Audit Report

OIG-18-037

BILL AND COIN MANUFACTURING

BEP Needs To Finalize Its COOP Plan

February 7, 2018 

Office of

Inspector General 

Department of the Treasury
This Page Intentionally Left Blank 
Contents 

BEP Needs To Finalize Its COOP Plan (OIG-18-037) Page i

Audit Report .............................................................................................. 1 

 Results in Brief .......................................................................................... 2 

 Background .............................................................................................. 3 

 Audit Results ........................................................................................... 5 

BEP Has Not Finalized Its COOP Plan ....................................................... 5 

 Recommendation ........................................................................... 10

BEP’s Draft COOP Plan Did Not Identify MEFs ........................................ 11

 Recommendation ........................................................................... 15

Appendices

 Appendix 1: Objective, Scope, and Methodology .................................... 17

 Appendix 2: Background on the National Continuity Policy and Federal 

Continuity Directives ........................................................ 20

 Appendix 3: Management Response ..................................................... 25

 Appendix 4: Major Contributors to This Report ....................................... 27

 Appendix 5: Report Distribution ............................................................ 28

Abbreviations

BIA Business Impact Analysis 

BPA Business Process Analysis 

BEP Bureau of Engraving and Printing 

Board Board of Governors of the Federal Reserve System 

COOP Continuity of Operations 

ECF Eastern Currency Facility 

FCD Federal Continuity Directive 

FEMA Federal Emergency Management Agency 

HSPD Homeland Security Presidential Directive 

ICP Integrated Contingency Plan 

JAMES Joint Audit Management Enterprise System 

MEF Mission Essential Function 

NSPD National Security Presidential Directive 

NCPIP National Continuity Policy Implementation Plan 
Contents 

BEP Needs To Finalize Its COOP Plan (OIG-18-037) Page ii

NEF National Essential Function 

PMEF Primary Mission Essential Function 

OEP Treasury’s Office of Emergency Preparedness 

OIG Office of Inspector General 

TT&E Test, Training, and Exercise 

Treasury Department of the Treasury 

WCF Western Currency Facility 
OIG

The Department of the Treasury 

Office of Inspector General 

Audit 

Report

BEP Needs To Finalize Its COOP Plan (OIG-18-037) Page 1 

 February 7, 2018

 Leonard R. Olijar 

 Director 

 Bureau of Engraving and Printing 

This report presents the results of our audit of the Department of 

the Treasury (Treasury), Bureau of Engraving and Printing’s (BEP)

continuity of operations (COOP) planning. COOP is an effort within 

individual Federal executive departments and agencies to ensure 

that their essential functions, and those functions that support our 

nation’s National Essential Functions (NEF), continue to be 

performed during a wide range of disasters or emergencies. 

Our objective was to assess BEP’s COOP plans for currency 

production should a major disruption occur at one or both of its 

production facilities. To accomplish our objective, we reviewed 

applicable laws and regulations, including the Federal Emergency 

Management Agency’s (FEMA) continuity guidance,1 interviewed 

officials from BEP, and conducted walkthroughs of BEP’s 

operations at its Eastern and Western Currency Facilities 

(ECF/WCF). We also interviewed officials from Treasury’s Office of 

Emergency Preparedness (OEP), the Board of Governors of the 

Federal Reserve System (Board), and FEMA to gain an 

understanding of their needs, involvement, and perspectives on 

BEP’s COOP planning. Appendix 1 provides a more detailed 

description of our objective, scope, and methodology. 

 

1

 FEMA’s guidance on COOP planning is contained within FEMA’s Federal Continuity Directives (FCD), 

which include requirements for Federal executive departments’ and agencies’ COOP planning, 

including: risk identification, succession planning, emergency delegations of authority, safekeeping of 

essential resources and records, and establishment of emergency operating capabilities, among other 

items. Our nation’s National Continuity Policy, and FEMA’s FCDs, are outlined in appendix 2.
BEP Needs To Finalize Its COOP Plan (OIG-18-037) Page 2 

Result in Brief 

BEP’s COOP plan has not been finalized and has been in draft since 

October 2015. Federal Continuity Directive (FCD) 1, Federal 

Executive Branch National Continuity Program and Requirements 

(2012), requires that all organizations develop and document a 

continuity plan and supporting procedures and that those plans are 

updated and reviewed annually by the organization head or 

designee.2 BEP has not finalized a COOP plan since its previous 

plan in 2002. At the time of our audit, BEP was working to finalize 

a new COOP plan; however, our review of the October 2015 draft 

plan found that it had incomplete and missing supporting 

documentation required by FCD 1 and FCD 2, Executive Branch 

Mission Essential Function and Candidate Primary Mission Essential 

Function Identification and Submission Process (July 2013). 

BEP’s draft COOP plan and associated documentation showed that 

BEP’s overall plan for a COOP event was to shut down production 

at the affected facility and use telework for conducting 

administrative functions only.3

 The draft COOP plan is contingent 

on BEP’s assumption that operations will be unaffected and 

available to support actions directed by the BEP Director, or the 

Director’s successor, at BEP’s other production facility. 

