Audit Report

OIG-18-003

FINANCIAL MANAGEMENT

Audit of the United States Mint’s Schedules of Custodial 

Deep Storage Gold and Silver Reserves as of 

September 30, 2017 and 2016

October 24, 2017

Office of Inspector General

Department of the Treasury
THIS PAGE INTENTIONALLY LEFT BLANK
Contents

Audit of the United States Mint’s Schedules of Custodial Deep Storage 

Gold and Silver Reserves as of September 30, 2017 and 2016 

(OIG-18-003)

Page i 

SECTION I - REPORT OF THE OFFICE OF INSPECTOR GENERAL

Independent Auditor’s Report........................................................................1

Report on the Schedules ......................................................................................1

Management’s Responsibility for the Schedules .................................................1

Auditor’s Responsibility...................................................................................1

Opinion ......................................................................................................2 

Other Reporting Required by U.S. Generally Accepted Government 

Auditing Standards..............................................................................................2 

 

Internal Control over Financial Reporting ...........................................................2

Compliance and Other Matters.........................................................................3

Purpose of the Other Reporting Required by U.S. Generally Accepted Government 

Auditing Standards .........................................................................................3 

 

SECTION II - UNITED STATES MINT’S SCHEDULES OF CUSTODIAL 

 DEEP STORAGE GOLD AND SILVER RESERVES

 AS OF SEPTEMBER 30, 2017 AND 2016

Schedules of Custodial Deep Storage Gold and Silver Reserves............................5 

Notes to the Schedules of Custodial Deep Storage 

Gold and Silver Reserves .................................................................................6 

APPENDICES

 

Appendix 1: Major Contributors to this Report...............................................8 

Appendix 2: Report Distribution...................................................................9 
SECTION I -

REPORT OF THE OFFICE OF INSPECTOR GENERAL 
OIG Audit

Report

The Department of the Treasury

Office of Inspector General

Audit of the United States Mint’s Schedules of Custodial Deep Storage Page 1 

Gold and Silver Reserves as of September 30, 2017 and 2016 

(OIG-18-003)

Independent Auditor’s Report

To the Acting Principal Deputy Director of the United States Mint

Report on the Schedules

We have audited the accompanying Schedules of Custodial Deep Storage Gold 

and Silver Reserves of the United States Mint (Mint) as of September 30, 2017

and 2016 (Schedules) and the related notes. 

Management’s Responsibility for the Schedules

Management is responsible for the preparation and fair presentation of these

Schedules in accordance with U.S. generally accepted accounting principles; 

this includes the design, implementation, and maintenance of internal control

relevant to the preparation and fair presentation of the Schedules that are free 

from material misstatement, whether due to fraud or error. 

Auditor’s Responsibility 

Our responsibility is to express an opinion on these Schedules based on our 

audits. We conducted our audits in accordance with U.S. generally accepted 

government auditing standards. Those standards require that we plan and 

perform the audits to obtain reasonable assurance about whether the Schedules 

are free from material misstatement. 

An audit involves performing procedures to obtain audit evidence about the 

amounts and disclosures in the Schedules. The procedures selected depend on 

the auditor’s judgment, including the assessment of the risks of material 

misstatement of the Schedules, whether due to fraud or error. In making those 

risk assessments, the auditor considers internal control relevant to the Mint’s 

preparation and fair presentation of the Schedules in order to design audit 

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

expressing an opinion on the effectiveness of the Mint’s internal control. 

Accordingly, we express no such opinion. An audit also includes evaluating the 

appropriateness of accounting policies used and the reasonableness of 
Audit of the United States Mint’s Schedules of Custodial Deep Storage Page 2

Gold and Silver Reserves as of September 30, 2017 and 2016

(OIG-18-003)

significant accounting estimates made by management, as well as evaluating 

the overall presentation of the Schedules. 

We believe that the audit evidence we have obtained is sufficient and 

appropriate to provide a basis for our audit opinion. 

Opinion 

In our opinion, the Schedules referred to above present fairly, in all material 

respects, the balances of the United States’ Deep Storage Gold and Silver 

Reserves in the custody of the Mint as of September 30, 2017 and 2016, in 

accordance with U.S. generally accepted accounting principles. 

Other Reporting Required by U.S. Generally Accepted 

Government Auditing Standards

Internal Control over Financial Reporting

In planning and performing our audits of the Schedules, we considered the 

Mint’s internal control over financial reporting related to the Schedules to 

determine the audit procedures that are appropriate in the circumstances for the 

purpose of expressing our opinion on the Schedules, but not for the purpose of 

expressing an opinion on the effectiveness of the Mint’s internal control over 

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

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

A deficiency in internal control exists when the design or operation of a control 

does not allow management or employees, in the normal course of performing 

their assigned functions, to prevent, or detect and correct, misstatements on a 

timely basis. A material weakness is a deficiency, or a combination of 

deficiencies, in internal control, such that there is a reasonable possibility that a 

material misstatement of the Schedules will not be prevented, or detected and 

corrected, on a timely basis. A significant deficiency is a deficiency, or a 

combination of deficiencies, in internal control that is less severe than a material 

weakness, yet important enough to merit attention by those charged with 

governance.

