LIC DEBT'S 

GOVERNMllENT 

CE AMD RESULTS ACT 

Office of Inspector General 

United States Department of the Treasury 
- DEPARTMENT Of THE TREASURY 

WASH I NGTON, D.C. 20220 

OFFICE OF 

INSPECTORGENERAL 

MEMORANDUM FOR VAN ZECK, COMMISSIONER 

BUREAU OF THE PUBL 

FROM : 	 Dennis S. Schindel 

Assistant ~nspectorGeneral for Audit 

SUBJECT : 	 Final Report on the Audit of the Bureau of 

the Public Debt's Compliance with the 

Government Performance and Results Act 

This memorandum transmits the final report titled Audit of 

the Bureau of the Public Debt's Compliance with the 

Government Performance and Results Act. The audit results 

showed that the Bureau of the Public Debt's (BPD) executive 

management was diligent in establishing performance goals 

and measures that reflect an emphasis on customer service 

and program efficiency. Based on our review of selected 

performance measures, we found that BPD is meeting, and in 

many cases exceeding, its established performance measures. 

Management has established procedures and controls that help 

ensure the quality of the data used to report on the 

selected performance measures, nevertheless improvements can 

be made. 

Specifically, we recommended and BPD management agreed to 


some improvements in the data verification and Results Act 


reporting aspects of the process. The details on those 


findings, recommendations, and BPD management's response can 


be found in the Audit Results section of the report. 


We appreciate the courtesies and cooperation provided to our 

auditors during the review. If you wish to discuss this 

report, you may conkact me at (202) 927-5400, or a member of 

your staff may contact Maria V. Carmona, Acting Director, 

Program .~udits,at (202) 283-1591. 

Attachment 

BACKGRO ..................................................... 1 €

OBJECTIVE, SCOPE, AND METHODOLOGY. ......................... 2 €

AUDIT RESULTS €

BPD Does Not Coordinate or Monitor the Efforts of the Federal Reserve 


Banks to the Extent Needed to Ensure Confidence in the Reported 


Performance Information .......................................... 4 


Improvements Can Be Made in the Quality Review of Savings Bond 


Transactions to Ensure Data Reliability .............................. 5 €

Improvements Can Be Made in the Quality Review of TreasuqdXrect 


Transactions to Ensure Data Reliability ............,................. 7 €

Management Should Update the TreasuryDirect Payment Verification 


Procedures and Modify the Reports Used to Measure the Timeliness of 


Payments ........................................................ 9 €

APPENDICES 

1. BPD Mission, Goals, and Measures.. ............................. 12 €

2. BPD Organizational Chart. ..................................... 13 €

3. Abbreviations.. ............................................... 14 €

4. Management Response. ........................................ 15 €

5. 	Major Contributors to This Report .............................. 19 €

4 


6. Report Distribution ............................................ 20 €

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COMPLIANCE WTH THE GOVERNMENT 


PERFORMANCE AND RESULTS ACT 

The Bureau of the Public Debt (BPD) is to be commended for establishmg 

performance goals and measures that reflect an emphasis on customer 

service and program efficiency. BPD worked diligently to create a Fiscal 

Year (FY) 1999 Performance Plan that represented the key business 

operations and their impact on the Nation's investors. Although all of the 

performance goals and related measures could be considered equal in 

importance, our audit primarily focused on the data used to measure 

progress towards achieving 5 of BPD's 10 performance measures. 

This included reviewing both the automated and manual systems, as well 

as the source documentation, used to report on the goals and measures 

mandated by the Government Performance and Results Act (Results Act). 

Based on our review of selected performance measures, we found that 

BPD is meeting, and in some cases exceeding, its established performance 

measures. Management established procedures and controls that help 

ensure the quality of the data used to report on the performance measures 

reviewed. However, we recommended some improvements in the data 

verification and the Results Act reporting aspects of the process. For 

example, BPD could strengthen its quality conbol over the performance 

measure data it receives from the Federal Reserve Banks on volume sales 

of savings bonds. We recommended several options on how management 

can have more confidence in the reported information. We also found that 

while performance measures established for processing both savings 

bonds and TreasuvDirect transactions were exceeded, stronger quality 

control over case transaction processing is needed to ensure the correct 

data elements are reported accurately. 

