(Dollars in millions) 2008 2007 2006 2004

% Change 

2007 to 2008 

Value of United States Mint Sales 

Circulating $ 1,294.5 $ 1,727.8 $ 1,271.9 $ 993.5 (25.1%) 

Numismatic Sale of Circulating Coins $ 29.6 $ 36.1 $ 24.4 $ 62.1 (18.0%) 

Numismatic Program $ 527.6 $ 515.4 $ 490.5 $ 279.1 2.4% 

Bullion Program $ 948.8 $ 356.1 $ 536.6 $ 315.7 166.4% 

Circulating $ 588.3 $ 722.6 $ 603.4 $ 395.8 (18.6%) 

Numismatic Sale of Circulating Coins $ 7.1 $ 9.0 $ 10.5 $ 15.7 (21.1%) 

Numismatic Program $ 467.7 $ 466.6 $ 417.2 $ 237.6 0.2%

Bullion Program $ 931.0 $ 351.6 $ 524.3 $ 313.1 164.8% 

Seigniorage (a) and Program Net Income (b) 

Circulating Seigniorage $ 706.2 $ 1,005.2 $ 668.5 $ 597.7 (29.7%) 

Numismatic Seigniorage $ 22.5 $ 27.1 $ 13.9 $ 46.4 (17.0%) 

Numismatic Program Net Income $ 59.9 $ 48.8 $ 73.3 $ 41.5 22.7% 

Bullion Program Net Income $ 17.8 $ 4.5 $ 12.3 $ 2.6 295.6% 

Gross Cost 

2005 

$ 1,144.8 

$ 37.9 

$ 317.5 

$ 270.7 

$ 445.4 

$ 14.6 

$ 244.3 

$ 265.2 

$ 699.4 

$ 23.3 

$ 73.2 

$ 5.5 

(a) Seigniorage is the face value of circulating coins sold to the Federal Reserve Banks (FRB) or the public less the cost of production. 

(b) Net Income is the sales revenue of numismatic or bullion coin products, less the total cost of production. 

1 

Financial Highlights 

Total Dollar Value of Sales 

(Dollars in millions) 

$1,650.4 $1,770.9 

$2,323.4 

$2,635.4 $2,800.5 

2004 2005 2006 2007 2008 

Total Seigniorage and Net Income 

before Protection Cost (Dollars in millions) 

$688.2 

$801.4 $768.0 

$1,085.6 

$806.4 

Net Income 

Seigniorage 

2004 2005 2006 2007 2008 

Transfers to the Treasury General Fund 

(Dollars in millions) 

$665.0 

$775.0 $750.0 

$825.0 

$750.0 

2004 2005 2006 2007 2008 

Shipments to the Federal Reserve Banks 

(Coins in millions) 

13,384 14,037 

16,106 

14,021 

9,974 

2004 2005 2006 2007 2008 

Numismatic Sales 

(Net units shipped in thousands) 

2004 2005 2006 2007 2008 

9,909.0 

10,730.1 

9,497.9 

11,409.7 11,078.9 

Bullion Sales 

(Ounces of bullion sold in thousands) 

2004 2005 2006 2007 2008 

10,025.5 

8,973.6 

11,872.6 

8,282.1 

18,370.7 
The United States Mint 

2008 Annual Report 

2 

Table of Contents 

Director’s Letter............................................................................................. 3 

Organizational Profile...................................................................................... 11 

Our Goals 

Exclusive Brand Identity.............................................................................. 13 

Effective Coin and Medal Portfolio.................................................................. 15 

Excellence in Coin Design ........................................................................... 18 

Operational Efficiency and Highest Quality Standards........................................... 20 

Optimal Workforce and Workplace Culture........................................................ 22 

Current and Future Challenges........................................................................... 24 

Message from the Chief Financial Officer.............................................................. 26 

Management’s Discussion and Analysis 

Operating Results by Segment 

Circulating.......................................................................................... 27 

Numismatic......................................................................................... 31 

Bullion............................................................................................... 34 

Transfer to the Treasury General Fund.............................................................. 37 

Performance Goals, Objectives and Results........................................................ 38 

Analysis of Systems, Controls and Legal Compliance............................................ 40 

Limitations of Financial Statements..................................................................... 42 

Independent Auditors’ Report............................................................................ 43 

Financial Statements....................................................................................... 45 

Notes to the Financial Statements........................................................................ 49 

Required Supplementary Information 

Heritage Assets......................................................................................... 60 

Independent Auditors’ Report on Internal Controls................................................... 61 

Independent Auditors’ Report on Compliance and Other Matters................................... 67 

Exhibit I - Significant Deficiencies................................................................... 63 

Exhibit II - Status of Prior Year Material Weakness............................................... 65 

Exhibit III - United States Mint’s Response to Auditor’s Report.................................. 66
available to pay for current Federal Government 

operations and programs. 

It annoys me to read an annual report that focuses only 

on positive outcomes and ignores significant issues. At 

the United States Mint, we see our products as 

extensions of America’s national identity. We believe 

our annual report must be transparent to the public, so 

that citizens can hold us accountable through their 

elected representatives. Our new annual report format is 

a comprehensive discussion of our agency’s activities, 

including our operating results, challenges and risks, and 

strategic priorities. We will do our best to honestly 

assess ourselves, take our lumps for the times when we 

fall short of expectations, and stand tall when our results 

do our country proud. 

I’ll begin with a quick summary of our coin programs 

and financial results and then explain the major strategic 

realignment we have embarked upon. I will conclude 

with a description of the results you can expect from the 

United States Mint in fiscal year (FY) 2009. 

Our Coin Programs We had a full plate of 

Congressionally mandated programs this year. We 

designed, minted and issued a record number of new 

coins in FY 2008. 

Director’s Letter:

To the American People, 

Members of the United States 

Congress, the United States 

Department of the Treasury, 

Our Customers, and Our 

Employees 

Edmund C. Moy 

United States Mint Director 

3

The United States Mint is 

accountable to you, our 

constituencies: the American people, because 

you are our ultimate shareholders and product users; the 

United States Congress, because you authorize and 

oversee our operations and programs; the United States 

Department of the Treasury, because we are part of the 

Treasury family of agencies and bureaus; our customers, 

including the Federal Reserve Banks (FRB) (buyers of 

United States coins for circulation), retail customers 

(buyers of our numismatic products) and investors 

(buyers of our bullion products); and, our employees, 

because we honor your dedication and public service.

Our New Annual Report Format Welcome to 

our new annual report format. This year our annual 

report looks more like one produced by a public 

company. We are first and foremost an agency of the 

Federal Government. We comply with all statutory 

annual reporting requirements, but we operate very 

much like a business. Our annual report should reflect 

that fact. For 2008, if we were a public company, our 

total revenue would rank 710 among our Nation’s 

largest corporations.

Revenue from the sale of our coins to the FRB, retail 

customers and authorized bullion purchasers is 

deposited into the United States Mint Public Enterprise 

Fund, a revolving fund account. Excess proceeds from 

circulating coins are transferred to the Treasury General 

Fund as a means of financing the national debt. Excess 

proceeds from the sale of numismatic and bullion items 

are transferred to the Treasury General Fund as revenue 
one for Tenzin Gyatso, the Fourteenth Dalai Lama, and 

another for pioneering heart surgeon Dr. Michael 

DeBakey—which we were honored to design, prepare, 

and strike. 

In the midst of all the work mandated by Federal law, we 

did complete some unfinished business: the recreation 

of Augustus Saint-Gaudens and President Theodore 

Roosevelt's rarest and arguably best version of the 

Double Eagle. Overcoming a century's inability to 

create a high relief coin for mass production, our 2009 

Ultra High Relief Double Eagle Gold Coin is the highest 

expression of the coin maker's art. 

We had a lot of work on our plate. The 126 coin designs 

in one year were the largest number ever in our history. 

But we rose to the task, completed them on time, and 

fulfilled every one of our mandates to mint new coins 

and strike new medals. 

But all was not rosy. We sell most of our numismatic 

coins through our website and that website went down 

for six days. We did not manage this downtime well and 

received a lot of deservedly angry calls from our 

customers. We also did not make the connection that a 

slowing economy may dramatically increase demand for 

our bullion products and relied upon our strategy of “just 

in time” inventories. We should have learned that, 

historically, gold and other precious metals are 

periodically subject to unanticipated market volatility. 

However, instead of maintaining an inventory that 

would have prepared us to meet the next surge in 

demand, we were reactive. Now we are competing with 

the rest of the world mints for a finite supply of 

investment quality planchets from a limited number of 

suppliers. As a result, we did not live up to our statutory 

mandate to mint and issue gold and silver bullion coins 

in quantities sufficient to meet public demand. 

Additionally, our precious metal numismatic product 

pricing formulas are not as transparent as they should 

be, and the process for re-pricing our products is 

cumbersome. As a consequence, when the price of gold 

dropped, we had overpriced coins that did not sell. 

When the price of gold rose dramatically, we had to stop 

sales because our products were underpriced. 

We worked hard and successfully completed many new 

programs. However, we also made some mistakes that 

we will learn from. 

Our Results FY 2008 was a year of mixed results. 

By law and budget doctrine, success is measured 

differently for each of our business lines—circulating 

coins, bullion coins, and numismatic products. In 

aggregate, while total revenue exceeded last year’s 

4 

Presidential $1 Coin We minted and issued James 

Madison, James Monroe, John Quincy Adams and 

Andrew Jackson Presidential $1 Coins. We also 

designed and readied for production the Martin Van 

Buren, William Henry Harrison, John Tyler, James K. 

Polk, and Zachary Taylor Presidential $1 Coins. 

Beginning with President Harrison, our designs will 

feature our national motto, "In God We Trust," on the 

obverse instead of being incused on the edge. 

50 State Quarters®, District of Columbia and 

Territorial Quarters We minted and issued the Utah, 

Oklahoma, New Mexico, Arizona, and Alaska 

commemorative quarters. We issued the final coin of 

the 50 State Quarters® Program, honoring Hawaii, in 

November 2008. In FY 2008, we also designed quarters 

commemorating the District of Columbia, the 

Commonwealth of Puerto Rico, Guam, American 

Samoa, the United States Virgin Islands, and the 

Commonwealth of the Northern Mariana Islands. 

First Spouse Gold Bullion Coin We minted and issued 

the Dolley Madison, Elizabeth Monroe, Louisa Adams, 

and Jackson's Liberty First Spouse Gold Bullion Coins. 

We also designed Martin Van Buren's Liberty, Anna 

Harrison, Letitia Tyler, Julia Tyler, Sarah Polk, and 

Margaret Taylor's First Spouse Gold Bullion Coins.

Native American $1 Coin A recently passed law 

required us to design and issue Native American $1 

Coins. During FY 2008, we designed the first of these 

new coins, featuring Sacagawea on the obverse and a 

new reverse design honoring Native American 

contributions to the Nation’s agricultural heritage. The 

new coins will be issued in January 2009. 

Lincoln One-Cent Coin We designed and unveiled the 

four reverse designs for the 2009 Lincoln Bicentennial 

One-Cent Coin Program. Each reverse design 

represents a different aspect, or theme, of the life of 

President Lincoln. 

Commemorative Coins FY 2008 saw the close of the 

2007 Little Rock Central High School Desegregation 

50th Anniversary Commemorative Coin Program and the 

2007 Jamestown 400th Anniversary Commemorative 

Coin Program. We also executed the 2008 American 

Bald Eagle Recovery and National Emblem 

Commemorative Coin Program and created designs for 

the 2009 Louis Braille Bicentennial-Braille Literacy 

Commemorative Coin Program and the Abraham 

Lincoln Commemorative Coin Program.

Commemorative Medals Congress passed and the 

President approved two Congressional Gold Medals
production. Both lower 

volumes and higher dollar coin 

production costs negatively 

affect our seigniorage per 

dollar issued. An upsurge in 

metal market prices in the 

future will erode seigniorage 

and further reduce seigniorage 

per dollar issued. 

The composition of United 

States coins is specified by 

law, and any change in the 

composition of our coins must 

be legislated by Congress and 

approved by the President. 

The House of Representatives 

passed legislation and the 

Senate is considering several 

proposed bills to give the 

Secretary of the Treasury

5 

record, earnings fell 25.7 

percent to $806 million. After 

retaining funds to finance 

current operating 

requirements, we returned 

$750 million to the Treasury 

General Fund. Here’s a quick 

outline of what happened in 

our three lines of business:

Circulating Coins The 

slowing economy in FY 2008 

was the main reason that 

orders for circulating coins 

dropped dramatically from the 

level of recent years. When 

the economy slows, there are 

fewer cash transactions. 

Businesses demand fewer 

coins from their banks, which 

in turn order fewer coins from

authority to change the composition of United States 

coinage. While there are many ways to address this 

issue, each with its merits, we are confident that both 

Congress and the United States Mint have one outcome 

in mind—to save taxpayers an average of approximately 

$60 million a year lost by using expensive base metals 

in our coins. We are hopeful that we will have a 

solution in this 110th Congress, or earlier next year in 

the new Congress.

The other challenge was a one-time inventory 

adjustment of coins by the FRB within its various 

distribution terminals. The FRB believed that, given the 

slowing economy, it had too many coins on hand. We 

are working more collaboratively with the FRB to 

determine appropriate inventory levels, and will start a 

strategic stockpile of coins in FY 2009. This will 

provide a reserve inventory of circulating coins to issue, 

should a surge in the economy require more coins than 

we can currently produce. 

Numismatic Coins Retail sales of high quality versions 

of our circulating coins and commemorative coins 

remained strong in spite of the slowing economy. We 

came close to matching our FY 2007 record unit sales 

with revenue totaling $557 million in FY 2008. Our 

mandate for numismatic coin sales is not to maximize 

profit but to recover costs and keep prices as low as 

practicable so that Americans can afford them. To avoid 

having the taxpayers subsidize the cost of numismatic 

products, we manage to a 15 percent margin as a hedge 

against unforeseen risk. In FY 2008, our numismatic net 

income was about $82 million. In the coming year, we 

will be exploring ways to keep the price of numismatic 

the FRB. The FRB then orders fewer coins from the 

United States Mint. The number of circulating coins we 

shipped to the FRB in FY 2008 dropped from about 14 

billion to under 10 billion, reducing our circulating 

revenue from $1.7 billion to $1.3 billion.

We sell our coins at face value to the FRB and because, 

on average, we make our coins at a cost of 45 percent of 

face value, our seigniorage (the difference between our 

costs and face value) is $0.55 per dollar issued. When 

the number of circulating coins we ship to the FRB 

decreases significantly, it has a negative effect on the 

total seigniorage that we transfer to the Treasury. Our 

circulating coin seigniorage this year was $706 million, 

down from $1,005 million in FY 2007. While we 

shipped 4.4 billion fewer coins than the average level of 

the past four fiscal years, quarter and $1 coins, which 

generate a higher return per dollar issued, made up a 

larger portion of shipments. Consequently, revenue and 

seigniorage did not fall as significantly as shipments and 

remained consistent with fiscal years prior to FY 2007. 

Two additional challenges affected our circulating coin 

operations. First, the dramatic increase in base metal 

prices worldwide has reduced our seigniorage per dollar 

issued in recent years. In FY 2008, however, base metal 

prices began to decline from former peaks. 

Unfortunately, lower volumes means that we must 

allocate our fixed costs over fewer units, offsetting the 

benefit of lower metal prices. 

Metal costs did increase significantly for $1 coins from 

last year. FY 2008 was the first year we had to purchase 

metal at prevailing market prices for all $1 coin 

FY 2008 was a year of 

mixed results. In 

aggregate, while total 

revenue exceeded last 

year’s record, earnings fell 

25.7 percent to $806 

million. After retaining 

funds to finance FY 2009 

operating expenses, we 

returned $750 million to 

the Treasury General 

Fund. 
Vision is a statement of aspiration. Our vision is to 

embody the American spirit through the creation of our 

Nation’s coins and medals. Every coin and medal that 

we produce should say something about our country’s 

greatness. We agree with President Teddy Roosevelt, 

who believed coins are an extension of a country’s 

national identity and should project the country’s values, 

principles, and ideals to the rest of the world. 

Mission is a statement of who we are: The men and 

women of the United States Mint serve the Nation by 

exclusively and efficiently creating the highest quality, 

most beautiful and inspiring coins and medals that 

enable commerce; reflect American values; advance 

artistic excellence; educate the public by 

commemorating people, places, and events; and fulfill 

retail demand for coins. 

Values define how we will behave while doing our 

work. Our values are accountability, leadership, trust/

respect/integrity, communication, continuous 

improvement, diversity, ethics, excellence, 

responsiveness, innovation, partnership/teamwork, and 

openness to change. It is a long list because, as labor 

and management collaboratively worked to list the 

values we wanted to live by, it became clear that there 

was a deep yearning for a higher code of conduct. 

Our goals are our priorities for the next five years:

• Establish and reinforce the exclusive brand identity of 

the United States Mint 

• Create and execute the most effective coin and medal 

portfolio strategy 

• Achieve greater excellence in coin and medal design

• Increase operational efficiency while meeting the 

highest quality standards 

• Develop an optimal workforce and workplace culture

How we will know when we get there? To gauge our 

progress toward our goals, management and labor 

products as close to actual cost as practicable, while 

managing to a reduced margin or employing different 

means as a hedge against risk. 

Bullion Coins One result of a slowing economy is 

increasing demand for precious metal products. We had 

record sales of silver bullion coins and a significant 

increase in gold bullion coin sales from last year. Total 

revenue neared $949 million, more than doubling last 

year’s bullion sales revenue. By law, the purpose of the 

bullion coin program is to make precious metal coins 

available at minimal cost to investors, so we manage to 

a two-percent margin. 

While we met demand for platinum coins, we fell short 

of fulfilling our statutory commitment of meeting 

investor demand for gold and silver bullion coins. Like 

all the other mints around the world, we compete for a 

limited supply of investment-grade gold and silver 

planchets. In FY 2008, we produced more ounces of 

precious metal bullion coins than any prior year, a feat 

that we are proud of. However, we could not procure 

enough planchets to meet demand. We were forced to 

temporarily suspend sales and established allocation 

programs to equitably distribute available inventory to 

authorized purchasers. 

Our Strategic Realignment FY 2007 was the 

final year of a previous strategic plan. For FY 2008, we 

began implementation of a new five-year strategic 

plan—a collaborative effort between management and 

union leadership. Among our expected outcomes are 

coins of greater artistry and historical significance, 

error-free coins, additional retail customers, increased 

efficiency, and status as one of the best places to work 

in the Federal Government. Our plan answers five 

questions:

 

Where do we want to be? We answered this question 

by defining our vision, mission, values, and priorities. 

6

Our goals are our priorities for the next five years:

♦ Establish and reinforce the exclusive brand identity of the 

United States Mint 

♦ Create and execute the most effective coin and medal portfolio 

strategy

♦ Achieve greater excellence in coin and medal design

♦ Increase operational efficiency while meeting the highest quality 

standards 

♦ Develop an optimal workforce and workplace culture
formulated fourteen 

measurements (metrics) of 

progress. Reducing hundreds 

of possible metrics to fourteen 

was difficult, but we narrowed 

it to those we believe are the 

best performance indicators to 

keep us focused on the actions 

needed to achieve our goals. 

The key metrics or 

performance indicators were 

incorporated into the 

appropriate employees’ 

performance plans, and 

budgets and financial 

incentives were aligned to 

maximize success. For the 

first time, we have monthly 

meetings with management 

and labor to analyze our 

progress, and a monthly report 

How do we get there? There 

is an obvious gap between our 

current situation—where we 

are now—and our 

aspirations—where we want to 

go. We know that most 

strategic realignments fail in 

their execution. 

How will we prevent failure? 

Part of the answer lies in 

process improvement. Our 

five-year plan is being broken 

down into year-by-year action 

steps. Each United States 

Mint department will develop 

a 12-month action plan aligned 

with the overall strategic plan. 

Departmental actions will be 

assigned and incorporated into 

individual employees’ 

performance plans. 

7

card is distributed to all employees so they can track our 

progress. 

We gave ourselves a report card grade of C for FY 

2008. Our workers are A players, so how can our result 

be a C? The grade reflects our current performance 

against the organization we want to become. We are 

working hard but not smart. We want to inject new 

behaviors, discipline and versatility to achieve success 

by intent and not accident. Our FY 2008 performance in 

areas of customer satisfaction, employee safety and 

employee satisfaction is not on par with the world class 

agency we are striving to become. While we have 

fulfilled our mission and have various individual 

successes, as a whole, the United States Mint should 

excel beyond minimal requirements. From the outside, 

the United States Mint appears to be delivering an 

average performance, and it is, but we aspire to more. 

We aspire to excellence. 

Where are we now? We did an honest assessment of 

our strengths and weaknesses in the seven areas outlined 

in the Baldrige Quality Award Criteria for High 

Performance (criteria used for judging within a highlyrespected award system for industry workplace 

performance). We concluded that the United States 

Mint has much strength and several weaknesses. Our 

strengths include pride in our organization, employees, 

history and products. We have adequate resources, clear 

direction, and good working conditions. Weaknesses 

include inadequate accountability, a risk-averse culture 

and a lack of coordination and trust. 

Another part of the solution is structure. We will ensure 

that our organizational structure meets the needs of our 

mission and attains the results we are seeking. Talent 

wins games; teamwork wins championships. We will go 

beyond the stovepipes of the organizational chart by 

using cross-functional task forces led by agency officials 

who have the authority to make decisions and will be 

held accountable for results. 

The last and perhaps most difficult part is coaching and 

mentoring our employees. We have not done this 

consistently before and need to learn how to do it before 

we can achieve our objectives. Coaching and mentoring 

means giving employees the skills, feedback, individual 

attention, and inspiration they need to perform to 

expectations and continuously improve. 

What will or might change in our future 

environment? We examined our current environment 

to project conditions over the next five years. We 

analyzed demographic trends; numismatic product 

competition; technology; current and projected 

economic conditions; our political and regulatory 

environment; and our suppliers, customers and retail 

environment. 

One critical finding was that we are not becoming a 

cashless society, as we previously believed. Between 

2001 and 2005, consumer use of cash was consistent at 

33 percent of all transactions. Credit card transactions 

grew at the expense of checking accounts. Debit and 

gift card growth hurt credit cards and checking. Think 

While we have fulfilled our 

mission and have various 

individual successes, as a 

whole, the United States 

Mint should excel beyond 

minimal requirements. 

From the outside, the 

United States Mint appears 

to be delivering an average 

performance, and it is, but 

we aspire to more. We 

aspire to excellence.
about your own experience and those of your parents 

and grandparents. For big-ticket items like appliances, 

clothing, or even an expensive dinner out, the 

Depression-era generation used cash, the post WorldWar II generation used checks, and baby boomers used 

credit cards (and now debit cards). To buy a soda or 

gum at a convenience store, on the other hand, most 

people continue to pay cash. Our forecast is that 

demand for coins will stay the same or even increase 

slightly for the foreseeable future. 

Another notable trend is the world-wide movement 

away from lower denomination coins to higher 

denomination coins. Most countries, like the United 

States, are seeking cost-effective ways to produce the 

lowest denomination coins by changing their size or 

metal content. Some countries have eliminated their 

lowest denomination coins altogether. Many countries 

have developed higher denomination coins, some the 

equivalent of $5. 

We aim to realize potential benefits for the American 

people by developing more accurate predictions of 

demand and inventory-level adjustments to ensure the 

right number of coins are in circulation. Lowering the 

manufacturing costs of all of our coins, especially those 

with negative seigniorage like the penny and nickel, is 

another beneficial avenue we are pursuing. We will also 

double our efforts to increase the success of the $1 coin 

through market development and aggressive, but costeffective, programs aimed at overcoming barriers to the 

circulation of these coins. 

Finally, demographic trends tell us that our typical retail 

customer base is shrinking. Our core numismatic 

customer tends to be an older white male in the upper 

middle class, college educated, and often retired. Our 

mission is to reach as many Americans as possible—a 

cross section of America. That means expanding the 

potential of numismatic product gift-giving among 

women. It means exploring ethnic markets like our 

recent outreach pilot to Asian Americans, a group with a

8

opportunity for us to extend our appeal to Americans of 

all ages and backgrounds. 