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

purpose described in the second paragraph of this section and was not designed 
Audit of the United States Mint’s Schedules of Custodial Deep Storage Page 3

Gold and Silver Reserves as of September 30, 2017 and 2016

(OIG-18-003)

to identify all deficiencies in internal control that might be material weaknesses

or significant deficiencies. Given these limitations, during our audit we did not 

identify any deficiencies in internal control over financial reporting related to the 

Schedules that we consider to be material weaknesses. However, material 

weaknesses may exist that have not been identified.

Because of inherent limitations in internal control, misstatements due to error or 

fraud, losses, or noncompliance may nevertheless occur and not be detected. 

We also caution that projecting our evaluation to future periods is subject to the 

risk that controls may become inadequate because of changes in conditions or 

that the degree of compliance with controls may deteriorate. 

Compliance and Other Matters

As part of obtaining reasonable assurance about whether the Schedules are free 

from material misstatement, we performed tests of the Mint’s compliance with 

certain provisions of laws, regulations, contracts, and grant agreements, 

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

determination of schedule amounts. We limited our tests of compliance to those 

provisions and did not test compliance with all laws, regulations, contracts and 

grant agreements applicable to the Mint. We caution that noncompliance may 

occur and not be detected by those tests. Providing an opinion on compliance 

with laws, regulations, contracts and grant agreements was not an objective of 

our audit and, accordingly, we do not express such an opinion. The results of 

our tests of the Mint’s compliance with certain provisions of laws, regulations, 

contracts and grant agreements disclosed no instances of noncompliance or 

other matters that are required to be reported under U.S. generally accepted 

government auditing standards.

Purpose of the Other Reporting Required by U.S. Generally Accepted 

Government Auditing Standards

The purpose of the communication described in the Other Reporting Required by 

U.S. Generally Accepted Government Auditing Standards section is solely to 

describe the scope of our testing of internal control over financial reporting and 

compliance, and the results of that testing, and not to provide an opinion on the 

effectiveness of the Mint’s internal control over financial reporting or on 

compliance. This communication is an integral part of an audit performed in 

accordance with U.S. generally accepted government auditing standards in 
Audit of the United States Mint’s Schedules of Custodial Deep Storage Page 4 

Gold and Silver Reserves as of September 30, 2017 and 2016 

(OIG-18-003)

James Hodge

Director, Financial Audit

considering the Mint’s internal control over financial reporting and compliance. 

Accordingly, this communication is not suitable for any other purpose. 

* * * * * *

Should you or your staff have any questions, you may contact me at

(202) 927-0009, or a member of your staff may contact Ade Bankole, Manager, 

Financial Audit at (202) 927-5329. We appreciate the courtesy and cooperation 

extended to our staff.

Washington, D.C.

October 24, 2017
SECTION II -

UNITED STATES MINT’S SCHEDULES OF CUSTODIAL 

DEEP STORAGE GOLD AND SILVER RESERVES 

AS OF SEPTEMBER 30, 2017 AND 2016
Audit of the United States Mint’s Schedules of Custodial Deep Storage Page 5

Gold and Silver Reserves as of September 30, 2017 and 2016

(OIG-18-003)

DEPARTMENT OF THE TREASURY

UNITED STATES MINT

SCHEDULES OF CUSTODIAL DEEP STORAGE GOLD AND SILVER 

RESERVES 

AS OF SEPTEMBER 30, 2017 AND 2016

(IN THOUSANDS)

2017 2016

Deep storage gold and silver reserves (Note 2) $10,364,687 $10,364,687

Liability to Treasury (Note 2) $10,364,687 $10,364,687

Net deep storage gold and silver reserves custodial position $ 0 $ 0 

The accompanying notes are an integral part of these schedules.
DEPARTMENT OF THE TREASURY

UNITED STATES MINT

NOTES TO THE SCHEDULES OF 

CUSTODIAL DEEP STORAGE GOLD AND SILVER RESERVES 

AS OF SEPTEMBER 30, 2017 AND 2016 

Audit of the United States Mint’s Schedules of Custodial Deep Storage Page 6 

Gold and Silver Reserves as of September 30, 2017 and 2016 

(OIG-18-003)

Note 1 Summary of Significant Accounting Policies 

A. Reporting Entity

The United States Mint (Mint), established in 1792, is an integral part of the Department 

of the Treasury (Treasury). The mission of the Mint is to manufacture and distribute 

circulating, precious metal and collectible coins, and providing security over assets 

entrusted to us.

In addition to manufacturing circulating coins, the Mint manufactures numismatic 

products, including medals, proof coins, uncirculated coins, bullion coins (gold and 

silver), and commemorative coins. These manufacturing operations are reported in the 

Mint’s financial statements. The Mint is also the custodian of a significant portion of the 

United States gold and silver reserves. The Mint uses the term custodial to identify gold 

and silver reserves held for Treasury. The custodial reserves are not assets of the Mint, 

but are assets of Treasury.