Finally, our audit tests showed that controls over TreasuryDirect interest	

and redemption payments are effective and ensure that payments are made 

accurately and timely. However, management should modify its reporting 

methodology to clearly show the results of the timeliness of these 

securities payments. The written procedures that guide BPD personnel in 

reconciling these payments should also be updated. 

BPD management agreed with our recommendations and has implemented 

procedures a& revised operational practices to address the reported 

findings. The full text of management's response appears in Appendix 4. -

The Results Act requires Federal agencies to more effectively plan, 

budget, execute, evaluate and account for their programs and activities. 

Under the Results Act, executive agencies are to prepare strategic plans, 

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PERFORMANCE AND RESULTS ACT 
covering a period of at least 5 years fonvard from the fiscal year in whlch €

the plan is submitted that set thzgeneral direction for their efforts. €

Agencies then are to prepare annual performance plans that establish the €

connections between the long-term goals outlined in the strategic plans €

and the day-to-day activities of program managers and staff. Finally, the €

Results Act requiresthat each agency report annually on the extent to €

which it is meeting its annual performance goals and on the actions needed €

to achieve or modify those goals that have not been met. €

While the Results Act does not require a specific format for the annual 


performance plan, it specifiesthat an agency should: €

*  Establish performance goalsto define the level of performance to 

be achieved by a program activity; 

0 	 Express such goals in an objective, quantifiable, and measurable 

form; 

0 	 Briefly describe the operational processes, skills, and technology, 

and the human, capital, information,or other resources required to 

meet the performance goals (commonly referred to as "means and 

strategies"); 

*  Establish performance indicatorsto be used in measuring or 

assessing the relevant outputs, service levels, and outcomes of each 

program activity; 

0 	 Provide a basis for comparing actual program results with the 

established performance goals; and 

Describe the means to be used to verify and validate measured €

values. €

The Results Act requires each agency to prepare annual reports on €

program performance for the previous fiscal yea.. The performance €

reports are to be issued by March 31 each year, with the first (for €

FY 1999)to be provided to Congress and to the President by €

March 31,2000. €

cope, and Methodology 

The audit assessed the reliability and validity of the data used to determine €

whether BPD met its performancemeasures. Specifically, our audit €

objective was to evaluate whether BPD's information systemsregarding €

performance measures produce data that is reliable and valid. €

OIG-00-076  BUREAU OF THE PUBLfC DEBT'S Page 2 €

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PERFORMANCE AND RESULTS ACT €
Initially, we conducted an audit survey of all of BPD's FY 1999 

performance goals and related measures. The 3 performance goals and 

10 related performance measures are listed in Appendix 1. The survey 

work involved interviewing and conducting conference calls with the 

Assistant or Deputy Assistant Commissioners and their staffs in the 

Offices of Financing, Public Debt ACCOW~~, Savings Bond Operations, 

and Securities and Accounting Services. We also obtained documentation 

&om these Offices related to the data collection procedures, workflow 

processes, and reporting mechanisms as they pertained to the data used for 

the performance measures. 

We then reviewed prior audit work and management reviews conducted 

by our own office, by the General Accounting Office, and by BPD's 

Program Review Branch to identify any known problem areas and control 

weaknesses. We also spoke with members of the Treasury Department's 

Ofice of Strategic Planning and the Project Leader for Government-wide 

Results Act Policy at the Office of Management and Budget (OMB). 

Finally, we solicited input fiom the Commissioner and Deputy 

Commissioner with reference to the performance measures. 

