a

GAO

United States General Accounting Office

Report to the Subcommittee on Domestic 

and International Monetary Policy, Trade, 

and Technology, Committee on Financial 

Services, House of Representatives

July 2003 COIN AND 

CURRENCY 

PRODUCTION

Issues Concerning 

Who Should Provide 

Security

GAO-03-696
The Mint and BEP use their own police forces to provide security. Eight of 

the 12 coin and currency organizations in the other G7 nations responded to 

our requests for information. Four organizations reported that they only 

used their own security forces; 2 organizations said they used their own 

security forces supplemented with contractor personnel; 1 organization said 

it used an outside agency to supplement its own security force; and 1 

organization said that it used an outside agency to provide its security. 

Private businesses that handle large amounts of cash, such as banks and 

casinos, that we contacted said they used either their own security staff or 

contractor staff. 

The Mint and BEP have experienced some thefts by employees over the last 

decade. The Mint, which did not have records of security incidents that 

occurred more than 5 years ago, reported 74 incidents of theft involving 

about $93,000 from 1998 though 2002, while BEP reported 11 incidents of 

theft from 1993 through 2002 involving about $1.8 million. Both the Mint and 

BEP had threat assessments made of their facilities and processes and took 

corrective action to enhance security. 

The Secret Service said that if its Uniformed Division were charged with the 

responsibility of protecting the Mint and BEP, the two agencies could benefit 

from the Secret Service’s expertise in protection and criminal investigations. 

However, unlike Secret Service police officers, Mint and BEP security 

personnel are already familiar with the coin and currency production 

processes, which is a benefit in identifying security risks in these 

manufacturing facilities. Further, if the Secret Service protected the Mint 

and BEP, the government could incur additional costs because the Secret 

Service requires more training for its officers than the Mint and BEP police. 

The Secret Service police officers also are provided more costly retirement 

benefits than the Mint and BEP police. 

The U.S. Mint and the Bureau of 

Engraving and Printing (BEP), 

which produce the nation’s coins 

and currency, provide their own 

security and have experienced 

some problems with theft by 

employees. Although security is 

necessary to carry out the agencies’ 

missions, their primary function is 

producing money. In light of these 

thefts, a congressional committee 

asked GAO whether the Mint and 

BEP should continue to provide 

their own security or whether the 

United States Secret Service should 

provide their security. 

Among the issues that GAO was 

asked to address were (1) how do 

the Mint, BEP, and other 

organizations that produce or 

handle large amounts of cash 

provide their security; (2) what 

thefts have occurred at the Mint 

and BEP and what steps have they 

taken to prevent thefts from 

recurring; and (3) what are the 

potential benefits and costs of 

having the Secret Service provide 

Mint and BEP security? 

The Mint said it generally agreed 

with the findings and conclusions 

that applied to the Mint. BEP and 

the Secret Service provided 

technical comments regarding the 

report, which GAO incorporated 

where appropriate, but had no 

overall comments on the report. 

www.gao.gov/cgi-bin/getrpt?GAO-03-696.

To view the full report, including the scope 

and methodology, click on the link above. 

For more information, contact Bernard Ungar 

at (202) 512-2834 or ungarb@gao.gov. 

Highlights of GAO-03-696, a report to the 

Subcommittee on Domestic and 

International Monetary Policy, Trade, and 

Technology, Committee on Financial 

Services, House of Representatives 

July 2003 

COIN AND CURRENCY PRODUCTION 

Issues Concerning Who Should Provide 

Security 
Page i GAO-03-696 Who Should Provide U.S. Mint and BEP Security

Contents

Letter 1

Results in Brief 2

Background 4

How Security Is Provided at the Mint, BEP, and Selected Other 

Organizations 5

Thefts at the Mint and BEP and Steps They Have Taken to Prevent 

Such Incidents 9

Potential Benefits and Costs of Having the Secret Service Provide 

Mint and BEP Security 15

Agency Comments 21

Appendixes

Appendix I: Scope and Methodology 22

Appendix II: Data Concerning the U.S. Mint and the Bureau of Engraving 

and Printing Police Forces 25

Appendix III: Data Regarding the United States Secret Service’s Uniformed 

Division 26

Appendix IV: Comments from the U.S. Mint 27

Abbreviations

BEP Bureau of Engraving and Printing

CSRS Civil Service Retirement System

DHS Department of Homeland Security

FERS Federal Employees Retirement System

FLETC Federal Law Enforcement Training Center

FPS Federal Protective Service

GSA General Services Administration

OPM Office of Personnel Management

TSA Transportation Security Administration

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Page 1 GAO-03-696 Who Should Provide U.S. Mint and BEP Security

United States General Accounting Office

Washington, D.C. 20548

Page 1 GAO-03-696 Who Should Provide U.S. Mint and BEP Security

A

July 18, 2003 Letr

The Honorable Peter T. King

Chairman

The Honorable Carolyn B. Maloney

Ranking Minority Member

Subcommittee on Domestic and International 

Monetary Policy, Trade, and Technology 

Committee on Financial Services

House of Representatives

The U.S. Mint and the Bureau of Engraving and Printing (BEP)—

Department of the Treasury agencies that produce the nation’s coins and 

currency—have experienced some thefts in the last decade by their 

employees, including the theft of about $1.6 million in test currency1

 from 

BEP in 1994. The government’s money producing facilities are also 

considered by law enforcement officials to be potential terrorist targets 

because of their symbolic importance and role in the U.S. economy. During 

fiscal year 2002, the Mint produced and shipped about 15 billion circulating 

coins, and BEP produced and shipped about 7.1 billion Federal Reserve 

notes. Although the primary mission of the Mint and BEP is to produce 

money, they also provide their own security. 

In light of these thefts by Mint and BEP employees, you asked us to review 

(1) how security is provided at the Mint and BEP and how that compares 

with the security arrangements at coin and currency producing 

organizations in other countries and at businesses that handle large 

amounts of money, (2) what thefts have occurred at the Mint and BEP in 

recent years and what steps have been taken to prevent thefts from 

recurring, and (3) what are the potential benefits and costs of having the 

United States Secret Service provide Mint and BEP security?

To address these questions, we obtained and reviewed Mint, BEP, and 

Secret Service police job classifications, application and training 

requirements, and salaries and benefits; thefts that occurred from 1998

1

Test currency is produced for design, equipment, and/or material testing or experimental 

purposes to evaluate counterfeit deterrent features or for other purposes. In this case, the 

currency was spendable and looked like real money. 
Page 2 GAO-03-696 Who Should Provide U.S. Mint and BEP Security

through 20022 at the Mint and from 1993 through 2002 at BEP; crimes that 

occurred and arrests that were made from 1993 through 2002 at buildings 

protected by the Secret Service’s Uniformed Division; and government and 

consultant security assessments of Mint and BEP security. We sought 

information from the other G7 nations (Canada, France, Germany, Italy, 

Japan, and the United Kingdom) regarding the security arrangements at 

their 12 money producing facilities and received responses from 8 

organizations in those countries. Further, we verified whether 

recommendations for security improvements at the Mint and BEP had been 

implemented. In addition, we interviewed officials from the Mint, BEP, 

Secret Service, and the Federal Reserve System and representatives from 

selected businesses, such as banks and casinos, that handle a large amount 

of cash about their security arrangements. We did our work in Washington, 

D.C.; Philadelphia, Pennsylvania; and Ft. Knox, Kentucky, in accordance 

with generally accepted government auditing standards and investigative 

standards established by the President’s Council on Integrity and Efficiency 

from July 2002 through June 2003. Our detailed scope and methodology are 

contained in appendix I.