The Mint’s Public Enterprise Fund (PEF) funds all custodial activities, including the 

protection of the United States gold and silver reserves.

 

B. Basis of Presentation

These schedules have been prepared to report the deep storage gold and silver reserves 

custodial position of the Mint. The books and records of the Mint have served as the 

source of the information contained herein. These schedules have been prepared in 

accordance with accounting principles generally accepted in the United States of America 

(GAAP). 

These schedules include all gold and silver classified by the Mint as “custodial deep 

storage reserves” as defined in Note 2. Deep storage is defined as that portion of the 

Treasury-owned gold and silver bullion reserves which the Mint secures in sealed vaults. 

Deep storage gold comprises the vast majority of the reserves and consists primarily of 

gold bars. These schedules do not reflect any United States gold and silver reported by 

the Mint as working stock, or any reserve amounts due to be replenished by the PEF, nor 

do they include Treasury-owned gold held by Federal Reserve Banks (FRB). Upon 

approval from the Secretary of the Treasury, the PEF may use gold and silver from the 

custodial deep storage reserves to support its numismatic operations. The Mint did not 

use deep storage gold or silver reserves to produce coins in fiscal years 2017 and 2016. 

Note 2 Deep Storage Gold and Silver Reserves

The gold and silver reserves reported in these schedules are exclusive of the gold and 

silver reserves considered to be working stock in the Mint’s financial records and of the 

Treasury-owned gold held by the FRB. The custodial deep storage gold and silver 

reserves included in these schedules are primarily in bar form, but may occasionally be in 
DEPARTMENT OF THE TREASURY

UNITED STATES MINT

NOTES TO THE SCHEDULES OF 

CUSTODIAL DEEP STORAGE GOLD AND SILVER RESERVES 

AS OF SEPTEMBER 30, 2017 AND 2016

Audit of the United States Mint’s Schedules of Custodial Deep Storage Page 7

Gold and Silver Reserves as of September 30, 2017 and 2016

(OIG-18-003)

Note 2 Deep Storage Gold and Silver Reserves (Continued)

coin or other form. The custodial deep storage reserves also include foreign gold coins 

that have been held by Treasury for many years. 

The deep storage gold and silver reserves are reported in these schedules at the values 

stated in 31 U.S.C. § 5116 and § 5117 (statutory rates) which are $42.2222 per fine troy 

ounce (FTO) of gold and no less than $1.292929292 per FTO of silver. Accordingly, the 

Mint values the silver at $1.292929292 per FTO. An offsetting liability is also reported 

for these assets.

At September 30, 2017 and 2016, the market values of gold per the London Gold Fixing 

(PM) were $1,283.10 per FTO and $1,322.50 per FTO, respectively. Deep storage gold 

inventories consisted of the following at September 30:

FTO Statutory Value Market Value

2017 245,262,897.04 $10,355,539,091 $314,696,823,192

2016 245,262,897.04 $10,355,539,091 $324,360,181,335

At September 30, 2017 and 2016, the market values of silver per the London Silver 

Fixing were $16.86 per FTO and $19.35 per FTO, respectively. Deep storage silver 

inventories consisted of the following at September 30:

FTO Statutory Value Market Value

2017 7,075,171.14 $ 9,147,696 $119,287,385

2016 7,075,171.14 $ 9,147,696 $136,904,562

The combined custodial deep storage gold and silver reserves consisted of the following 

at September 30:

Statutory Value Market Value

2017 $10,364,686,787 $314,916,110,577

2016 $10,364,686,787 $324,497,085,897
APPENDICES
Appendix 1

Major Contributors to this Report

Audit of the United States Mint’s Schedules of Custodial Deep Storage Page 8 

Gold and Silver Reserves as of September 30, 2017 and 2016 

(OIG-18-003)

Financial Audit Division

Ade Bankole, Manager

Dennis Orsini, Auditor

Jenny Hu, Referencer
Appendix 2

Report Distribution

Audit of the United States Mint’s Schedules of Custodial Deep Storage Page 9 

Gold and Silver Reserves as of September 30, 2017 and 2016 

(OIG-18-003)

The Department of the Treasury

Secretary of the Treasury

Treasurer of the United States

Assistant Secretary for Management

Deputy Chief Financial Officer

Acting Director, Financial Reporting and Policy

United States Mint

Acting Chief Financial Officer

 

Independent Public Accountant

KPMG LLP
REPORT WASTE, FRAUD, AND ABUSE

Treasury OIG Hotline: 1-800-359-3898

Hotline@oig.treas.gov

Gulf Coast Restoration Hotline: 1-855-584.GULF (4853)

gulfcoastrestorationhotline@oig.treas.gov

Access Treasury OIG reports and other information online: 

www.treasury.gov/about/organizational-structure/ig