At the conclusion of the survey phase, we selected five performance 

measures (# 1,2,5, 6, and 7, See Appendix 1) for in-depth audit. The 

survey and audit phases were conducted between March and August 1999, 

and included work in BPD's Parkersburg, West Virginia, and headquarters 

offices. We conducted our fieldwork in accordance with the Government 

Auditing Standards issued by the Comptroller General of the United 

States, and included such tests as were deemed necessary. 

Audit Results 

Our review showed that BPD is meeting, and in some cases exceeding, 

its established performance measures. We found a number of internal 

controls in place that help ensure the validity and reliability of the data 

used to evaluate success in achieving the performance measures. 

However, our audit results indicated that there are some conditions that 

warrant management's attention. The following section provides the 

specific details on those conditions and our recommendations to improve 

the affected operations. 

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PERFOWCE AND RESULTS ACT 
Finding 1 BPD Does Not Coordinate or Monitor the Efforts of the Federal Reserve 

Banks to the Extent Needed to Ensure Confidence in the Reported 

Performance Information. 

The public can purchase savings bonds directly from more than 

40,000 fmancial institution locations throughout the country. As fiscal 

agents of the United States, the Federal Reserve Banks function as the 

Federal Government's bank and perform the service of issuing, servicing, 

and redeeming tens of millions of U.S. savings bonds each year on behalf 

of the Treasury Department. Five Federal Reserve Bank Savings Bond 

Processing Sites (Buffdo, Kansas City, Minneapolis, Pittsburgh, and 

Richmond) track and monitor the purchase, printing, and mailing of Series 

EE and Series I savings bonds. 

The Federal Reserve Banks' objective is to guarantee receipt of over-thecounter savings bonds within 15 business days fiom the date the purchase 

order is presented to a fmancial institution. The banks use automated 

systems to track the number of business days between the date a customer 

submits a purchase order and the date the bond is printed and mailed. 

Each bank submits a monthly report to BPD, where the Office of Savings 

Bond Operations prepares a summary report to gauge progress against the 

Results Act performance measure. 

At issue with this performance measure is the fact that the entire 

operational process, and any related success toward achieving the desired 

performance measure, is performed by the financial institutions and the 

five Federal Reserve Banks, and not by BPD. From the receipt of a 

customer's purchase order, to fmal mailing of the bond to the customer, to 

the capture of the data that measures the number of days, all stages in this 

process are entirely outside of the BPD work environment. The only role 

that BPD plays in this process is in the roll-up of data reported by the 

five Federal Reserve Banks. That data is thenused to measure progress 

against the Results Act performance measure. BPD does not perform any 

independent verification, or corroborate the accuracy and completeness of 

the data sent t6 it by the Federal Reserve Banks, yet BPD's FY 1999 

Performance Plan categorizes the savings bond data as having "reasonable 

accuracy." BPD relies on whatever controls over data accuracy may exist 

at the financial institutions or at the Federal Reserve Banks. 

OM?Circular A-11, Preparation and Submission of Budget Estimates, 

Part 2, Preparation and Submission of Strategic Plans and Annual 

Performance Plans, does not require agencies to develop an independent 

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COMPLIANCE WITH THE GOVERNMENT 

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capacity for verifying or validating performance d2ia received from, or 

based on, sources outside the agency. However, it does stipulate that 

available information from an outside source regarding the accuracy and 

reliability of its data should be collected. 

We were informed by management within the Ofice of Savings Bond 

Operations that it was not their intent to institute a process that would 

create an additional resource burden resulting &om verifying the savings 

bond data. 

Recommendation 1 

BPD should incorporate its own verification process to ensure the quality 

of reported data it receives from the Federal Reserve Banks. Or, in lieu of 

conducting its own independent verification, BPD should consider 

requiring submitting entities, in this case the Federal Reserve Banks, to 

certify as to the accuracy and completeness of data. If neither of these 

options are established, BPD should consider eliminating or redefining 

this performance measure. In real terms, this process is a Federal Reserve 

Bank operation; thus, any success or failure in achieving the performance 

measure is dependent upon an external entity and not the efforts of BPD. 