BEP’s draft COOP plan did not identify any Mission Essential 

Functions (MEF).4 The plan stated that BEP had no essential 

functions that need to be continued uninterrupted during an 

emergency. Board officials questioned BEP’s MEF determination 

and told us that BEP provided services that directly support the 

Board and that these services could not be deferred during an 

 

2

 FCD 1 was updated by FEMA on January 17, 2017, subsequent to the scope of our audit. Although 

there were numerous technical changes to the directive, one significant change was the requirement 

that essential functions and Business Process Analyses (BPA) be reviewed biennially, instead of 

annually. The updates reflected in the January 17, 2017, version of FCD 1 do not change the results 

of our audit. 

3

 A COOP event is an event that that disrupts, or has the potential to disrupt, normal activities and 

necessitates the activation of continuity plans. These events can be short or long term and can result 

from various hazards such as accidents, technological events, natural disasters, terrorist attacks, 

warfare, and chemical, biological (including pandemic influenza), radiological, nuclear, or explosive 

events.

4

 MEFs are department and agency-level government functions that must be continued after a 

disruption of normal activities.
BEP Needs To Finalize Its COOP Plan (OIG-18-037) Page 3 

emergency. FEMA officials told us that BEP should have identified 

MEFs based on the requirements identified in FCD 2. 

We are recommending that the Director of BEP (1) finalize BEP’s 

COOP plan. This should include, among other things, plans specific 

to both facilities and supporting documentation required by FEMA’s 

FCDs, such as business process and impact analyses to address 

risk and a comprehensive Test, Training, and Exercise (TT&E) 

program; and (2) work with the Board, in consultation with FEMA’s 

National Continuity Programs Office as necessary, to determine 

BEP’s MEFs and if any of those MEFs support other organizations’

MEFs. 

In a written response, which is included in its entirety as appendix 

3, BEP management outlined actions taken and planned to address 

our recommendations. Management stated that BEP will finalize its 

COOP plan. BEP management also stated that in support of 

Treasury’s review in response to the recently updated FCD 2, BEP 

will consult with Treasury and the Board to determine if BEP has a 

MEF or if any of the BEP functions support other organizations’ 

MEFs. Treasury will submit an updated MEF list to FEMA by 

August 1, 2018. 

We considered BEP‘s corrective actions planned and taken 

responsive to our recommendations. Management will need to 

record the estimated date for completing its planned corrective 

actions as well as the actual date of completed corrective actions 

in the Joint Audit Management Enterprise System (JAMES), 

Treasury’s audit recommendation tracking system.

Background 

BEP’s primary function is to print billions of Federal Reserve Notes 

for delivery to the Federal Reserve System each year.5 BEP is 

responsible for designing and engraving the printing plates 

5 The Board operates as the nation's central bank and serves to ensure that adequate amounts of 

currency and coin are in circulation. BEP is the sole producer of U.S. paper currency and the United 

States Mint produces all U.S. coinage. 
BEP Needs To Finalize Its COOP Plan (OIG-18-037) Page 4 

necessary to print currency.6 BEP also advises other Federal 

agencies on document security matters and produces various other 

security documents, such as the inside covers of U.S. Passports. In 

addition, BEP processes claims for the redemption of mutilated 

currency. 

BEP has two primary locations for currency production, the ECF in 

Washington, D.C., and the WCF in Ft. Worth, TX. BEP’s Office of 

Security is responsible for personnel and physical security of the 

BEP.7

 The Office of Security includes the Police Operations Division 

and Emergency Management Program staff.8

On May 4, 2007, the President issued National Security 

Presidential Directive (NSPD)-51/Homeland Security Presidential 

Directive (HSPD)-20 to act as our nation’s National Continuity 

Policy. This policy establishes our nation’s core NEFs and 

prescribes continuity requirements for all executive branch 

departments and agencies, which includes Treasury and its 

subcomponent agencies, such as BEP, to maintain a comprehensive 

and effective continuity capability composed of COOP and 

Continuity of Government programs.9, 10 

Under this National Security and Homeland Security Presidential 

Directive, each executive branch department and agency is 

responsible for identifying their essential functions. In particular, 

executive branch departments and agencies must identify their 

Primary MEFs (PMEF) that must be performed to support the NEFs 

 

6

 Plate making is a process by which a Master Plate, which is engraved with the design for a particular 

currency denomination, is used to create other plates for use in production. Master plates are not 

used for production. 

7

 BEP’s Office of Security reports to BEP’s Chief Information Officer/Associate Director for 

Management. 

8

 BEP operates a police department that protects BEP personnel and facilities. The BEP Police are 

responsible for enforcing federal laws, Treasury Department rules and regulations, and D.C laws 

through a Memorandum of Understanding with D.C. Metropolitan Police for making traffic stops and 

arrests within the areas surrounding the ECF. WCF’s police jurisdiction is limited to its property line.