Results in Brief The Mint and BEP use their own police forces to protect the money they 

produce and its facilities and employees. Eight of the 12 coin and currency 

organizations in the other G7 nations responded to our requests for 

information. Four organizations reported that they only used their own 

security forces; 2 organizations said they used their own security forces 

supplemented with contractor personnel; 1 organization said it used an 

outside agency to supplement its own security force; and 1 organization 

said that it used an outside agency to provide its security. The six casino 

and banking companies that we contacted handle large amounts of cash, 

and they used either their own security staff or contractor staff. In general, 

the businesses that used their own employees to provide security said they 

did so to maintain greater control over their security operations, while the 

businesses that used contract security personnel generally said they did so 

because it was less costly.

The Mint reported that about $92,862 of government property, primarily 

coins, was stolen from 1998 through 2002, involving 74 incidents. This 

amount includes the market value of coins with production errors that 

2

The Mint did not have data regarding thefts that occurred from 1993 through 1997; 

therefore, it provided data on thefts that occurred from 1998 through 2002.
Page 3 GAO-03-696 Who Should Provide U.S. Mint and BEP Security

were stolen from the Mint. BEP reported 11 incidents of theft from 1993 

through 2002 totaling about $1.8 million, including 1 theft of $1.6 million in 

currency by an employee in 1994. According to Mint and BEP security 

officials, the thefts that occurred did not happen because of deficiencies in 

the existing security forces, but were the result of breaches of trust by 

employees. Moreover, the Mint and BEP have had outside organizations 

review their security and assess threats and make recommendations for 

improvements. The Mint has taken measures to prevent employee thefts, 

such as improving internal controls and accountability over the production 

of coins with errors, which are valuable to coin collectors. Among the 

measures that BEP has taken to prevent employee thefts are implementing 

camera surveillance of production employees and reducing the amount of 

money in the vault where $1.6 million was stolen in 1994. We did not 

identify any major security gaps that the Mint and BEP are not currently 

addressing.

According to the Secret Service, if it were given the responsibility of 

protecting the Mint and BEP, the two agencies could benefit from the 

Secret Service’s expertise in protection and criminal investigations. 

However, the disadvantages of using the Secret Service are that additional 

costs could be incurred for initial training and retirement benefits. Further, 

unlike Secret Service police officers, Mint and BEP security personnel are 

familiar with the coin and currency production process, which is a benefit 

in identifying security risks in such manufacturing facilities. An alternative 

regarding the Mint and BEP police forces would be to transfer them to a 

new, separate unit of the Uniformed Division. Under this alternative, the 

existing Mint and BEP police forces would become a second tier of the 

Uniformed Division and would be trained, supervised, and managed by the 

Secret Service. A potential advantage of this arrangement would be that the 

separate unit possibly could be used as a stepping-stone for Mint and BEP 

police who would like to become Uniformed Division officers. Further, this 

arrangement could streamline activities, such as procurement, training, 

and recruitment, that may save the government money. However, creating 

two tiers of Uniformed Division officers with different hiring standards, 

retirement benefits, and collective bargaining rights could cause problems 

with morale. According to the Secret Service, because of the differences in 

the hiring standards between the Uniformed Division and the Mint and BEP 

police, the stepping-stone concept for the Mint and BEP police officers 

would be impractical and the Secret Service would not use them in 

fulfilling its other protective responsibilities. In addition, placing 

responsibility for the security of the Mint and BEP in a separate agency that 

is not part of the Treasury Department could hinder the responsiveness of 
Page 4 GAO-03-696 Who Should Provide U.S. Mint and BEP Security

the security personnel to the Mint and BEP. The Secret Service said that 

this alternative offers no advantages to the Secret Service; would place 

additional financial, manpower, and other administrative burdens on the 

agency; and would dilute the Uniformed Division’s protective mission.

In commenting on a draft of this report, the Mint said it generally agreed 

with the findings and conclusions that applied to the Mint. BEP and the 

Secret Service had no overall comments on the draft report.

Background The Mint and BEP, which are part of the Treasury Department, produce the 

nation’s coins and currency. The Mint primarily produces circulating coins 

in Denver, Colorado, and Philadelphia. It also makes numismatic coins and 

medals and stores over $100 billion in government precious metals at 

facilities in Denver; Fort Knox; Philadelphia; San Francisco, California; 

Washington, D.C.; and West Point, New York. BEP produces (1) the nation’s 

currency for the Federal Reserve System, (2) many security documents 

that the federal government issues, and (3) some postage stamps. Its 

production facilities are in Washington, D.C., and Ft. Worth, Texas. During 

fiscal year 2002, the Mint produced and shipped about 15 billion circulating 

coins at a cost of $430.9 million, including $47.2 million for security. BEP 

produced and shipped about 7.1 billion Federal Reserve notes in 2002 at a 

cost of $376.7 million, including $33.2 million for security. 

The authority of the Mint and BEP to establish police forces is derived from 

40 U.S.C. § 1315, which provides the Mint and BEP police with powers to 

enforce federal laws and regulations for the protection of individuals and 

property, including making arrests and carrying firearms. Prior to the 

enactment of the Homeland Security Act of 2002, the Administrator of the 

General Services Administration (GSA), through GSA’s Federal Protective 

Service (FPS), was responsible for policing government buildings under 

GSA’s control and had delegated this responsibility to the Secretary of the 

Treasury who redelegated it to the Mint and BEP. Although the Homeland 

Security Act amended 40 U.S.C. § 1315 by transferring responsibility for 

this policing authority to the Secretary of the Department of Homeland
Page 5 GAO-03-696 Who Should Provide U.S. Mint and BEP Security

Security (DHS),3 the savings provisions in the act state that the existing 

delegations will continue to apply.4 Additional security legislation found in 

Public Law 104-208 (1996) provides Mint and BEP police officers with the 

authority to carry out their duties on Mint and BEP property and the 

surrounding areas and while transporting coins, currency, and other agency 

assets.5

The primary mission of the Secret Service is to protect the President and 

other individuals, enforce the nation’s counterfeiting laws, and investigate 

financial crimes. In carrying out this mission, the Secret Service’s 

Uniformed Division also protects the buildings in which the people it 

protects are located, such as the White House complex, the Treasury 

Department headquarters building and annex, the Vice President’s 

residence, and foreign diplomatic missions. The Uniformed Division has 

statutory authority to carry out its duties under 3 U.S.C. § 202 and 18 U.S.C. 

§ 3056, including the power to make arrests, carry firearms, and execute 

warrants issued under the laws of the United States. The Secret Service’s 

jurisdiction extends throughout the United States on mission-related work.