Management Response 

Management agreed with the recommendation. The Savings Bond 

Functional Group, which is comprised of officials from BPD and the 

Federal Reserve Banks, meets quarterly to address policy and operational 

concerns, review program performance, and explore ways of improving 

efficiency and controlling costs. The BPD will provide instructions to the 

Federal Reserve Banks to certify the accuracy of their monthly service 

level performance reports. 

Finding 2 Improvements Can Be Made in the Quality Review of Savings Bond 

Transactions 6Ensure Data Reliability. 

Savings bonds have been sold for more than 50 years, and the records are 

maintained in a variety of forms by BPD. Accordingly, a multitude of 

servicing transactions is necessary to effect changes to, or resolve 

problems with, bond holder accounts. For example, individuals who need 

to have savings bonds reissued to reflect new ownership or to replace 

bonds that have been stolen submit their requests to BPD. 

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These transactions are processed by BPD's Office of Savings Bond 

Operations in Parkersburg. 'The Ofice is organized into four Divisions: 

Transactions and Rulings, Accounts and Reconcilements, Data Services, 

and Staff Services. 

One or more of these Divisions can handle the bond holder%request or 

inquiry. Each Division has separate time frames for completing the 

various types of transactions, depending upon the nature and complexity 

of the transaction. However, collectively, the OBce of Savings Bond 

Operations' performance measure is to complete 90 percent of the 

transactions in 4 weeks, or the equivalent of 20 business days. 

To determine if the transaction data relating to receipt and closure dates 

was being captured accurately, we selected a statistical sample of 

213 cases of a total of 3,867 cases closed by the Division of Transactions 

and Rulings during the week of May 10,1999. We chose cases closed by 

this Division because they represented the widest breadth and complexity 

of customer transactions. 

Our review of the sampled case files indicated that the standard for 

meeting the performance measure was actually exceeded for the 5-day 

period selected. Our sample data showed that 92 percent of the 

transactions were completed within 4 weeks. The Transactions and 

Rulings Division managers have several controls in place to ensure the 

quality of case processing. First, the Division has classroom, on-the-job, 

and remedial training for its examiners. New examiners are assigned 

supervisors and coaches, who ensure that each completed case is reviewed 

and that feedback is provided. The coaching period continues for 1 year. 

Coaches remain assigned to examiners as they progress to more difficult 

transactions, and work with them until a certain level of proficiency is 

reached. 

However, one condition we found concerning the data relating	to customer 

service transaction processing could be improved. Our sample data 

showed mismatches between the dates noted on source documents in the 

case transaction files and the dates entered on the Case File Control 

System. The Case File Control System produces the data that is used to 

calculate the cbstomer service transaction processing time framesfor this

performance measure. A review of the file source documents showed that 

45 percent of the customer transactions reviewed had variances with either 

the receipt date, the closure date, or both. The discrepancies resulted in 

processing time frames that were either shorter or longer than what the 

Case File Control System identified. While the mismatches do affect 

consistency and comparability, the mismatched receipt'closure dates did

not negatively impact the Office's meeting the performance measure. 

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The Division conducts a biannual physical inventory of work-in-process 

and compares the count to the Case File Control System (i.e., the 

Results Act performance measurement system). If there is a mismatch 

of 3 percent or less, the Division will accept the count in its Case File 

Control System as accurate. If there is a disagreement of more 

than 3 percent, the Division will review the system to identify the 

discrepancies. However, this inventory control does not verify the 

accuracy of the receipt and closure date entries. 

Although the discrepanciesin the dates between the source documents and 

the Case File Control System in this 1-week sample did not affect the 

overall performance measurement figures, they do affect data consistency 

and comparability. 

Recommendation 2 

The quality review of customer service transaction case files should 

include a check to ensure that the receipt/closure dates reflected in the case 

file documentation are accurately recorded in the system that produces 

Results Act performance data.

Management Response 

Management agreed with the recommendation. The Division of 

Transactions and Rulings in the Savings Bond Operations Office has 

added a step to their semiannual review to validate the accuracy of the 

dates used to measure performance. 