9

 COOP, as defined in the NSPD-51/HSPD-20 and the National Continuity Policy Implementation Plan 

(NCPIP), is an effort within individual executive departments and agencies to ensure that PMEF 

continue to be performed during a wide range of emergencies, including localized acts of nature, 

accidents, and technological or attack-related emergencies. 

10 NSPD-51/HSPD-20 was superseded by Presidential Policy Directive 40, which was signed on 

July 15, 2016, subsequent to the scope of our audit. The standards established within Presidential 

Policy Directive 40 do not change the results of our audit.
BEP Needs To Finalize Its COOP Plan (OIG-18-037) Page 5 

before, during, and after an emergency. Also, executive branch 

departments and agencies must plan, program, and budget for 

continuity capabilities in accordance with this directive. 

FEMA is responsible for developing and promulgating FCDs in order 

to establish continuity planning requirements for all Federal 

executive branch departments and agencies, including Treasury. 

The FCDs include requirements to (1) identify essential functions 

using an identification and risk management process; and (2) 

prepare and approve a written COOP plan that contains items such 

as orders of succession, continuity facilities management, and 

COOP TT&E. Appendix 2 contains a more detailed description of 

the National Continuity Policy and FEMA’s FCDs. 

Audit Results

Finding 1 BEP Has Not Finalized Its COOP Plan

As of May 2017, BEP’s COOP plan was still in draft. BEP has not 

finalized a COOP plan since its previous plan in 2002. Based on our 

review of the October 2015 draft COOP plan, we found that 

although BEP has a generally agreed upon approach to COOP and 

emergency response, better documentation is needed. At the time 

of our audit, BEP was working to finalize a new COOP plan; 

however, our review of the draft plan found that it had incomplete 

and missing supporting documentation required by FEMA’s 

continuity guidance. 

BEP’s COOP Plan was Not Finalized 

As of May 2017, BEP had not finalized its COOP plan. BEP officials 

provided us with a draft COOP plan dated October 2015 and other 

documentation describing BEP’s security policies, emergency 

response plans, and COOP planning. BEP officials told us that BEP 

had not finalized a COOP plan since its last plan, which was 

finalized in 2002. BEP officials also told us that the 2002 plan was 

out-of-date and not applicable to current operations. 

FCD 1 requires that all organizations develop and document a 

continuity plan and supporting procedures and that those plans are 
BEP Needs To Finalize Its COOP Plan (OIG-18-037) Page 6 

updated and reviewed annually by the organization head or 

designee. In addition, Treasury has directed that all bureaus shall 

ensure effective execution of plans and procedures for emergency 

preparedness.11 Treasury’s Business Continuity Contingency Plan

requires that each subcomponent agency within Treasury maintain 

a COOP plan.12

BEP officials told us that the COOP plan had not been finalized 

because BEP was focusing its resources on implementing a 

business continuity software application called Sustainable 

Planner.13 BEP officials stated that their goal was to capture all of 

BEP’s processes within the software and then to focus on 

developing BEP’s COOP plan through Sustainable Planner. BEP 

officials also cited a lack of available personnel as a reason for not 

having a completed COOP plan, as BEP does not have the 

resources available to work on both a written COOP plan and 

Sustainable Planner. 

BEP’s Fiscal Year 2015 Statement of Assurance of Continuity 

Capability, submitted to Treasury’s Assistant Secretary for 

Management (who acts as Treasury’s Continuity Coordinator) 

stated that BEP did not have a completed COOP plan. However, 

the Statement of Assurance cited that BEP had many of the 

essential elements required by FCD 1.14 

Although BEP did not have a finalized COOP plan at the time of our 

audit, BEP did have procedures for emergency planning and has 

 

11 Treasury Directive 23-01, dated January 27, 2012, designates to OEP the responsibility to 

administer Treasury emergency programs and discusses the roles of the Bureaus and Departmental 

Offices for emergency management and continuity coordination. This Directive applies to all bureaus, 

offices, and organizations within Treasury. 

12

 Treasury’s Business Continuity Contingency Plan establishes Treasury’s approach to continuity of 

operations, and aligns and unifies Treasury’s offices and bureau continuity planning efforts. The plan 

is written by Treasury’s OEP, the agency in Treasury that is responsible for overall continuity 

planning, to meet the requirements of the National Continuity Policy and FCD 1. 

13 Sustainable Planner is a business continuity application offered by Virtual Corporation, Inc., which 

also contains COOP planning. The software provides storage, risk management, and continuity 

planning items. The contract is a firm-fixed price contract for a base year and three option years. The 

contract includes software implementation and on-going support. We did not review this contract as 

part of our audit. 

14 The National Continuity Policy requires that each executive branch organization have a Continuity 

Coordinator at the assistant secretary or equivalent level who represents their department or agency 

and ensures continuity capabilities in the organization. 
BEP Needs To Finalize Its COOP Plan (OIG-18-037) Page 7 

conducted various incident response drills such as active-shooter 

simulations, hazardous material spill exercises, and fire drills. 