The Outlook for FY 2009 I expect our financial 

results to improve slightly next year by increasing 

seigniorage per dollar issued and making our 

numismatic products a greater value to our customers 

through improved efficiency, quality, and service.

Small Improvement in Overall Financial Result If 

the economy does not improve until the end of 2009, as 

many predict, we anticipate that circulating revenue will 

be up only slightly and total seigniorage will see a very 

modest increase. We are predicting a slight 

improvement in our financial results based primarily on 

higher circulation of the $1 coin and efforts to reduce 

operational costs. Sales of the $1 coin to the FRB are 

likely to increase from FY 2008 levels because the first 

of the newly designed Native American $1 coins will go 

into circulation in FY 2009. We will also conclude pilot 

campaigns in four cities that we hope will significantly 

increase demand and usage of $1 coins. These pilots 

will test our hypothesis that a combination of banks 

adequately supplied with $1 coins, retailers educated 

and trained to accept and dispense $1 coins, and 

consumers educated and motivated to use $1 coins will 

encourage robust circulation in a specific geographic 

area. What we learn from these geographic pilots will 

help us with a larger regional or national rollout.

Base metal prices continue to fluctuate. If prices 

continue to climb, there may be further erosion of 

seigniorage per dollar issued on circulating coins. We 

are optimistic that Congress will pass legislation 

enabling the United States Mint to more aggressively 

address the composition and cost of our circulating 

coins, but implementation will take time. Should 

legislation pass, we predict that the first positive effects 

of any content change will occur in FY 2010. 

Numismatic Revenues Will Increase We expect 

numismatic revenue to increase and improvements in 

special affinity for gifts of 

24-karat gold. 

The success of the 50 State 

Quarters® Program has 

created 147 million casual 

collectors. This program has 

educated a generation of 

children about geography and 

state history. The fact that 

almost half of our citizens 

show interest in United States 

coinage means there is an 

planning to result in a margin 

lower than 15 percent. We 

are counting on two 

initiatives to achieve this 

result: 1) the one-year 

introduction of the 24-karat 

2009 Ultra High Relief 

Double Eagle Gold Coin, and

2) providing the products our 

customers buy year-round 

earlier in the year.

We are not becoming a 

cashless society, as we 

previously believed. 

Between 2001 and 2005, 

consumer use of cash was 

consistent at 33 percent of 

all transactions. 
you for giving me an opportunity to do so, and to serve 

my country at the United States Mint. 

Sincerely,

9

grade from a C. We know we can do better. Parts of 

our foundation are not as strong as they need to be and 

require renovation, much like any house built in 1792. 

FY 2009 will be a rebuilding year. We will improve by 

closing the gap between where we are now and where 

we want to be.

Internal initiatives will have a constructive impact on 

reinforcing our foundation. These initiatives include 

developing a strong brand identity, creating an improved 

portfolio of products, creating a master start-to-finish 

coin production and sales schedule to give customers 

advance notice of products and reduce backlogs, and 

using state-of-the-art counters and digital vision 

inspection systems to improve product quality.

People are our best asset, and we have not invested in 

them enough lately. In FY 2009, we will institutionalize 

a Performance Management System, aligning our goals 

and metrics with employee performance plans and 

rewarding employees for their part in our progress. We 

will continue to build upon a leadership development 

program for all managers and supervisors. Our plans 

and actions will begin to reflect our values—especially 

accountability, teamwork, trust, and ethics—on a daily 

basis.

Conclusion: Business-as-usual Is Not Good 

Enough When I was sworn in as the 38th Director of 

the United States Mint on September 5, 2006, I became 

a steward of a government agency with a proud history 

uniquely intertwined with the history of the United 

States. On the surface, we produced good results that 

pleased most people, but we know there is plenty of 

room to improve organizational and operational 

efficiency and achieve better results. 

Bullion revenues are projected 

to remain high next year. To 

the extent that a weak 

economy may lead to 

additional precious metal 

sales, I expect bullion sales at 

the United States Mint to 

continue to be strong. We are 

currently working to expand 

the number of suppliers of 

quality gold and silver 

planchets. 

Improved Non-financial 

Results You will see some 

improvement next year in our 

non-financial results. We will 

strive to raise our report card 

Business-as-usual and 

average results are not 

enough. We can be a premier 

government agency whose 

service to the American 

public is characterized by 

excellence. We are 

committed to nothing less. 

The appointment of the 

United States Mint Director 

to a five-year term provides 

enough time to make a longterm positive impact. I 

believe that I should be 

accountable to you and leave 

this agency a much better

place than I found it. I thank

Business-as-usual and 

average results are not 

enough. We can be a 

premier government agency 

whose service to the 

American public is 

characterized by excellence. 

We are committed to 

nothing less. 
United States Mint Executive Staff 

Left to Right

Dennis O’Connor, Chief of Protection; Jerry Horton, Chief Information Officer; Patricia M. Greiner, Chief 

Financial Officer; Debra Tomchek, Associate Director Workforce Solutions; Edmund C. Moy, Director; 

Daniel P. Shaver, Chief Counsel; Mike Stojsavljevich, Chief Strategy Officer; B. B. Craig, Associate 

Director Sales and Marketing; Richard Peterson, Associate Director Manufacturing; Andrew D. Brunhart, 

Deputy Director; David L. Kim, Chief of Staff

Left to Right

David M. Croft, Denver Plant Manager; 

Larry Eckerman, San Francisco Plant Manager; 

Ellen McCullom, West Point Plant Manager; 

Marc Landry, Philadelphia Plant Manager; 

10 
The United States Mint 

Organizational Profile 

circulation. Both facilities also produce dies for striking 

coins. All sculpting and engraving of circulating and 

numismatic coin and medal designs is performed in 

Philadelphia. Production of numismatic and bullion 

products is primarily performed at facilities in San 

Francisco, California, and West Point, New York. All 

four plants produce commemorative coins as authorized 

by laws passed by Congress and approved by the 

President. The United States Bullion Depository at Fort 

Knox, Kentucky, stores and safeguards United States 

gold and silver bullion reserves. 

Primary Responsibilities 

The United States Mint’s primary responsibilities 

include the following:

Circulating The United States Mint is responsible for 

enabling commerce by minting and issuing circulating 

Overview 

Established in 1792, the United States Mint is the 

world’s largest coin manufacturer. Our vision is to 

embody the American spirit through the creation of our 

Nation’s coins and medals. The men and women of the 

United States Mint serve the Nation by exclusively and 

efficiently creating the highest quality, most beautiful 

and inspiring coins and medals that enable commerce; 

reflect American values; advance artistic excellence; 

educate the public by commemorating people, places 

and events; and fulfill retail demand for coins.

The United States Mint is committed to achieving 

efficient operations and providing value to the American 

people. Since FY 1996, the United States Mint has 

operated under the United States Mint’s Public 

Enterprise Fund (PEF). As authorized by Public Law 

104-52 (codified at 31 U.S.C. § 5136), the PEF enables 

Vision: 

To embody the American spirit 

through the creation of our 

nation’s coins and medals. 

Mission: 

The men and women of the 

United States Mint serve the 

nation by exclusively and 

efficiently creating the highest 

quality, most beautiful and 

inspiring coins and medals that 

enable commerce, reflect 

American values, advance 

artistic excellence, educate the 

public by commemorating 

people, places and events, and 

fulfill retail demand for coins.

the United States Mint to operate 

without tax dollars. We generate 

revenue through the sale of 

circulating coins to the Federal 

Reserve Banks (FRB), 

numismatic products to the 

public and bullion coins to 

authorized purchasers. Revenue 

in excess of all liabilities and 

short-term operating costs is 

transferred to the United States 

Treasury General Fund. 

The United States Mint operates 

six facilities and employs 

approximately 1,900 employees 

across the United States. Each 

facility performs unique 

functions critical to our overall 

operations. All policy 

formulation, program 

management, research and 

development, marketing and 

customer service operations are 

performed at our Headquarters in 

Washington, D.C. 

Manufacturing facilities in 

Philadelphia, Pennsylvania, and 

Denver, Colorado, produce coins 

of all denominations for 

coins in amounts necessary to 

meet the needs of the United 

States. We manufacture and sell 

circulating coins to the FRB for 

distribution to the Nation’s 

depository institutions. 

Commercial banks and other 

financial institutions then place 

coins into circulation to meet the 

demand of retailers and the 

public. Depository institutions 

can return coins to the FRB 

when they have more than 

necessary to meet demand. The 

United States Mint sells 

circulating coins to the FRB at 

face value. The net return, 

known as seigniorage, is the 

difference between the face 

value and the cost of producing 

circulating coinage. Seigniorage 

is transferred on a quarterly basis 

to the Treasury General Fund to 

help finance the national debt. 

 

Numismatic The United States 

Mint prepares and distributes 

numismatic items, including 

proof and uncirculated versions 

of coins, proof and uncirculated

11 
12

coin sets, other special sets, commemorative coins, and 

medal products. These products are manufactured and 

specially packaged for collectors and other members of 

the public who desire high-quality versions of the 

Nation’s coinage as gifts or mementos. Through 

commemorative coin programs passed by Congress and 

approved by the President, the United States officially 

honors people, places, and events. Such programs 

typically raise money for recipient organizations and 

worthy causes with evident public support. Customers 

can purchase numismatic coin and medal products 

through the United States Mint website, by phone order, 

or by mail order. Public points of sale are also available 

at the United States Mint facilities in Philadelphia, 

Denver and Washington and a United States Mint kiosk 

in Union Station in Washington. The objective of the 

United States Mint numismatic program is to make 

numismatic products accessible, available, and 

affordable to the American public. We make every 

effort to control costs and keep the prices of numismatic 

items as low as practicable. Any net proceeds from the 

sales of numismatic products are transferred to the 

Treasury General Fund to help reduce the deficit. 

Bullion The United States Mint manufactures and 

issues gold, silver and platinum bullion coins through a 

network of authorized purchasers, which include 

precious metal and coin dealers, brokerage companies 

and participating banks. Bullion coins provide investors 

a simple and tangible means to own coins whose weight,

content and purity are guaranteed by the United States 

Government. Coins are available to the general public 

through authorized purchasers. 

Medals The United States Mint prepares and strikes 

National and other medals. Congressional Gold Medals 

are selective awards authorized by Congress and 

approved by the President to recognize people, events, 

places, and institutions that have significantly affected 

the country or the world. Congressional Gold Medals 

honoring specific individuals in recognition of their 

achievements and contributions are widely considered 

the highest honor the Nation can bestow. The United 

States Mint also strikes bronze duplicates of these 

medals, as well as “list” medals, which are often a part 

of continuing medal series, such as the Presidents of the 

United States, and Historic Buildings of the United 

States. We sell bronze versions of these 

commemorative medals to the public as part of the 

numismatic program. 

Protection The United States Mint is responsible for 

protecting over $200 billion in United States assets 

stored in our facilities. The Office of Protection 

safeguards United States Mint assets, such as our 

products, employees, facilities and equipment, as well as 

non-United States Mint assets in our custody, including 

gold and silver bullion reserves held at the United States 

Bullion Depository at Fort Knox. 

Organizational Structure 

United States Mint 

Denver 

United States Mint 

Philadelphia 

United States Mint 

San Francisco 

United States Mint 

West Point 

United States 

Bullion Depository 

Fort Knox 

Manufacturing 

Chief 

Financial 

Officer 

Sales & 

Marketing 

Chief 

Information 

Officer 

Workforce 

Solutions Protection 

Director 

Deputy Director 

Chief 

Counsel 

Chief 

Strategy 

Officer 

Chief of 

Staff 
• Diminishing the public’s likelihood of confusion and 

mistake between the United States Mint and other 

sources of coins and medallions, such as private mints 

and dealers; and 

• Promoting the reputation, goodwill, confidence and 

quality associated with the United States Mint name 

and marks. 

The Committee is currently seeking information from 

other Federal government agencies, foreign mints and 

private sector entities with branding experience and 

capabilities. With this information, we will determine 

the appropriate next steps to achieving our goal of 

establishing the United States Mint’s public image 

through the consistent use of a single, recognizable 

brand. 

Customer Satisfaction The foundation of a 

trusted, highly recognized brand is high quality products 

and services. Developing superior products and 

providing responsive customer service has enabled the 

United States Mint to retain core numismatic customers. 

Maintaining product quality and customer service is 

critical to attracting new customers, fostering the United 

States Mint brand and expanding our customer base into 

underserved segments of the population.

Since FY 2003, the United States Mint has utilized a 

bimonthly Customer Satisfaction Measure (CSM) 

survey to capture customer satisfaction with the United 

States Mint’s performance as a supplier of coins and 

coin products and the quality of those products. 

While 80 percent of active customers report high overall 

satisfaction with the United States Mint’s performance 

as a product supplier, this percentage has declined 

The United States Mint is a wellestablished brand within both the 

national and international 

numismatic coin collecting 

community. However, recognition of the agency 

and our products and services is less prevalent among 

the general public and within the retail marketplace. 

The United States Mint believes building a trusted, 

highly-recognized brand is vital to expanding our 

customer base and ensuring continued success of 

numismatic and bullion programs. To the American 

people, the United States Mint should be distinguished 

for exemplifying accountability, integrity, innovation 

and excellence in the production and sale of the Nation’s 

coins and medals. 

Current Status of the United States Mint 

Brand In FY 2008, we created a Brand Identity 

Steering Committee (Committee) to develop and 

establish a United States Mint branding strategy. The 

objective of this effort is to establish and reinforce the 

exclusive brand identity of the United States Mint. 

Some of the key components of this objective are as 

follows: 

• Increasing the public’s recognition of the United 

States Mint as the exclusive origin of United States 

coins and medals, including circulating coins, 

numismatic products, precious metal investment coins, 

and national medals; 

• Reinforcing the distinctiveness, individuality, and 

official authority of United States Mint marks, names, 

symbols, and trade dress; 

Our Goals: 

Exclusive Brand Identity

13 

Percentage of Customers Highly Satisfied Percentage of Orders Fulfilled within Seven Days

2006 2007 Nov-07 Jan-08 Mar-08 May-08 Jul-08 Sep-08 2008 

94% 96% 94% 95% 96% 94% 96% 95% 95% 

Product Quality Overall Satisfaction 

87% 85% 

79% 82% 77% 79% 80% 80% 80% 

76% 

O-07 N-07 D-07 J-08 F-08 J-08 A-08 S-08 M-08 A-08 M-08 J-08 

2008 Average 

44% 

91% 

79% 82% 

69% 

55% 

88% 87% 81% 

89% 

73% 70% 
14

steadily since FY 2006. Customer satisfaction with 

product quality, conversely, has remained high with 

about 95 percent of active customers highly satisfied 

with the quality of our products. Problems and delays 

with orders, poor communications and customer service 

issues all contributed to lower overall customer 

satisfaction in FY 2008. CSM survey results indicate 

that untimely order fulfillment was the most significant 

factor in the decline. 

The United States Mint’s ability to timely deliver 

products to numismatic customers declined significantly 

in 2008 due to a number of factors. We started 2008 

with an aggressive product launch schedule. Production 

capacity was unable to meet demand for the multiple 

products released in the beginning of the calendar year. 

Many products had to be placed on back order until 

production capacity could recover. In January 2008, the 

United States Mint temporarily suspended operation of 

our online catalog for six days to ensure a reliable 

transition to a new service provider. Finally, in 

February 2008, a tornado hit and significantly damaged 

our product fulfillment facility in Memphis, Tennessee. 

It took five days to restore the facility to working 

operation and resume deliveries. 

In FY 2009, the United States Mint plans to thoroughly 

reexamine the entire production process from design to 

distribution. A key component of this effort is to better 

integrate the product launch schedule with expected 

production capacity. This should ensure that adequate 

inventories are available when products are released and 

minimize backorders. We will also more directly 

measure and track the duration between order and 

fulfillment dates in FY 2009 to identify potential 

problems and implement corrective action. We plan to 

revise the CSM survey to evaluate the impact of our 

efforts and obtain a better understanding of our 

customers and how to serve them. 

American Public’s Awareness and 

Favorability The public’s view of the United States 

Mint is particularly important to the success of our 

Congressionally mandated programs. The support and 

involvement of the American public is important to the 

enactment and acceptance of special circulating coinage, 

such as 50 State Quarters® and Presidential $1 Coins. 

The United States Mint conducts a national survey to 

measure the population’s knowledge of our main 

functions and obtain baseline job approval ratings. 

Three waves of the national survey were conducted in 

FY 2008. 

Average results from the three surveys indicate that 

about half of American adults claimed to have some or 

extensive knowledge of the United States Mint. 

However, only one in five exhibited actual knowledge 

through identification of the agency’s multiple primary 

functions. Nearly half, 49.3 percent, of adults did 

correctly identify the United States Mint as the agency 

that produces United States coins. Despite confusion 

over the United States Mint’s exact role, 26.0 percent of 

adults gave the United States Mint an excellent job 

performance rating. An additional 32.3 percent of adults 

gave the agency a good rating.

Adults who knew more about the United States Mint 

viewed the agency slightly more favorably than those 

with less knowledge. Statistical analysis confirmed that 

knowledge of the United States Mint was not a direct 

driver of positive ratings. Rather, knowledge of the 

United States Mint drove reliability and honesty factors, 

which in turn produced positive job ratings. This result 

indicates that focusing marketing and branding on the 

reliability and honesty of the United States Mint will 

most effectively enhance public recognition and 

perception. 

Initial branding survey results are driving current and 

future initiatives to build a strong United States Mint 

brand identity. As these initiatives are implemented, the 

survey questionnaire will be refined to evaluate their 

impact on the public’s awareness and perception of the 

United States Mint. 

Excellent 

26.0% 

Good 

32.3% 

Average 

31.3% 

Below Average 

6.0% 

Poor 

4.4% 

Survey of American Public: 

Rate how good a job 

the United States Mint 

is doing. 

United States Mint 

49.3% 

Do not 

Know 

33.4% 

United States 

Treasury 

12.3% 

Other 

5.0% 

Survey of American Public: 

Name the agency that 

produces United 

States coins.
segments these products target. By identifying our most 

and least popular products, we can better prioritize 

advertising and production resources. We can also work 

to eliminate unpopular or obsolete products from our 

portfolio. Once we have fully assessed our current 

product offerings, we will begin examining underserved 

market segments and developing new products to target 

them. 

50 State Quarters® Program A significant 

portion of United States Mint operations remains 

dedicated to the 50 State Quarters® and Presidential $1 

Coin Programs. In FY 2008, the United States Mint 

minted and issued commemorative quarters honoring 

Utah, Oklahoma, New Mexico, Arizona, and Alaska. 

The program’s final coin, honoring Hawaii, was issued 

at the beginning of FY 2009. This will be followed by a 

one-year program commemorating the District of 

Columbia and the United States Territories: Puerto 

Rico, Guam, American Samoa, the United States Virgin 

Islands and the Commonwealth of Northern Mariana 

Islands. 

The popularity of the 50 State Quarters® products has 

increased awareness of the United States Mint, boosted 

circulating revenue and seigniorage through sustained 

collector and transactional demand and augmented 

numismatic program results. Since the program began 

in FY 1999, annual quarter shipments to the FRB have 

averaged about 3.4 billion coins. Since FY 2005, 

quarter proof and silver quarter proof sets have 

contributed an average of 1.3 million units and $24.7 

The United States Mint 

numismatic program has 

experienced dramatic growth over 

the past several years. Over the past 10 

years, revenue has grown from $160.8 million in FY 

1999 to $557.2 million in FY 2008. The recent 

enactment of legislation has allowed us to expand 

product lines in both numismatic and circulating 

business segments. While sales of both new and core 

recurring products have been strong, we recognize the 

need to continually make improvements in the portfolio 

of products we offer. Our goal is to develop the optimal 

product portfolio to maximize our customer base and 

units sold while minimizing customer acquisition costs. 

We plan to achieve this goal by analyzing current and 

past product offerings, reassessing customer demand and 

exploring new ethnic and geographic markets. 

Coin and Medal Portfolio Assessment The 

United States Mint numismatic product portfolio 

currently includes over 150 products with approximately 

10 intersecting product lines. At the close of FY 2008, 

we began a thorough assessment of our coin and medal 

product portfolio. The assessment is intended to 

prioritize current product offerings as well as new 

product investment. 

The assessment will initially analyze the performance of 

current and prior product offerings and the customer 

Our Goals: 

Effective Coin & Medal Portfolio

Top Selling Numismatic Products 

(Net units shipped in thousands) 

Numismatic Total Revenue 

(Dollars in millions) 

15 

2008 Proof Set 

2007 Uncirculated Set 

2007 Proof Set 

2008 Pres $1 Proof Set 

2008 AE Silver Proof Coin 

2008 Quarter Proof Set 

2007 Silver Proof Set 

2008 Uncirculated Set 

2008 Silver Proof Set 

2008 Silver Quarter Proof Set 

995.1 

895.6 

820.2 

744.9 

700.9 

580.6 

435.9 

429.5 

411.4 

359.8 

$100 

$200 

$300 

$400 

$500 

$600 

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 
Americans to accept and use $1 coins as normal 

currency for everyday transactions. The Office initially 

focused on ensuring compliance with the Presidential $1 

Coin Act and encouraging acceptance with financial 

institutions. As part of a Local Activation Plan, O$CP 

met with 96 bank representatives in the Washington 

D.C. area to familiarize them with the program and 

provide materials to help promote the coins. The vast 

majority of representatives viewed the Presidential $1 

Coin as a collectible coin distributed by the FRB to 

make it widely available to the American public. They 

generally dispensed it only when asked. Banks also 

found the FRB minimum ordering quantity for $1 coins 

often exceeded their need and storage capacity. 

Dispensing $1 coins only upon request, most banks 

quickly reached or surpassed their storage capacity with 

the initial releases. Consequently, they stopped ordering 

the coin from the FRB and demand steadily declined. 

Direct Shipment In May 2008, the United States Mint 

initiated the Circulating $1 Coin Direct Ship Program to 

provide $1 coins to banks and retailers in smaller 

volumes than offered by the FRB. Financial institutions, 

retailers and individuals can now order boxes of 250 or 

500 $1 coins directly from the United States Mint free of 

postage and handling fees. Initial orders for the coins 

were unexpectedly strong. The first inventory of John 

Quincy Adams Presidential $1 Coins was exhausted 

after only three weeks. Such strong sales indicate that 

some demand for the Presidential $1 Coins is not being 

met through the normal distribution channels. Just over 

seven million $1 coins were shipped through the Direct 

Ship Program at the close of the fiscal year.

Proactive Approach In FY 2008, the United States 

Mint conducted research on the awareness, sentiment 

and use of the Presidential $1 Coin among the American 

public, retailers and banking personnel. Results 

indicated that institutional, attitudinal and behavioral 

barriers would need to be overcome to achieve robust 

circulation of the coins. The themes the United States 

million to numismatic program annual unit sales and 

revenue, respectively. 

Unless new legislation is enacted, the United States Mint 

will no longer mint and issue quarters featuring rotating 

designs in FY 2010. 

Presidential $1 Coin Program The United States 

Mint continued America’s tribute to the Nation’s 

Presidents in 2008, issuing four Presidential $1 Coins 

featuring Presidents Madison, Monroe, Adams, and 

Jackson. While first-year shipments of the Presidential 

$1 Coins to the FRB totaled 674 million coins, 

shipments have steadily declined since the George 

Washington Presidential $1 Coin release. Total 

shipments fell 31.2 percent to only 464 million 

Presidential $1 Coins in FY 2008. This decline is 

largely attributable to weakening collector demand as 

the program entered its second year and honors lesser 

known presidents. While patterned after the 50 State 

Quarters® Program, the Presidential $1 Coin Program 

has not stimulated comparable transactional demand to 

offset waning collector demand. Depository institutions 

and retailers consider the Presidential $1 Coin more a 

collectible than legal tender for commerce. 

The Presidential $1 Coin Act (Public Law 109-145) 

mandates the United States Mint to identify, analyze and 

overcome barriers to the robust circulation of $1 coins. 

Promoting circulating usage of the coins is also 

beneficial to our financial results because $1 coins can 

be minted and issued at a higher seigniorage per dollar 

than any other denomination. Achieving steady and 

sustained transactional demand for $1 coins is critical to 

the long-term success of the Presidential $1 Coin 

Program. 