Finding 3 	 Improvements Can Be Made in the Quality Review of TreasurvDirect 

Transactions to Ensure Data Reliability. 

TreasuryDirect is BPD's book-entry system whereby customers buy 

Treasury secu$ies directly from the Government and hold them in their 

names, electronically, on Treasury's records. Individual investors can 

establish a single Treasu~Directaccount for all marketable Treasury 

securities with the same ownership and hold all their bills, notes, or bonds 

in their TreasuryDirect account. TreasulyDirect provides a centralized 

database that can be accessed through BPD or from any Federal Reserve 

Bank. 

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BPD is responsible for servicing approximately 800,000 TreosuryDirect 

investors. Tne customer requests can vary from straightforward account 

changes to complex changes in ownership. BPD's performance measure 

is to complete 90 percent of Treasurflirect customer service transactions 

within 3 weeks, or the equivalent of 15 business days. Data used for this 

measure is captured by the Customer Service Case Tracking System, 

which tracks transactions fkom receipt date to the date a response is sent to 

the investor. 

To determine if the transaction data relating to receipt and closure 

dates was being captured accurately, we reviewed a statistical sample 

of 120 closed transaction files of the 7,434 transactions that were serviced 

and closed in April 1999 by the Division of Customer Service within the 

Office of Securities and Accounting Services. A comparison of the source 

documents in the sampled files against the receipt and closure dates 

recorded in the Customer Service Case Tracking System showed 

mismatches with either the receipt date, the closure date, or both, 

in 58 percent of the sample cases reviewed. The discrepancies resulted in 

processing time frames that were either shorter or longer than what the 

Customer Service Case Tracking System identified. 

The tracking system automatically advances to the next business day if a 

date is key-entered after 2:00 p.m. Allowing for this program date change 

may drop the mismatch percentage to as low as 43 percent. The exact 

percentage cannot be determined because the system does not distinguish 

between cases input after 290 p.m. on one day and cases input prior 

to 2:00 p.m. of the following day. This disparity may have contributed to 

the discrepancy between the percentage of TreasuryDirect account

transactions completed within 15 days per the system-generated data 

versus the source documentation that we analyzed. 

The April 1999 Management Information Report, which is produced 

from the data stored in the computerized tracking system, showed 

that 99 percent of the TreaswyDirect transactions for that month were 

completed within 15 business days. However, our sample results showed

that 91 percent were completed within the performance measure time 

frame. Although our sample results showed that the Division exceeded 

' the performance standard of completing 90 percent of customer service 

transactions within 3 weeks, the discrepancies in both the receipt/closure 

dates and the month-end processed percentage do affect data consistency 

and comparability. 

We were informed that the Division's team leaders perform a quality 

review of approximately 70 percent of the closed transaction files, but hs 

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does not include a comparison of the source document data against the 

information recorded in the Customer Service Case Tracking System. 

The quality review of Treasumirect customer service transaction case 

files should include a check to ensure that the receipt/closure dates 

reflected in the case file documentation are accurately recorded in the 

system that produces Results Act performance measurement data. 

Management Response 

Management agreed with the recommendation. The Division of Customer 

Senice has implemented a procedure to randomly review TreasuryDirect 

customer service transaction case files to ensure that the receiptklosure 

dates reflected in the case file documentation are appropriately recorded in 

the tracking system according to established procedures. 

Finding 4 € Management Should Update the TreasurvDirectPayrnent Verification 

Procedures and Modifi the Reports Used to Measure the Timeliness of 

Payments. 

These two performance measures address the performance goal to 

"Provide quality service to investors in Treasury marketable securities." 

As the custodian of TreasuryDirect customers' investments, it is BPD's

responsibility to correctly calculate and deliver payments to them. 

Personnel from the Accounting IntegrityBranch, within the Office of

Securities and Accounting Services, employ several manual and 

automated controls to ensure that customers' investment payments are 

correctly calculated and delivered. 