BEP has a Security Manual that serves as BEP’s overarching 

guidance for the Office of Security and includes a checklist for 

responses to certain events and emergency management.15 In 

addition to BEP’s overall guidance, the ECF relies on various 

procedures for emergency planning, including those for 

environmental management, emergency action, fire prevention, and 

police response. ECF has also performed an overall facilities risk 

assessment, which was centered on possible threats to building 

security. WCF’s emergency response actions are contained within 

WCF’s Integrated Contingency Plan (ICP).

16

 

Although not the focus of this audit, we did note that BEP has 

considered physical, security, and environmental risks and 

emergency response as part of its normal operations. However, we 

found that BEP’s procedures for emergency planning have not been 

updated recently and were scattered across many different 

documents. WCF officials stated that they plan for their ICP to 

contain the following: occupancy emergency, facilities response, 

facilities security, procedures for the emergency operations center, 

BEP’s overall COOP plan, WCF’s local COOP plan, training and 

exercises, and risk assessments. WCF officials stated that the plan 

to develop the ICP into a consolidated reference for all emergency 

planning will help to incorporate emergency response and 

continuity planning into daily operations, which is a requirement of 

NSPD-51/HSPD-20 and the FCDs. ECF officials stated that ECF 

primarily relies on police orders for emergency response and did not 

have procedures similar to the ICP. 

 

15

 BEP’s Office of Security is responsible for personnel and physical security of the BEP. 

16 The purpose of the ICP is to provide guidance, instructions, and procedures to BEP WCF personnel at 

all levels in the event of an emergency, as well as to provide procedures for preparing for and 

minimizing emergency situations. The ICP is designed to minimize the hazards to human health and 

the environment due to spills, fires, explosions, unplanned incidents, catastrophic occurrences, 

threats, or loss of utilities.
BEP Needs To Finalize Its COOP Plan (OIG-18-037) Page 8 

BEP’s Draft COOP Plan Was Focused on Supporting Administrative 

Functions Only and Did Not Include Critical Support 

BEP’s draft COOP plan and associated documentation showed that 

BEP’s overall plan for a COOP event was to shut down production 

at the affected facility and use telework for conducting 

administrative functions only. The draft COOP plan is contingent on 

BEP’s assumption that operations will be unaffected and available 

to support actions directed by the BEP Director, or the Director’s 

successor, at BEP’s alternate production facility. Also, the draft 

COOP plan acknowledges that if the Federal Reserve stock of 

currency nears depletion, BEP may receive a request to resume 

operations. The draft COOP plan identifies WCF as a back-up site 

for BEP’s COOP Incident Management Team if telework or the 

primary site is unavailable. The draft COOP plan references 

continuity sites that BEP no longer intends to use and the plan was 

primarily focused on ECF, and WCF to a lesser extent. 

BEP officials told us that the COOP plan was meant to be BEP’s 

overall COOP plan. WCF officials stated that they were working to 

create a local COOP plan, which they planned to incorporate into 

BEP’s overall COOP planning as a separate document. 

The draft COOP plan was missing critical supporting 

documentation, although BEP used the most recent version of 

FEMA’s Continuity Plan Template for Federal 

Departments/Agencies that outlines all FCD requirements, including 

the requirements to identify Essential Functions.17 Examples of 

missing critical supporting documentation required by the FCDs are 

shown in Table 1 below. 

 

17

 The purpose of FEMA’s Continuity of Operations Plan Template for Federal Departments and 

Agencies (April 2013) is to provide instructions, guidance, and sample text for the development of 

Continuity plans and programs in accordance with FCDs 1 and 2 for the Federal executive branch. 
BEP Needs To Finalize Its COOP Plan (OIG-18-037) Page 9 

Table 1. Examples of Critical Supporting Documentation Missing from BEP’s Draft COOP 

Plan

Element Missing Documentation

Essential Functions BEP was missing support for the determination of essential functions, including PMEFs and 

MEFs. Also, BEP was missing support for having conducted a Business Process Analysis 

(BPA). The Business Process Analysis (BPA) is a systematic method of identifying and 

documenting all the elements necessary to perform each organizational MEF. The 

determination of MEFs and PMEFs are central to COOP planning and the ability to meet 

essential needs during an emergency. FCD 1 requires that organizations must annually 

review their essential functions and BPA and document the date of the review and names of 

personnel conducting the review. FEMA’s most recent version of FCD 1, dated January 17, 

2017, requires that essential functions and BPAs be reviewed biennially.

The draft COOP plan indicated that the worksheet supporting the determination of BEP’s 

essential functions had been completed and was attached; however, the worksheet was not 

attached and BEP did not provide the document to us when requested. 

BEP officials told us that they did not conduct a BPA when drafting the COOP plan but 

planned to incorporate it into Sustainable Planner.

Risk Management BEP was missing support for COOP Risk Management analysis, including the Business 

Impact Analysis (BIA). The BIA is a method of assessing comparative risk for MEFs and 

PMEFs, to include the processes that support them. FCD 1 requires that a formal review of 

the risk management process be conducted at least every five years.