At the start of FY 2008, the United States Mint formed 

the Office of $1 Coin Programs (O$CP) to identify and 

remove barriers to circulation while motivating

Oklahoma 

Commemorative 

Quarter-Dollar

New Mexico 

Commemorative 

Quarter-Dollar

Arizona 

Commemorative 

Quarter-Dollar

Alaska 

Commemorative 

Quarter-Dollar

16
generating a significant increase in transactional 

demand, a regional or national program will be rolled 

out in 2009. 

Mint had originally used to promote the Presidential $1 

Coin – convenience, utility, educational value and 

patriotism – were immaterially or negatively associated 

with propensity to use the coin.

From the O$CP’s initial work and research, it became 

apparent that an innovative and proactive approach was 

necessary to stimulate circulating demand. The United 

States Mint contracted with a marketing consortium of 

three companies specializing in public relations, 

advertising and retailer activation to help us develop a 

comprehensive strategy for promoting robust circulation 

of the $1 coin. 

A three-pronged strategy was proposed and developed to 

be tested in a four-city pilot program. In addition to 

standard public relations and advertising efforts used in 

the past, the United States Mint would also focus on 

retail activation by promoting usage directly with large 

scale retailers. We found that certain themes resonated 

much more strongly with people in initial tests. These 

themes center on the durability and longevity of the 

coins, the 100 percent recyclable materials used to 

produce coinage and the billions of dollars the Nation 

could save over time by using the $1 coins. We are 

testing the new themes and promotion techniques in four 

pilot cities across America: Charlotte, North Carolina; 

Austin, Texas; Grand Rapids, Michigan; and Portland, 

Oregon. 

The four-month pilot was initiated in August 2008. 

Integrated television, radio, print and web advertising 

promoting the coins as “Real Change” was disseminated 

throughout the four cities. An active public relations 

campaign was initiated with local media. National, midsize and small retailers were provided free, customized 

point-of-sale materials, a retailer website with program 

information and innovative ideas to promote customer 

involvement, and the support from an on-site United 

States Mint representative. We will conduct a thorough 

review of the pilot when it concludes. If successful in 

James Madison 

Presidential $1 Coin

James Monroe 

Presidential $1 Coin

John Quincy Adams 

Presidential $1 Coin

Andrew Jackson 

Presidential $1 Coin

17 
Advance Our Craft The United States Mint strives to 

become known as an innovator in coins and medal 

design. Technological advances should not only 

enhance our design capabilities, but also drive the design 

process itself. Our coins and medals should embody 

cutting edge techniques and innovative designs. 

Artistically Beautiful Coins and medals serve as a 

unique medium that can embody all the principles 

discussed while also being aesthetically beautiful. 

Artistic Infusion Program The Artistic Infusion 

Program (AIP) was launched in 2004 to enrich and 

invigorate our design capabilities by developing a group 

of visual artists to create and submit designs for selected 

coin and medal programs. The artists, chosen from a 

nationwide competition, represent a broad range of 

disciplines including illustration drawing, sculpting, 

painting, and graphic design. Since its formation, the 

AIP has evolved to include a refined pool of talented 

American artists to complement our elite and 

accomplished team of sculptor-engravers. Several 

Master Designer artists have been with the program for 

multiple years and have developed into top performers, 

earning an impressive list of design credits. 

Recently enacted laws, including the Presidential $1 

Coin, First Spouse 24-Karat Gold Coins, District of 

Columbia and United States Territories Quarters, and 

Lincoln One-Cent Redesign have required the United 

States Mint to significantly increase our coin and medal 

design capacity. The exceptional designs of AIP artists 

have contributed to the success of these programs and 

18 

The United States Mint 

recognizes and embraces its 

responsibility to do more than 

merely craft coins and medals. Coins are one of the most visible, tangible 

representations of a country. Thus, we believe our 

products are exceptional artistic media for expressing 

our national character, memorializing our past, and 

embodying our future. While prior successes in coin 

and medal design are noteworthy, the United States 

Mint strives to reach new levels in design excellence. 

A concerted, agency-wide plan is necessary to enhance 

successful programs and realize greater achievements. 

By assembling exceptional talent, furthering 

technological advancement, and fostering designs that 

express the American spirit and values, we intend to 

advance a neo-renaissance of beautiful coin and medal 

design. 

What Is Artistic Excellence? The United States 

Mint has established five core principles to define 

artistic excellence and direct our efforts. Each coin and 

medal we produce in the future shall embody these five 

principles. 

Uniquely American While bridging various styles, 

mediums and compositions, great American art 

commonly expresses the same intrinsically American 

themes: democracy, freedom, equality, diversity, and 

individualism. The United States Mint’s coins and 

medals should also convey such uniquely American 

ideals. 

Exemplifies the 21st Century Like much historic art, 

coins can be classified and identified by their origin and 

era. Our coins and medals should likewise be 

recognizable by their American origin and artistic era, as 

well as our Nation’s technological advances. 

 

Tells a Story Often American coin designs focus too 

much on depicting a subject’s appearance rather than 

telling the subject’s compelling story. Employing 

symbolism and imagery will allow our coins and medals 

to convey much more than portraiture. 

Our Goals: 

Excellence in Coin Design 

2008 Coin of the 

Year Award Winner: 

Best Trade and Most 

Popular Coin 
in national and international coin competitions provides 

affirmation of our coin designs’ artistry. A Coin of the 

Year (COTY) award is one of the most prestigious 

accolades a coin designer or national mint can receive. 

Coins from throughout the world are selected on the 

basis of excellence in artisanship, practicality, and 

general appeal. The COTY judging panel consists of 

more than 50 leading experts in minting, technology, 

numismatic journalism and coin collecting. The 25th

COTY Awards were held in Berlin, Germany, in 

February 2008. United States Mint coins received 

awards in three of the 10 COTY categories. The Ben 

Franklin Commemorative Coin took the Most 

Historically Significant Coin award. The Nevada 

Commemorative Quarter-Dollar received awards for 

Best Trade and Most Popular Coin categories. 

With greater emphasis placed on excellence in design, 

more awards are anticipated in the near future. 

However, awards alone do not address the root causes of 

gaps in artistic excellence within the agency. Objective 

evaluation of all our designs is necessary to achieve new 

levels in artistic excellence. In FY 2009, the United 

States Mint will ask members of the Citizens Coinage 

Advisory Commission (CCAC) and the Commission on 

Fine Arts (CFA) to grade designs created for all coins 

and medals. Congress established the CCAC in 2003 to 

advise the Secretary of the Treasury on themes and 

designs of United States coins and medals and represent 

the interests of American citizens and collectors. The 

CFA, established by Congress in 1910, provides expert 

advice to the President, Congress and the heads of 

departments and agencies on the design and aesthetics of 

media of Federal interest, including national coins, 

medals and memorials. Members of the CCAC and 

CFA will evaluate and score all United States Mint coin 

and medal designs based on how well they embody the 

five core principles of artistic excellence. Scores will 

provide objective feedback to our artists and motivate 

progress toward superior designs.

stimulated newfound interest in circulating and 

numismatic coinage. Our goal is to continue to develop 

and mentor new and existing AIP artists to achieve 

further success. 

Recreating a Masterpiece In the early 1900s, 

President Theodore Roosevelt called for a “renaissance” 

in American coinage. He believed that the coins of the 

era needed to be more attractive and better embody 

America’s national identity and growing preeminence 

on the world stage. President Roosevelt appointed 

Augustus Saint-Gaudens, a renowned sculptor and artist, 

to redesign the Nation’s coins. Sharing President 

Roosevelt’s vision, Saint-Gaudens designed what has 

been called the most beautiful coin ever minted in the 

United States, the 1907 $20 Double Eagle Gold Coin. 

There were four variations of the 1907 Double Eagle. 

The minting process of the day was not conducive to the 

initial high relief version that Saint-Gaudens and 

Roosevelt specifically desired. Eventually a reduced 

relief coin, requiring less metal, was developed and 

mass produced. Saint-Gaudens’ full vision for the 

production of an ultra high relief coin was never realized 

until now. 

Through the advent of modern technology, the United 

States Mint will be able to mass produce a 

contemporary, but faithful rendition of Augustus SaintGaudens’ 1907 Double Eagle original design. In 2009, 

we will issue the 2009 Ultra High Relief Double Eagle 

Gold Coin to fulfill Augustus Saint-Gaudens’ vision. 

Through 21st century technology, original Saint-Gaudens 

coin plasters were digitally mapped. Digital design and 

die-making processes were used to update the SaintGaudens sculpture to reflect the year 2009, the 

additional four stars representing the current 50 states, 

and the inscription “In God We Trust.” The 2009 Ultra 

High Relief Double Eagle Coin is a uniquely American 

artistic expression – created by an American sculptor 

and crafted by an iconic American institution. 

Measuring Artistry Continued award recognition

2008 Coin of the 

Year Award Winner: 

Most Historically 

Significant 

19

2009 Ultra High Relief 

Double Eagle Gold Coin
inventory will also allow the agency to quickly meet an 

unexpected spike in coin demand. 

Digital Design Through substantial investment over 

the past several years, the United States Mint has made 

significant technological advances in coin design, 

production and packaging. For over 150 years, the 

process for making dies to strike coins remained 

essentially unchanged. To create each die, first a 

repetitive hand sculpting process was used to develop a 

large-scale clay or plaster model of the original coin 

design. A hard cast epoxy version would then be 

generated from the model. This epoxy model would be 

mounted on an engraving machine which then slowly 

traced the model’s details with a small stylus. Through 

a series of mechanical reductions, the machine would 

cut the traced pattern into a coin-sized steel version of 

the original sculpt, known as a master hub. Following a 

series of hand cleaning, machining, grinding, die 

striking, and hand polishing procedures, this single hub 

was used to produce all subsequent dies for coin 

striking. 

These conventional methods often produced inconsistent 

or inaccurate hubs, dies and coins. Hubs based on the 

same design could vary if produced by different 

engraving machines. The repetitive hand sculpting 

process sometimes produced irregular backgrounds 

because of warping of the sculpting media. The lengthy, 

manual process frequently resulted in coins appearing 

considerably different than the original artistic design. 

In FY 2008, the United States Mint completed a major 

The United States Mint is 

responsible for enabling commerce 

by minting and issuing circulating 

coins in amounts necessary to meet 

the needs of the United States. We 

continually strive for efficient coin manufacturing and 

sales operations. Greater efficiency benefits the 

American public as well as our customers. By reducing 

production and administrative costs, the United States 

Mint is able to transfer larger sums to the Treasury 

General Fund. Greater productivity and efficiency also 

allow us to keep the sale price of our numismatic 

products as low as practicable for our customers. 

Continuous Supply of Circulating Coins The 

United States Mint is responsible for providing an 

uninterrupted supply of circulating coin to meet the 

needs of the United States. In FY 2009, we will begin 

establishing a strategic coin reserve to ensure continuous 

supply of circulating coins in the event of coin demand 

exceeding production capacity. The strategic reserve 

will hold sufficient coinage to compensate for an 

unexpected disruption in operations equivalent to the 

loss of one circulating plant for a period of three 

months. Production disruptions beyond that time may 

require additional measures. The United States Mint 

plans to build the coin inventory over the next three 

years by taking advantage of excess production capacity 

during periods of lower coin demand. The accumulated 

Our Goals: 

Operational Efficiency & Highest Quality 

Standards 

Janvier Transfer-Engraver 

United States Mint Philadelphia

Computer Numerically Controlled (CNC) Digital Engraver 

United States Mint Philadelphia

20 
21 

research and development initiative to transform the 

entire coin design, hub development, and die polishing 

process. Our goal was to develop a streamlined digital 

design and die manufacturing process to take advantage 

of existing skills and eliminate inconsistency. 

The resulting new digital process employs computer 

software tools to generate two- and three-dimensional 

designs on virtual paper and clay. Designs are digitally 

scanned, reviewed and revised electronically. Once 

obverse and reverse designs are perfected, a Computer 

Numerically Controlled (CNC) machine uses digitally 

controlled lasers to accurately reproduce the design on a 

single or multiple hubs. This digital process has 

reduced the time required to manufacture a hub from 

two to three days to under 24 hours. The precision and 

accuracy of digital methods have allowed us to develop 

more intricate and beautiful coin designs than previously 

possible. 

Automation In FY 2008, the United States Mint 

replaced certain production and packaging processes 

with automated systems. By increasing productivity, 

automation is generating more efficient operations and 

higher quality products. 

Automated systems were installed in both San Francisco 

and West Point facilities to improve numismatic product 

packaging in 2008. The San Francisco system employs 

multiple robots to rapidly package proof coin sets. It 

uses a vision scanning system to identify a product, 

verify the correct packaging material and inspect 

packaging for any errors. Based on the desired end 

product, the system will insert single or multiple lenses 

into a single box. These finished boxes are then packed 

in shipping cases, and an additional robot transfers them 

to pallets for immediate shipment to our distribution 

center.

The West Point automated system replaces a lengthy 

manual process for inserting encapsulated coins into 

presentation case packaging. The system employs 

multiple robot arms that systematically disassemble 

presentation case packaging, place encapsulated coins 

inside each case, reassemble the case packaging and 

place final products into larger shipping cartons for 

direct transportation to our distribution center. The 

system also utilizes a vision scanning system to inspect 

each coin, case, certificate of authenticity and 

presentation packaging for any errors. 

Automating these processes is expected to significantly 

reduce operator fatigue and injury. Automated quality 

checks are also anticipated to reduce costs related to 

product returns and rework. 

Highest Quality Standards Product quality is a 

top priority for the United States Mint. To produce 

coins befitting the “Mint Condition” standard, we 

continually monitor and enhance our production 

processes. Each manufacturing facility evaluates the 

quality of critical production materials, including strip, 

blanks and packaging materials, received from various 

suppliers. We assess the final quality of dies used in 

numismatic and circulating coin production. 

Each manufacturing facility also conducts monthly 

product quality audits to identify the source of defects 

and target continual quality improvements. For each 

audit, a quality review team randomly samples and 

evaluates coins for visual and dimensional defects. The 

source of any defective coin is identified, and corrective 

action is taken to prevent additional defects. For each 

product line, the team calculates a Mint Quality Index 

(MQI), a composite score of how well coin products 

conform to quality standards. 

A MQI score of 100 indicates that product audits found 

no visual or dimensional defect in the coins examined. 

The score falls based on the number and severity of 

defects identified. Since we began measuring 

circulating MQI in 2005, the average fiscal year score 

has trended upward. Despite a small decline in FY 

2007, circulating MQI peaked in FY 2008 with a score 

of 86.8. While we only began to consistently measure 

numismatic MQI in 2007, our numismatic score has 

remained at or above 90. Through continued process 

and product quality audits, we hope to maintain or 

surpass these scores in the future. 

In FY 2009, the United States Mint will consider 

implementing a state-of-the-art visual inspection system 

for circulating coin production. The system would be 

capable of continuously scanning circulating coins for 

obvious visual and dimensional defects. If effectively 

implemented, the system will improve our capability to 

produce coins within the required quality specifications. 

Mint Quality Index (MQI)

Circulating 

Numismatic 

2005 2006 2007 2008 

67.2 

82.9 

74.9 

90.3 86.8 90.8 
22 

Check Survey to identify opportunities for improvement 

and ensure continuous focus on employee satisfaction. 

FY 2008 third quarter results indicate some 

improvement in employee satisfaction. A majority, 72 

percent, of employees expressed satisfaction with their 

jobs, well above the 60 percent of employees expressing 

job satisfaction in the 2006 FHCS. About 60 percent of 

employees reported they would recommend the United 

States Mint as a good place to work, an improvement 

from the 55 percent of employees recommending the 

agency in the 2006 FHCS. While survey results suggest 

some improvement, the United States Mint still needs to 

develop new approaches and strategies to engage 

management and employees and solidify our 

commitment to employee satisfaction. 

A Need for Improved Leadership The 2006 

FHCS indicated that our employees found significant 

deficiencies in the United States Mint’s leadership. 

Typically, about a third of employees negatively rated 

management’s performance in the areas of motivation, 

integrity, communication, fairness and dispute 

resolution. Only about half, 53 percent, of employees 

reported they had trust and confidence in their 

supervisor. To address these weaknesses, the United 

States Mint deployed the Leadership Development 

Program (LDP) in FY 2008 to provide managers with 

the knowledge and confidence they need to more 

effectively lead their employees. 

The initial phase of the LDP required all supervisors, 

managers and executives to attend training sessions 

focused on such management essentials as 

communication, teamwork, conflict resolution and 

human resources and equal employment opportunity 

responsibilities. Since December 2007, 283 supervisors 

have attended the LDP training. Attendees benefited 

from the course materials as well as the opportunity to 

meet and interact with other managers throughout the 

organization. Employee Pulse Check Survey results 

indicated a significant improvement in the percentage of 

employees reporting that their supervisor takes an active 

interest in their training and development since the LDP 

began. Based on the program’s initial success, the 

United States Mint plans to implement a three-phased 

LDP emphasizing interpersonal skills, managing 

The United States Mint strives to 

develop our workforce to ensure 

that each employee has the 

necessary knowledge, skills, and 

attributes to effectively and 

meaningfully contribute to our 

mission. Simultaneously, we are committed to 

providing our employees with a fair and safe workplace. 

Human capital planning has become increasingly critical 

to the United States Mint in recent years because of 

declining employee satisfaction, the loss of key 

personnel to retirement and a changing business 

environment. Concerted action is necessary to address 

these challenges and ensure we are positioned to 

accomplish our mission, now and in the future. 

Employee Satisfaction On a biannual basis, the 

United States Office of Personnel Management 

administers the Federal Human Capital Survey (FHCS) 

to all full-time, permanent employees of the Federal 

Government. The survey measures employees’ 

perceptions regarding how effectively their agency 

manages its workforce. FHCS results are used to 

develop the Best Places to Work in the Federal 

Government rankings. Recently, the United States Mint 

has performed poorly relative to other Federal agencies. 

In rankings based on the 2006 FHCS, the United States 

Mint ranked 200 out of 222 of Federal agencies 

surveyed. We ranked even lower in the subcategories of 

teamwork, effective leadership and support of diversity. 

Declining employee satisfaction affects our overall 

productivity and efficiency. Dissatisfied employees 

typically are less motivated, have higher absentee and 

accident rates and limit themselves to fewer duties. 

The United States Mint uses a quarterly Employee 

Pulse-Check Survey to measure employee satisfaction 

with the workplace. In FY 2007, we added questions to 

the survey based on Best Places to Work in the Federal 

Government drivers and specific FHCS questions 

addressing performance management, leadership and 

diversity. We use the results of the Employee PulseOur Goals: 

Optimal Workforce & Workplace Culture
23 

change, strategic thinking, and organizational 

development. 

An Aging Workforce Nearly half of the current 

United States Mint workforce will be eligible for 

retirement in the next five years. Loss of key personnel 

may affect some of the agency’s most critical 

occupational categories. We are addressing these 

concerns through the Manufacturer Certification and 

Apprenticeship Program (MCAP). The MCAP is an onthe-job training and certification program for wage 

grade employees in the coin and die divisions of our 

Philadelphia and Denver facilities. This program is 

intended to create a highly skilled and flexible 

manufacturing workforce. 

 

As the MCAP progresses, all currently specialized, 

lower grade jobs will be combined into two higher grade 

positions which incorporate all functions necessary to 

produce either coins or dies. For example, all individual 

coining jobs, such as packaging operator, press operator 

and die setter, will be combined into a single coin 

manufacture position. Employees advance gradually 

through the MCAP by completing classroom and onthe-job training in each production skill requirement. 

Employees must demonstrate proficiency in operations 

to achieve certification and advance to the next program 

level. At the top level, employees will be qualified to 

perform any job in the entire coin or die production 

process. Those who successfully complete the program 

will periodically rotate through all positions to ensure 

their competency levels are maintained. 

 

The MCAP will be monitored closely to confirm 

compliance with training and certification requirements. 

The progress of participants will be tracked and periodic 

progress reports generated to comply with senior 

management and United States Department of Labor 

(DOL) requests. Depending on its success in Denver 

and Philadelphia, the MCAP may be expanded to other 

production facilities. 

Preparing for the Future Along with efforts to 

enhance employee satisfaction and leadership, the 

United States Mint is assessing whether we have the 

necessary skills and resources to achieve our mission 

now and in the future. At the end of FY 2008, the 

United States Mint asked supervisors and managers to 

identify the ten critical job-related skills needed for each 

occupation they oversee. Comparing current with 

desired skills will indicate any gaps that should be 

addressed. This initial skills gap assessment will guide 

training and recruiting efforts in upcoming fiscal years. 

Additional assessments will be conducted in future years 

to evaluate our progress in closing any skill gaps. 

The United States Mint also deployed the Treasury 

Learning Management System (TLMS) in FY 2008 to 

assist managers in identifying and obtaining appropriate 

training for their employees. TLMS is a comprehensive 

online training system which will provide employees 

instant access to over 2,000 online courses. Both 

employees and supervisors will be able to use TLMS to 

develop personal training plans to address any skills 

gaps as well as achieve personal training goals. 

Employee Safety In FY 2008, the United States 

Mint struggled to maintain employee safety levels 

achieved in prior years. The recordable incident rate per 

100 full-time workers was 4.10, based on 71 recordable 

injuries and illnesses. The recordable incident rate 

measures the occurrence of incidents meeting DOL 

Occupational Safety and Health Administration (OSHA) 

recordable criteria and indicates our performance in 

ensuring a safe work environment for employees. FY 

2008 is the third consecutive year the rate increased. 

Safety efforts have become more focused on improving 

physical surroundings and conditions than addressing 

unsafe practices which expose employees to risk of 

injury. Despite the overall decline, certain facilities 

have maintained high safety standards. An OSHA team 

audited our Philadelphia plant in FY 2008 and renewed 

the facility’s prestigious Voluntary Protection Programs 

(VPP) Star status for five years. 

The United States Mint implemented a more proactive 

safety improvement plan in mid-FY 2008 to mitigate 

further increases in the accident rate. The plan aimed to 

increase focus on order and housekeeping, foster application of best practices and address the root cause of 

accidents to prevent recurrence. Employees were actively engaged in safety efforts, including employee 

driven safety observations, daily huddles and weekly 

safety topic meetings. Through a concerted effort, the 

United States Mint has made progress in this area. Initial efforts focused on our Denver facility. The Denver 

rate dropped 36.3 percent to 8.05 in the second half of 

FY 2008 compared to 12.63 in the first half of the year. 

Safety will remain an area of focus in FY 2009. 

Recordable Incident Rate per 100 Full-Time Workers

2004 2005 2006 2007 2008 

4.61 

3.42 3.45 

3.84 

4.10 
Current and Future Challenges 

United States Mint plans to work with the FRB to ensure 

the accumulated coins are distributed over time, 

minimizing any potential shock to production. The 

release of six quarters honoring the District of Columbia 

and the United States Territories may delay the potential 

adjustment until FY 2010. 

Higher Circulating Production Costs 

Dramatic increases in the prices of zinc, copper, and 

nickel in recent years have driven up the cost of 

producing circulating coinage. From September 2004 to 

September 2007, the average monthly spot price of base 

metals increased 164 percent for copper, 122 percent for 

nickel and 196 percent for zinc. While metal prices 

declined somewhat in FY 2008, metal continues to make 

up a significant portion of overall production costs, 

eroding seigniorage derived from circulating operations. 

Currently, both the penny and nickel cost more to 

produce than their face value. Minting and issuing these 

coins at a loss reduces the amount of seigniorage 

available for the United States Mint to transfer to the 

Treasury General Fund. 

In 2007, the Department of the Treasury and the 

United States Mint, with the support of the 

Administration, sent a legislative proposal to 

Congress that would authorize the Secretary of the 

Treasury to change the composition of coins to less 

expensive alternative coinage materials. As a result, 

the “Coinage Materials Modernization Act of 

2007” (H.R. 3330 and S. 1986) was introduced. 

The United States Mint continues to promote the 

passage of coinage materials modernization legislation. 

Such legislation would provide for a flexible and 

transparent process to identify potential alternative 

materials to be used in new coinage, research and test 

various materials, and thoroughly review the capital 

investment, available suppliers and production line 

changes necessary for implementation. We believe the 

public input and objective analysis required by this 

process is the most promising approach to achieving a 

permanent solution to addressing the cost of producing 

the Nation’s circulating coins. 

