division’s records with the 

Office of Human Resources’ roster. 

We also reviewed records of 13 individuals that were involved in 

incidents of theft and separated from the Bureau. This was done 

to determine whether their records were listed in the active files on 

the ESS. Of the 13 individuals, we found 7 individuals listed in the 

active files on the ESS. Including the 1 individual from the sample; 

The Bureau of Engraving and Printing’s Controls Over Background 

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we identified eight individuals listed in the active files that should 

have been archived. Three of these people have not worked at the 

Bureau for 5 years, three for 9 years, one for 12 years, and one for 

13 years. 

 

 Our review of the ESS, which also contains Ft. Worth information, 

indicated similar problems exist in Ft. Worth. For example, 20 out 

of 95 employees need reinvestigations performed, 19 out of 95 

employees need to be updated to high-risk, and 67 out of 95 

employees have multiple records in the ESS. In some instances 

these employees had overlapping issues. During the initial course 

of our review, no one was officially designated below the Bureau 

Director’s level to provide overall oversight over background 

investigations at the two facilities. We believe if the proper reports 

are generated from the ESS, management will have a means of 

review for the status of background investigations on an overall

basis from a Bureau perspective. We brought this to the attention 

of management and were told no one was designated to perform 

this function. 

 

 After sharing these problems with the Personnel Security Division, 

the manager began to make efforts to correct the incorrect Social 

Security numbers and archive former employee records from the 

ESS database. However, the ESS needs to be completely verified 

and validated to ensure the integrity of the database. In addition, 

the Bureau needs to enhance the technical capability of this system 

and ensure the system is monitored and data is verified by 

management. In July 2002, the Bureau’s Office of Security Chief 

told us that a policy was in process to provide overall monitoring 

and oversight for both offices at Washington, D.C. and Ft. Worth, 

Texas. In September 2002, Bureau management agreed to work 

with its Information Technology Directorate to assess the ESS’ 

capabilities. 

 The Bureau has Employees Working in Areas Inconsistent with 

Their Background Investigation Designation

 The Bureau’s 1999 Vulnerable Area Policy identified an additional 

number of areas designated as vulnerable. It also applied to 

employees occupying positions in vulnerable areas and employees 

The Bureau of Engraving and Printing’s Controls Over Background 

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with unescorted access to vulnerable areas. The ESS, however, 

does not produce automated reports showing the collective number 

and names of employees working in these newly identified areas 

that require an upgraded background investigation. The Bureau has 

to retrieve each employee’s file individually to determine an 

individual’s status. Given the number of employees in the Bureau 

and the continuous process of background investigations, we do 

not believe this is the most efficient method of monitoring and 

maintaining controls over background investigations. 

Our review of the stratified sample of 45 records showed that the 

Bureau had 12 individuals (26 percent) working in high-risk areas 

with only moderate risk background investigations. These 

positions should have been upgraded and should have had a highrisk background investigation. These persons included --------

-----------working i n -- ------------------------------------------------------- 

--------------------------- 

 g in 

-------------------------------------------- -------------------------------------wor king 

in ----------------------------------------------------------------------------------

----------------------------------------------------------- --------------------------d a

-------------------------workin------- - ----------------------------- ---------

----------------------------- All t------- ---------------------------------------- ed 

---------------- --- --------areas the Bureau ha s designated as 

vulnerable. However, these employees’ background investigations 

were at the moderate-risk level, but they were working in high-risk 

areas. This could put the Bureau at a higher risk. When we 

questioned the manager of the Personnel Security Division, we 

were told that upgrades are being performed over a 5-year cycle 

and about 25 are done per month. Notwithstanding, the 1999 

policy has been in effect for 3 years. If the ESS produced status 

reports on the number of upgrades that have been performed and 

the number to be performed, management would be better 

informed as to whether the 1999 policy is being implemented 

effectively and timely. 

We also believe the Bureau should devise a means for reassessing 

employees’ position descriptions and determine whether the 

position and accessibility to vulnerable areas match the background 

investigation designation. We believe this is particularly necessary 

The Bureau of Engraving and Printing’s Controls Over Background 

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in light of the events of September 11, 2001, and the national 

security risks of unauthorized usage of Immigration and 

Naturalization and other documents to which unauthorized and 

unofficial escorted persons may gain access. 