BEP officials told us that they did not conduct this analysis when drafting the COOP plan but 

planned to incorporate it into Sustainable Planner.

Budgeting and 

Acquisition of 

Resources

BEP was missing support for the COOP budget and acquisition of resources. FCD 1 requires

that organizations develop a continuity Multi-Year Strategy and Program Management Plan 

that provides for the development, maintenance, and annual review of continuity capabilities 

which includes performance of essential functions, planning, testing, and budgetary 

requirements for these items, among other items.

The draft COOP plan stated that BEP budgets for and acquires those capabilities essential to 

continuity and that supporting documentation is maintained. However, BEP did not provide 

the documentation to us when requested. 

BEP officials told us that they do not have a specific budget or line item for COOP, but 

funding was available and sufficient for all necessary COOP expenditures.

Orders of 

Succession

BEP was missing orders of succession. FCD 1 states that organizations must establish and 

document, in advance, the legal authority for the position of organization head and other key 

supporting positions to make key policy decisions during a continuity situation. Also, 

organizations must inform those officials listed within the delegations of authority who 

might be expected to assume authorities in a continuity activation. Orders of succession 

should be at least three personnel deep and developed for all key leadership positions.

The draft COOP plan stated that BEP had developed orders of succession that were eight 

personnel deep and referenced an attachment; however, the attachment was not included. 

BEP officials did not provide orders of succession to us when requested and said that some 

directives were in the process of being revised.
BEP Needs To Finalize Its COOP Plan (OIG-18-037) Page 10

We believe that significant value is added by having robust 

business and contingency planning that goes from essential 

function and risk identification, management, and mitigation, to 

creating formalized living policies and procedures, and is then 

followed up with exercises and training. According to FCD 

1, continuity planning is simply the good business practice of 

ensuring the execution of essential functions through all 

circumstances and it is a fundamental responsibility of public and 

private entities responsible to their stakeholders. While we 

recognize that BEP has taken steps to finalize its COOP plan by 

working to implement Sustainable Planner and has worked to 

finalize its written COOP plan, additional work is needed for BEP’s 

COOP planning to be considered adequate. 

Recommendation 

We recommend the Director of BEP: 

Delegation of 

Authority

BEP was missing delegation of authorities. FCD 1 states that organizations must establish 

and document in advance the legal authority for the position of Organization Head and other 

key supporting positions to make key policy decisions during a continuity situation.

The draft COOP stated that BEP has predetermined delegations of authority that will take 

effect when normal channels of direction are disrupted. The draft COOP plan also stated

that individuals with possible delegated authorities have been notified. We requested 

supporting documentation for those statements but BEP did not provide the documentation

requested. 

BEP officials told us that they do not have formalized delegations of authority.

Test, Training, and 

Exercises

BEP was missing documentation for COOP-related TT&E. FCD 1 states that organizations 

must develop and maintain a continuity TT&E program for conducting and documenting 

TT&E. Organizations must document all conducted events, including documenting the date 

of the event, those participating in the event, and the results of the event. Training and 

exercises must be conducted annually.

The draft COOP plan stated that BEP maintains a “robust TT&E program” and it outlines 

BEP’s plan for tests of capabilities, training, and COOP exercises including a Corrective 

Action Program.

BEP officials told us that they outlined various exercises that BEP had conducted, including 

their involvement in FEMA’s 2012 government-wide exercise called Eagle Horizon, and an 

extensive BEP active-shooter exercise; however, none of the exercises conducted have led 

to a full test of BEP’s COOP capabilities during an event. Officials at ECF told us that 

Incident Response Team members had participated in a COOP specific briefing once before. 

Officials at WCF told us that they had not done COOP specific training. Regardless of the 

extent of exercises and training conducted, BEP did not thoroughly record the activity and 

provided us with limited supporting documentation.

Source: Office of Inspector General (OIG) analysis of BEP’s COOP planning documentation. 
BEP Needs To Finalize Its COOP Plan (OIG-18-037) Page 11

1. Finalize BEP’s COOP plan. The plan should include, among 

other things, plans specific to both facilities and supporting 

documentation required by FEMA’s FCDs, such as business 

process and impact analyses to address risk and a 

comprehensive TT&E program. 

Management Response 

BEP management concurred with the recommendation. According 

to its response, BEP will finalize its COOP plan. Presently, BEP’s 

plan includes a core document and supporting plans for each 

facility as well as order of succession and delegation of authority 

for each. Business Impact Analyses were completed and updated. 

BEP conducted six different types of exercises in 2017 with 

documented After Action Reports. According to BEP management, 

these reports are tracked and prioritized as part of a corrective 

action program, and will be incorporated into the exercise planning 

for 2018. 

OIG Comment 

BEP’s planned and taken actions meet the intent of our 

recommendation. 