Promoting Robust Circulation of $1 Coins 

While first-year shipments of the Presidential $1 Coins 

to the FRB reached 674 million coins, shipments have 

24 

Achanging operating 

environment is posing new 

challenges and opportunities for 

the United States Mint. Future success 

depends on a variety of factors including increased 

collaboration with the Federal Reserve Banks (FRB); 

flexibility in production of circulating coins; robust 

circulation of the $1 coin; and strategies for mitigating 

the effects of commodity and precious metal markets. 

FRB Inventory Adjustments In January 2008, 

the FRB began to deplete its accumulated inventory of 

lower denomination circulating coins to meet demand. 

From September 2007 to September 2008, the FRB 

reduced its monthly ending inventory of penny, nickel 

and dime coins by 1.1 billion pieces or 20.4 percent. 

This significantly reduced FRB’s need for newly minted 

coinage. The number of penny, nickel and dime coins 

shipped to the FRB fell 34 percent from FY 2007. 

The relative strength of higher denominations lessened 

the impact of the FRB inventory adjustment on overall 

circulating revenue. Sustained demand for newly 

minted 50 State Quarters® Program coins augmented 

quarter shipments which fell but by only seven percent 

from FY 2007. Shipments of $1 coins also fell, but this 

was largely attributable to declining collector demand as 

the Presidential $1 Coin Program entered its second year 

and difficulties emerged in promoting robust circulation 

of the coins. 

The United States Mint expects circulating revenue to 

increase somewhat in upcoming years as low 

denomination inventory levels bottom out and the 

United States economy emerges from the recent 

slowdown. However, an additional FRB inventory 

adjustment is possible as the 50 State Quarters®

Program concludes in FY 2009. Prior to the program 

start in January 1999, the FRB increased its monthly 

ending inventory of quarters 243.9 percent from 841 

million in September 1998 to 2,892 million in 

September 2008. 

A rapid suspension of FRB orders for quarters could 

significantly disrupt circulating coin production. The
25 

steadily declined as the program entered its second year 

and honors lesser known Presidents. Depository 

institutions and retailers consider the Presidential $1 

Coin more a collectible than legal tender for commerce. 

The Presidential $1 Coin Act (Public Law 109-145) 

mandates the United States Mint to identify, analyze and 

overcome barriers to the robust circulation of $1 coins. 

Promoting circulating usage of the coins is also 

important to financial results because $1 coins generate 

a higher return per dollar issued than any other 

denomination. Achieving steady and sustained 

transactional demand for $1 coins is critical to the longterm success of the Presidential $1 Coin Program. 

Volatile Precious Metal Markets Record 

growth and dramatic swings in the prices of gold, silver, 

and platinum on commodity exchanges present unique 

challenges to our bullion and numismatic operations. 

The bullion markets experienced unprecedented growth 

through most of FY 2008 as gold and silver prices rose 

to 20-year highs. Weakness in equity markets and 

declines in the United States dollar against most foreign 

currencies drove investors to commodities as safe 

havens, especially gold and silver. The United States 

Mint is one of the world’s largest producers of gold and 

silver coins. However, production capacity and the 

volume of precious metal blanks our suppliers can 

timely provide constrain the number of bullion products 

the United States Mint can produce and sell. In FY 

2008, we temporarily suspended the sale of certain 

bullion products because inventories were insufficient to 

meet record demand. We also set standard allocation 

and ordering limits so that scarce products would be 

equitably distributed among authorized purchasers. This 

has led to some customer dissatisfaction with our 

operations as well as misunderstanding among the 

investor community and the public. 

Volatile precious metal markets can create untenable 

price differentials between precious metal products and 

the United States Mint’s numismatic products. Intended 

to satisfy collector rather than investor demand, our 

numismatic products are made of various compositions 

of precious metals and are priced prior to sale. Each 

product is priced based on production costs and the 

prevailing market price of gold, silver or platinum. 

When current precious metal prices diverge significantly 

from the original purchase, investors will begin 

purchasing numismatic coins to take advantage of the 

differential between the product and the market price. 

In FY 2008, because of upward trends in precious metal 

markets, the United States Mint temporarily suspended 

sale of certain numismatic products to adjust the sale 

price to be more in line with the prevailing market price. 

Suspending sales and re-pricing products negatively 

affects overall sales and customer satisfaction. 

We are currently developing a new pricing model to 

prevent any future suspension of numismatic product 

sales. The model will be transparent to our customers 

and match our precious metal buying strategy to 

numismatic product selling patterns.
Strong financial management remains a key strategic 

focus for the United States Mint. As previously 

reported, we identified one material weakness in FY 

2007 resulting from the conversion of our automated 

financial system from internal to third party 

management. This significant change required the 

United States Mint to implement revised controls and 

reporting processes for financial reporting and inventory 

management. We closed out all FY 2007 corrective 

actions by January 30, 2008. 

To ensure no further deficiencies, the United States Mint 

conducted a full-scope A-123 program review during 

FY 2008 for financial reporting under OMB Circular A123 “Management’s Responsibility for Internal Control” 

guidelines. Additionally, we performed a more detailed 

review of inventory management. Based on the results 

as of June 30, 2008, the United States Mint identified a 

single material weakness resulting from internal control 

failures related to the financial statement line item 

Inventory and Related Property. Planned corrective 

actions and target dates were developed for each internal 

control failure. We have made substantial 

improvements in our processes and anticipate closing 

out all FY 2008 corrective actions by November 15, 

2008. 

The United States Mint prepared its financial statements 

in compliance with accounting standards issued by the 

Federal Accounting Standards Advisory Board 

(FASAB). The FASAB is designated by the American 

Institute of Certified Public Accountants as the standardsetting body for the financial statements of Federal 

government entities, with respect to the establishment of 

United States Generally Accepted Accounting 

Principles. 

We closed FY 2008 continuing to provide the American 

people high quality products and good financial results 

given our current operating environment. We are 

committed to presenting our results in a complete and 

understandable manner to our stakeholders, the 

American public. We hope you find the new annual 

report format useful and transparent. We look forward 

to maintaining our 216 year-old tradition of service to 

the American public and our collectors in FY 2009. 

Sincerely, 

 

 

Patricia M. Greiner 

Chief Financial Officer 

Patricia M. Greiner 

United States Mint Chief Financial Officer 

26 

Message from the 

Chief Financial Officer:

I am pleased to present the United 

States Mint’s financial statements 

as an integral part of the FY 2008 

Annual Report. As an organization, our 

priority is to report accurate financial data while 

objectively and steadily executing our fiscal 

responsibilities to the American people. For FY 2008, 

our independent auditors rendered an unqualified 

opinion. The United States Mint remains committed to 

accountability and integrity in our financial and 

management responsibilities. 

The United States Mint faced a challenging year in FY 

2008. Shipments of circulating coins fell significantly 

because of lower economic activity and adjustments in 

the Federal Reserve Banks’ inventory levels. 

Unprecedented demand for precious metals strained our 

ability to procure the materials necessary to 

continuously supply bullion coins. We are proud to 

report that, even with these challenges, the United States 

Mint transferred $750 million to the Treasury General 

Fund as a result of our FY 2008 operations. 
Circulating Coinage 

The primary mission of the United States Mint is to 

enable commerce by minting and issuing circulating 

coinage to meet the needs of the United States. Coins 

are shipped to the Federal Reserve Banks (FRB) as 

needed to replenish inventory and fulfill commercial 

demand. Revenue from the sale of circulating coins is 

recognized when coins are shipped to the FRB. 

Earned revenue from circulating coinage equals the 

gross costs (metal, manufacturing, and transportation) 

incurred to make and distribute the coins. Seigniorage 

represents the difference between the cost to make the 

coin and the face value received from the FRB. 

Seigniorage is considered an “other financing source” in 

the financial statements. It adds to the Federal 

Government’s cash balance, but unlike the payment of 

taxes or other receipts, seigniorage does not involve a 

transfer of financial assets from the public. Instead, it 

arises from the exercise of the Federal Government’s 

sovereign power to create money and the public’s desire 

to hold financial assets in the form of coins. The 

President’s Budget excludes seigniorage from receipts 

and treats it as a means of financing the national debt. 

Circulating Shipments & Seigniorage 

Total circulating coins shipped to the FRB decreased 

nearly 28.9 percent from 14,021 million pieces in FY 

2007 to 9,974 million pieces in FY 2008. The total 

dollar value of circulating shipments to the FRB 

decreased to $1,294.5 million from $1,727.8 million last 

year. 

The slowing economy was the main reason for declining 

circulating shipments in FY 2008. Demand for 

2008 2007 2006 2005 2004 

Value of Shipments $ 1,294.5 $ 1,727.8 $ 1,271.9 $ 1,144.8 $ 993.5 

Gross Cost $ 588.3 $ 722.6 $ 603.4 $ 445.4 $ 395.8 

Cost of Goods Sold $ 491.3 $ 629.1 $ 508.8 $ 359.5 $ 306.9 

SG&A $ 97.0 $ 93.5 $ 94.6 $ 85.9 $ 88.9 

Seigniorage $ 706.2 $ 1,005.2 $ 668.5 $ 699.4 $ 597.7 

Seigniorage per $1 Issued $ 0.55 $ 0.58 $ 0.53 $ 0.61 $ 0.60 

Circulating (Dollars in millions except Seigniorage per $1 Issued) 

% Change 

2007 to 2008 

(25.1%) 

(18.6%) 

(21.9%) 

3.7% 

(29.7%) 

27 

circulating coins fell as retail activity weakened. 

Compounding the impact of the economic slowdown, in 

January 2008, the FRB began drawing down inventory 

levels system-wide. By using inventory of lower 

denominations to meet transactional demand, the FRB 

largely reduced its need for newly minted coins. 

Shipments of higher denominations fell to a lesser extent 

because of continued collector interest in rotating coin 

designs. The relative strength of higher denominations 

boosted the total dollar value of shipments in FY 2008. 

While the total quantity of coins shipped was cut in half 

from past fiscal years, higher denominations made up a 

growing portion of total coins shipped. Consequently, 

the value of shipments did not fall as significantly and 

remained consistent with fiscal years prior to FY 2007. 

Weakened demand reduced both the gross cost and 

seigniorage from circulating operations. While 

circulating gross costs fell to $588.3 million from 

$722.6 million in FY 2007, gross costs made up a larger 

2008 Operating Results: 

Circulating 

Circulating Dollar Value of Shipments & Seigniorage 

(Dollars in millions) 

2004 2005 2006 2007 2008 

Seigniorage 

Value of Shipments 

$993.5 

$1,144.8 

$1,271.9 

$1,727.8 

$1,294.5 

$597.7 

$699.4 $668.5 

$1,005.2 

$706.2 
proportion of the overall face value of coins shipped. 

Seigniorage decreased nearly 29.7 percent to $706.2 

million from $1,005.2 million last year. Lower 

production volumes and higher dollar coin production 

costs offset the benefit of lower base metal prices on 

per-unit costs and resulted in lower seigniorage per 

dollar issued in FY 2008. Seigniorage per dollar issued 

fell slightly to $0.55 in FY 2008 from $0.58 in FY 2007. 

Shipments by Denomination 

Reduced demand for newly minted circulating coins was 

most evident for lower denominations. Shipments of 

penny, nickel and dime coins fell 25.6 percent, 49.8 

percent and 52.4 percent, respectively, from FY 2007. 

Continued demand for newly minted 50 State Quarters®

Program coins augmented shipments of quarter-dollar 

coins which fell by only 7.4 percent from FY 2007. 

While shipments of $1 coins decreased 31.2 percent, this 

was largely attributable to declining collector demand as 

the Presidential $1 Coin Program entered its second year 

and difficulties continued with promoting robust 

circulation of the coins. 

The significant decline in shipments of lower 

denominations resulted from both the economic 

slowdown and adjustments the FRB made to inventory 

levels. Compared with the FRB monthly ending 

inventory in September 2007, the FRB stock of pennies 

fell 19.8 percent. The inventory of nickels declined 13.0 

percent, and the stock of dimes fell 25.1 percent. In 

contrast, the FRB monthly ending inventory of quarters 

increased 34.4 percent and the stock of $1 coins grew 

80.0 percent over the same period. 

Circulating Coinage Costs 

Steady increases in the prices of copper, nickel and zinc 

have driven up the cost of producing circulating coinage 

over the last few years. The average daily spot price for 

the month of September increased 164.2 percent for 

copper, 122.5 percent for nickel and 195.5 percent for 

zinc between 2004 and 2007. Over that time, metal 

made up a growing portion of overall production costs 

and reduced the seigniorage generated from circulating 

operations. In FY 2008, however, the market price of 

nickel and zinc fell from FY 2007 peaks. The price of 

copper began to decline at the close of the fiscal year. 

The average daily spot price for the month of September 

decreased 8.6 percent for copper, 39.8 percent for nickel 

and 39.8 percent for zinc between 2007 and 2008. 

Despite the recent decline in base metal prices, gross 

cost actually increased relative to the overall face value 

of coins shipped. Various factors offset the benefit of 

lower metal prices and resulted in lower seigniorage per 

28 

Unit Cost by Denomination

One-cent Five-cent Dime Quarter-Dollar $1 

$0.00 

$0.05 

$0.10 

$0.15 

$0.20 

$0.25 

$0.30 

FY 2006 FY 2007 FY 2008 

Seigniorage per $1 Issued by Denomination

One-cent Five-cent Dime Quarter-Dollar $1 

($1.00) 

($0.75) 

($0.50) 

($0.25) 

$0.00 

$0.25 

$0.50 

$0.75 

$1.00 

FY 2008 Federal Reserve Banks Monthly Ending Inventory for Lower Denominations 

(Pieces in millions)

Sep-07 Jan-08 M ay-08 Sep-08 Sep-07 Jan-08 M ay-08 Sep-08 Sep-07 Jan-08 M ay-08 Sep-08

One-Cent 

0 

500 

1,000 

1,500 

2,000 

2,500 

3,000 

Five-Cent 

0 

200 

400 

600 

800 

1,000 

Dime 

0 

300 

600 

900 

1,200 

1,500 

1,800 
dollar issued in FY 2008. When production volumes 

decline because of lower demand, fixed production costs 

are spread over fewer units. This offsets any per-unit 

gains from lower base metal costs. For example, the 

per-unit metal cost of a nickel fell about $0.0154 from 

$0.0815 in FY 2007 to $0.0661 in FY 2008. However, 

the per-unit fixed production costs increased $0.0082, 

resulting in only a small decline in the nickel overall 

unit cost. Similarly, the penny unit cost fell slightly 

from FY 2007 because higher per-unit vendor 

fabrication costs offset lower per-unit metal costs. The 

unit costs for dime and quarter denominations increased 

in FY 2008 because of higher per-unit fixed production 

costs.

While declining from last year, the unit cost for penny 

and nickel denominations remained above face value for 

the third consecutive fiscal year. Lower demand did 

reduce the overall loss the United States Mint incurred 

from producing these denominations. Penny and nickel 

coins were produced at a loss of $47.0 million, down 

from the FY 2007 loss of about $98.6 million. 

Gross cost also increased relative to the value of 

shipments from last year because of higher $1 coin 

metal costs. The United States Mint maintained an 

inventory of excess $1 coin strip since the initial 

Sacagawea Golden Dollar coin production in calendar 

years 2000 and 2001. This strip, purchased at a cost 

much lower than FY 2007 prices, was used to produce 

the initial Presidential $1 Coin release. Because the 

value of metal inventory is not reported as cost of goods 

sold (COGS) until coins are shipped to the FRB, the cost 

to produce coins with the older strip was lower than 

what it would have been had new strip been purchased 

at prevailing prices. FY 2008 was the first year new 

strip had to be acquired for all $1 coin production. This 

increased the per-unit metal costs by about $0.0384 from 

$0.0281 in FY 2007 to $0.0665 in FY 2008. Higher 

metal cost, combined with higher fixed production costs, 

increased the overall $1 coin unit costs 67.9 percent 

from $0.1573 in FY 2007 to $0.2641 in FY 2008. 

Base Metal Daily Official Spot Price 

(Prices in dollars per pound)

FY 2008 Shipments to Federal Reserve Banks, Cost and Seigniorage by Denomination 

(Coins and dollars in millions except seigniorage per $1 issued)

One-Cent Five-Cent Dime QuarterDollar 

HalfDollar $1 Mutilated 

& Other Total 

Coins Shipped to the FRB 5,272 647 1,070 2,510 — 475 — 9,974 

Dollar Value of Shipments $ 52.7 $ 32.3 $ 107.1 $ 627.6 $ — $ 474.8 $ — $1,294.5 

Gross Cost $ 74.9 $ 57.1 $ 46.6 $ 273.5 $ — $ 125.4 $ 10.8 $ 588.3 

Cost of Goods Sold $ 74.7 $ 57.1 $ 40.3 $ 235.2 $ — $ 73.2 $ 10.8 $ 491.3 

SG&A $ 0.2 $ — $ 6.3 $ 38.3 $ — $ 52.2 $ — $ 97.0 

Seigniorage $ (22.2) $ (24.8) $ 60.5 $ 354.1 $ — $ 349.4 $ (10.8) $ 706.2 

Seigniorage per $1 Issued $ (0.42) $ (0.77) $ 0.56 $ 0.56 $ — $ 0.74 $ — $ 0.55 

29 

Sep-04 Sep-05 Sep-06 Sep-07 Sep-08 Sep-04 Sep-05 Sep-06 Sep-07 Sep-08 Sep-04 Sep-05 Sep-06 Sep-07 Sep-08

Copper 

$0.00 

$1.00 

$2.00 

$3.00 

$4.00 

$5.00 

Nickel 

$0.00 

$10.00 

$15.00 

$20.00 

$25.00 

$30.00 

$5.00 

Zinc 

$0.00 

$0.50 

$1.00 

$1.50 

$2.00 

$2.50 
FY 2007 Shipments to Federal Reserve Banks, Cost and Seigniorage by Denomination 

(Coins and dollars in millions except seigniorage per $1 issued)

One-Cent Five-Cent Dime QuarterDollar 

HalfDollar $1 Mutilated 

& Other Total 

Coins Shipped to the FRB 7,084 1,289 2,247 2,711 — 690 — 14,021 

Dollar Value of Shipments $ 78.1 $ 64.4 $ 224.8 $ 677.8 $ — $ 682.7 $ — $ 1,727.8 

Gross Cost $ 118.2 $ 122.9 $ 92.1 $ 265.3 $ — $ 108.5 $ 15.6 $ 722.6 

Cost of Goods Sold $ 118.2 $ 122.9 $ 81.2 $ 231.3 $ — $ 59.9 $ 15.6 $ 629.1 

SG&A $ — $ — $ 10.9 $ 34.0 $ — $ 48.6 $ — $ 93.5 

Seigniorage $ (40.1) $ (58.5) $ 132.7 $ 412.5 $ — $ 574.2 $ (15.6) $ 1,005.2 

Seigniorage per $1 Issued $ (0.51) $ (0.91) $ 0.59 $ 0.61 $ — $ 0.84 $ — $ 0.58 

FY 2006 Shipments to Federal Reserve Banks, Cost and Seigniorage by Denomination 

(Coins and dollars in millions except seigniorage per $1 issued)

One-Cent Five-Cent Dime QuarterDollar 

HalfDollar $1 Mutilated 

& Other Total 

Shipments to the FRB 8,553 1,461 3,023 3,007 2 60 — 16,106 

Dollar Value of Shipments $ 85.0 $ 72.6 $ 301.9 $ 751.1 $ 1.0 $ 60.3 $ — $ 1,271.9 

Gross Cost $ 103.3 $ 87.2 $ 114.4 $ 272.7 $ 0.4 $ 9.7 $ 15.7 $ 603.4 

Cost of Goods Sold $ 103.3 $ 87.1 $ 89.9 $ 209.4 $ 0.4 $ 3.0 $ 15.7 $ 508.8 

SG&A $ — $ 0.1 $ 24.5 $ 63.3 $ — $ 6.7 $ — $ 94.6 

Seigniorage $ (18.3) $ (14.6) $ 187.5 $ 478.4 $ 0.6 $ 50.6 $ (15.7) $ 668.5 

Seigniorage per $1 Issued $ (0.22) $ (0.20) $ 0.62 $ 0.64 $ 0.60 $ 0.84 $ — $ 0.53 

Unit Cost of Producing and Distributing Coins by Denomination

FY 2008 One-Cent Five-Cent Dime QuarterDollar Half-Dollar $1 

Cost of Goods Sold $ 0.0139 $ 0.0877 $ 0.0371 $ 0.0925 $ — $ 0.1517 

SG&A $ — $ — $ 0.0059 $ 0.0153 $ — $ 0.1098 

Distribution to FRB $ 0.0003 $ 0.0006 $ 0.0006 $ 0.0012 $ — $ 0.0026 

Total Expenses $ 0.0142 $ 0.0883 $ 0.0436 $ 0.1090 $ — $ 0.2641 

FY 2007 One-Cent Five-Cent Dime QuarterDollar Half-Dollar $1 

Cost of Goods Sold $ 0.0165 $ 0.0949 $ 0.0357 $ 0.0841 $ — $ 0.0835 

SG&A $ — $ — $ 0.0048 $ 0.0125 $ — $ 0.0705 

Distribution to FRB $ 0.0002 $ 0.0004 $ 0.0004 $ 0.0012 $ — $ 0.0033 

Total Expenses $ 0.0167 $ 0.0953 $ 0.0409 $ 0.0978 $ — $ 0.1573 

FY 2006 One-Cent Five-Cent Dime QuarterDollar Half-Dollar $1 

Cost of Goods Sold $ 0.0119 $ 0.0592 $ 0.0294 $ 0.0681 $ 0.1729 $ 0.0495 

SG&A $ — $ 0.0001 $ 0.0081 $ 0.0211 $ — $ 0.1092 

Distribution to FRB $ 0.0002 $ 0.0004 $ 0.0003 $ 0.0015 $ 0.0020 $ 0.0008 

Total Expenses $ 0.0121 $ 0.0597 $ 0.0378 $ 0.0907 $ 0.1749 $ 0.1595 

30
31 

2008 Operating Results: 

Numismatic 

2008 2007 2006 2005 2004 

Sales Revenue $ 557.2 $ 551.5 $ 514.9 $ 355.4 $ 341.2 

Gross Cost $ 474.8 $ 475.6 $ 427.7 $ 258.9 $ 253.3 

Cost of Goods Sold $ 388.1 $ 396.7 $ 346.2 $ 180.1 $ 180.2 

SG&A $ 86.7 $ 78.9 $ 81.5 $ 78.8 $ 73.1 

Net Income & Seigniorage $ 82.4 $ 75.9 $ 87.2 $ 96.5 $ 87.9 

Numismatic Net Margin 14.8% 13.8% 16.9% 27.2% 25.8% 

Seigniorage Portion $ 22.5 $ 27.1 $ 13.9 $ 23.3 $ 46.4 

Numismatic (Dollars in millions) 

% Change 

2007 to 2008 

1.0% 

(0.2%) 

(2.2%) 

9.9% 

8.6% 

(17.0%) 

2004 2005 2006 2007 2008 

$341.2 $355.4 

$514.9 

$551.5 $557.2 Net Income and Seigniorage 

Sales Revenue 

$87.9 $96.5 $87.2 $75.9 $82.4 

Numismatic Sales Revenue, Net Income & Seigniorage 

(Dollars in millions) Numismatic Products 

The United States Mint prepares and distributes a 

variety of numismatic products directly to the public. 

For some numismatic products, authorizing legislation 

specifies program requirements, such as design theme, 

mintage level and the duration of product availability. 

Other programs are structured by law to grant the 

Secretary of the Treasury discretion in determining 

product specifications. The value of sales of numismatic 

products is considered earned revenue in the financial 

statements. The net return from numismatic operations 

is calculated by subtracting the program’s gross costs 

from sales revenue. A main objective of numismatic 

operations is to keep the sale price of products as low as 

practicable for customers. The program is managed to a 

15 percent net margin overall to ensure sale prices are as 

low as practicable and returns are sufficient to fund 

numismatic operating costs. 