How Security Is 

Provided at the Mint, 

BEP, and Selected 

Other Organizations

The Mint and BEP use their own police forces to protect their facilities and 

the money they produce. Eight of the 12 coin and currency organizations in 

the other G7 nations responded to our requests for information. Four 

organizations reported that they only used their own security forces; 2 

organizations said they used their own security forces supplemented with 

contractor personnel; 1 organization said it used an outside agency to 

supplement its own security force; and 1 organization said that it used an 

outside agency to provide its security. The six casino and banking 

businesses that we contacted, which handle large amounts of cash, used 

either their own security staff or contract staff. In general, the businesses 

that used their own employees to provide security said they did so to 

maintain greater control over their security operations, while the 

businesses that used contract security personnel generally said they did so 

because it was less costly. 

3

Public Law 107-296, 116 Stat. 2135, 2178 (2002).

4

Public Law 107-296, 116 Stat. 2135, 2310-2311 (2002).

5

Note to 31 U.S.C. § 5141.
Page 6 GAO-03-696 Who Should Provide U.S. Mint and BEP Security

Mint and BEP Police Forces As of March 2003, the Mint had 381 police officers. It also employed 38 

people to provide administrative support for its security operations. BEP 

had 209 police officers as of March 2003. It also employed 36 people to 

provide administrative support for its security operations. In addition, BEP 

employed 79 security specialists, investigators, and security managers who 

BEP does not count as police officers, but who are licensed and trained to 

carry firearms and can provide back-up for the police. BEP conducts most 

of its own background investigations, while the Mint contracts out this 

work.6

 

The Mint and BEP police primarily provide security by guarding entry and 

exit at the agencies’ facilities and conducting electronic surveillance. In 

contrast to the Secret Service, which is concerned primarily with 

protecting individuals and, as part of that mission, controlling public access 

into protected facilities, the Mint and BEP police are focused on preventing 

employees from taking coins and currency from the facilities. Both the 

Mint and BEP police use outside experts to conduct threat assessments 

regarding their facilities and to make recommendations for security 

improvements.

The Mint and BEP police provide security for production facilities that are 

not located in the same cities. The Mint police provide protection at the 

primary coin production facilities in Denver and Philadelphia; the facilities 

in San Francisco and West Point, which produce numismatic coins; the Ft. 

Knox facility, where gold and other precious metals are stored; and the 

Mint’s Washington, D.C., headquarters. The BEP police provide protection 

at BEP’s Washington, D.C., headquarters and at currency production 

facilities in Washington, D.C., and Ft. Worth.

Because both the Mint and BEP protect money producing facilities, the two 

agencies have considered merging their police forces. According to the 

Mint, a combined police force could exercise greater flexibility in 

deploying security personnel in response to emergencies. However, the 

6

Background investigations are conducted on Mint and BEP job applicants and contractors, 

and periodic investigation updates are conducted on current employees. The Mint’s 

background investigations are conducted by the Internal Revenue Service’s National 

Background Investigation Center and the Office of Personnel Management (OPM). In fiscal 

year 2002, BEP conducted 1,247 background investigations and referred 191 investigations 

to OPM. BEP referred these investigations to OPM because the applicants had lived and 

worked in multiple states. According to BEP, it was more cost-effective for OPM to conduct 

those investigations because OPM has several offices located throughout the United States.
Page 7 GAO-03-696 Who Should Provide U.S. Mint and BEP Security

Mint also said that (1) because of the geographic dispersion of the Mint’s 

and BEP’s production facilities, the number of police positions that could 

be eliminated through a merger of the police forces would be limited and 

(2) all Mint and BEP police officers would have to be trained in the security 

aspects of both the coin and currency production processes. 

BEP management was opposed to merging the Mint and BEP police forces 

because the centralization of the forces would not necessarily lead to a 

more effective security effort, and these officials raised questions regarding 

managerial controls, allocation of resources and funds, and accountability. 

BEP management noted that because Mint and BEP production facilities 

are not located in the same cities, local supervision still would be needed at 

each facility. 

Although the Mint and BEP are not pursuing a merger of their police forces, 

they are considering sharing certain security-related functions. In April 

2003, Mint and BEP officials met to discuss the sharing of security-related 

services and agreed to share intelligence information, and they are studying 

the feasibility of jointly conducting drug testing and background 

investigations.

Appendix II provides specific information regarding Mint and BEP police 

forces in terms of the facilities they protect, job classifications, number of 

police, application requirements, starting salaries, attrition rates, and 

training requirements.

Security Arrangements at 

Money Producing Facilities 

in Other Countries

We sent questionnaires to both the coin and currency producing 

organizations in the six other G7 nations (Canada, France, Germany, Italy, 

Japan, and the United Kingdom) requesting information about who 

provides their security and whether they had experienced thefts from 1993 

through 2002. Eight of the 12 coin and currency producing organizations 

responded to our requests for information. Four organizations reported 

that they only used their own security forces; 2 organizations said they 

used their own security forces supplemented with contractor personnel; 1 

organization said it used its own security force and personnel from the 

country’s customs agency; and 1 organization said that the country’s 

Ministry of Defense provided its security. 

Two of the 8 organizations reported that they had experienced thefts of 

$1,000 or more over the last 10 years; 1 of those organizations was 

protected by its own security force, and the other was protected by the 
Page 8 GAO-03-696 Who Should Provide U.S. Mint and BEP Security

country’s Ministry of Defense. The organization that was protected by its 

own security force reported experiencing two thefts. One incident involved 

an employee’s theft of gold that was worth about $40,000. The other 

incident involved two employees’ theft of error coins worth about $1,000 to 

coin collectors. The second organization, which was protected by the 

country’s Ministry of Defense, reported that currency worth about $40,200 

was stolen from its facilities. The other 6 organizations that responded said 

they had not experienced any thefts of $1,000 or more over the last 10 

years.

Security Arrangements at 

Businesses that Handle 

Large Amounts of Cash

We contacted four banks and two casinos regarding who provides their 

security and why because, like the Mint and BEP, these entities also handle 

large amounts of cash. The security director for one banking company said 

that it only uses its own security guards in its major cash vault facilities, 

which may contain hundreds of millions of dollars. He said that from his 

company’s assessment of risk factors and experiences, it appeared that its 

own well-trained, well-paid security guards are more dependable, reliable, 

and honest than contract guards. The security directors at the three other 

banks we interviewed said that they used contract security personnel to 

provide their security because of the cost advantages compared with hiring 

in-house staff. Of those three companies that used contract guards, one 

also used in-house staff to supervise contract personnel and to guard its 

cash vault operations. 

Security directors from two major casino companies both said that they 

employ their own security staff, rather than using contract staff. The 

security director of the first company said that using its own security staff 

provides the company with more control, for example, by conducting 

background investigations on staff to ensure their suitability. Similarly, the 

security director of the second company said that it is difficult to maintain 

supervisory control or take corrective actions over contract security 

officers. 
Page 9 GAO-03-696 Who Should Provide U.S. Mint and BEP Security

Security Arrangements at 

the Federal Reserve System

The Federal Reserve System, the nation’s central bank, employs its own 

police force.7 Security personnel were granted federal law enforcement 

authority under the Uniting and Strengthening America by Providing 

Appropriate Tools Required to Intercept and Obstruct Terrorism (USA 

Patriot) Act of 2001.8

 A Federal Reserve security official said that the 

Federal Reserve preferred to use its own police force because it is 

important to (1) know the officers and their training and capabilities and 

(2) have the police force under its management control. The Federal 

Reserve reported that it had experienced 12 internal thefts by its employees 

in the past 10 years totaling $516,080, of which $239,562 has been recovered 

to date.9

Thefts at the Mint and 

BEP and Steps They 

Have Taken to Prevent 

Such Incidents

We asked the Mint and BEP to provide information regarding thefts that 

occurred over the last decade. We reviewed these incidents with Mint and 

BEP security officials in terms of what happened, why, and how they 

occurred, and what steps have been taken to prevent thefts from recurring. 