Finding 2 BEP’s Draft COOP Plan Did Not Identify MEFs 

BEP’s draft COOP plan did not identify any MEFs and stated that 

BEP had no essential functions that need to be continued 

uninterrupted during an emergency to support a NEF. Board 

officials questioned BEP’s MEF determination and told us that BEP 

provided services that directly support the Board and cannot be 

deferred during an emergency. FEMA officials told us that BEP 

should have identified MEFs based on the requirements identified in 

FCD 2. 

Although the draft COOP plan identified that BEP has essential 

functions, it stated that BEP “does not have any PMEFs as defined 

by FCD 2 that need to be continued uninterrupted or resumed 

within 12 hours, regardless of the circumstances to support a 
BEP Needs To Finalize Its COOP Plan (OIG-18-037) Page 12

National Essential Function.”

18 In this regard, the draft COOP plan 

recognized two critical assumptions: first, that WCF operations are 

unaffected and available to support actions directed by the BEP 

Director, or the Director’s successor; second, that if and when the 

Federal Reserve stock piles nears depletion, BEP may receive a 

request from the Board to resume operations.

BEP officials told us that Treasury officials determine if a Treasury 

component organization like BEP has a MEF, which is based on 

whether a component organization’s functions support a Treasury 

PMEF. BEP officials said that the printing of currency does not 

support a Treasury PMEF and is therefore not a MEF. 

BEP officials also told us that BEP, OEP, and the Board had 

discussions in 2009 and determined that BEP did not have a MEF 

because there was an understanding that the Board had currency 

reserves, and production during an emergency would not be 

needed. In a 2009 email correspondence, BEP questioned OEP 

about whether BEP should have MEFs; OEP officials confirmed that 

BEP did not have any MEFs. 

BEP officials told us that it was their understanding that there is 4 

to 5 years’ worth of currency in circulation and that the Board 

could simply alter its shred rate if necessary to maintain the correct 

amount in circulation.19 Additionally, BEP officials told us that WCF 

was built as a continuity site for redundant currency production 

operations and that either production facility was independently 

capable of meeting the Board’s production demands. 

We asked BEP officials if physical security or the protection of 

vaults or sensitive printing equipment should be a MEF. The 

officials told us that they considered physical security and the 

protection of production equipment as a supportive function, and 

supportive functions per FCD 2 are not to be considered MEFs. 

 

18

 BEP’s draft COOP plan identified the following Essential Functions: manufacturing, processing, and 

storing Federal Reserve Notes; designing, engraving, and manufacturing instruments of reproduction 

for currency production; security; environmental health and safety; engineering and production 

support; procurement services; personnel services; information technology; and financial 

management. 

19 The Board is responsible for the destruction of worn currency. The shred rate is the rate at which the 

Board removes worn currency notes from the economy. These destroyed currency notes are replaced 

with new notes manufactured by BEP. 
BEP Needs To Finalize Its COOP Plan (OIG-18-037) Page 13

FCD 2 states, however, that Essential Supporting Activities are 

critical functions that an organization must continue during 

continuity activation, but that do not meet the threshold for MEFs 

or PMEFs. 

OEP officials confirmed that they had discussions in 2009 with BEP 

and the Board regarding the determination of BEP’s essential 

functions. OEP officials also confirmed that the Board determined 

that Board had enough currency on-hand that BEP did not need to 

print currency within the 30-day timeframe stated in the 

requirements of FCD 1.20 OEP told us that BEP has responsibilities 

during a continuity situation, but those functions were not 

necessarily considered COOP essential functions, and therefore did 

not need to be a MEF. They agreed with BEP’s determination that 

the protection of currency production equipment falls under 

physical security, a supportive function, which should not be a 

MEF. 

Board officials stated that they could not recall discussions with 

BEP and OEP regarding the determination of BEP’s MEFs. Board 

officials told us that the Board and its Reserve Banks had functions 

dependent on BEP during a COOP event and that the Board’s COOP 

plan identified MEFs that BEP directly supported. Board officials 

were surprised that BEP had not identified any MEFs because BEP’s 

main mission was to produce currency and provide that currency to 

the Board. They thought that BEP should have identified as MEFs 

its support and continuation of the functions necessary for the 

Board to meet its mission, as well as security over that process. 

Board officials questioned BEP’s ability to meet production 

demands from a single site and did not agree with BEP’s assertion 

that currency production would not be needed during a COOP 

event because of the Board’s currency reserves. The officials also 

said that the Board has currency reserves which could meet current 

demand for at least 40 days. 

Board officials told us that BEP did not involve the Board in BEP’s 

COOP planning process. Board officials believed that the Board 

should be partners with BEP in the development of BEP’s COOP 

 

20 FCD 1 states that an organization must ensure the continuation of essential functions during a crisis 

and sustainment for up to 30 days or until normal operations resume.
BEP Needs To Finalize Its COOP Plan (OIG-18-037) Page 14

plan since the Board is BEP’s primary customer and knows what 

production is needed during a COOP event. 