The United States Mint sells certain circulating coins 

through numismatic channels. Earned revenue (gross 

costs) from numismatic sales of circulating coins is 

recognized in the same way as circulating sales to the 

FRB. Seigniorage from the numismatic sale of 

circulating coins is not available to the United States 

Mint as spending authority, but is transferred to the 

Treasury General Fund as off-budget receipts. 

Sales Revenue, Net Income & Seigniorage 

In FY 2008, numismatic sales revenue plus earned 

revenue from the sale of circulating coins increased 

slightly to $557.2 million from $551.5 million last year. 

The enactment of legislation authorizing the 50 State 

Quarters®, Presidential $1 Coin and First Spouse Gold 

Bullion Coin Programs has allowed the United States 

Mint to expand product lines and attract new customers 

in recent years. Strong sales of recurring program 

products drove most of the steady state growth in FY 

2008. 

Numismatics gross costs fell slightly to $474.8 million 

from $475.6 million in FY 2007 because rising sales, 

general and administrative (SG&A) expenses were 

offset by declining COGS. As circulating revenue 

decreased, numismatic program revenue made up a 

larger portion of the United States Mint total revenue in 

FY 2008. Consequently, a larger portion of the United 

States Mint total SG&A cost was allocated to the 

numismatic program. SG&A expenses grew 9.9 percent 

from FY 2007, but the increase was offset by a 2.2 

percent decline in COGS. 

Net income and seigniorage increased 8.6 percent to 

$82.4 million in FY 2008 from $75.9 million last year. 
32 

A higher net return from the sale of American Buffalo 

and Recurring Products accounted for most of the 

overall increase. The numismatic program was 

managed to just below the standard net margin of 15 

percent. The numismatic net margin increased to 14.8 

percent in FY 2008 from 13.8 percent in FY 2007. 

Results by Product Program 

American Eagle Program American Eagle gold, silver 

and platinum coins are offered in proof and uncirculated 

quality as part of the numismatic program. Revenue 

from the sale of American Eagle products fell 24.6 

percent to $166.0 million in FY 2008 from $220.1 

million in FY 2007. American Eagle Program revenue 

peaked in FY 2007 because of high overall demand for 

precious metals as well as the release of new 

uncirculated products. As precious metal market prices 

increased, sales were augmented by certain customers 

purchasing American Eagle products, traditionally 

intended for coin collectors, for investment purposes. 

While precious metal market prices continued to 

increase for most of FY 2008, revenue from the sale of 

American Eagle products declined. The United States 

Mint had to suspend the sale of certain products in FY 

2008, which limited American Eagle program revenue. 

The sale of American Eagle platinum proof and 

uncirculated products was suspended multiple times in 

FY 2008 to allow for re-pricing. Through the fiscal 

year, the market price of platinum steadily increased, 

held around $2,000 per troy ounce, and declined back to 

FY 2007 levels. Sales suspensions were necessary to 

adjust platinum product prices and prevent prices from 

diverging significantly from the variable market price. 

Declining sales of top revenue generating products, 

especially the American Eagle gold proof and 

uncirculated four-coin set, also reduced the program’s 

total revenue. Total net unit sales of these two sets alone 

decreased 59.7 percent in FY 2008, and sales revenue 

from the sets was down $31.3 million from last year. 

Despite declining sales of many products, American 

Eagle program net income fell only slightly from $29.6 

million in FY 2007 to $28.6 million in FY 2008 as 

COGS made up a smaller portion of revenue. 

American Buffalo Program Initial demand for the first 

American Buffalo product, the 24-karat gold proof coin, 

generated significant sales revenue in FY 2006. 

Revenue declined in the program’s second year but 

increased somewhat in FY 2008 as sales of new 

products offset declining demand for the original gold 

proof coin. The United States Mint introduced several 

new products in the 24-karat gold American Buffalo 

product line in FY 2008. The American Buffalo 2008 

Celebration Coin, a 24-karat one-ounce gold coin, was 

introduced in February. Fractional half-ounce, quarterounce and tenth-ounce weights of American Buffalo 

Gold Proof and Uncirculated Coins were introduced in 

July. New product sales contributed to a 31.6 percent 

increase in American Buffalo Program revenue from 

$59.9 million in FY 2007 to $78.8 million in FY 2008. 

Net income increased to $7.5 million from $5.6 million 

last year.

Commemorative Coin Programs Revenue from the 

sale of commemorative coins, less surcharges paid to 

recipient organizations, fell to $37.3 million in FY 2008 

from $45.6 million in FY 2007. Only one 

commemorative product, authorized by Congress, was 

introduced in January 2008. The Bald Eagle 

Commemorative Coin Program generated $32.1 million 

in revenue and $6.9 million in surcharges for the 

recipient organization. FY 2008 figures also include 

results from the sale of the Little Rock Central High 

School Commemorative Coin and the Jamestown 400th 

Anniversary Commemorative Coin, released in calendar 

year 2007. 

Recurring Programs Recurring programs include high 

quality, specially presented products based on the 

Nation’s circulating coinage. These products include 

Proof Sets, Uncirculated Sets, Quarter Sets, and 

Presidential $1 Coin Sets. Revenue from recurring 

programs increased 29.3 percent to $245.5 million in FY 

2008 from $189.8 million in FY 2007. Higher sales of 

Sales Revenue by Numismatic Product Program (Dollars in millions)

American 

Eagle 

American 

Buffalo 

Commemoratives Recurring Sale of 

Circulating 

$0 

$50 

$100 

$150 

$200 

$250 

$300 

FY 2006 FY 2007 FY 2008 

FY 2008 Numismatic Sales Revenue by Product Program

Recurring 

44.1% 

American Eagle 

29.8% 

American Buffalo 

14.1% 

Commemoratives 

6.7% 

Sale of Circulating 

5.3% 
FY 2008 Numismatic Revenue, Cost and Net Income or Seigniorage by Program (Dollars in millions)

American 

Eagle 

American 

Buffalo 

Commemoratives Recurring 

Numismatic 

Sale of 

Circulating 

Total 

Sales Revenue $ 166.0 $ 78.8 $ 37.3 $ 245.5 $ 29.6 $ 557.2 

Gross Cost $ 137.4 $ 71.3 $ 32.9 $ 226.1 $ 7.1 $ 474.8 

Cost of Goods Sold $ 117.1 $ 64.8 $ 27.6 $ 174.8 $ 3.8 $ 388.1 

SG&A $ 20.3 $ 6.5 $ 5.3 $ 51.3 $ 3.3 $ 86.7 

Net Income/Seigniorage $ 28.6 $ 7.5 $ 4.4 $ 19.4 $ 22.5 $ 82.4 

Numismatic Net Margin 17.2% 9.5% 11.8% 7.9% 76.0% 14.8% 

FY 2007 Numismatic Revenue, Cost and Net Income or Seigniorage by Program (Dollars in millions)

American 

Eagle 

American 

Buffalo 

Commemoratives Recurring 

Numismatic 

Sale of 

Circulating 

Total 

Sales Revenue $ 220.1 $ 59.9 $ 45.6 $ 189.8 $ 36.1 $ 551.5 

Gross Cost $ 190.5 $ 54.3 $ 40.3 $ 181.5 $ 9.0 $ 475.6 

Cost of Goods Sold $ 171.0 $ 50.3 $ 35.8 $ 134.6 $ 5.0 $ 396.7 

SG&A $ 19.5 $ 4.0 $ 4.5 $ 46.9 $ 4.0 $ 78.9 

Net Income/Seigniorage $ 29.6 $ 5.6 $ 5.3 $ 8.3 $ 27.1 $ 75.9 

Numismatic Net Margin 13.4% 9.3% 11.6% 4.4% 75.1% 13.8% 

FY 2006 Numismatic Revenue, Cost and Net Income or Seigniorage by Program (Dollars in millions)

American 

Eagle 

American 

Buffalo 

Commemoratives Recurring 

Numismatic 

Sale of 

Circulating 

Total 

Sales Revenue $ 117.5 $ 166.7 $ 24.9 $ 181.4 $ 24.4 $ 514.9 

Gross Cost $ 100.0 $ 150.8 $ 20.1 $ 146.3 $ 10.5 $ 427.7 

Cost of Goods Sold $ 84.3 $ 137.3 $ 14.7 $ 101.5 $ 8.4 $ 346.2 

SG&A $ 15.7 $ 13.5 $ 5.4 $ 44.8 $ 2.1 $ 81.5 

Net Income/Seigniorage $ 17.5 $ 15.9 $ 4.8 $ 35.1 $ 13.9 $ 87.2 

Numismatic Net Margin 14.9% 9.5% 19.3% 19.3% 57.0% 16.9% 

33

2007 and 2008 Proof and Uncirculated Sets augmented 

FY 2008 revenue. Sales of new Presidential $1 Coin 

and Annual Dollar Coin Uncirculated Sets, released at 

the end of the 2007 calendar year, also boosted recurring 

revenue. Net income increased 133.7 percent from $8.3 

million in FY 2007 to $19.4 million in FY 2008. 

Numismatic Sales of Circulating Coinage 

Introduction of the 50 State Quarters® and Presidential 

$1 Coin Programs increased collector demand for newly 

minted circulating coins. The United States Mint 

typically sells circulating coins in bags and rolls directly 

to the public. Sales revenue equals the face value of the 

coins sold. Any additional revenue above the face value 

or production costs (whichever is higher) and any 

additional expenses incurred are included in recurring 

programs results. The total face value from the sale of 

circulating coinage fell 18.0 percent to $29.6 million in 

FY 2008 from $36.1 million in FY 2007. Seigniorage 

decreased to $22.5 million in FY 2008 from $27.1 

million last year. 
34 

coins, respectively. Efficient use of production capacity 

allowed the United States Mint to achieve such 

unprecedented production volumes without incurring 

additional operating costs. 

While gross cost increased 164.8 percent from FY 2007 

as market prices peaked, COGS made up a smaller 

portion of total sales revenue. As with the numismatic 

program, bullion program revenue made up a larger 

portion of the United States Mint total revenue in FY 

2008. Consequently, a greater portion of general and 

administrative expense was allocated to the bullion 

program. SG&A cost did increase significantly from FY 

2007, but made up only a small portion of total gross 

cost. 

Net income rose to $17.8 million in FY 2008 from $4.5 

million in FY 2007. The bullion program was 

successfully managed to just below the standard net 

margin of 2 percent. 

2008 2007 2006 2005 2004

Sales Revenue $ 948.8 $ 356.1 $ 536.6 $ 270.7 $ 315.7 

Gross Cost $ 931.0 $ 351.6 $ 524.4 $ 265.2 $ 313.1 

Cost of Goods Sold $ 922.6 $ 350.0 $ 523.0 $ 264.4 $ 312.5 

SG&A $ 8.4 $ 1.6 $ 1.4 $ 0.8 $ 0.6 

Net Income $ 17.8 $ 4.5 $ 12.2 $ 5.5 $ 2.6 

Bullion Net Margin 1.9% 1.3% 2.3% 2.0% 0.8% 

Bullion (Dollars in millions) 

% Change 

2007 to 2008 

166.4% 

164.8%

163.6% 

425.0% 

295.6% 

2008 Operating Results: 

Bullion 

Bullion Sales Revenue and Net Income 

(Dollars in millions) 

$315.7 

$270.7 

$536.6 

$356.1 

$948.8 

$2.6 $5.5 $12.2 $17.8 $4.5 

2004 2005 2006 2007 2008 

Net Income 

Sales Revenue 

Bullion Products 

The United States Mint manufactures and issues gold, 

silver and platinum bullion coins through American 

Eagle Bullion Coin and American Buffalo Bullion Coin 

Programs. These coins are typically purchased by 

investors seeking a simple, tangible means of owning 

precious metals. The United States Mint sells bullion 

coins to authorized purchasers, which include precious 

metal and coin dealers, brokerage companies and 

participating banks. Authorized purchasers agree to 

maintain an open, two-way market for these coins, 

assuring their liquidity. This ensures that the public can 

purchase coins from and sell coins to authorized 

purchasers at the prevailing market price, adjusting for 

any premium the authorized purchaser applies. 

The United States Mint purchases precious metal on the 

open market at the time of an order. Coins are sold to 

authorized purchasers at the same market price paid for 

the metal plus a premium to cover bullion program 

operating costs. The purpose of the bullion programs is 

to make precious metal coins available at minimal cost 

to investors. Consequently, the program is managed to 

nominal net margin. 

Bullion Sales Revenue & Net Income 

The bullion markets experienced unprecedented growth 

through most of FY 2008 with gold and silver prices 

reaching 20-year highs. As the value of metals 

increased, soaring demand for United States Mint 

bullion products generated record sales revenue. Total 

bullion revenue increased 166.4 percent from $356.1 

million in FY 2007 to $948.8 million in FY 2008. From 

last year, the United States Mint sold 200.0 percent and 

122.8 percent more ounces of gold and silver bullion
Results by Product Program 

Sales of American Eagle gold and silver bullion 

products drove most of the revenue growth in FY 2008. 

American Eagle 22-karat gold bullion sales revenue 

increased 307.6 percent to $449.6 million from $110.3 

million in FY 2007. American Eagle silver bullion sales 

revenue rose 178.0 percent to $306.4 million from 

$110.2 million last year. Revenue from the sales of 

these two products alone made up 79.7 percent of total 

bullion sales revenue in FY 2008. Net income from 

both American Eagle gold and silver bullion coins 

increased in FY 2008 as COGS made up a smaller 

portion of revenue. American Eagle gold net income 

increased from $1.2 million in FY 2007 to $10.2 million 

in FY 2008. American Eagle silver net income rose to 

$5.0 from $1.2 million last year.

Sales of American Buffalo 24-karat gold and American 

Eagle platinum bullion coins increased in FY 2008, but 

not to the same extent as the American Eagle gold and 

silver coins. American Buffalo 24-karat gold bullion 

sales revenue increased 45.0 percent to $170.4 million 

from $117.5 million in FY 2007. American Buffalo 

gold net income remained at $1.7 million. American 

Eagle platinum sales increased 23.8 percent to $22.4 

million from $18.1 million in FY 2007. Net income for 

American Eagle platinum coins grew from $0.4 million 

to $0.9 million. 

Precious Metal Markets & Supply

Constraints 

The bullion markets experienced unprecedented growth 

through most of FY 2008. The average daily spot price 

for the month of September increased 104.8 percent for 

gold, 93.7 percent for silver and 44.3 percent for 

platinum between 2004 and 2008(a). Daily spot prices 

appeared to have peaked in the middle of FY 2008. 

However, concerns over the stability of financial 

markets at the close of FY 2008 drove investors back to 

commodities, especially gold, as potential safe havens. 

 

Production capacity and the volume of precious metal 

blanks our suppliers can timely provide limit the number 

of bullion products the United States Mint can produce 

and sell. In FY 2008, the United States Mint 

temporarily suspended the sale of certain bullion 

products because inventories were insufficient to meet 

unprecedented demand. American Eagle silver bullion 

sales were initially suspended in February 2008. Sales 

resumed at the beginning of March but were quickly 

suspended again. To ensure equitable distribution of 

available inventory, the United States Mint initiated an 

allocation program for American Eagle silver bullion in 

April 2008. The United States Mint suspended sales of 

American Eagle gold bullion in August 2008, but sales 

were quickly resumed under a similar allocation 

program. Sales of the American Buffalo gold coin were 

also temporarily halted at the end of August 2008. The 

United States Mint resumed sales under an allocation 

program at the start of FY 2009. 

35

(a) London Bullion Market Association London PM spot price for gold and platinum and spot price for silver. 

Sales Revenue by Bullion Product Program (Dollars in millions)

American 

Eagle Silver 

American 

Eagle Platinum 

American 

Buffalo Gold 

American 

Eagle Gold 

FY 2006 FY 2007 FY 2008 

$0 

$50 

$100 

$150 

$200 

$250 

$300 

$350 

$400 

$450 

$500 

FY 2008 Bullion Sales Revenue by Product Program

American Eagle 

Platinum 

2.4% 

American 

Buffalo Gold 

17.9% 

American Eagle Gold 

47.4% 

American Eagle Silver 

32.3% 

Precious Metal Daily Spot Price(a) (Prices in dollars per troy ounce)

Sep-04 Sep-05 Sep-06 Sep-07 Sep-08 Sep-04 Sep-05 Sep-06 Sep-07 Sep-08 Sep-04 Sep-05 Sep-06 Sep-07 Sep-08

Gold 

$200 

$400 

$600 

$800 

$1,000 

$1,200 

$0 

Silver 

$5 

$10 

$15 

$20 

$25 

$0 

Platinum 

$500 

$1,000 

$1,500 

$2,000 

$2,500 

$0 
36 

FY 2008 Bullion Revenue, Cost and Net Income by Program (Dollar in millions)

American Eagle 

Gold 

American Eagle 

Silver

American Eagle 

Platinum 

American Buffalo 

Gold Total 

Sales Revenue $ 449.6 $ 306.4 $ 22.4 $ 170.4 $ 948.8

Gross Cost $ 439.4 $ 301.4 $ 21.5 $ 168.7 $ 931.0 

Cost of Goods Sold $ 435.3 $ 299.3 $ 21.2 $ 166.8 $ 922.6

SG&A $ 4.1 $ 2.1 $ 0.3 $ 1.9 $ 8.4

Net Income $ 10.2 $ 5.0 $ 0.9 $ 1.7 $ 17.8

Bullion Net Margin 2.3% 1.6% 4.0% 1.0% 1.9% 

FY 2007 Bullion Revenue, Cost and Earnings by Program (Dollar in millions)

American Eagle 

Gold 

American Eagle 

Silver 

American Eagle 

Platinum

American Buffalo

Gold Total 

Sales Revenue $ 110.3 $ 110.2 $ 18.1 $ 117.5 $ 356.1

Gross Cost $ 109.1 $ 109.0 $ 17.7 $ 115.8 $ 351.6

Cost of Goods Sold $ 108.7 $ 108.6 $ 17.5 $ 115.2 $ 350.0

SG&A $ 0.4 $ 0.4 $ 0.2 $ 0.6 $ 1.6

Net Income $ 1.2 $ 1.2 $ 0.4 $ 1.7 $ 4.5

Bullion Net Margin 1.1% 1.1% 2.2% 1.4% 1.3% 

FY 2006 Bullion Revenue, Cost and Earnings by Program (Dollar in millions)

American Eagle 

Gold 

American Eagle 

Silver

American Eagle 

Platinum 

American Buffalo 

Gold Total 

Sales Revenue $ 222.9 $ 130.5 $ 15.4 $ 167.8 $ 536.6 

Gross Cost $ 217.7 $ 127.1 $ 14.8 $ 164.8 $ 524.3 

Cost of Goods Sold $ 217.1 $ 126.9 $ 14.7 $ 164.3 $ 522.9 

SG&A $ 0.6 $ 0.2 $ 0.1 $ 0.5 $ 1.4 

Net Income $ 5.2 $ 3.4 $ 0.6 $ 3.0 $ 12.2 

Bullion Net Margin 2.3% 2.6% 3.9% 1.8% 2.3%

Bullion Sales by Precious Metal (Ounces of bullion sold in thousands)

Gold 

549.5 

411.5 395.0 

164.0 

492.0 

2004 2005 2006 2007 2008 

Silver

2004 2005 2006 2007 2008 

9,453.2 

8,545.7 

11,196.6 

7,932.5 

17,675.5 

Platinum 

2004 2005 2006 2007 2008 

22.7 

16.5 

14.5 14.6 14.2 
Transfer to the 

Treasury General Fund

37 

As required by Public Law 104-52, the United States Mint transfers all revenue not required for current and 

anticipated operations to the Treasury General Fund, retaining only the amount required by the Public 

Enterprise Fund (PEF) to support United States Mint operations and programs. 

In FY 2008, the United States Mint transferred a total of $750 million to the Treasury General Fund. This total 

included $735 million transferred off-budget and $15 million transferred on-budget. The off-budget transfer 

contains seigniorage, the financing source resulting from the sale of circulating coins. The on-budget transfer 

represents FY 2007 numismatic profits transferred to the Treasury General Fund in FY 2008. In comparison, 

the United States Mint transferred $782 million off-budget, and $43 million on-budget, for a total transfer of 

$825 million during FY 2007. Prior year retained earnings and current year financing sources were sufficient 

to cover existing obligations and liabilities of the PEF. 

On-Budget and Off-Budget Transfers to the Treasury General Fund 

(Dollars in millions) 

2004 2005 2006 2007 2008 

$0 

$100 

$200 

$300 

$400 

$500 

$600 

$700 

$800 

$4 

$45 $84 $43 $15 

$661 

$730 

$666 

$782 

$735 

On-Budget Off-Budget 
Performance Goals, Objectives 

and Results

24.0 billion in FY 2007, due to significantly lower 

Federal Reserve Banks (FRB) orders for circulating 

coins. The United States Mint was unable to 

significantly reduce conversion costs in FY 2008 

because of sustained fixed costs and rising energy and 

fuel costs. As production volumes declined, these 

costs were spread over fewer CEs, resulting in a higher 

overall cost per 1000 CEs. 

Overview As mandated by the Government 

Performance & Results Act (GPRA) of 1993, agencies 

are to identify critical activities, devise pertinent 

performance measures, and report on these activities 

to the President and Congress. 

In FY 2008, the United States Mint developed new 

strategic goals focused on brand identity, product 

portfolio, artistic excellence, improving efficiency, 

and developing an optimal workforce and workplace. 

Performance measures indicating our progress in 

achieving each of these goals were presented earlier in 

this report. To assess our performance on primary 

budget activities, the United States Mint monitors 

three key performance measures. 

Conversion Cost per 1,000 Coin 

Equivalents The United States Mint’s costs vary 

by the volume and mix of products sold each year. 

This makes it difficult to compare operating results 

from year to year. A coin equivalent (CE) calculation 

is used to convert production output to a common 

denominator based on a fixed product cost ratio. Total 

production costs, excluding metal and fabrication, are 

then divided by this standardized production level to 

obtain the conversion costs per 1,000 coin equivalents. 

Standardized output allows comparison of 

performance over time by negating the effect of 

varying product volume and mix on cost. In FY 2008, 

the target for this measure was redefined as a 

percentage from a baseline. Essentially, the baseline 

is an estimate of the expected total conversion cost for 

the volume of CEs produced based on historic cost and 

CE data. The dollar value of the baseline for a year’s 

expected conversion costs is dependent on the actual 

volume of CEs produced. 

In FY 2008, the conversion cost was $8.46 per 1000 

CEs, 11.0 percent above the baseline of $7.62 . CE 

production decreased to 21.3 billion in FY 2008 from

38 

The United States Mint plans to focus on improving 

overall efficiency in FY 2009 by reducing machine 

downtime and the volume of scrap. Efficiency gains are 

expected to reduce conversion cost in future years. 

Protection Cost per Square Foot Protection 

cost per square foot is calculated as the Office of 

Protection’s total operating cost divided by the area of 

usable space of the United States Mint. Protection’s 

total operating costs excludes depreciation expense 

because it is a non-cash outlay. Usable space is defined 

as 90 percent of total square footage. The measure 

indicates the Office of Protection’s efficiency in 

safeguarding United States Mint facilities, employees 

and assets. Total square footage of usable space is 

relatively constant and only changes with major events 

such as the addition or removal of a facility. There was 

no change to total square footage of usable space in FY 

2008. 

Protection cost per square foot was $31.76 in FY 2008, 

Budget Performance Measures 

FY 2008 

Result 

FY 2008 

Target 

FY 2007 FY 2006 FY 2005 FY 2004 

Conversion Cost per 1,000 Coin Equivalents 11.0% 0.0% $ 7.23 $ 7.55 $ 7.42 $ 7.42 

Protection Cost per Square Foot $ 31.76 $ 32.50 $ 31.29 $ 32.49 $ 32.43 $ 32.43 

Total Losses $ — $ 5,000 $ 223 $ 10,467 $ 3,490 $ 2,773 

Conversion Cost per 1,000 Coin Equivalents

$7.42 $7.42 $7.55 $7.23 

$8.46 

2004 2005 2006 2007 2008 
below the target of $32.50. The United States Mint is 

restating the FY 2007 results, originally reported as 

$31.75. The restated figure of $31.29 excludes 

depreciation expense. Figures for FY 2004 through FY 

2006 exclude depreciation expense and are not restated. 