According to Mint and BEP security officials, the thefts did not occur 

because of deficiencies in the existing security forces, but were the result 

of breaches of trust by employees. Further, both the Mint and BEP have 

had threat assessments conducted regarding their facilities and have 

generally implemented the recommendations that were made to improve 

security. As a result, it does not appear that the Mint and BEP have major 

security gaps that they are not currently addressing.

7

After the September 11, 2001, terrorist attacks, the Board of Governors temporarily 

supplemented the security at its Washington, D.C., facilities with an armed contract security 

service, but the contact security service is now being phased out.

8

Public Law 107-56, 115 Stat. 272, 333 (2001), amended 12 U.S.C. § 248, by adding subsection 

(q) on uniform protection authority of Federal Reserve facilities.

9

The Federal Reserve indicated that the theft of some of the missing money is still under 

investigation and that it expects to recover more of the stolen cash.
Page 10 GAO-03-696 Who Should Provide U.S. Mint and BEP Security

Thefts at the Mint Although we requested that the Mint provide information on thefts that 

occurred during the past 10 years, the Mint indicated that it did not have 

records of thefts that occurred more than 5 years ago and provided records 

regarding incidents that occurred from 1998 through 2002. The Mint’s 

records indicated that about $92,862 of government property (primarily 

coins) was stolen during that time, including $80,000 total market value of 

coins with production errors (“error coins”) that a Mint employee stole 

from 1998 through 2000.10 The records reflected 74 reports of theft that 

occurred both inside and outside of Mint facilities. They also indicated that 

two employees were convicted of stealing from the Mint; an employee who 

stole 400 to 500 error coins was sentenced to prison, and another employee 

who was caught stealing 35 1-dollar coins was sentenced to probation. 

Mint records indicated that about $82,357 of property (primarily coins) was 

reported stolen from inside Mint facilities from 1998 through 2002, 

involving 28 incidents, including the following:

• the theft by an employee of 400 to 500 coins, including error coins with a 

total value to coin collectors of about $80,000, and

• 27 other incidents involving the theft of $2,357 of coins and government 

property, such as office and production equipment, including 10 

incidents involving coins found on employees or contractors with a face 

value of at least $36.11

Outside of Mint facilities, about $10,505 in government property was 

reported stolen, involving 46 incidents, including the following:

10The Mint did not record the value of all items that were stolen during this period. 

Therefore, the total value of the items stolen is incomplete. The Mint also reported the total 

market value, rather than the face value, of the 400 to 500 coins that were stolen by an 

employee from 1998 through 2000. The head of a company that specializes in the buying and 

selling of error coins told us that the value of error coins depends on many factors, such as 

the type of error and the rarity of the coins. He said, for example, that a circulating 

commemorative state quarter that is 50 percent off-center could be worth between $150 to 

$200, depending on which state is on the coin and how many similar coins are available. 

However, other rare error coins can be worth tens of thousands of dollars apiece. Mint 

officials said that although error coins are valuable to coin collectors, they are considered to 

be scrap by the Mint with negligible cost.

11Because the Mint did not maintain records regarding the value of some of the coins 

involved in these incidents, the actual value of these items is higher than $36.
Page 11 GAO-03-696 Who Should Provide U.S. Mint and BEP Security

• 33 reports from Mint customers who claimed that they did not receive 

coins sent through the mail, valued at $6,357; 

• 9 reports of other stolen property, such as coins, coin blanks (coins that 

have not yet been stamped), and office equipment, valued at $1,356;

• 3 reports of penny blanks that were stolen from rail cars in 1999 and 

2000, valued at about $592;12 and

• 1 report of $2,200 in nickels that were stolen while being transported by 

truck in 2000.

We asked the Mint Police Chief whether the thefts occurred due to 

deficiencies in the police force and what has been done to prevent thefts 

from recurring. The Police Chief said that the incidents occurred because 

of an abuse of trust by employees, which he said that no police force could 

prevent. Regarding the most serious incident—the theft of 400 to 500 coins 

by a Mint employee from 1998 through 2000—the Police Chief said that this 

occurred when the Mint was producing a high volume of coins and new 

production equipment was installed at the Philadelphia facility, which 

began producing large numbers of error coins. He said that thousands of 

error coins were on the production floor during this period. He also said 

that because the first coin made in a batch was not being checked before 

continuing a production run, many error coins were produced before 

corrections were made to the equipment. The Police Chief said that the 

employee was able to take the coins out of the Mint facility over that 3-year 

period because he did not exceed the threshold set to trigger the metal 

detectors.

The steps that the Mint took to prevent thefts from recurring did not 

involve improvements to the police force, but concerned improved internal 

controls and production procedures. For example, to prevent thefts of 

error coins, the Mint has required that the first coin produced in a batch be 

checked for errors; that new equipment be used to quickly destroy error 

coins once they are made, rather than having them brought to the metal 

fabricator to be melted; that a report be prepared and provided to the 

police chief each time an error coin is produced; and that error coins be 

locked up. The Mint also is in the process of sealing off the production 

12This amount represents the value of penny blanks stolen during two of the three incidents. 

The Mint did not report the value of the penny blanks stolen in the third incident.
Page 12 GAO-03-696 Who Should Provide U.S. Mint and BEP Security

areas from the rest of the production facility. In addition, the Mint is 

considering requiring production employees to wear uniforms, which 

would not have pockets or pants cuffs where coins could be hidden. 

Regarding the coins that Mint customers purchased, but claimed that they 

did not receive, the Mint’s Police Chief said the Mint has joined the U.S. 

Postal Service’s interagency fraud group, which helps to identify postal 

addresses that could be used to fraudulently order coins. Regarding the 

theft of coins while being transported, the Mint Police Chief said that coins 

are transported by contractors and that the government is fully insured for 

their loss. The Police Chief said that the Mint tries to minimize thefts by 

employees by having background investigations conducted on personnel 

hired and by severely punishing those who are caught stealing. 

The Mint indicated that it conducts threat assessments of its facilities every 

5 years. In December 2000, Sandia National Laboratories assessed Mint 

facilities and made 42 recommendations to improve security in its report. 

None of these recommendations pertained to improvements in the police 

force, for example, in terms of the officers’ training or skills. 

In February and March 2003, we visited the Mint’s Philadelphia and Ft. 

Knox facilities and found that 9 of the 13 recommendations contained in 

the Sandia report pertaining to those facilities were fully implemented. Of 

the 4 recommendations that had not been implemented, the Mint indicated 

that it plans to implement 3 of them. The fourth recommendation had not 

been implemented because the Mint believed, and we agreed, that it 

detracted from, rather than enhanced, security. The Mint is also in the 

process of conducting other security reviews in connection with 

countering possible terrorist threats.13 To avoid possibly compromising 

security, we are not discussing in this report the specific subjects of the 

ongoing reviews or the specific security recommendations contained in 

past assessments. 