To test the sufficiency of these controls, and ascertain the reliability and 

validity of the data, we selected a judgmental sample of 20 interest and 

redemption payments (commonly referred to as CUSIPs -Committee on 

-

Uniform Security identification &ocedules). These performance 

measures are so interrelated that we used the same sample data to perform 

the audit tests on both measures. 

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These sampled payments represented a mix of Treasury bills, notes, and 

bonds whereby periodic interest was paid or the securities had matured. 

The payments were made in March, April, and May 1999. We reviewed 

the various system-generated reports that produce the dates and amounts 

for each of the sampled interest and redemption payments. We also 

reviewed the manual reconciliation process performed by Branch 

accountants that serve to verify the accuracy of the payment data being 

generated by the automated systems. 

Our audit test of the 20 CUSIP interest/redemptionpayments showed that 

Branch accountants properly reconciled all payments between the 

TreasuryDirect Audit Report and the Public Debt Accounting and 

Reporting System (PARS). This manual verification process ensures that 

payments generated by the TreasuryDirect system agree with amounts in. 

the general ledger (PARS). 

A review of the TreasuryDirect Access Book Entry System indicated that 

all payments had been properly categorized and disbursed. We also noted 

that there was evidence of supervisory review of the accountants' interest 

formulas and mathematical calculations. 

In conclusion, we found that there are sufficient automated and manual 

controls in place to ensure that TreasuryDirect interest and redemption 

payments are disbursed accurately and timely. However, there are two 

conditions that need management's attention. First, the written procedures 

used by the accountants to verify the timeliness and accuracy of payments 

are dated. The written procedures that were in use during our onsite audit

tests were developed inAugust 1995 and November 1997. They were 

also being used to train new accountants. Branch management agreed that 

the procedures were in need of updating because of the many changes 

made in the payment process since the procedures were developed. 

Although the written procedures were comprehensive, various ad hoc

supplements were used to reflect the current workflow environment. 

Branch management assured us that revising the existing procedures has 

been given top priority. 

The second issue warranting management's attention is that there is 

unclear reportkg of Results Act information relating to Performance 

Measure #6 - Make I00 percent of TreasuryDirect interest and 

redemption pvments timely. Currently, a Monthly Information Report is 

prepared for BPD's senior management. Although th~sreport provides 

details on the accuracy of the percentage of interestkedemption payments 

made in a given month, the report language used to describe the timeliness 

performance measure is misleading. 

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Management agreed that the report heading, Report Percent Due During 

Reporting Month, is ambiguous in regads to the timeliness issue and a 

modification will be made to clearly report the percentage of timely 

payments made in a given month. Aside from the Results Act reporting 

issue, we found that there are internal processing schedules used by the 

Accounting Integrity Branch personnel to ensure payment dates are not 

missed. 

Recommendation 4 

Management should revise existing written procedures to incorporate 

changes in the interest/redemptionpayment verification process. 

Recommendation 5 

Management should modify the existing Results Act Monthly Information

Report to clarify information on the percentage of timely interest and 

redemption payments made to TreasuryDirect customers.

Management Response 

Management agreed with both of the recommendations. Procedures 

related to the verification of the timeliness and accuracy of interest and 

redemption payments have been updated and are pending final review. 

Management expects to implement the revised procedures by February 11, 

2000. In addition, the Monthly Information Report has been revised to 

clarify the reporting of timeliness of interest and redemption payments. 

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Mission Statement 

The mission of Public Debt is to borrow the money needed to operate the Federal 

Government and to account for the resulting debt. 

Performance Goals and Measures for FY 1899 

Performance Goal: Provide quality service to purchasers of savings bonds. 

Performance Measures: 

1. Issue 95 percent of over-the-counter savings bonds in 3 weeks. 

2. Complete 90percent of customer service transactions in 4 weeks. 

Performance Goal: Meet the borrowing needs of the Federal Government. 