While FY 2008 Protection cost per square foot remained 

below the target, it increased from FY 2007. Contracted 

services expense increased by 52 percent in FY 2008 

due to a one-time charge for a prior year research and 

development project not fully capitalized and an 

increase in charges from other federal agencies. 

Replenishing firearm and emergency supplies increased 

supply costs by 43 percent from last year. The Office 

of Protection did reduce expenses for overtime and 

travel in FY 2008 compared to FY 2007. 

39 

The United States Mint initiated a review of the total 

losses measure in FY 2008. Results of this review 

suggest that the definition of total losses does not 

capture information that is useful as a measure of 

performance. The majority of cases are referred to the 

Treasury Inspector General. Associated losses remain 

potential and are not reported in the total losses measure. 

As of September 30, 2008, 30 cases with potential losses 

totaling $456,040.75 were referred for investigation. 

The following number of cases and associated potential 

dollar amounts were referred in prior fiscal years. Cases 

were largely classified as potential financial losses 

related to the sale of numismatic products to the public. 

The United States Mint Office of Protection will 

continue efforts to contain costs, while fulfilling 

protection responsibilities. Projects to automate entry 

and exit at facilities are expected to reduce the costs 

associated with these functions. 

Total Losses The United States Mint performs its 

protection function by minimizing vulnerability to theft 

and preventing unauthorized access to critical assets. 

Total losses measure the dollar amount of losses 

incurred because of the realization of threats to the 

United States Mint. Total losses are classified in three 

categories based on cases that have been investigated 

and closed: 

• Financial Losses: intentional monetary losses, thefts 

or fraud from metal reserves, produced coinage, retail 

sales and other administrative losses. 

• Cost of Intrusions: the cost of repair or recovery 

from an intentional intrusion into United States Mint 

systems and facilities either electronically or 

physically. 

• Productivity Losses: the cost of intentional damage 

or destruction to production capabilities, including 

related costs for continuity of operations. 

As defined, total losses do not include losses incurred 

during the normal course of sales operations. Such 

losses are reported in the financial statements as cost of 

goods sold. 

Fiscal Year Number of cases Potential Amount 

2004 36 $ 286,427.35

2005 12 $ 132,515.65 

2006 6 $ 17,712.65 

2007 0 $ 0.00 

2008 30 $ 456,040.75

Cases Referred to the Office of the Inspector General

The measure has been defined as cases that are 

investigated and closed, with the result recorded in the 

fiscal year in which the case was closed. Cases that are 

investigated and closed internally by the Office of 

Protection relate more to production quality control and 

damage to administrative resources than realized threats 

to the United States Mint’s assets. Last year we reported 

that the results were unavailable at the time of 

publication of the FY 2007 Annual Report pending our 

review of the measure. The review found that FY 2007 

losses from closed cases were $223, below the target of 

$10,000. No losses are reported for FY 2008 because no 

cases were closed with unrecovered losses during the 

fiscal year. No cases have been opened because of 

intrusions or productivity losses in the past five fiscal 

years. The review has identified shortcomings in the use 

of total losses as a performance measure. To be useful 

to management, a performance measure should present 

timely information. The United States Mint will 

discontinue the use of the total losses measure but 

continue to review information on investigations and 

potential financial loss cases to ensure proper procedures 

and internal controls policies are in place. 

Protection Cost per Square Foot

$32.43 $32.43 $32.49 $31.29 $31.76 

2004 2005 2006 2007 2008 

Total Losses

$2,773 $3,490 

$10,467 

$223 $ — 

2004 2005 2006 2007 2008 
Analysis of Systems, Controls 

and Legal Compliance

40

Management Assurances 

The United States Mint management is responsible for establishing and maintaining adequate internal control 

over financial reporting, which includes safeguarding of assets and compliance with laws and regulations. The 

United States Mint has made a conscious effort to meet the internal control requirements of the Federal 

Manager’s Financial Integrity Act (FMFIA), the Federal Financial Management Improvement Act (FFMIA), 

Office of Management and Budget (OMB) Circular A-123, and the Reports Consolidation Act of 2000. The 

organizations under the United States Mint’s purview are operating in accordance with the procedures and 

standards prescribed by the Comptroller General and Office of Management and Budget guidelines. 

The systems of management controls for the United States Mint are designed to ensure that: 

a) Programs achieve their intended results; 

b) Resources are used consistent with overall mission; 

c) Programs and resources are free from waste, fraud and mismanagement; 

d) Laws and regulations are followed; 

e) Controls are sufficient to minimize any improper or erroneous payments; 

f) Performance information is reliable; 

g) Systems security is in substantial compliance with relevant requirements; 

h) Continuity of operations planning in critical areas is sufficient to reduce risk to reasonable levels; and 

i) Financial management systems are in compliance with Federal financial systems standards, i.e., FMFIA 

Section 4 and FFMIA. 

For all United States Mint responsibilities, we provide herein qualified assurance that the above listed 

management control objectives, taken as a whole, were achieved by our office during FY 2008. Specifically, 

this assurance is provided relative to Sections 2 and 4 of FMFIA. We further assure that our financial 

management systems are in substantial compliance with the requirements imposed by FFMIA. 

In 2008, we conducted a full scale assessment of internal controls, including the mandatory Treasury test items, 

to evaluate the effectiveness of United States Mint internal control over financial reporting in accordance with 

OMB Circular A-123, Management’s Responsibility for Internal Control at the entity, process and transaction 

level. The assessment was conducted by a) documenting policies, procedures and processes; b) identifying 

relevant control points within the processes; and c) conducting transaction level testing to evaluate the 

effectiveness of the identified controls. 

Based on the results of this evaluation, the United States Mint identified one material weakness in its internal 

controls over financial reporting for the period ending June 30, 2008. This material weakness was an aggregate 

result of internal control failures surrounding the financial statement line item Inventory and Related Property. 

Other than the one material weakness noted below, the United States Mint can provide a qualified assurance 

that internal control over financial reporting as of June 30, 2008 is operating effectively. 
41 

United States Mint 

A-123 Material Weakness from the Annual Assessment of Internal Control 

June 30, 2008 

Overall Finding: Material Weakness because of an aggregate result of internal control failures surrounding 

the financial statement line item Inventory and Related Property.

Summary of Material Weakness: As a result of the annual assessment of internal controls conducted in accordance with guidance by OMB Circular A-123, we have identified one material weakness in internal controls 

as it relates to the financial reporting of Inventory and Related Property on the United States Mint’s financial 

statements. This material weakness is an aggregate result of inventory-related internal control failures that can 

be summarized as failures to: 

• properly date and sign government bills of lading, shipping documents and authorizations; 

• enter system transactions in a timely manner for inventory receipts, movements and adjustments; 

• maintain appropriate documentation for inventory receipts, movements and adjustments; 

• comply with existing inventory counting standard operating procedures (SOPs) for conducting quarterly 

physical inventories; 

• reconcile the actual physical inventory of goods sold with the United States Mint’s CamData POS system 

for conventions and sales counters; 

• properly document the receipt and departure counts of merchandise with proper signatures for conventions 

and sales counter space; and 

• conduct quarterly physical inventories for all United States Mint sales counters.

Corrective Action Plan: The Senior Management Council (SMC) and Senior Assessment Team (SAT) developed a corrective action plan to address this material weakness. The corrective action plan addresses the specific issues related to the material weakness through a multi-tiered approach which includes: a) the development and implementation of SOPs and Directives; b) the assignment of employee accountability for compliance with SOPs and Directives; c) employee training in inventory related SOPs and Directives; and d) validation by the United States Mint’s Office of Internal Control (OIC) that the corrective actions have been completed. The Corrective Action Plan has been entered into Treasury’s JAMES (Joint Audit Management Enterprise) System. 

The United States Mint is committed to resolving this material weakness. The SAT will provide the SMC with 

monthly updates on the progress of closing out all corrective actions. As of November 15, 2008, we have 

closed out all but one of the corrective actions. We anticipate closing out the remaining corrective action by 

December 15, 2008. 
Limitations of the Financial Statements

42 

The principal financial statements have been prepared to report the financial position and results of operations 

of the United States Mint, pursuant to the requirements of 31 U.S.C. § 3515(b). The statements have been 

prepared from the books and records of the United States Mint in accordance with generally accepted 

accounting principles for Federal entities and the formats prescribe by the Office of Management and Budget 

(OMB). The statements are in addition to the financial reports used to monitor and control budgetary resources 

which are prepared from the same books and records. The statements should be read with the realization that 

they are for a component of the United States Government. 
43 

Independent Auditors’ Report 

Inspector General 

United States Department of the Treasury 

Director 

United States Mint: 

We have audited the accompanying balance sheets of the United States Mint as of September 30, 

2008 and 2007, and the related statements of net cost, changes in net position, and combined 

statements of budgetary resources (hereinafter referred to as “financial statements”) for the years then 

ended. These financial statements are the responsibility of the United States Mint’s management. Our 

responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United 

States of America; the standards applicable to financial audits contained in Government Auditing 

Standards, issued by the Comptroller General of the United States; and Office of Management and 

Budget (OMB) Bulletin No. 07-04, Audit Requirements for Federal Financial Statements. Those 

standards and OMB Bulletin No. 07-04 require that we plan and perform the audits to obtain 

reasonable assurance about whether the financial statements are free of material misstatement. An 

audit includes consideration of internal control over financial reporting as a basis for designing audit 

procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion 

on the effectiveness of the United States Mint’s internal control over financial reporting. 

Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence 

supporting the amounts and disclosures in the financial statements, assessing the accounting 

principles used and significant estimates made by management, as well as evaluating the overall 

financial statement presentation. We believe that our audits provide a reasonable basis for our 

opinion. 

In our opinion, the financial statements referred to above present fairly, in all material respects, the 

financial position of the United States Mint as of September 30, 2008 and 2007, and its net costs, 

changes in net position, and budgetary resources for the years then ended in conformity with U.S. 

generally accepted accounting principles. 

The information in the Management’s Discussion and Analysis, and Required Supplementary 

Information, is not a required part of the financial statements, but is supplementary information 

required by U.S. generally accepted accounting principles. We have applied certain limited 

procedures, which consisted principally of inquiries of management regarding the methods of 

measurement and presentation of this information. However, we did not audit this information and, 

accordingly, we express no opinion on it. 

KPMG LLP 

2001 M Street, NW 

Washington, DC 20036

KPMG LLP. KPMG LLP, a U.S. limited liability partnership, is 

a member of KPMG International, a Swiss cooperative.
In accordance with Government Auditing Standards, we have also issued our reports dated 

December 3, 2008, on our consideration of the United States Mint’s internal control over financial 

reporting and our tests of its compliance with certain provisions of laws, regulations, and contracts 

and other matters. The purpose of those reports is to describe the scope of our testing of internal 

control over financial reporting and compliance and the results of that testing, and not to provide an 

opinion on the internal control over financial reporting or on compliance. Those reports are an 

integral part of an audit performed in accordance with Government Auditing Standards and should be 

read in conjunction with this report in assessing the results of our audits. 

December 3, 2008 

44 
Assets 

Intragovernmental: 

Fund Balance with Treasury (Note 3) $303,386 $255,731 

Accounts Receivable, Net (Note 4) 399 5,870 

Advances and Prepayments (Note 5) 4,292 4,452 

Total Intragovernmental Assets 308,077 266,053 

 

Custodial Gold and Silver Reserves (Notes 2 and 6) 10,493,740 10,493,740 

Accounts Receivable, Net (Note 4) 23,411 80,279 

Inventory and Related Property (Notes 7 and 20) 470,957 418,072 

Supplies 16,206 14,635 

Property, Plant and Equipment, Net (Note 8) 207,634 218,014 

Advances and Prepayments (Note 5) 4,656 1,805 

Total Assets (Notes 2 and 14) $11,524,681 $11,492,598 

 

Heritage Assets (Note 9) 

 

Liabilities 

Intragovernmental: 

Accounts Payable $6,425 $509 

Accrued Workers' Compensation and Benefits 7,259 7,117 

Unearned Revenues — 156 

Total Intra-governmental Liabilities 13,684 7,782 

 

Custodial Liability to Treasury (Notes 2 and 6) 10,493,740 10,493,740 

Accounts Payable 42,562 60,096 

Surcharges payable (Note 3) 11,314 6,526 

Accrued Payroll and Benefits 16,635 15,353 

Other Actuarial Liabilities 29,349 29,704 

Unearned Revenues 11,023 1,891 

Total Liabilities (Notes 10 and 14) $10,618,307 $10,615,092 

 

Commitments and Contingencies (Notes 12 and 13) 

 

Net Position 

Cumulative Results of Operations - Earmarked Funds (Note 14) 906,374 877,506 

Total Liabilities and Net Position $11,524,681 $11,492,598 

45 

The accompanying notes are an integral part of these financial statements. 

Balance Sheets Department of the Treasury 

 United States Mint

 As of September 30, 

(Dollars in thousands) 2008 2007 
Numismatic Production and Sales 

Gross Cost $1,398,624 $818,184 

Less Earned Revenue (1,476,433) (871,472) 

Net Program Revenue (77,809) (53,288) 

 

Numismatic Production and Sales of Circulating Coins 

Gross Cost 7,128 9,011 

Less Earned Revenue (7,128) (9,011) 

Net Program Revenue — — 

 

Circulating Production and Sales 

Gross Cost 588,308 722,582 

Less Earned Revenue (Note 16) (588,308) (722,582) 

Net Program Revenue — — 

Net Revenue Before Protection of Assets (77,809) (53,288) 

 

Protection of Assets 

Protection Costs 41,000 37,683 

Net Cost of Protection of Assets 41,000 37,683 

Net Revenue from Operations (Notes 14 and 15) ($36,809) ($15,605) 

The accompanying notes are an integral part of these financial statements. 

46 

Statements of Net Cost Department of the Treasury 

 United States Mint

 For the Years Ended September 30, 

(Dollars in thousands) 2008 2007
Cumulative Results of Operations 

 

Net Position, Beginning of Year - Earmarked Funds (Note 14) $877,506 $643,597 

 

Financing Sources: 

Transfers to the Treasury General Fund On-Budget (Note 19) (15,000) (43,000) 

Transfers to the Treasury General Fund Off-Budget (Note 19) (735,000) (782,000) 

Other Financing Sources (Seigniorage) (Note 16) 728,638 1,032,284 

Imputed Financing Sources (Note 11) 13,421 11,020 

Total Financing Sources (7,941) 218,304 

Net Revenue from Operations 36,809 15,605 

Net Position, End of Year - Earmarked Funds (Note 14) $906,374 $877,506 

47 

Statements of Changes in Net Position Department of the Treasury 

 United States Mint

 For the Years Ended September 30, 

(Dollars in thousands) 2008 2007 

The accompanying notes are an integral part of these financial statements.
Budgetary Resources 

Unobligated balance, brought forward, October 1 $53,088 $40,549 

Recoveries of prior-year unpaid obligations 26,759 15,389 

Budget authority 

Spending authority from offsetting collections 

Earned 

Collected 2,066,420 1,863,258 

Change in receivable from federal sources 476 5,870 

Change in unfilled customer orders 

Advance received 8,976 2,047 

Without advance from federal sources 741 30 

Subtotal 2,076,613 1,871,205 

Permanently not available (15,000) (43,000) 

Total Budgetary Resources $2,141,460 $1,884,143 

 

Status of Budgetary Resources 

Obligations incurred 

Reimbursable (Note 17) $2,090,602 $1,831,055 

Unobligated balances 

Apportioned 50,858 53,088 

Total Status of Budgetary Resources $2,141,460 $1,884,143 

 

Change in Obligated Balances 

Obligated balance, net 

Unpaid obligations, brought forward, October 1 $208,543 $179,561 

Less: Uncollected customer payments from federal 

 sources, brought forward, October 1 (5,900) — 

Total unpaid obligated balance, net 202,643 179,561 

 

Obligations incurred, net (Note 17) 2,090,602 1,831,055 

Gross outlays (2,012,741) (1,786,683) 

Recoveries of prior-year unpaid obligations, actual (26,759) (15,389) 

Change in uncollected customer payments from federal sources (1,217) (5,900) 

Obligated balance, net, end of the period 

Unpaid obligations 259,645 208,543 

Uncollected customer payments from federal sources (7,117) (5,900) 

Total unpaid obligated balance, net, end of period 252,528 202,643 

 

Net Outlays 

Net outlays 

Gross outlays 2,012,741 1,786,683 

Collections (2,075,396) (1,865,305) 

Total Outlays ($62,655) ($78,622) 

48 

Statements of Budgetary Resources Department of the Treasury 

 United States Mint

 For the Years Ended September 30, 

(Dollars in thousands) 2008 2007 

The accompanying notes are an integral part of these financial statements.
49 

1. Summary of Significant Accounting Policies 

Reporting Entity Established in 1792, the United 

States Mint is a bureau of the Department of the 

Treasury (Treasury). The men and women of the United 

States Mint serve the Nation by exclusively and 

efficiently creating the highest quality, most beautiful 

and inspiring coins and medals that: enable commerce; 

reflect American values; advance artistic excellence; 

educate the public by commemorating people, places 

and events; and fulfill retail demand for coins. 

Numismatic products include medals; proof coins; 

uncirculated coins; platinum, gold, and silver bullion 

coins; and commemorative coins. Custodial assets 

consist of the United States’ gold and silver metal 

reserves. These custodial reserves are often referred to 

as “deep storage” and “working stock,” and are reported 

on the Balance Sheet. 

The production of numismatic products is financed 

principally through sales to the public. The production 

of circulating coinage is financed through sales of coins 

at face value to the Federal Reserve Banks. Activities 

related to protection of Treasury-owned custodial assets 

are funded by revenues and other financing sources 

received by the United States Mint Public Enterprise 

Fund (PEF). 

Pursuant to Public Law (P.L.) 104-52, Treasury, Postal 

Service, and General Government Appropriation Act for 

FY 1996, as codified at 31 U.S.C. § 5136, the PEF was 

established to account for all receipts and expenses 

related to production and sale of numismatic items and 

circulating coinage and protection activities. Expenses 

accounted for in this fund include the cost of metals and 

fabrication and transportation of metals used in 

circulating and numismatic coin production and costs of 

transporting circulating coinage between the United 

States Mint production facilities and Federal Reserve 

Banks (FRB). Metals used in circulating and 

numismatic coin production include nickel, copper, zinc, 

manganese, gold, silver, and platinum, as well as 

smaller quantities of other base metals. Other costs/

expenses accounted for in this fund include costs related 

to research and development and purchases of 

equipment, as well as capital improvements and 

protection costs. P.L. 104-52 states that any amount in 

the PEF that is determined to be in excess of the amount 

required by the PEF shall be transferred to the Treasury 

General Fund. 

Treasury’s Bullion Fund (Bullion Fund) is used to 

account for United States gold and silver reserves. A 

separate Schedule of Custodial Deep Storage Gold and 

Silver Reserves has been prepared for the deep storage 

portion of the Treasury gold and silver reserves for 

which the United States Mint acts as custodian. 

Basis of Accounting and Presentation The 

accompanying Financial Statements were prepared in 

conformity with the reporting format promulgated by the 

Office of Management and Budget (OMB) Circular A136, Financial Reporting Requirements, and in 

accordance with accounting standards issued by the 

Federal Accounting Standards Advisory Board 

(FASAB). The United States Mint’s financial 

statements have been prepared to report the financial 

position, net cost of operations, changes in net position, 

and budgetary resources, as required by P.L. 104-52. 

Management uses estimates and assumptions in 

preparing financial statements. Those estimates and 

assumptions affect the reported amounts of assets and 

liabilities, the disclosure of contingent assets and 

liabilities, and the reported revenues and expenses. 

Actual results could differ from those estimates. 

Accounts subject to estimates include depreciation, 

imputed costs, payroll and benefits, accrued worker’s 

compensation, allowance for uncollectible accounts 

receivable, and unemployment benefits. 

The accompanying financial statements have been 

prepared on the accrual basis of accounting. Under the 

accrual method, revenues and other financing sources 

are recognized when earned and expenses are 

recognized when a liability is incurred, without regard to 

receipt or payment of cash. 

Earned Revenues and Other Financing Source 

(Seigniorage) Circulating Sales: P.L. 104-52, 

establishing the PEF, provides for the sale of circulating 

coinage at face value to the FRB. Revenue from the sale 

of circulating coins is recognized when the product is 

shipped to the FRB. 

Revenue from the sale of circulating coins to the FRB 

and numismatic sales of circulating coins is limited to 

the recovery of the cost of manufacturing those coins. 

Notes to the Financial Statements Department of the Treasury 

For the Years Ended September 30, 2008 and 2007 United States Mint

(Dollars are in thousands except Fine Troy Ounce information)
50 

Other Financing Source (Seigniorage) is the face value 

of newly minted coins less the cost of production (which 

includes the cost of the metal, manufacturing, and 

transportation). Seigniorage is the profit from coining 

money. Seigniorage adds to the government’s cash 

balance, but unlike the payment of taxes or other 

receipts, it does not involve a transfer of financial assets 

from the public. Instead, it arises from the exercise of 

the Government’s sovereign power to create money and 

the public’s desire to hold financial assets in the form of 

coins. Therefore, the President’s Budget excludes 

seigniorage from receipts and treats it as a means of 

financing. The President’s Budget also treats profits 

resulting from the sale of gold as a means of financing 

because the value of gold is determined by its value as a 

monetary asset rather than as a commodity. Other 

financing source (seigniorage) is recognized when coins 

are shipped to the FRB in return for deposits to the PEF. 

Numismatic Sales: Revenue from numismatic sales to 

the public is recognized when products are shipped to 

customers. Prices for numismatic products are based on 

the product cost plus a reasonable net margin. Bullion 

products are priced based on the market price of the 

precious metals plus a premium to cover manufacturing 

costs. 

Rental Revenue: The United States Mint receives rental 

revenue from floor space that is subleased in two United 

States Mint facilities located in Washington, D.C. The 

space is subleased at cost to other Federal government 

entities. For the purpose of presentation, rental revenue 

is combined with numismatic sales on the statement of 

net cost. 

Fund Balance with Treasury All cash is maintained at 

the Treasury. Fund Balance with Treasury is the 

aggregate amount of the United States Mint’s cash 

accounts with the U.S. Government’s central accounts 

from which the United States Mint is authorized to make 

expenditures and pay liabilities. It is an asset because it 

represents the United States Mint’s claim to the U.S. 

Government resources. 

Accounts Receivable Accounts receivable are amounts 

due to the United States Mint from the public and other 

Federal agencies. An allowance for uncollectible 

customer accounts receivable from the public is 

established for all accounts that are more than 180 days 

past due. However, the United States Mint will continue 

collection action on those accounts that are more than 

180 days past due as specified by the Debt Collection 

Improvement Act of 1996. 

Inventories and Related Property Inventories of 

circulating and numismatic coinage that do not contain 

either gold or silver are valued at the lower of cost or 

market. Costs of the metal and fabrication components 

of the inventories are determined using a weighted 

average inventory methodology. Conversion costs (i.e., 

the cost to convert the fabricated blank into a finished 

coin) are valued using a standard cost methodology. 

Numismatic coinage containing Treasury-owned gold 

and silver does not include the value of the Treasuryowned gold or silver because the metals are non-entity 

assets. The costs of those metals appear as “Custodial 

Gold and Silver Reserves” on the Balance Sheet and are 

valued at the statutory rates of $42.2222 per fine troy 

ounce (FTO) of gold and no less than $1.292929292 per 

FTO of silver. Accordingly, the United States Mint 

values silver at $1.292929292 per FTO. 

 

United States Mint-owned platinum, gold, and silver are 

valued at the lower of cost or market using a weighted 

average inventory methodology. 

Custodial Gold and Silver Reserves Custodial gold 

and silver reserves consist of both “deep storage” and 

“working stock” gold and silver. 

Deep Storage is defined as that portion of the U.S. 

Government-owned gold and silver Bullion Reserve 

which the United States Mint secures in sealed vaults. 

Deep storage gold comprises the vast majority of the 

Bullion Reserve and consists primarily of gold bars. 

Deep storage silver is also primarily in bar form. 