We also contacted two coin dealers who specialize in buying and selling 

error coins to ask about the recent circulation of such coins. The head of 

one firm said that the number of error coins that he has seen has dropped 

13According to the Mint’s Police Chief, following the September 11, 2001, terrorist attacks, 

information regarding the Mint’s Philadelphia facility was found in Afghanistan indicating 

that it was a potential terrorist target.
Page 13 GAO-03-696 Who Should Provide U.S. Mint and BEP Security

significantly since the spring of 2001. The head of the other firm said that 

he is now seeing the fewest number of error coins in decades. 

Thefts at BEP BEP reported 11 incidents of theft from 1993 through 2002 involving about 

$1.8 million.14 According to BEP, seven employees were convicted of theft 

in connection with these incidents, including one employee who was 

sentenced to prison, and about $1.5 million of the stolen money was later 

recovered. The incidents included the theft of 

• $1,630,000 in test $100 bills from BEP’s Advanced Counterfeit 

Deterrence Vault by a program manager in 1994 ($1.3 million of the 

stolen money was later recovered); 

• $60,000 from a Federal Reserve vault inside BEP facilities by three BEP 

employees in 1995;

• $30,000 in blank, engraved $100 bills in 2001 by the former BEP currency 

production chief;

• $20,960 worth of stamps by a postage stamp worker in 1996, which was 

recovered;15

• $2,000 (100, $20 notes) by a machine operator in 1993 (most of which 

were later recovered); 

• a 32-note sheet of $10 blank engraved notes by a contract cleaning 

employee in 1993; and

• $25 in worn and soiled currency in 1999 by a currency examiner, who 

also admitted to taking $250 on one occasion and $400 on two other 

occasions.

No suspects were identified with respect to four other security incidents. 

Three of the four incidents involved $5,500 in currency that was reported 

14Some cases involved currency for which the production process was not yet completed. 

One incident accounted for over $1.6 million of the $1.8 million total.

15This employee was caught taking $5,600 worth of stamps from a BEP production facility. 

Another $15,360 worth of stamps was found in the employee’s BEP locker and in the trunk 

of his automobile.
Page 14 GAO-03-696 Who Should Provide U.S. Mint and BEP Security

missing from BEP facilities in 1997 and 1998. The fourth incident involved 

the recovery from Atlantic City casinos in 1996 and 1997 of $16,000 in 

unfinished notes produced by BEP.

We asked BEP’s Security Chief whether the thefts occurred because of 

deficiencies in the police force and what has been done to prevent thefts 

from recurring. The Security Chief said that the incidents did not occur 

because of deficiencies in the police force, but were due to a breach of 

trust by employees. Further, he said that bags and purses that employees 

carry with them to work are subject to search when leaving the facilities 

without first establishing probable cause,16 but that BEP police need to 

establish probable cause before searching an employee. Further, he 

pointed out that in some cases, the currency and postage stamps that 

employees attempted to steal did not leave BEP facilities because the 

police were effective in preventing removal of the items. 

BEP’s Security Chief said that the measures taken to prevent the 

recurrence of thefts include implementing the video surveillance of 

production staff, reducing the amount of money in the vault where $1.6 

million was stolen in 1994, increasing the number of layers of wrap 

surrounding the currency after it is produced, rewrapping currency in the 

presence of security personnel when the original wrap has been damaged 

due to handling, increasing the number of police patrols in certain areas, 

having currency transported by a least two authorized personnel, and 

having the word ‘TEST’ imprinted on test currency.

In June 1994, following a BEP employee’s theft of $1.6 million in test 

currency from BEP’s Washington, D.C., production facility, the Treasury 

Department directed that steps be taken to improve the security and 

internal controls at BEP, including an in-depth physical security review to 

be conducted by the Secret Service. In December 1994, the Secret Service 

completed its review and recommended 343 security improvements at BEP. 

Also, BEP contracted with KPMG Peat Marwick to review internal controls 

at BEP’s production facilities. In January 1995, KPMG made 134 

recommendations for internal control improvements. Further, in 

September 1999, BEP contracted with the consulting firm Kelly, Anderson

16Probable cause has been defined as reasonable grounds to suspect that a person has 

committed or is committing a crime.
Page 15 GAO-03-696 Who Should Provide U.S. Mint and BEP Security

& Associates17 to review, evaluate, and document security and internal 

control corrective actions taken by BEP. Kelly Anderson reported in 

February 2000 that 19 of the Secret Service’s recommendations and 7 of the 

KPMG recommendations needed additional effort. In February and March 

2003, we found that BEP had fully implemented 14 of the 19 Secret Service 

recommendations and is in the process of implementing another. BEP 

indicated that it did not intend to fully implement the other 4 

recommendations (3 of the 4 were partially implemented) for cost and 

other reasons, which we did not believe to represent major gaps in security. 

We selected a random sample of 20 other Secret Service recommendations 

that were identified as being high risk and KPMG recommendations 

pertaining to that facility and verified that they had been implemented. 

Three of the Secret Service recommendations directly pertained to the 

police force. Two of the recommendations were to improve police training, 

and the third was to improve background checks on police before they are 

hired. Kelly Anderson reported in 2000 that these recommendations were 

fully implemented. 

BEP’s Security Chief said that, in addition to the agency’s ongoing 

assessments of terrorist-related threats, BEP is planning to have a 

contractor further assess terrorist threats and possible countermeasures. 

To avoid possibly compromising security, we are not discussing in this 

report what the future threat assessment would encompass or the specific 

security recommendations contained in past assessments.

Potential Benefits and 

Costs of Having the 

Secret Service Provide 

Mint and BEP Security

According to the Secret Service, if it were given the responsibility of 

protecting the Mint and BEP, those agencies could benefit from the Secret 

Service’s expertise in protection and criminal investigations. However, 

unlike the Secret Service’s Uniformed Division, the Mint and BEP police 

are already familiar with the coin and currency production processes, 

which is an advantage in identifying security risks. In addition, the 

government would incur additional costs for the initial training of police 

and retirement benefits if the Secret Service assumed responsibility for 

protecting the Mint and BEP. 

17Kelly Anderson, which is based in Alexandria, Virginia, provides consulting services to 

federal government agencies under a contract with the General Services Administration for 

management, organization, and business improvement services.
Page 16 GAO-03-696 Who Should Provide U.S. Mint and BEP Security

Secret Service’s Uniformed 

Division

The Secret Service’s Uniformed Division consists of police officers whose 

duties are focused on the agency’s protective responsibilities, which are to 

protect the President and other individuals. As of February 2003, the 

Uniformed Division had 1,106 officers. The Secret Service requires 

Uniformed Division officers to obtain top-secret security clearances and 

submit to a polygraph test, which the Mint and BEP do not. The Secret 

Service also requires its officers to receive more initial training than the 

Mint and BEP police, and the Secret Service’s training is focused on its 

protective mission. Appendix III provides Uniformed Division data 

regarding facilities that the Secret Service officers protect, number of 

police, application requirements, starting salaries, attrition rates, and 

training requirements.