Performance Measmes: 

3. Conduct I00 percent of marketable securities auctions without error. 

4. Announce auction results within I hour 95percent of the time. 

Performance Goal: Provide quality service to investors in Treasury marketable securities.

Perfonnance Measures: 

Complete 90 percent of TreasuryDirect customer service Pansactions within 


3 weeks. 


Make 100percent of TreasuryDirect interest and redemptionpayments timely. 


Make 99.9 percent of TreasuryDirect interest and redemption payments 


accurately. 9 

Make 100 percent of Commercial Book Entry interest and redemption payments 


accurately and timely. 


Process I00 percent of Government Securities Investment Program transactions 


timely. 


Process 99.9percent of Government Securities Investment Program transactions 


accurately. 


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1 DEPARTMENT OF THE TREASURY 

BUREAU OF TEE PUBLIC DEBT I 

Commissioner 

(Deputy Comrmsslaner)

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Appendix 3 

BPD 

CUSIPs 

FY 

OIG 

OMB 

PARS 

Results Act 

U.S. 

Bureau of the Public Debt 

Committee on Uniform Security Identification Procedures 

Fiscal Year 

Office of Inspector General 

Office of Management and Budget 

Public Debt Accounting and Reporting System 

Government Performance and Results Act 

United States 

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DEPARTMENT OF THE TREASURY 

BUREAU OF THE PUBUC DEBT 

WASHINGTON, DC 2023-1 

January 21,2000 

Dennis S. Schindel €

Assistant Inspector General for Audit 

Office of the Inspector General €

Department of the Treasury €

Washington, DC 20220 

Mr. Schindel: 

Enclosed with this letter is our response to your draft report, "Bureau of the Public Debt's 

Compliance with the Government Performance and Results Act." We have verbally provided 

separate technical corrections to the report, including recommendadom. We agree with the audit 

report's recommendations and have provided expected implementation dates as appropriate. 

We have also reviewed the draft from a disclosureperspective andhave determined that it 

contains no information that warrants protection under the Freedom of Information Act 

If you have any questions regarding this matter, please do not hesitate to call me at 

(202) 691-3500.

Sincerely, 

Enclosure 

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Response to the Report, 

*B~rrpnofthe Pnbiic Debt's Complinnce with 

the Govcrnmmf PerZbrmance and EtualbAdn 

BPD should incorporate its own verification process to ensure the quality of reporteddata it 

receives hm the FederalRcscnrc Banks- Or,in lieu ofconductingits own independent 

vuification, BPD should considertwpirhg subitting entities, in case the Fedd Resave 

Banks, to certify as to the aclrracy and completeness of data Yf neitherof these options are 

established, BPD should corder elhimsing or redefiningthis p=rformancem- Inreal 

terms, thisprocess is a Fed4 ReserveBankoperation; thus,any success or failure in achieving 

the performance measure is dependent upon an cxtcrd entity and not theefforts of BPD. 

Although FederalReserve Bank processing sites have opuational rrsponsiiility for issuing overthccounter bonds, we art responsible for establishing Public Debt's paforrpapcc goals and for 

ensuring that they arc accurately measured and met The SavingsBond FunctionalCroup, which 

is comprised ofofficialsfiom BPD and theFRBs, meets quarterly to address policy and 

operational concerns, review program perfbmncc, and explore ways of improving dficiency 

and canaolling costs. Modification of Public Debt's automated systems to verify FEU3 

tunaround times would be costly and is not w;dfiantedbecauseof ourconfidence in Ftdd 

Reserve systems. At the same time, wt an:not prepand to elimin;ne this performance measure 

beraw timely issue ofsavingsbonds is kcy to high quality customer service. We will, fiowevcr, 

provide instructionsto the FRBsto certSy the accuracy of their monthly sewice level objective 

performance reports. We will provide these instTuai0n.sby Januaxy 31,2000. 