Working Stock is defined as that portion of the U.S. 

Government-owned gold and silver Bullion Reserve 

which the United States Mint can use as the raw material 

for minting coins. Working stock gold comprises only 

about one percent of the Gold Bullion Reserve and 

consists of bars, blanks, unsold coins, and condemned 

coins. Similarly, working stock silver consists of bars, 

blanks, unsold coins, or condemned coins. 

Treasury allows the United States Mint to use some of 

its gold and silver as working stock. Generally, the 

United States Mint will replace the working stock when 

used in production with purchases of gold and silver on 

the open market. In those cases in which the gold or 

silver is not replaced, the United States Mint reimburses 

Treasury the market value of the depleted gold or silver. 

Supplies Supplies are items that are not considered 

inventory and are not a part of the finished product. 

These items include plant engineering and maintenance 

supplies. Supplies are accounted for using the 

consumption method, in which supplies are recognized
51 

as assets upon acquisition and expensed as they are 

consumed. 

Advances and Prepayments Payments in advance of 

the receipt of goods and services are recorded as 

advances and prepaid expenses at the time of 

prepayment, and are expensed when related goods and 

services are received. 

Property, Plant and Equipment Property, plant and 

equipment are valued at cost less accumulated 

depreciation. The United States Mint’s threshold for 

capitalizing new property, plant and equipment is 

$25,000 for single purchases and $500,000 for bulk 

purchases. Depreciation is computed on a straight-line 

basis over the estimated useful lives of the related assets 

as follows: 

Computer Equipment 3 to 5 years 

ADP Software 2 to 10 years 

Machinery and Equipment 7 to 20 years 

Structures, Facilities and 

Leasehold Improvements 10 to 30 years 

Major alterations and renovations are capitalized over 

the shorter of a 20-year period or the remaining useful 

life of the asset and depreciated using the straight-line 

method, while maintenance and repair costs are charged 

to expense as incurred. There are no restrictions on the 

use or convertibility of general property, plant and 

equipment. 

Heritage Assets Heritage assets are items that are 

unique because of their historical, cultural, educational, 

or artistic importance. These items are collection type 

assets that are maintained for exhibition and are 

preserved indefinitely. 

Liabilities Liabilities represent actual and estimated 

amounts likely to be paid as a result of transactions or 

events that have already occurred. All liabilities 

covered by budgetary resources can be paid from 

revenues received from the United States Mint PEF. 

Surcharges Legislation authorizing commemorative 

programs often requires that the PEF remit a portion of 

the sales proceeds to recipient organizations. These 

amounts are defined as surcharges. A surcharges 

payable account is established for surcharges collected 

but not yet paid to the designated recipient organization. 

Pursuant to P.L. 104-208, Omnibus Consolidated 

Appropriations for Fiscal Year 1997 (Act), recipient 

organizations cannot receive surcharge payments unless 

all of the United States Mint’s operating costs for the 

coin program are fully recovered. The United States 

Mint may make interim surcharge payments during a 

commemorative program if the recipient organization 

meets the eligibility criteria in the Act, if the 

profitability of the program is determinable, and if the 

United States Mint is assured it is not at risk of a loss. 

P.L. 108-15, The American 5-Cent Coin Design 

Continuity Act of 2003, contains a provision that 

recipient organizations have two years from the end of 

the program sales to meet the requirements of P.L. 104-

208. If the requirements are not met within two years, 

the surcharges collected are to be deposited in the 

Treasury as miscellaneous receipts. Additionally, P.L. 

108-15 changed the fundraising requirement for 

recipient organizations from an amount equal to the 

maximum surcharges possible based on the maximum 

mintage to an amount equal to the surcharges actually 

collected based on sales. 

Earmarked Funds Pursuant to P.L. 104-52, the PEF 

was established as the sole funding source for United 

States Mint activities. The PEF meets the requirements 

of an earmarked fund as defined in SFFAS 27, 

Identifying and Reporting Earmarked Funds. 

Unearned Revenues These are amounts received from 

customers for which the numismatic products have not 

been shipped. In the case of intragovernmental entities, 

unearned revenue is rental payments received in 

advance. 

Return Policy If for any reason a customer is 

dissatisfied, the entire product must be returned within 

30 days of receiving the order to receive a refund or 

replacement. Shipping charges are not refunded. 

Further, the United States Mint will not accept partial 

returns or issue partial refunds. Historically, the United 

States Mint receives very few returns, which are 

immaterial. Therefore, no reserve for returns is 

considered necessary. 

Shipping and Handling The United States Mint 

reports shipping and handling cost as Cost of Goods 

Sold and not as part of Selling, General and 

Administrative expenses. General postage costs for 

handling administrative functions are reported as part of 

the United States Mint’s General and Administrative 

Expenses. 

Annual, Sick and Other Leave Annual leave is 

accrued when earned and reduced as leave is taken. The 

balance in the accrued leave account is calculated using 

current pay rates. Sick leave and other types of nonvested leave are charged to operating costs as they are 

used.
52 

Accrued Workers Compensation and Other 

Actuarial Liabilities The Federal Employees' 

Compensation Act (FECA) provides income and 

medical cost protection to cover Federal civilian 

employees injured on the job, employees who have 

incurred a work-related injury or occupational disease, 

and to pay beneficiaries of employees whose deaths are 

attributable to job-related injuries or occupational 

disease. The FECA program is administered by the 

United States Department of Labor (DOL), which pays 

valid claims and subsequently seeks reimbursement 

from the United States Mint for these paid claims. 

The FECA liability is based on two components. The 

first component is based on actual claims paid by DOL 

but not yet reimbursed by the United States Mint. There 

is generally a two-to-three-year time period between 

payment by DOL and reimbursement to DOL by the 

United States Mint. The second component is the 

actuarial liability, which estimates the liability for future 

payments as a result of past events. The actuarial 

liability includes the expected liability for death, 

disability, medical, and miscellaneous cost for approved 

compensation cases. 

Protection Costs Virtually all of the Treasury’s gold 

and majority of the silver reserves are in the custody of 

the United States Mint, which is responsible for 

safeguarding the reserves. These costs are borne by the 

United States Mint, but are not directly related to the 

circulating or numismatic coining operations of the 

United States Mint. Organizationally, the Protection 

Department, which is responsible for safeguarding the 

reserves, is a separate line of business from coining 

operations. 

Other Cost and Expenses (Mutilated and Uncurrent) 

Other costs and expenses consist primarily of returns of 

mutilated or uncurrent coins to the United States Mint. 

Coins that are chipped, fused, and/or not machinecountable are considered mutilated. The United States 

Mint reimburses the entity that sent in the mutilated 

coins using weight formulas that estimate the face value 

of these coins. If the coins have melted (as in a fire), the 

United States Mint reimburses the entity an amount 

based on the metal content of the melted mass. 

Uncurrent coins are worn, but machine-countable, and 

their genuineness and denomination are still 

recognizable. Uncurrent coins are replaced with new 

coins of the same denomination by the FRB. All 

mutilated or uncurrent coins received by the United 

States Mint are shipped to a fabricator which purchases 

the returned metal and recycles it in the manufacture of 

coinage strip. 

Tax Exempt Status As an agency of the Federal 

Government, the United States Mint is exempt from all 

income taxes imposed by any governing body, whether 

it is a Federal, state, commonwealth, local, or foreign 

government. 

Concentrations The United States Mint purchases the 

coil and blanks used in the production of circulating 

coins from three vendors at competitive market prices. 

Transfers to the Treasury General Fund The United 

States Mint transfers to the Treasury General Fund 

amounts in the PEF determined to be in excess of the 

amounts required for United States Mint operations and 

programs. These amounts are generated from the other 

financing source (seigniorage) derived from the sale of 

circulating coins and from net revenues generated from 

the sale of numismatic products. 

 

Excess amounts generated from other financing source 

(seigniorage) are off-budget and deposited in the 

Treasury General Fund. Off-budget means that these 

funds cannot be used to reduce the annual budget deficit. 

Instead, they are used as a financing source (i.e., they 

reduce the amount of cash that Treasury has to borrow 

to pay interest on the national debt). Excess amounts 

from revenues generated from the sale of numismatic 

products less protection costs are on-budget and 

deposited in the Treasury General Fund. Unlike 

seigniorage, the numismatic transfer is available as 

current operating revenue or can be used to reduce the 

annual budget deficit. 

Budgetary Resources The United States Mint receives 

all of its financing from the public and receives an 

apportionment from the OMB. This apportionment is 

considered a budgetary authority. The United States 

Mint’s budgetary resources consist of unobligated 

balances, transfers, and spending authority from 

offsetting collections, which is net of amounts that are 

permanently not available. “Permanently not available” 

funds are on-budget numismatic transfers to the General 

Fund. 

2. Non-Entity Assets 

Components of Non-entity Assets at September 30 are 

as follows: 

Custodial Gold Reserves (Deep Storage) $10,355,539 $10,355,539 

Custodial Silver Reserves (Deep Storage) 9,148 9,148 

Custodial Gold Reserves (Working Stock) 117,514 117,514 

Custodial Silver Reserves (Working Stock) 11,539 11,539 

Total Non-entity Assets 10,493,740 10,493,740 

Total Entity Assets 1,030,941 998,858 

Total Assets $11,524,681 $11,492,598 

2008 2007
53 

included that amount in the Allowance for Doubtful 

Accounts for FY 2008. Receivables with the public at 

September 30, 2008 are $24.3 million, which consist 

primarily of amounts owed by metal fabricators for 

scrap and webbing. This compares to receivables with 

the public at September 30, 2007, of $80.7 million, 

which primarily consisted of $77.1 million in accounts 

receivable from metal scrap and webbing sold to 

fabricators. The remainder of the accounts receivable 

represents outstanding balances on numismatic orders. 

The allowance for doubtful accounts is the balance of 

the accounts receivable with the public that is past due 

by 180 days or more. Collection action continues on 

these accounts, but an allowance is recorded. 

5. Advances and Prepayments 

The components of advances and prepayments at 

September 30 are as follows: 

Intragovernmental advances and prepayments at 

September 30, 2008 and 2007, include $2.5 million each 

year that the United States Mint paid the Treasury 

Working Capital Fund for a variety of centralized 

services. Also included in intragovernmental advances 

are the progress payments (advances) for equipment and 

building improvements under construction. The United 

States Mint completed an entity-wide security upgrade 

during FY 2008, which required progress payments to 

other federal agencies for construction and other related 

services. As of September 30, 2008 this advance had 

been liquidated, but as of September 30, 2007, the 

balance of the advance was $1.1 million. The remaining 

balance of approximately $1.8 million represents 

payments made to the United States Postal Service for 

product delivery services at September 30, 2008, 

compared to approximately $810 thousand paid at 

September 30, 2007. 

Advances and Prepayments with the public consist 

primarily of advances for freight forwarding. 

6. Custodial Gold and Silver Reserves 

As custodian, the United States Mint is responsible for 

safeguarding much of the Nation’s gold and silver 

reserves, which include deep storage and working stock. 

The asset and the custodial liability to Treasury are 

reported on the Balance Sheet at statutory rates. In 

accordance with 31 U.S.C. § 5117(b) and 31 U.S.C. § 

5116(b)(2), statutory rates of $42.2222 fine troy ounce 

(FTO) of gold and no less than $1.292929292 per FTO 

of silver, respectively, are used to value the entire 

 2008 2007 

Intragovernmental $4,292 $4,452 

With the Public 4,656 1,805 

Total Other Assets $8,948 $6,257 

The United States Mint does not receive appropriated 

budget authority. The fund balance with Treasury is 

entirely available for use to support United States Mint 

operations. At September 30, 2008 and 2007, the 

revolving fund balance included $11.3 million and $6.5 

million, respectively, in restricted amounts for possible 

payment of surcharges to recipient organizations. 

4. Accounts Receivable, Net 

Components of accounts receivable are as follows: 

Entity assets are assets that the reporting entity has 

authority to use in its operations. The United States 

Mint management has legal authority to use entity assets 

to meet entity obligations. However, all assets in the 

possession of the United States Mint are not entity 

assets. Treasury allows the United States Mint to use 

some of its gold and silver as working stock in the 

production of coins. The United States Mint must 

replace the working stock or pay the Treasury General 

Fund for the metal used. Thus, Treasury deep storage 

and working stock gold and silver are all considered 

non-entity assets. 

3. Fund Balance with Treasury 

Fund Balance with Treasury at September 30 consists 

of: 

At September 30, 2008, there were approximately $6.3 

million in intragovernmental accounts receivable, 

compared to $5.9 million at September 30, 2007. This 

largely represents amounts due to the United States Mint 

for a joint numismatic product with another agency. 

Management determined that the collection of $5.9 

million related to the program was in doubt and has 

Revolving Fund $303,386 $255,731 

Total Fund Balance with Treasury $303,386 $255,731 

 

Status of Fund Balance with Treasury 

Unobligated Balance 50,858 53,088 

Obligated Balance, Not Yet Disbursed 252,528 202,643 

Total $303,386 $255,731 

2008 2007 

September 30, 2008 

Gross 

Receivables Allowance Net 

Receivables 

Intragovernmental $6,345 ($5,946) $399 

With the Public 24,254 (843) 23,411 

Total Accounts Receivable $30,599 ($6,789) $23,810 

 

September 30, 2007 

Gross 

Receivables Allowance Net 

Receivables 

Intragovernmental $5,870 $ — $5,870 

With the Public 80,671 (392) 80,279 

Total Accounts Receivable $86,541 ($392) $86,149 
custodial reserves held by the United States Mint. 

Accordingly, the United States Mint values the silver at 

$1.292929292 per FTO. 

The market value for gold and silver at September 30 is 

determined by the London Gold Fixing (PM) rate. 

Amounts and values of custodial gold and silver in 

custody of the United States Mint at September 30 are as 

follows: 

Raw materials consist of unprocessed materials and byproducts of the manufacturing process and the metal 

value of unusable inventory such as scrap or condemned 

coins that will be recycled into a usable raw material. In 

addition, as of September 30, 2008 and 2007, the 

inventory includes $32.0 million and $27.0 million in 

fair value silver hedge activity of which additional 

information can be found in note 20. Work-in-process 

consists of semi-finished materials. 

September 30, 2008 

 Asset Cost 

Accumulated 

Depreciation 

and 

Amortization 

Total Property, 

Plant and 

Equipment, Net 

Land $2,529 $ — $2,529 

Structures, Facilities and 

Leasehold Improvements 192,499 (122,640) 69,859 

Computer Equipment 30,990 (28,082) 2,908 

ADP Software 57,255 (54,735) 2,520 

Construction-In-Progress 26,296 — 26,296 

Machinery and Equipment 244,207 (140,685) 103,522 

Total Property, Plant and 

Equipment, Net $553,776 ($346,142) $207,634 

 

September 30, 2007 

 Asset Cost 

Accumulated 

Depreciation 

and 

Amortization 

Total Property, 

Plant and 

Equipment, Net 

Land $2,529 $ — $2,529 

Structures, Facilities and 

Leasehold Improvements 189,274 (116,715) 72,559 

Computer Equipment 30,212 (26,485) 3,727 

ADP Software 92,290 (86,689) 5,601 

Construction-In-Progress 21,584 — 21,584 

Machinery and Equipment 236,715 (124,701) 112,014 

Total Property, Plant and 

Equipment, Net $572,604 ($354,590) $218,014 

The land and buildings used to manufacture circulating 

coinage and numismatic products are owned by the 

United States Mint and located in San Francisco, 

California; Philadelphia, Pennsylvania; Denver, 

Colorado; and West Point, New York. In addition, the 

United States Mint owns the land and buildings at the 

United States Bullion Depository at Fort Knox. 

Depreciation and amortization expenses charged to 

operations during the years ended September 30, 2008 

and 2007, were $34.3 million and $37.9 million, 

respectively. 

9. Heritage Assets 

Assets classified as heritage assets are predominately 

coins produced in prior years that are held for historical 

archival purposes. The United States Mint divides 

heritage assets into two categories: Coin Collections 

and Historical Artifacts. The coin collections include 

examples of the various coins produced by the United 

States Mint over the years, separated into collections of 

non-precious metal coins; silver coins; and gold and 

extremely rare coins. The historical artifacts are divided 

into the furniture collection and the equipment collection 

7. Inventory and Related Property 

The components of inventories and related property at 

September 30 are summarized below: 

 2008 2007 

Raw Materials $313,186 $229,440 

Work-In-Process 49,481 89,878 

Inventory held for current sale 108,290 98,754 

Total Inventory and Related Property $470,957 $418,072 

54 

8. Property, Plant and Equipment, Net 

Components of property, plant and equipment are as 

follows: 

 2008 2007 

Gold - Deep Storage: 

Inventories (FTO) 245,262,897 245,262,897 

Market Value ($ per FTO) $884.50 $743.00 

Market Value ($ in thousands) $216,935,032 $182,230,333 

Statutory Value ($ in thousands) $10,355,539 $10,355,539 

Gold - Working Stock: 

Inventories (FTO) 2,783,219 2,783,219 

Market Value ($ per FTO) $884.50 $743.00 

Market Value ($ in thousands) $2,461,757 $2,067,932 

Statutory Value ($ in thousands) $117,514 $117,514 

Silver - Deep Storage: 

Inventories (FTO) 7,075,171 7,075,171 

Market Value ($ per FTO) $12.96 $13.65 

Market Value ($ in thousands) $91,694 $96,576 

Statutory Value ($ in thousands) $9,148 $9,148 

Silver - Working Stock: 

Inventories (FTO) 8,924,829 8,924,829 

Market Value ($ per FTO) $12.96 $13.65 

Market Value ($ in thousands) $115,666 $121,824 

Statutory Value ($ in thousands) $11,539 $11,539 

Total Market Value of Custodial Gold 

and Silver Reserves ($ in thousands) $219,604,149 $184,516,665 

Total Statutory Value of Custodial Gold 

and Silver Reserves ($ in thousands) $10,493,740 $10,493,740 
[e.g., period furniture (some antiques) previously used at 

the United States Mint facilities, balances/scales, 

obsolete manufacturing equipment, examples of daily 

activity, etc.] that were used in years past. The United 

States Mint generally does not place a value on heritage 

assets, even though some of the coins and artifacts are 

priceless. However, the assets are accounted for and 

controlled for protection and conservation purposes. 

Heritage assets held by the United States Mint are 

generally in acceptable physical condition. 

10. Liabilities Not Covered by Budgetary 

Resources 

Components of Liabilities Not Covered by Budgetary 

Resources at September 30 are as follows: 

Federal Insurance Contribution Act (FICA) for which 

the United States Mint contributes a matching amount to 

the Social Security Administration. 

Although the United States Mint contributes a portion 

for pension benefits and makes the necessary payroll 

deductions, it is not responsible for administering either 

CSRS or FERS. Therefore, the United States Mint does 

not report CSRS or FERS assets, accumulated plan 

benefits or unfunded liabilities, if any, applicable to the 

United States Mint employees. Reporting such amounts 

is the responsibility of the Office of Personnel 

Management (OPM). OPM has provided the United 

States Mint with certain cost factors that estimate the 

cost of providing the pension benefit to current 

employees. The cost factors of 25.2 percent of basic pay 

for CSRS-covered employees and 12.0 percent of basic 

pay for FERS-covered employees were in use for FY 

2008. The cost factor for CSRS-covered employees was 

increased by two-tenths of one percent (.2%) over FY 

2007 by OPM. The cost factor for FERS-covered 

employees remained the same. 

The amounts that the United States Mint contributed to 

the retirement plans and social security for the year 

ended September 30 are as follows: 

Liabilities not covered by budgetary resources represent 

amounts owed in excess of available funds, other 

amounts, or custodial liabilities to Treasury that are 

entirely offset by custodial gold and silver reserves held 

by the United States Mint on behalf of the Federal 

Government. 

11. Retirement Plans, Other Post-employment 

Costs, and Other Imputed Costs 

The United States Mint contributes seven percent of 

basic pay for employees participating in the Civil 

Service Retirement System (CSRS). On January 1, 

1987, the Federal Employees’ Retirement System 

(FERS) went into effect pursuant to P.L. 99-335. Most 

employees hired after December 31, 1983, are 

automatically covered by FERS and Social Security. 

Employees hired prior to January 1, 1984, could elect to 

join FERS or remain in CSRS. 

A primary feature of FERS is that it offers a savings 

plan to which the United States Mint automatically 

contributes one percent of basic pay and matches any 

employee contributions up to an additional four percent 

of basic pay. Employees can contribute any dollar 

amount or percentage of their basic pay as long as the 

annual dollar total does not exceed the Internal Revenue 

Code limit of $15,500 for calendar year 2008. 

Employees participating in FERS are covered by the 

 2008 2007 

Social Security System $7,047 $6,707 

Civil Service Retirement System 1,674 1,632 

Federal Employees Retirement System 

(Retirement & Thrift Savings Plan) 11,502 10,858 

Total Retirement Plans and 

Other Post-employment Cost $20,223 $19,197 

The United States Mint is also recognizing its share of 

the future cost of post-retirement health benefits and life 

insurance for employees while they are still working 

with an offset classified as imputed financing. OPM 

continues to report the overall liability of the Federal 

Government and make direct recipient payments. OPM 

has also provided certain cost factors that estimate the 

true cost of providing the post-retirement benefit to 

current employees. The cost factors relating to health 

benefits are $5,220 and $5,572 per employee enrolled in 

the Federal Employees Health Benefits Program in FY 

2008 and FY 2007, respectively. The cost factor 

relating to life insurance is two-one hundredths percent 

(.02%) of basic pay for employees enrolled in the 

Federal Employees Group Life Insurance Program for 

both FY 2008 and FY 2007. 

55 

 2008 2007 

Custodial Gold Reserves (Deep Storage) $10,355,539 $10,355,539 

Custodial Silver Reserves (Deep Storage) 9,148 9,148 

Working Stock Inventory-Gold 117,514 117,514 

Working Stock Inventory-Silver 11,539 11,539 

Total Liabilities Not Covered by 

Budgetary Resources $10,493,740 $10,493,740 

Total Liabilities Covered by Budgetary 

Resources 124,567 121,352 

Total Liabilities $10,618,307 $10,615,092 
56 

The amount of imputed cost related to retirement plans 

and other post-employment costs incurred by the United 

States Mint for the year ended September 30 is as 

follows (before the offset for imputing financing): 

be satisfied from the PEF. Likewise, under the 

Notification and Federal Employee Antidiscrimination 

and Retaliation Act of 2002 (No FEAR Act, P. L. 107-

174), settlements and judgments related to acts of 

discrimination and retaliation for whistleblowing will be 

paid from the PEF. In the opinion of management, the 

ultimate resolution of these actions will not materially 

affect the United States Mint’s financial position or the 

results of its operations. 

Asserted and pending legal claims for which loss is 

reasonably possible were estimated to range from zero 

to $7 million at September 30, 2008. In management's 

opinion, the ultimate resolution of other actions will not 

materially affect the United States Mint’s financial 

position or net cost. 

14. Earmarked Funds 

P. L. 104-52 provides that “all receipts from United 

States Mint operations and programs, including the 

production and sale of numismatic items, the production 

and sale of circulating coinage at face value to the FRB, 

the protection of government assets, and gifts and 

bequests of property, real or personal shall be deposited 

into the PEF and shall be available to fund its operations 

without fiscal year limitations.” The PEF meets the 

requirements of an earmarked fund as defined in SFFAS 

27, Identifying and Reporting Earmarked Funds. 

15. Intragovernmental Costs and Earned 

Revenue

Intragovernmental costs and earned revenue reflect 

transactions in which both the buyer and seller are 

Federal entities. Revenue with the public reflects 

transactions for goods or services with a non-Federal 

entity. However, if a Federal entity purchases goods or 

services from another Federal entity and sells those 

goods to the public, the revenue would be classified as 

“with the public,” but the related expense would be 

classified as “intragovernmental.” The purpose for this 

classification is to enable the Federal Government to 

prepare consolidated financial statements. The 

following table provides earned revenues, gross cost, 

and net program revenue. 

In addition to the pension and retirement benefits 

described above, the United States Mint also records 

imputed costs and financing for Treasury Judgment 

Fund payments made on behalf of the agency. Entries 

are made in accordance with FASAB Interpretation No. 