We asked the Secret Service to provide data on the number and types of 

crimes and arrests that had occurred at the White House complex (which 

includes the White House, the Eisenhower Executive Office Building, and 

the New Executive Office Building) and the adjacent Treasury Department 

headquarters building and annex during the last 10 years. It reported an 

average of 1,574 incidents each year at these facilities from 1993 through 

2002. The Secret Service reported, for example, in 2002, 34 arrests, 30 bomb 

threats, 5 demonstrations, 177 incidents of weapons (not firearms) found 

during magnetometer checks, 3 fence jumpers and unlawful entries, and 44 

suspicious packages and vehicles.18 We also asked the Secret Service to 

break down the types of arrests that were made at the White House 

complex and the Treasury Department headquarters and annex during the 

past 10 years. The data indicated that from 1993 through 2002, the Secret 

Service made 72 arrests for unlawful entry, 66 of which were in the White 

House complex, and 25 arrests for theft in the area surrounding the White 

House complex (none of the arrests for thefts were reported as having 

occurred within the White House complex or the Treasury Department 

building).

In providing the data regarding the number of security incidents that 

occurred at facilities protected by the Secret Service, the Secret Service 

emphasized that the Uniformed Division has a different mission than the 

Mint and BEP. The Secret Service said that the Uniformed Division is 

18The number of incidents that the Secret Service reported for 2002 was substantially lower 

than in previous years from 1993 through 2001. According to the Secret Service, the 

decrease was likely the result of the suspension of public tours at the White House after the 

September 11, 2001, terrorist attacks.
Page 17 GAO-03-696 Who Should Provide U.S. Mint and BEP Security

concerned primarily with protecting individuals and, as part of that 

mission, controlling public entry into its protected facilities. By 

comparison, the Mint and BEP police forces are concerned primarily with 

the theft of coins and currency by their agencies’ own employees from their 

respective facilities. According to the Secret Service, this difference 

between the missions of the Uniformed Division and the Mint and BEP is 

substantial and unique, and to compare data regarding the number of 

security incidents that occurred at facilities protected by the Uniformed 

Division and the Mint and BEP would result in an unfair analysis of the 

abilities and actions of the Uniformed Division. We are not implying that 

these data are similar or comparable; we present these data to illustrate the 

differences between the types and number of security incidents that are 

handled by the Secret Service and the Mint and BEP, which reflect their 

different missions, and to show that facilities protected by the Secret 

Service are not crime-free.

The Chief of the Uniformed Division said that assuming the additional 

responsibility of protecting the Mint and BEP would result in the dilution of 

the Secret Service’s core protective responsibilities. He said that giving the 

Secret Service responsibility for the security of Mint and BEP facilities 

would divert from the agency’s core protective mission and would cause a 

staffing shortage. Further, he said that it would not be in the Secret 

Service’s best interests to take on the additional responsibility of providing 

security for the Mint and BEP at a time when the effect of transferring the 

Secret Service from the Treasury Department to DHS is undetermined. 

Mint and BEP officials were opposed to having an outside law enforcement 

agency assume responsibility for their security functions because they said 

that security is best accomplished by their own employees who are familiar 

with the agencies’ internal operations and the coin and currency 

production processes. Mint and BEP officials also said that their police 

officers have opportunities for advancement through promotion to 

supervisory positions. BEP also said that police are encouraged to transfer 

into career security positions, such as general investigator and security 

specialist. However, they also said that a larger agency such as the Secret 

Service may offer more opportunities for advancement. We asked the 

Secret Service to provide data on the number of Uniformed Division 

officers who had become special agents at the agency from fiscal years 

1998 to 2002 and found that relatively few officers had become agents. 

(Duties of special agents include investigation and protection, while the 

mission of Uniformed Division officers is focused on protection.) The data 

indicated that an average of 21 officers had become special agents each 
Page 18 GAO-03-696 Who Should Provide U.S. Mint and BEP Security

year during that 5-year period out of an average Uniformed Division 

workforce of about 1,040 officers, or about 2 percent. 

If the Mint and BEP police became part of the Uniformed Division and 

there was a rotation of duties, the Secret Service’s mission of protecting the 

president and providing security at national special security events could 

be more appealing to some police officers, compared with the routine 

nature of protecting Mint and BEP facilities. The Mint’s Police Chief said 

that, to provide variety in the work of Mint police officers and to increase 

morale, up to 50 Mint police officers a year help the Uniformed Division 

perform duties at special events—for example, at the Olympics. 

Potential Costs Associated 

with Having the Secret 

Service Protect the Mint and 

BEP

If the Secret Service protected the Mint and BEP, the government could 

incur additional costs because the Secret Service requires more initial 

training for its officers than the Mint and BEP police, Uniformed Division 

officers can retire with less government service than the Mint and BEP 

police, and the Secret Service would have to increase management and 

overhead to handle the additional workforce. Further, it is unknown how 

many Mint and BEP police officers would be able to meet the Secret 

Service’s hiring standards or what the costs would be of absorbing these 

officers into the Secret Service’s retirement system.

The Uniformed Division provides new hires with 6 more weeks of initial 

training than the Mint police and 1 more week of training than the BEP 

police. The Uniformed Division spends an average of $20,033 per officer for 

initial training, compared with $16,306 per officer at the Mint and $18,791 

per officer at BEP. 

The government also could be expected to incur higher retirement costs if 

the Secret Service protected the Mint and BEP because Uniformed Division 

officers receive federal law enforcement retirement benefits, which allows 

them to retire after 20 years of service at age 50 or at any age with 25 years 

of service.19 By comparison, Mint and BEP police receive standard 

retirement benefits for federal employees, which generally allow them to 

retire after 30 years of service at age 55 if covered by the Civil Service 

19Under the Federal Employees Retirement System (FERS), officers receiving federal law 

enforcement retirement benefits receive 1.7 percent of their high-3 years of employment, 

multiplied by the first 20 years of service, and 1 percent multiplied by each year of service 

greater than 20 years. 
Page 19 GAO-03-696 Who Should Provide U.S. Mint and BEP Security

Retirement System (CSRS) or after 30 years of service under the Federal 

Employees Retirement System (FERS).20 Agency contributions for 

employees receiving federal law enforcement retirement benefits are 31.4 

percent for employees in CSRS and 22.7 percent for employees in FERS. By 

comparison, agency contributions for employees receiving standard 

retirement benefits are 17.4 percent for employees in CSRS and 10.7 

percent for employees in FERS. Further, because employees receiving 

federal law enforcement retirement benefits may retire sooner than those 

who do not receive such benefits, it is likely that there would be higher 

turnover in the police force, resulting in the need to train more officers and, 

thus, in higher training costs over time.

If the Secret Service assumed responsibility for protecting the Mint and 

BEP and added 590 officers to its Uniformed Division to carry out that 

responsibility, the size of the Uniformed Division’s police force of 1,106 

officers would increase by about 50 percent. Such an increase would likely 

require the Secret Service to add additional overhead and resources to 

manage the additional workforce. However, there also could be an offset by 

reducing or possibly eliminating similar positions at the Mint and BEP. It 

was not possible to estimate during our review what additional people and 

facilities would be needed or what cost would be incurred.