 

Under the 1999 Vulnerable Area Policy, all positions with access to 

vulnerable areas are to be upgraded to high-risk and given full 

background investigations. Two of the 12 employees we reviewed 

that should have been upgraded, had not received background 

investigations since 1981, a period of 21 years. As previously 

noted, since the ESS does not produce status reports, the Bureau 

cannot easily and readily determine how many positions already 

have been upgraded, how many need to be upgraded as a result of 

the 1999 policy, and how many persons have not been 

investigated over an extended period of time, such as 21 years. 

 Our statistical sample indicated that 3 of the 45 (7 percent) of the 

Bureau’s Washington employees in high-risk positions were due for 

a reinvestigation, but there was no indication in the ESS that one 

had been opened. These 3 had not been updated since 1997. 

When we questioned Personnel Security Division personnel, we

were told that reinvestigations are identified monthly as individuals 

become due, and these individuals were just overlooked. 

 

The Bureau’s Backlog of Open Cases Creates an Extended FiveYear Reinvestigation Period

The Bureau of Engraving and Printing’s Personnel Security 

Handbook, dated November 1999, and the Bureau Circular 

No.71-00.51, require periodic reinvestigations of all employees 

occupying high-risk and critical sensitive positions. Background 

investigations are conducted when the employee initially occupies 

the position and every 5 years thereafter. 

At the beginning of our audit, we asked for a count and status of 

open cases. The Personnel Security Division manager told us that 

the ESS could not produce a list of open cases. When we asked 

how he monitored open cases and whether background 

investigations were performed timely, he stated that he would go 

to each adjudicator and get a manual count of the number of cases 

The Bureau of Engraving and Printing’s Controls Over Background 

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that are open. Again, we determined this was not an efficient 

method to monitor and maintain controls over background 

investigations. He stated he could request that the Bureau’s 

Information Technology Directorate write a program to identify all 

open cases from the ESS and provide us a list. Our review showed 

that as of May 7, 2002, there were 366 open background 

investigations. A backlog problem was reported in the Secret 

Service Report issued in October 2000. 

Of the 366, there were 215 cases determined to be backlogged 

“no issue” or “no action” cases, i.e. no questionable issues were 

identified during the field investigation to deem a person unsuitable 

for the applicable level of duty. “No action” cases are also cases 

that, for example, uncovered an old arrest, but are not considered

as having an impact on the employee’s suitability for work. The 

Personnel Security Division does not consider these cases to be a 

priority, subsequently leaving these cases open for long periods of 

time, i.e., not adjudicated and closed timely. For example, of the 

215 no issue cases alone, we found cases still opened since 1999 

and 41 percent opened and not closed as far back as 2000 and 

2001. Because the reinvestigation timeframe begins at the closing 

date of the previous investigation, cases left open cause the 

timeframe to extend beyond the required 5-year reinvestigation 

period, thus causing the reinvestigation of employees to be unduly 

extended. 

“Issue” cases, on the other hand, are those that disclosed conduct, 

medical, or qualification problems that may deter employment 

suitability. These cases are adjudicated first. 

During the course of our audit, we identified and discussed 

conditions found with the manager of the Personnel Security 

Division. The Personnel Security Division assigned an additional

adjudicator to review the backlog of cases and is considering ways 

to enhance the ESS. We believe that the Bureau should take a 

proactive approach to complete outstanding cases more timely, 

reassess and upgrade employees’ security status, reinvestigate 

employees every 5 years on a timely basis, and ensure that 

Personnel Security files are updated and its ESS is enhanced. This 

would serve as a measure to significantly improve controls over 

The Bureau of Engraving and Printing’s Controls Over Background 

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currency and other documents, thus preventing or reducing the risk 

and possibility of theft incidents. We also believe that coordination 

and reviews of the status of background investigations at both the 

Washington and Ft. Worth facilities would provide improved overall 

oversight from a Bureau perspective, as was discussed with and 

concurred by Bureau management. 

In summary the ESS needs to be enhanced or some other official 

designated automated system needs to be put in place to produce 

(a) status reports as to the precise number of open and closed 

cases, (b) the number of persons who have been reinvestigated or 

upgraded, and (c) the number of outstanding investigations relative 

to the length of time the investigations have been open, i.e. the

number opened for 6-months, 12-months, and so on. This will 

establish an aging and tracking system to provide management

better controls and procedures in determining if background 

investigations are being completed and adjudicated in a timely 

manner. 

We further concluded the ESS should be reviewed regularly for 

erroneous data, especially regarding Social Security numbers. 

Employee files should be reviewed and the Personnel Security

Division should assess and determine the validity of the data 

collected for the respective employees. As a minimum, the ESS 

data should be archived and reconciled with the Office of Human 

Resources roster; the Bureau management should ensure 

information used in conducting and assessing background 

investigations is valid; and, reliable and timely information should 

be obtained, maintained, reported, and used for decision-making. 