2. For FY 2008 entries for Judgment Fund payments 

totaled $2.8 million (Other Funds). For FY 2007, there 

were no payments by the Judgment Fund on behalf of 

the United States Mint. 

12. Lease Commitments 

The United States Mint as Lessee: The United States 

Mint leases office and warehouse space from 

commercial vendors and the General Services 

Administration (GSA). In addition, the agency leases 

copier and other office equipment from commercial 

vendors and vehicles from GSA. With the exception of 

the commercial leases on two office buildings in 

Washington, DC, all leases are one-year, or one-year 

with renewable option years. The two building leases in 

Washington, DC have terms of 20 and 10 years, 

respectively. Because all of the United States Mint’s 

leases are considered cancelable, there are no minimum 

lease payments due. 

The United States Mint as Lessor: The United States 

Mint subleases office space at cost to several other 

Federal entities in the two leased buildings in 

Washington, DC. The leases vary from one year with 

option years to multiple year terms. As of September 

30, 2008, the United States Mint subleased in excess of 

182,000 square feet in the two leased buildings. As of 

September 30, 2008, tenants include the Internal 

Revenue Service, the Treasury Executive Institute, the 

Bureau of the Public Debt, U.S. Customs and Border 

Protection, the Federal Consulting Group, and the U.S. 

Marshals Service. All of the subleases are operating 

leases and subject to annual availability of funding. 

13. Contingencies 

The United States Mint is subject to legal proceedings 

and claims which arise in the ordinary course of its 

business. Judgments, if any, resulting from pending 

litigation against the United States Mint generally would 

 2008 2007 

Health Benefits $7,953 $8,427 

Life Insurance 23 11 

Pension Expense 2,655 2,582 

Total Imputed Retirement and Post- $10,631 $11,020 
57 

2008 2007 

Numismatic Production and Sales 

Cost: 

Intragovernmental: 

Selling, General and Administrative $16,170 $9,091 

Imputed Costs 4,916 2,204 

Total Intragovernmental Costs 21,086 11,295 

Public: 

Cost of Goods Sold 1,301,887 739,506 

Selling, General and Administrative 75,651 67,383 

Total Public Cost 1,377,538 806,889 

Gross Cost 1,398,624 818,184 

Revenue: 

Intragovernmental: 

Rent Revenues 9,071 8,471 

Other Intragovernmental Revenues 734 260 

Total Intragovernmental Revenues 9,805 8,731 

Public 1,466,628 862,741 

Total Earned Revenue 1,476,433 871,472 

Net Program Revenue ($77,809) ($53,288) 

 

Numismatic Production and Sales of Circulating Coins 

Cost: 

Intragovernmental: 

Selling, General and Administrative $578 $474 

Total Intragovernmental Costs 578 474 

Public: 

Cost of Goods Sold 3,847 5,020 

Selling, General and Administrative 2,703 3,517 

Total Public Cost 6,550 8,537 

Gross Cost 7,128 9,011 

Revenue: 

Public 7,128 9,011 

Total Earned Revenue 7,128 9,011 

Net Program Revenue $ — $ — 

 

Circulating Production and Sales 

Cost: 

Intragovernmental: 

Selling, General and Administrative $13,510 $21,622 

Imputed Costs 8,505 8,815 

Total Intragovernmental Costs 22,015 30,437 

Public: 

Cost of Goods Sold 472,080 604,688 

Selling, General and Administrative 83,450 71,830 

Other Costs and Expenses 

(Mutilated and Uncurrent) 10,763 15,627 

Total Public Cost 566,293 692,145 

Gross Cost 588,308 722,582 

Revenue: 

Public 588,308 722,582 

Total Earned Revenue 588,308 722,582 

Net Program Revenue $ — $ — 

 

Net Revenue Before Protection of Assets ($77,809) ($53,288) 

Protection of Assets 

Public: 

Protection Cost $41,000 $37,683 

Total Earned Revenue — — 

Net Cost of Protection of Assets $41,000 $37,683 

 

Net Revenue from Operations ($36,809) ($15,605) 

16. Earned Revenues and Other Financing 

Source (Seigniorage) 

Earned revenues and other financing source 

(seigniorage) are recognized upon shipment of 

circulating coins to both the FRB and numismatic 

customers. A portion of the earned revenue from 

circulating production and sales displayed on the United 

States Mint’s Statement of Net Cost is generated by 

goods and services provided to the public. Revenue is 

limited to the recovery of all costs associated with the 

production, administration, and distribution of 

circulating coins (both to the FRB and to the public), 

and payment by the United States Mint for mutilated and 

uncurrent coins. The difference between the face value 

of coins and cost is other financing source (seigniorage). 

A portion of other financing source (seigniorage) is 

returned to the Treasury General Fund as an off-budget 

receipt. The United States Mint transfers to the 

Treasury General Fund amounts in the PEF determined 

to be in excess of amounts required to finance operations 

and programs. After recovering all costs from 

numismatic sales, the remaining profit is returned to the 

Treasury General Fund as an on-budget receipt. 

The components of circulating coins and numismatic 

sales of circulating coins for the year ended September 

30 are as follows: 

17. Apportionment Categories of Obligations 

Incurred 

The United States Mint receives apportionments of its 

resources from OMB. An apportionment is a plan, 

approved by OMB, to spend resources provided by law. 

All United States Mint obligations are classified as 

reimbursable, as they are financed by offsetting 

collections received in return for goods and services 

provided. OMB usually uses one of two categories to 

distribute budgetary resources. Category A 

apportionments distribute budgetary resources by fiscal 

quarters. Category B apportionments typically distribute 

budgetary resources by activities, projects, objects, or a 

combination of these categories. The United States Mint 

has only category B apportionments.

 2008 2007 

Revenue-FRB $588,308 $722,582 

Other Financing Source (Seigniorage)-FRB 706,212 1,005,194 

Total Circulating Coins $1,294,520 $1,727,776 

 

Revenue-with the public $7,128 $9,011 

Other Financing Source (Seigniorage)-with the 

public 22,426 

 

27,090 

Total Numismatic Sales of Circulating Coins $29,554 $36,101 
58 

Details of Obligations Incurred as of September 30 are 

as follows:

18. Explanation of Differences Between the 

Statement of Budgetary Resources and the 

Budget of the United States Government 

Statement of Federal Financial Accounting Standards 

No. 7, Accounting for Revenue and Other Financing 

Sources and Concepts for Reconciling Budgetary and 

Financial Accounting, requires an explanation of 

material differences between budgetary resources 

available, the status of those resources, and outlays as 

presented in the Statement of Budgetary Resources to 

the related actual balances published in the Budget of 

the United States Government (President’s Budget). 

The President’s Budget with actual numbers for fiscal 

year 2008 is expected to be published in February 2009 

and made available through OMB. The following chart 

displays the differences between the Statement of 

Budgetary Resources and the actual FY 2007 balances 

included in the FY 2009 President’s Budget. The 

explanation for the differences is two-fold. First, there 

is a timing difference between the preparation of the 

Statement of Budgetary Resources and the President’s 

Budget. Items that may have been incorporated into the 

final Statement of Budgetary Resources would not 

appear in the President’s Budget, which is based on the 

final TIER submission to Treasury. Secondly, as part of 

the conversion to a budgetary accounting system from a 

non-budgetary system, the United States Mint and the 

Administrative Resource Center continue to make 

necessary corrections to budgetary account balances. 

2008 2007 

Reimbursable: 

Category B 

Total Operating Expenses $2,056,364 $1,809,473 

Numismatic Capital 19,514 9,245 

Circulating and Protection Capital 14,724 12,337 

Total Apportionment 

Categories of Obligations Incurred $2,090,602 $1,831,055 

September 30, 2007 

Statement of 

Budgetary 

Resources 

President's 

Budget 

United States Mint Public Enterprise Fund 

Total Budgetary Resources $1,884,143 $1,889,950 

Status of Budgetary Resources: 

Obligations Incurred 1,831,055 1,836,862 

Unobligated Balances-available 53,088 53,088 

Total Status of Budgetary Resources $1,884,143 $1,889,950 

Net Outlays ($78,622) ($72,814) 

19. Legal Arrangements Affecting Use of 

Unobligated Balances 

The United States Mint PEF establishes that all receipts 

from United States Mint operations and programs, 

including the production and sale of numismatic items, 

the production and sale of circulating coinage, the 

protection of Government assets, and gifts and bequests 

of property, real or personal, shall be deposited into the 

United States Mint PEF and shall be available without 

fiscal year limitations. Any amount that is in excess of 

the amount required by the United States Mint to cover 

obligations shall be transferred to the Treasury for 

deposit as miscellaneous receipts. At September 30, 

2008 and 2007, the United States Mint transferred 

excess receipts to the Treasury General Fund of $750 

million and $825 million, respectively. 

20. Hedging Program 

The United States Mint has engaged in a hedging 

program since FY 2006 to avoid fluctuation in silver 

costs as a result of the changes in market prices. The 

United States Mint purchases silver in large quantities 

and sells an interest in that silver to a trading partner, 

while maintaining physical custody and title to the 

silver. Sales of silver to the trading partner are made at 

the same spot price that the United States Mint paid to 

obtain the silver on the open market. The partner’s 

interest in United States Mint silver is reduced as 

finished silver coins are sold to authorized purchasers 

(APs). Repurchases of the trading partner’s interest in 

the silver occurs upon sale of coins by the United States 

Mint. Repurchases are made on the same day as sales, 

in the same quantity sold, and using the same spot price 

as was used for the sale to the AP. Each sale to and 

from the purchaser carries a small transaction fee, the 

selling and buying fees net to a cost of one half cent per 

ounce. The United States Mint incurred $90 thousand in 

hedging fees in FY 2008, compared to $43 thousand 

incurred in FY 2007. 

At September 30, 2008 and 2007, hedging activity of 

$32.0 million and $27.0 million included in inventory 

represents the value of the silver sold to the trading 

partner and not yet sold by the United States Mint and, 

therefore, not repurchased from the trading partner. In 

FY 2008, the United States Mint recorded an unrealized 

gain from hedging activity of $932 thousand, compared 

with $1.6 million in FY 2007. 
59 

21. Reconciliation of Net Cost of Operations to 

Budget 

For The Years Ended 

September 30, 

2008 2007 

Resources Used to Finance Activities: 

Budgetary Resources Obligated 

Obligations Incurred $2,090,602 $1,831,055 

Less: Spending Authority from Offsetting 

Collections and Recoveries 2,103,372 1,886,594 

Net Obligations (12,770) (55,539) 

 

Other Resources 

Transfers to the Treasury General Fund 

On-Budget (15,000) (43,000) 

Transfers to the Treasury General Fund 

Off-Budget (735,000) (782,000) 

Imputed Financing from Costs Absorbed 

by Others 13,421 11,020 

Other Financing Sources (Seigniorage) 728,638 1,032,284 

Net Other Resources Used to Finance Activities (7,941) 218,304 

Total Resources Used to Finance Activities (20,711) 162,765 

 

Resources Used to Finance Items Not 

Part of the Net Cost of Operations: 

Change in Budgetary Resources Obligated 

for Goods, Services and Benefits Ordered 

but Not Yet Provided 63,435 18,246 

Resources that Finance the Acquisition 

of Assets or Liquidation of Liabilities 84,754 189,814 

Other (77,815) (43,000) 

Total Resources Used to Finance Items 

Not Part of the Net Cost of Operations 70,374 165,060 

Total Resources Used to Finance the 

Net Cost of Operations (91,085) (2,295)

 

Components Requiring or Generating 

Resources in Future Periods 

Increase in Exchange Revenue Receivable 

from the Public — (52,159) 

Total Components of Net Cost of Operations 

that will Require or Generate Resources in 

Future Periods — (52,159) 

 

Components not Requiring or Generating 

Resources in the Current Period: 

Depreciation and Amortization 34,292 37,879 

Revaluation of Assets 7,046 (1,437) 

Other 12,938 2,407 

Total Components of Net Revenue from 

Operations that will not require or Generate 

Resources 54,276 38,849 

Total Components of Net Revenue from 

Operations that will not require or Generate 

Resources in the Current Period 54,276 (13,310) 

Net Revenue from Operations ($36,809) ($15,605) 
60 

Introduction 

This section provides the Required Supplemental Information as prescribed by the Office of Management and 

Budget (OMB) Circular A-136, “Financial Reporting Requirements.” 

Heritage Assets 

The United States Mint is steward of a large, unique, and diversified body of heritage assets that are both 

collection and non-collection in nature. These items include a variety of rare and semi-precious coin 

collections and historical artifacts, and are held at various United States Mint locations. Some of these items 

are placed in locked vaults within the United States Mint where access is limited to only special authorized 

personnel. Other items are on full display to the public requiring little if any authorization to view. Items on 

display are accounted for and controlled for protection and conservation purposes. 

The United States Mint has created two categories to account for the large and varied stock of heritage assets. 

These categories include coin collections and historical artifacts. The table below summarizes the Unites States 

Mint’s collection and non-collection type heritage assets balance as of September 30, 2008. Overall, the 

United States Mint heritage assets, both collection and non-collection type, are in good condition. 

Required Supplementary Information Department of the Treasury 

(Unaudited) United States Mint

For the Years Ended September 30, 2008 and 2007

Coin Collections 

Quantity of Items Held September 30, 

2008 2007 

Non Precious Metal Coin Collection 1 1

Silver Coin Collection 1 1

Gold And Extremely Rare Coin Collection 1 1

Total 3 3

 

Quantity of Items Held September 30, 

2008 2007 

Furniture Collections (includes antiques) 2 2

Equipment Collection 1 1

Total 3 3

Historical Artifacts Coin Collections 
Independent Auditors’ Report on Internal Control Over Financial Reporting 

Inspector General 

United States Department of the Treasury 

Director 

United States Mint: 

We have audited the balance sheets of the United States Mint as of September 30, 2008 and 2007 and 

the related statements of net cost, changes in net position, and combined statements of budgetary 

resources (hereinafter referred to as “financial statements”) for the years then ended, and have issued 

our report thereon dated December 3, 2008. 

We conducted our audits in accordance with auditing standards generally accepted in the United 

States of America; the standards applicable to financial audits contained in Government Auditing 

Standards, issued by the Comptroller General of the United States; and Office of Management and 

Budget (OMB) Bulletin No. 07-04, Audit Requirements for Federal Financial Statements. Those 

standards and OMB Bulletin No. 07-04 require that we plan and perform the audits to obtain 

reasonable assurance about whether the financial statements are free of material misstatement. 

The management of the United States Mint is responsible for establishing and maintaining effective 

internal control. In planning and performing our fiscal year 2008 audit, we considered the United 

States Mint’s internal control over financial reporting by obtaining an understanding of the design 

effectiveness of the United States Mint’s internal controls, determining whether internal controls had 

been placed in operation, assessing control risk, and performing tests of controls as a basis for 

designing our auditing procedures for the purpose of expressing our opinion on the financial 

statements. To achieve this purpose, we did not test all internal controls relevant to operating 

objectives as broadly defined by the Federal Managers’ Financial Integrity Act of 1982. The 

objective of our audit was not to express an opinion on the effectiveness of the United States Mint’s 

internal control over financial reporting. Accordingly, we do not express an opinion on the 

effectiveness of the United States Mint’s internal control over financial reporting. 

Our consideration of internal control over financial reporting was for the limited purpose described in 

the preceding paragraph and would not necessarily identify all deficiencies in the internal control 

over financial reporting that might be significant deficiencies or material weaknesses. 

A control deficiency exists when the design or operation of a control does not allow management or 

employees, in the normal course of performing their assigned functions, to prevent or detect 

misstatements on a timely basis. A significant deficiency is a control deficiency, or combination of 

control deficiencies, that adversely affects the United States Mint’s ability to initiate, authorize, 

record, process, or report financial data reliably in accordance with U.S. generally accepted 

accounting principles such that there is more than a remote likelihood that a misstatement of the 

61 

KPMG LLP 

2001 M Street, NW 

Washington, DC 20036 

KPMG LLP. KPMG LLP, a U.S. limited liability partnership, is 

a member of KPMG International, a Swiss cooperative. 
62 

United States Mint’s financial statements that is more than inconsequential will not be prevented or 

detected by the United States Mint’s internal control. A material weakness is a significant deficiency, 

or combination of significant deficiencies, that results in more than a remote likelihood that a 

material misstatement of the financial statements will not be prevented or detected by the United 

States Mint’s internal control. 

In our fiscal year 2008 audit, we consider the deficiencies, described in Exhibit I, to be significant 

deficiencies in internal control over financial reporting. However, we believe that none of the 

significant deficiencies described in Exhibit I are material weaknesses. Exhibit II presents the status 

of prior year material weakness.

The United States Mint’s responses to the findings identified in our audit are presented in Exhibit III. 

We did not audit the United States Mint’s response and, accordingly, we express no opinion on it.

We noted certain additional matters that we have reported to management of the United States Mint 

in a separate letter dated December 3, 2008. 

This report is intended solely for the information and use of the United States Mint’s management, 

the Department of the Treasury’s Office of Inspector General, OMB, the U.S. Government 

Accountability Office, and the U.S. Congress and is not intended to be and should not be used by 

anyone other than these specified parties. 

December 3, 2008 
63 

Exhibit I 

THE UNITED STATES MINT 

Significant Deficiencies 

Improvements Needed Over Inventory Tracking 

We noted the United States Mint’s (Mint) accounting system is not being updated timely for receipts 

and transfers of inventory. Significant variances between inventory counts and inventory records 

were noted as a result of: 

1. Documentation not being received timely to record transactions for both Circulating and 

Numismatic inventory; 

2. The creation of discreet jobs for the consumption of coil to webbing not being performed 

properly; 

3. No documentation being received for coils to properly transfer inventory from dock workin-process (WIP) to circulating WIP; 

4. Condemned and Sweeps inventory amounts were inaccurate due to missing paper work from 

Coining Division; 

5. Incorrect items being transacted for stamped dollars in Numismatic, because of improper 

documentation; and 

6. Five 25 cent coils being improperly entered into the system, causing the final inventory 

reconciliation to be inaccurate. 

Additionally we noted that one United States Mint facility was improperly receiving raw materials 

for pennies directly into work-in-process, without the approval of Headquarters. 

 

OMB Circular A-123, Managements Responsibility for Internal Control, defines management’s 

responsibility and provides guidance to Federal managers on improving the accountability and 

effectiveness of Federal programs and operations by establishing, assessing, correcting, and reporting 

on internal control. In addition the circular states that “transactions should be promptly recorded, 

properly classified, and accounted for in order to prepare timely accounts and reliable financial and 

other reports.” 

GAO Standards for Internal Control in the Federal Government holds that transactions should be 

properly authorized, documented, and recorded accurately and timely. 

Recommendations: We recommend that the United States Mint: 

1. Enforce and follow the inventory procedures related to the recording and tracking of 

inventory movements in the accounting system to ensure the subsidiary ledger agrees to the 

inventory physically located at the facilities. 

2. Enforce and follow the inventory procedures, specifically related to properly receiving and 

classifying inventory between raw materials and work-in-process. 

September 30, 2008 
64 

Exhibit I 

THE UNITED STATES MINT 

Significant Deficiencies 

Improvement Needed in Review of Open Obligations 

Mint Headquarters did not properly review open obligations during the year to ensure that closed 

obligations were being de-obligated timely Specifically we noted: 

1. The population used for the open obligation review is not being reconciled to the general 

ledger. 

2. The employees performing the reviews do not have updated procedures to follow; therefore, 

a complete review is not performed 

3. Once each division returns the portion of open obligations they were requested to review, 

there is no final reconciliation by Mint Headquarters to ensure all open obligations were 

reviewed as required. 

4. Procedures related to de-obligating of funds were not being performed timely. 

OMB Circular A-123, Management’s Responsibility for Internal Control, states that monitoring the 

effectiveness of internal control should occur in the normal course of business. In addition, periodic 

reviews, reconciliations or comparisons of data should be included as part of the regular assigned 

duties of personnel. 

Furthermore, internal control best practices require monitoring procedures to be adequately 

documented. 

Recommendations: We recommend that the United States Mint: 

1. Update the standard operating procedures (SOP) to include a reconciliation of open 

obligations population to the general ledger. 

2. Enforce the SOP procedures for de-obligating closed obligations and ensure staff is provided 

with the updated SOP. 

September 30, 2008 
65 

Exhibit II 

THE UNITED STATES MINT 

Status of Prior Year Material Weakness 

September 30, 2008 

Prior Year 

Condition

Prior Year

Recommendation

Status as of 

September 

30, 2008

Improvement needed in Internal Controls related to Financial Accounting and Reporting

Inventory Recommendation #1: Develop controls and processes related to the 

recording and tracking of inventory movements in the financial 

statement system to ensure the subsidiary ledger agrees to the inventory 

physical located at the facilities. 

Recommendation #2: Establish a policy and procedure for the 

accounting treatment of metal by-product located at the United States 

Mint that is not in the subsidiary ledger. 

Partially 

Closed

Closed
66 

Exhibit III 

December 3, 2008 

KPMG LLP 

2001 M Street N.W. 

Washington, DC 20036 

Ladies and Gentlemen: 

We have reviewed the fiscal year 2008 auditors’ report and are in substantial agreement with the reported 

observations. The United States Mint recognizes the need for strong internal controls and is taking corrective 

actions to address the noted deficiencies. We have made significant progress toward resolving the reported 

issues and will continue to work with KPMG and the Office of Inspector General in identifying the specific 

actions that will ensure we have taken appropriate corrective action. 

 Sincerely, 

 Patricia M. Greiner 

Associate Director/Chief Financial Officer 

 United States Mint 
Independent Auditors’ Report on Compliance and Other Matters 

Inspector General 

United States Department of the Treasury 

Director 

United States Mint: 

We have audited the balance sheets of the United States Mint as of September 30, 2008 and 2007, 

and the related statements of net cost, changes in net position, and combined statements of budgetary 

resources (hereinafter referred to as “financial statements”) for the years then ended, and have issued 

our report thereon dated December 3, 2008. 

We conducted our audits in accordance with auditing standards generally accepted in the United 

States of America; the standards applicable to financial audits contained in Government Auditing 

Standards, issued by the Comptroller General of the United States; and Office of Management and 

Budget (OMB) Bulletin No. 07-04, Audit Requirements for Federal Financial Statements. Those 

standards and OMB Bulletin No. 07-04 require that we plan and perform the audit to obtain 

reasonable assurance about whether the financial statements are free of material misstatement. 

The management of the United States Mint is responsible for complying with laws, regulations, and 

contracts applicable to the United States Mint. As part of obtaining reasonable assurance about 

whether the United States Mint’s financial statements are free of material misstatement, we 

performed tests of the United States Mint’s compliance with certain provisions of laws, regulations, 

and contracts, noncompliance with which could have a direct and material effect on the 

determination of the financial statement amounts, and certain provisions of other laws and 

regulations specified in OMB Bulletin No. 07-04, including the provisions referred to in Section 803

(a) of the Federal Financial Management Improvement Act of 1996 (FFMIA). We limited our tests 

of compliance to the provisions described in the preceding sentence, and we did not test compliance 

with all laws, regulations, and contracts applicable to the United States Mint. However, providing an 

opinion on compliance with those provisions was not an objective of our audit, and accordingly, we 

do not express such an opinion. 

The results of our tests of compliance described in the preceding paragraph of this report, exclusive 

of those referred to in FFMIA, disclosed no instances of noncompliance or other matters that are 

required to be reported herein under Government Auditing Standards or OMB Bulletin No. 07-04. 

The results of our tests of FFMIA disclosed no instances in which the United States Mint’s financial 

management systems did not substantially comply with (1) Federal financial management systems 

requirements, (2) applicable Federal accounting standards, and (3) the United States Government 

Standard General Ledger at the transaction level. 

67 

KPMG LLP 

2001 M Street, NW 

Washington, DC 20036 

KPMG LLP. KPMG LLP, a U.S. limited liability partnership, is 

a member of KPMG International, a Swiss cooperative. 
68 

This report is intended solely for the information and use of the United States Mint’s management, 

the Department of the Treasury’s Office of Inspector General, OMB, the U.S. Government 

Accountability Office, and the U.S. Congress and is not intended to be and should not be used by 

anyone other than these specified parties. 

December 3, 2008