In addition, if the Secret Service assumed responsibility for protecting the 

Mint and BEP, it is unknown how many of the Mint and BEP police would 

qualify to become part of the Uniformed Division, considering that 

applicants to become Uniformed Division officers are required to submit to 

a polygraph test and obtain top-secret security clearances, which are not 

required for Mint and BEP police. According to the Secret Service, for 

example, a substantial number of applicants for the position of Uniformed 

Division officer are rejected at the polygraph stage of the process. The 

Secret Service also requires applicants to meet certain physical fitness 

standards. Lastly, for those Mint and BEP police hired by the Uniformed 

Division, there would be a cost of including them in the federal law 

enforcement retirement plan. According to the Office of Personnel 

Management, it could cost the government an estimated $72.7 million (in 

20To retire with full standard federal retirement benefits, employees generally must be at 

least between ages 55 and 57 with 30 years of service. The age at which they are eligible to 

retire with unreduced retirement benefits depends on the year of their birth and the specific 

retirement plan under which they are covered (CSRS or FERS). Employees who are age 60 

can retire with 20 years of service; employees who are age 62 can retire with 5 years of 

service. 
Page 20 GAO-03-696 Who Should Provide U.S. Mint and BEP Security

present value dollars) if the entire existing Mint and BEP police forces 

were given law enforcement retirement benefits. This computes to an 

average of about $123,000 per officer. Because it was not possible to 

determine how many of the existing Mint and BEP police officers would be 

absorbed by the Uniformed Division, we could not estimate how much this 

would cost.

An alternative regarding the Mint and BEP police forces would be to 

transfer them to a new, separate unit of the Uniformed Division. Under this 

alternative, the existing Mint and BEP police forces would become a 

second tier of the Uniformed Division and would be trained, supervised, 

and managed by the Secret Service. One potential advantage of this 

arrangement would be that the separate unit possibly could be used as a 

stepping-stone for Mint and BEP police who would like to become 

Uniformed Division officers. Further, this arrangement could streamline 

activities, such as procurement, training, and recruitment, that may save 

the government money. For example, a unified police force could help 

recruiting efforts by being able to offer a variety of duties and duty stations. 

However, according to the Secret Service, because of the differences in the 

hiring standards between the Uniformed Division and the Mint and BEP 

police, the stepping-stone concept for the Mint and BEP police officers 

would be impractical and the Secret Service would not use them in 

fulfilling its other protective responsibilities. The Secret Service said that 

this alternative offers no advantages to the Secret Service; would place 

additional financial, manpower, and other administrative burdens on the 

agency; and would dilute the Uniformed Division’s protective mission. 

Further, Uniformed Division officers receive federal law enforcement 

retirement benefits, while Mint and BEP police do not. 

The Mint and BEP police are covered by the labor management and 

employee relations provisions set forth in Chapter 71 of Title 5 of the 

United States Code, while the Secret Service employees are exempt from 

these provisions pursuant to 5 U.S.C. § 7103 (a)(3)(H). According to the 

Secret Service, if the Mint and BEP forces became a separate unit of the 

Uniformed Division, this would create animosity in the agency because the 

Mint and BEP police would have collective bargaining rights while 

Uniformed Division officers would not. The Mint said that because 

Uniformed Division officers receive federal law enforcement retirement 

benefits and the Mint and BEP police do not, the substantial disparity in the 

compensation between the Mint and BEP police officers and the 

Uniformed Division would create problems with morale and performance. 

In addition, the Mint said that placing responsibility for security in a 
Page 21 GAO-03-696 Who Should Provide U.S. Mint and BEP Security

separate agency that is not part of the Treasury Department could hinder 

the responsiveness of the security personnel to the Mint and BEP. 

According to BEP, because of the difference in hiring standards between 

the Uniformed Division and the Mint and BEP police forces, the Mint and 

BEP police forces comprising the second tier would always feel less than 

equal, which would also affect morale and create poor job performance.

Agency Comments We provided copies of a draft of this report to the Directors of the Mint, 

BEP, and Secret Service for comment. On June 30, we received written 

comments from the Director of the Mint, which are reprinted in appendix 

IV. The Mint Director said that the Mint concurred with the findings and 

conclusions that apply to the Mint. BEP and Secret Service liaisons with 

GAO provided by E-mail technical comments regarding the draft report, 

which we incorporated where appropriate, but did not provide overall 

comments on the report.

We are sending copies of this report to the Chairmen and Ranking Minority 

Members of the Senate Committee on Banking, Housing, and Urban Affairs, 

the House Committee on Financial Services, and the House Select 

Committee on Homeland Security; the Secretary of the Treasury; the 

Secretary of the Department of Homeland Security; the Directors of the 

Mint, BEP, and Secret Service; and other interested parties. We will also 

make copies available to others upon request. In addition, the report will be 

available at no charge on the GAO Web site at http://www.gao.gov.

Major contributors to this report were Bob Homan, John Baldwin, Paul 

Desaulniers, and John Cooney. If you have any questions, please contact 

me on (202) 512-2834 or at ungarb@gao.gov.

Bernard L. Ungar

Director, Physical Infrastructure Issues
Page 22 GAO-03-696 Who Should Provide U.S. Mint and BEP Security

Appendix I

Scope and Methodology AAppenednxidexiIs

To review how security is provided at the U.S. Mint and the Bureau of 

Engraving and Printing (BEP) and how it compares with other 

organizations, we interviewed Mint and BEP officials about their security 

practices, responsibilities, and security threats. We collected information 

about their police forces, including job classifications, number of police, 

application requirements, starting salaries, retirement benefits, attrition 

rates, training, and statutory authorities. In addition, we discussed with 

Mint and BEP officials the feasibility of consolidating certain securityrelated functions and collected information on the number of personnel 

who work on security at the two agencies, but who are not police officers. 

We also asked the 12 coin and currency producing organizations in the six 

other G7 nations (Canada, France, Germany, Italy, Japan, and the United 

Kingdom); the Federal Reserve; and businesses that handle a large amount 

of cash, such as banks and casinos, about who provides their security, why, 

and whether they had experienced thefts of items in value of more than 

$1,000 in each incident during the last 10 years. We chose to contact the 

coin and currency producing organizations in the other G7 nations because 

they were in other major industrialized, democratic countries. We received 

responses from 8 of the 12 foreign coin and currency producing 

organizations that we contacted regarding our requests for information. 

The coin and currency producing organizations in 1 country did not 

respond to our requests for information. The banks and casinos that we 

contacted were selected by the American Bankers Association and the 

American Gaming Association, which represent the banking and casino 

industries. However, the selected banks and casinos do not represent the 

views of the two industries. 

To determine what thefts have occurred at the Mint and BEP and whether 

steps have been taken to address them, we asked the agencies to provide 

information about thefts that have occurred at their facilities during the last 

10 years.1

 We also reviewed relevant Department of the Treasury Office of 

Inspector General reports, including investigative reports pertaining to 

certain incidents of theft. We then discussed those incidents with the Mint 

and BEP security officials, and we also discussed with the officials the 

steps that were taken to prevent thefts from recurring and whether the 

thefts were caused by deficiencies in the police forces. 

1

The Mint indicated that it did not have information regarding security incidents going back 

10 years. However, the Mint did provide information regarding security incidents that 

occurred during the past 5 years.
Appendix I

Scope and Methodology

Page 23 GAO-03-696 Who Should Provide U.S. Mint and BEP Security

Regarding Mint security, we also reviewed a 2000 Sandia National 

Laboratories report, which contained 42 recommendations to improve 

security, to determine whether its recommendations pertaining to the 

Mint’s Philadelphia, Pennsylvania, and Ft. Knox, Kentucky, facilities had 

been implemented. We visited those facilities because more 

recommendations pertained to those facilities compared with other Mint 

facilities. In addition, we contacted two coin dealers about the circulation 

of “error coins.” These dealers were selected because they specialized in 

the buying and selling of error coins.