Thcquality rcvicw of customer service transdon casefiles shouldincludea check to 

that the receiptklosure dates reflectedin the case file documentation are accurately recorded in 

the system that produces Results Act performance data 

Management Response: 

l"hcDivision of Transactions and Rulings in the Savings Bond Operations Office is committed to 

providing timely customerservicc and adequate internalconmls. While we arc confident that 

our case tracking system provides the intcrd e~ntrr,lsnecavary forus to accurately tradrthe 

Results Act pQformance data,we bave added a step to our semiannuai review to validatethe 

accraacy ofthe dates used to measure per5ormanccOIG-00-076 	 BUREAU OF THE P.f-TBLIC DEBT'S 

COMPLIANCE WITH THE GOVERNMENT 

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* 

Page 16 
NAG NT 


The quahty review of Trea~uryDinctcustomer service tmsaction case files should include a 

check to ensure that the receipt/closure data reflected in the caseme documentation are 

accurately recorded in the system that produces ResultsAn perfonnilllcemeaSuTerne~tdata 

Management Response: 

The Office of Securities and Accounting Smices has a policy of logging thereceipt date of 

correspondenceinto the Division of Customer Senice Case Tracking System (DCATS)based on 

when the case is received inthat Division. In additim, the =king system automatically 

advances to the next business day if a date is key-entered after 2:00 p.m. As a result, the date of 

receipt or completion may differ hm the date on the source documents in the case file. 

However, the difference in dates would not be substantid., in most cases no more than a day. 

For quite some time ow Division team leaders have wormed a quality minuof closed 

transaction files, but this did not include a comparisonof the source document data against the 

information recorded in DCATS. We have now implemented a pmcedure to randomly review 

TreasuryDirect customer service transaction case files to ensure that the receipt/closure dates 

reflected in the case file documentation areappropriateIy recorded in the tracking system 

according to estabIished procedures. 

Recommendation4 

Management should revise existing written pmcedures to incorporate changes in the 

interedredemption payment verification process. 

Management Response: 

Lined below are the three procedures that directly relate to the timeliness and accuracy of 

interest and redemption payments: 

1) Treasury Note and Bond Periodic Interest Payment 

2) Treasury Note and Bond Find Interest 

3) Treasury Bill Par Maturing 

All three of these procedures have been updated and are pending final review. We expect to 

implement the mised procedures by February 11,2000-

Recommendation 5 

OIG-00-076  BUREAU OF THEPUBLIC DEBT'S Page 17 

COMPLIANCE WITH THE GOVERNMENT 

PERFORMANCE AND RESULTS ACT 
Appendix 4 €

Management should modify the existing Results Act Monthly Information Report to clarify 

idonnation on the percentage of timely interest and redemption payments made to 

TreasuryDirect customers. 

Management Response: €

The Monthly Information	Report has been revised to clarify the reporting of timelinessofinterest 

and redemption payments.

OIG-00-076 BUREAU OF THE PUBLIC DEBT'S Page 18 

COMPLIANCE WITH THE GOVERNMENT

PERFORMANCE AND RESULTS ACT 
PROG 

Maria V. Cannona, Acting Director 

C. Samuel McGeorge, Audit Manager 

Michael C. Sinko, Auditor-in-Charge 

Michael A. Sielicki, Senior Auditor 

Ethel R. Taylor-Young, Senior Auditor 

OIG-00-076  BUREAU OF THE PUBLIC DEBT'S Page 19 

COMPLIANCE WTH THE GOVERNMENT

PERFORMANCE AND RESULTS ACT
Fiscal Assistant Secretary 

Office of Strategic Planning and Evaluations 

Office of Budget 

Oftice of Accounting and Internal Control 

AU OF TEE PUBLIC DEBT 

Commissioner 

Deputy Commissioner 

Accounting Services Division 

Program Review Branch 

OFFICE OF MANAGEMENT AND BUDGET 

Esther Rosenbaurn, OIG Budget Examiner 

OIG-00-XXX € BUREAU OF THE PUBLIC DEBT'S Page 20 

COMPLIANCE WITH THE GOVERNMENT 

PERFORMANCE AND RESULTS ACT