BEP officials told us that the Board was not directly involved in 

BEP’s COOP planning. BEP officials told us that the Board’s desire 

for greater involvement in BEP’s COOP planning was consistent 

with the Board’s increased involvement with BEP’s operations and 

that the extent of the Board’s future involvement in BEP’s COOP 

planning would need to be determined by BEP’s Senior 

Management. BEP officials disagreed with Board officials about 

what would be needed during a COOP event and maintained that 

BEP does not have any MEFs. 

FEMA officials told us that in their judgement BEP should probably 

have MEFs based on the language in FCD 2: 

“MEFs are those essential functions directly related to 

accomplishing the mission of the organization. Generally, 

a MEF is unique to the department/agency – most other 

departments/agencies do not perform this function. 

MEFs are those functions the departments/agencies 

perform to provide vital services, exercise civil authority, 

maintain the health and safety of the general public, and 

sustain the economic/industrial base during a disruption 

of normal operations.”

FEMA officials told us that BEP’s role in the manufacturing of 

currency was unique to BEP and supported “sustaining” the 

economic and industrial base. They believed that BEP’s 

manufacturing and processing of reserve notes (including the 

security over designs and the equipment) and storage of the 

reserve notes (including security) should probably be MEFs. 

FEMA officials told us that although BEP could perhaps postpone a 

MEF during an emergency event, the responsibility over the MEF 

could not be deferred. Additionally, the need to identity the 

function as a MEF cannot be negated; redundant operations, such 

as BEP’s alternate production facility or the Board’s currency 

reserves, may allow BEP to postpone performing the MEF during a 

COOP event, but those operations should still be part of BEP’s 
BEP Needs To Finalize Its COOP Plan (OIG-18-037) Page 15

reconstitution or devolution plans as BEP moves to restore 

operations to meet its mission after an emergency event.21

FEMA officials told us that component level agencies and bureaus 

were responsible for determining their own MEFs and clarified that 

a PMEF is a MEF that supports the NEFs and cannot be postponed 

during an emergency.22 According to FEMA officials, COOP should 

continue until all normal operations can be reconstituted.23 FEMA 

officials told us that nearly all executive department agencies will 

have MEFs, and that even if an agency did not have a MEF, 

agencies are still required to have a COOP plan. 

According to FCD 1, organizations must identify and prioritize their 

essential functions, using the methodology outlined in FCD 2, and 

document them in its continuity plan. This includes identifying all 

functions the organization performs and determining if they are 

MEFs using mission versus non-mission criteria and essential 

versus non-essential criteria. In addition, FCD 1 specifies that 

organizations must identify those essential functions that provide 

interdependent support to an essential function performed by 

another organization, including when and where the vital support 

would be provided. While we recognize that BEP made a concerted 

effort to identify its MEFs in conjunction with OEP and the Board, 

we believe that BEP has not appropriately identified its MEFs. 

Recommendation 

We recommend the Director of BEP: 

1. Work with the Board, in consultation with FEMA’s National 

Continuity Programs Office as necessary, to determine BEP’s 

MEFs and if any of those functions support other organizations’

MEFs. 

 

21 Reconstitution plans outline the process by which surviving and/or replacement organization 

personnel resume normal organization operations from the original or replacement primary operating 

facility. Devolution plans outline the transition of roles and responsibilities for performance of 

essential functions through pre-authorized delegations of authority and responsibility. 

22 According to FEMA, the determination that a MEF supports a NEF, and is also a PMEF, is done at the 

Department level – i.e. the Treasury OEP level. 

23

 FCD 1 requires that PMEFs be performed continuously during an event, or resumed within 12 hours 

of an event, and must be maintained for up to 30 days after an event or until the resumption of 

normal operations.
BEP Needs To Finalize Its COOP Plan (OIG-18-037) Page 16

Management Response 

BEP management responded that Treasury has not designated 

banknote production as a MEF for the purposes of COOP planning. 

In 2008 and 2014, in accordance with FCD 2, Treasury identified 

its MEFs. In consultation with BEP and the Board, Treasury 

determined that the Federal Reserve maintained a sufficient supply 

of Federal Reserve notes such that production could be suspended 

for more than 30 days during an emergency. However, establishing 

even a temporary facility capable of producing Federal Reserve 

notes would require years of effort, far in excess of the amount of 

time during which any existing supply of notes could meet the 

demands of the economy. Also, consistent with the recently 

updated and reissued FCD 2, Treasury is currently reviewing its 

MEFs, and will submit an updated list to FEMA by August 1, 2018. 

BEP will consult with Treasury and support this review to include 

consultations with the Board to determine if BEP has a MEF or if 

any of the BEP functions support other organizations’ MEFs.

OIG Comment 

BEP’s planned and taken actions meet the intent of our 

recommendation. 

* * * * * *

We appreciate the cooperation and courtesies extended to our staff 

during the audit. If you wish to discuss the report, you may 

contact me at (617) 223-8638 or Mark Ossinger, Audit Manager, 

at (617) 223-8643. Major contributors to this report are listed in 

appendix 4. A distribution list for this report is provided as 

appendix 5. 