Regarding BEP security, we reviewed a 1994 Secret Service report, a 1995 

KPMG Peat Marwick report, and a 2000 Kelly, Anderson & Associates 

report regarding recommendations to improve security at BEP facilities. 

We determined whether the 19 United States Secret Service 

recommendations and the 7 KPMG recommendations that Kelly Anderson 

indicated had not been implemented in 2000 were implemented. We also 

determined whether a random sample of 20 high-risk recommendations 

contained in the Secret Service and KPMG reports, which Kelly Anderson 

reported had been implemented, were actually implemented. We visited 

BEP’s Washington, D.C., facility to check whether recommendations had 

been implemented because the recommendations in the Secret Service and 

KPMG reports pertained to that facility.

To determine the potential benefits and costs of having the Secret Service 

provide Mint and BEP security, we asked the Mint, BEP, Secret Service, and 

Treasury Department for their views on which agency would be most 

effective regarding various security-relations functions. We also compared 

the information that we collected regarding the Secret Service’s Uniformed 

Division with the data collected regarding the missions, security forces, 

training costs, retirement benefits, and security incidents at the Mint and 

BEP. 

Regarding retirement costs, we asked the Office of Personnel Management 

(OPM) to estimate how much more it would cost the government if the 

Mint and BEP police were given the same law enforcement retirement 

benefits that the Uniformed Division officers receive. To calculate the 

estimate, OPM asked us to provide data on the number of police at the Mint 

and BEP who are in the Civil Service Retirement System and the Federal 

Employees Retirement System and their average salaries. We also asked 

the Mint, BEP, and Secret Service to provide their views on the advantages 

and disadvantages of transferring the Mint and BEP police forces to a 

second tier of the Uniformed Division. The scope of our work did not 
Appendix I

Scope and Methodology

Page 24 GAO-03-696 Who Should Provide U.S. Mint and BEP Security

include examining the advantages and disadvantages of contracting out 

security services for the Mint and BEP. 

We did our work in Washington, D.C.; Philadelphia; and Ft. Knox in 

accordance with generally accepted government auditing standards and 

investigative standards established by the President’s Council on Integrity 

and Efficiency from July 2002 through June 2003. 
Page 25 GAO-03-696 Who Should Provide U.S. Mint and BEP Security

Appendix II

Data Concerning the U.S. Mint and the Bureau 

of Engraving and Printing Police Forces ApendxiI

Sources: U.S. Mint and Bureau of Engraving and Printing.

a

This figure represents the attrition rate for police officers agencywide. Our June 2003 report on police 

recruitment and retention issues at 13 federal agencies, including the Mint and BEP, analyzed where 

Mint and BEP police who were stationed in Washington, D.C., and left their jobs in 2002, found other 

employment. (U.S. General Accounting Office, Federal Uniformed Police: Selected Data on Pay, 

Recruitment, and Retention at 13 Police Forces in the Washington, D.C., Metropolitan Area, GAO-03-

658 (Washington, D.C.: June 13, 2003).) According to that report, of the 21 Mint police who were 

stationed in Washington, D.C., and left their jobs in 2002, 18 went to the Transportation Security 

Administration (TSA) and 3 went to other federal law enforcement agencies. The report also indicated 

that of the 32 BEP police who were stationed in Washington, D.C., and left their jobs in 2002, 12 went 

to TSA, 12 went to other federal law enforcement agencies, 3 went to state and local law enforcement 

agencies, and no information was available regarding the other 5 officers.

Mint police BEP police

Protected facilities Mint facilities in Denver, Colorado; Ft. Knox, 

Kentucky; Philadelphia, Pennsylvania; San 

Francisco, California; West Point, New York; 

and Washington, D.C. 

BEP facilities in Ft. Worth, Texas; and 

Washington, D.C.

Federal job classification for police Police Officer (job classification 0083) Police Officer (job classification 0083)

Number of police as of March 2003 381 209

Major job application requirements U.S. citizen

Pass a medical examination, drug screening, 

and background investigation

One year of specialized experience as a police 

officer or comparable experience (may be 

substituted with a 4-year college degree in 

Police Science or comparable field)

Obtain a secret security clearance

U.S. citizen

Age 21

Pass the National Police Officer Selection Test

Pass a medical examination, drug screening, 

and background investigation

One year of specialized experience as a police 

officer or comparable experience (may be 

substituted with a 4-year college degree in 

Police Science or comparable field)

2003 starting salaries for police 

stationed in Washington, D.C.

$38,852 $38,852

Fiscal year 2002 police attrition rates 14 percenta 17 percenta

Fiscal year 2001 police attrition rates 7 percent 7 percent

Mission training requirements 10 weeks of basic training at the Federal Law 

Enforcement Training Center (FLETC)

5 weeks of field training after FLETC

48 hours of annual training

In the 4th year of employment, 2 weeks of 

advanced training 

2 weeks of training before FLETC

10 weeks of basic training at FLETC

8 weeks of field training after FLETC

2 weeks of annual training
Page 26 GAO-03-696 Who Should Provide U.S. Mint and BEP Security

Appendix III

Data Regarding the United States Secret 

Service’s Uniformed Division ApendxiI

Source: United States Secret Service.

a

The Secret Service protects the people who occupy these facilities.

b

According to our June 2003 report on recruitment and retention issues regarding 13 police forces in 

the Washington, D.C., metropolitan area, including the Secret Service, of the 234 Uniformed Division 

officers who left their jobs in fiscal year 2002, the greatest number (148 officers) went to work at the 

newly created TSA.

c

This training reflects firearms requalification requirements only. Secret Service officials said that 

Uniformed Division officers receive additional in-service training, depending on the group they are 

assigned to, such as canine or counter-sniper.

Secret Service’s Uniformed Division

Protected facilitiesa The White House complex, the Treasury Department headquarters building and 

annex, the Vice President’s residence, and foreign diplomatic missions 

Job classification According to Secret Service officials, pursuant to 5 U.S.C. § 5102 (c), the Uniformed 

Division is exempt from the federal job classification system and, therefore, its 

officers do not have the 0083 job classification that applies to the Mint and BEP 

police.

Number of police as of February 2003 1,106

Major job application requirements U.S. citizen

Ages 21 to 36 at time of appointment

Pass the National Police Officer Selection Test

Pass a medical examination, drug screening, and background investigation

Possess a high school diploma or equivalent

Qualify for top-secret security clearance

Must submit to a polygraph test

2003 starting salaries for police stationed in 

Washington, D.C.

$40,345

Fiscal year 2002 police attrition rates 23 percentb

Fiscal year 2001 police attrition rates 12 percent

Mission training requirements 10 weeks of basic training at FLETC 

11 weeks of specialized training after FLETC

22 hours of annual trainingc
Page 27 GAO-03-696 Who Should Provide U.S. Mint and BEP Security

Appendix IV

Comments from the U.S. Mint ApendxiIV

(543034)
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