This should be continuously adhered to for new hires, reinvestigations, and upgrades. 

Recommendations 

We recommend that the Bureau Director: 

1. Enhance the ESS to produce reports that accurately depict 

the Bureau’s status of background investigations on an 

individual and overall basis, and ensure that the ESS is 

reconciled on a regular basis with the Bureau’s Office of 

The Bureau of Engraving and Printing’s Controls Over Background 

Investigations Need to be Improved (OIG 03-004) 

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Human Resources roster. Ascertain employees’ current 

employment status and archive multiple records and former 

employees in accordance with the policy. 

2. Review employees’ manual files that contain erroneous 

Social Security numbers to ascertain whether background 

investigations reflect the actual person being investigated. 

Correct the erroneous Social Security numbers in the ESS 

and the manual files. 

3. Reassess employees’ job positions and descriptions to 

determine if they are commensurate with security levels and 

accessibility to vulnerable areas. Provide the required 

background investigation for upgraded positions. 

4. Ascertain that procedures are in place in the Personnel 

Security Division to ensure background investigations are 

tracked, adjudicated, and closed timely to reduce or 

eliminate backlogs. 

5. Designate someone to provide continuous oversight over 

both facilities (Washington, D.C. and Ft. Worth) relative to 

background investigations and other applicable security 

issues. Perform a self-assessment of the Ft. Worth facility 

to identify the magnitude and type of issues that were

identified at the Washington, D.C. facility. Take appropriate 

actions to correct those issues. 

Management Comments

The Bureau concurred with the audit finding and 

recommendations. The Bureau has formed a project team of 

senior personnel to perform a self-assessment of the 

Bureau's background investigations program to be completed 

in mid-December 2002. The project team will address the 

recommendations. In addition, the Bureau has designated 

the Chief, Office of Security, to provide continuous oversight 

over background investigations and other security issues on 

a bureau-wide basis. 

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OIG Comments 

Based on the Bureau’s corrective and planned actions, we 

consider these recommendations to have a management 

decision. Once the self-assessment is completed, we 

request that the results, corrective actions, and target dates 

for each recommendation be provided for our review. 

* * * * * * 

We appreciate the cooperation and courtesies extended to our 

staff during this audit. The major contributors to this report are

identified in Appendix 5. If you have any questions, please 

contact me at (202) 927-5904 or Iris Hudson, Audit

Manager, at (202) 927-4881. 

Thomas E. Byrnes 

Director, Manufacturing and Procurement Audits 

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 Appendix 1: 

 Objectives, Scope, Methodology 

 

The overall objective of the audit was to determine whether the 

Bureau has implemented adequate controls to: (1) prevent and /or 

deter the theft of currency and other documents and (2) ensure

that initial and updated background investigations of employees 

and contractor personnel are performed in a timely manner, i.e. if 

background investigations are completed before the employee is 

placed and, if periodic reinvestigations are performed when 

required. Because of the expansive scope of this review, the 

initial part of our audit focused on background investigations. 

 

To accomplish these objectives, we interviewed personnel in the 

Office of Security and the Office of Human Resources. We 

reviewed: (1) personnel files, (2) the Personnel Security Division’s 

ESS database, (3) prior reports and studies on controls over the 

Bureau’s security, and (4) the incidents that have occurred at or 

been linked to the Washington facility. We used a stratified 

sampling methodology with a 95 percent confidence level, 2 

percent expected deviation rate and 5 percent expected tolerable 

error rate. This resulted in a sample of 140 records, a total of 95 

employee records for Ft. Worth and 45 employee records for 

Washington, DC. 

 

Our audit fieldwork was performed primarily from April 2002 to 

September 2002 at the Bureau’s Washington, D.C. facility. We 

performed our audit in accordance with generally accepted 

Government auditing standards. 

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 Appendix 2: 

 Management Response 

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 Appendix 3: 

 Major Contributors to this Report

 

Thomas Byrnes, Director, Manufacturing and Procurement Audits 

Iris Hudson, Audit Manager 

Cynthia McKelvin, Auditor 

 

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 Appendix 4 

 Report Distribution 

The Department of the Treasury

Office of Strategic Planning and Evaluations 

Office of Accounting and Internal Control

Bureau of Engraving and Printing

 Director 

Associate Director (Chief Financial Officer) 

Manager, Management Controls Division 

Office of Management and Budget

OIG Budget Examiner 

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