/s/

Sharon Torosian 

Audit Director, Manufacturing and Revenue
Appendix 1 

Objective, Scope, and Methodology 

BEP Needs To Finalize Its COOP Plan (OIG-18-037) Page 17

Our audit objective was to assess the Bureau of Engraving and 

Printing’s (BEP) Continuity of Operations (COOP) plans for currency 

production should a major disruption occur at one or both of its 

production facilities. 

To accomplish our objective, we reviewed Presidential Executive 

Orders and Federal guidance that comprise our nation’s National 

Continuity Policy and COOP planning requirements, including 

National Security Presidential Directive (NSPD)-51/Homeland 

Security Presidential Directive (HSPD)-20; National Continuity 

Policy Implementation Plan; Federal Continuity Directive (FCD) 1, 

Federal Executive Branch National Continuity Program and 

Requirements (2012); and FCD 2, Federal Executive Branch 

Mission Essential Function and Candidate Primary Mission Essential 

Function Identification and Submission Process (July 2013).24 We 

reviewed BEP’s draft COOP plan and respective documentation and 

assessed them against Federal Emergency Management Agency’s 

(FEMA) FCDs. Appendix 2 provides more detailed information on 

the FCDs. 

To gain an understanding of BEP’s COOP planning and operations, 

we interviewed BEP officials and staff and conducted tours of 

BEP’s Eastern and Western Currency Facilities (ECF/WCF). External 

to BEP, we interviewed officials from Department of the Treasury’s 

(Treasury) Office of Emergency Preparedness (OEP), the Board of 

Governors of the Federal Reserve System (Board), and FEMA. 

At BEP, we interviewed:

BEP Headquarters and ECF - 

 Chief, Office of Security 

 Deputy Chief, Office of Security 

 Internal Review Division Manager, Office of Compliance 

 ECF Emergency Management Specialist 

 

24 During fieldwork, we reviewed NSPD-51/HSPD-20, and the corresponding National Continuity Policy 

Implementation Plan, as criteria for this audit; however, these policies were superseded by 

Presidential Policy Directive 40, which was signed on July 15, 2016, subsequent to the scope of our 

audit. Additionally, FEMA released an updated version of FCD 1 dated January 17, 2017, 

subsequent to the scope of our audit. The criteria used during our audit included NSPD-51/HSPD-20 

and the FCD 1 dated 2012. The updates reflected in Presidential Policy Directive 40, and the 

January 17, 2017, version of FCD 1, do not change the results of our audit. 
Appendix 1 

Objective, Scope, and Methodology 

BEP Needs To Finalize Its COOP Plan (OIG-18-037) Page 18

BEP WCF - 

 Manager, Security Division 

 Manager, Physical Security Branch 

 Manager, WCF Compliance Division 

 WCF Emergency Management Specialist 

 WCF Assistant Police Chief 

External to BEP, we interviewed: 

 OEP’s Acting Director and a Senior Policy Advisor/Project 

Manager, to gain an understanding of OEP’s involvement in 

BEP’s COOP planning, training, and exercises, as well as 

BEP’s reporting and other obligations to OEP, as part of 

Treasury’s overall COOP planning.

 The Board’s Assistant Director, Division of Reserve Bank 

Operations & Payment Systems, and a Financial Analyst, 

Division of Reserve Bank Operations & Payment Systems to 

gain an understanding of the Board’s involvement and 

satisfaction with BEP’s COOP planning and to determine 

BEP operations critical to the Board.

 FEMA National Continuity Programs Office’s Federal Branch 

Chief and a Continuity Operations Specialist to gain an 

understanding of FEMA’s perspectives on the continuity 

requirements required by NSPD-51/HSPD-20 and FCDs and 

to gather FEMA’s opinions on whether those requirements 

were met in BEP’s COOP planning.

In addition to the interviews with BEP officials, we toured ECF and 

WCF to gain a general understanding of BEP’s operations, which 

included: BEP’s plate making areas; currency production and 

storage areas; production monitoring areas; and, BEP’s Police 

Operations/Command Centers and Emergency Operations Centers. 

We performed our fieldwork from January 2016 through May 

2017. 

We conducted this performance audit in accordance with generally 

accepted government auditing standards. Those standards require 
Appendix 1 

Objective, Scope, and Methodology 

BEP Needs To Finalize Its COOP Plan (OIG-18-037) Page 19

that we plan and perform the audit to obtain sufficient, appropriate 

evidence to provide a reasonable basis for our findings and 

conclusions based on our audit objectives. We believe that the 

evidence obtained provides a reasonable basis for our findings and 

conclusions based on our audit objectives. 
Appendix 2 

Background on the National Continuity Policy and Federal Continuity Directives 

BEP Needs To Finalize Its COOP Plan (OIG-18-037) Page 20

National Continuity Policy 

The U.S. Government’s National Continuity Policy, as outlined in 

the May 4, 2007, National Security Presidential Directive (NSPD)-

51/Homeland Security Presidential Directive (HSPD)-20 establishes 

the requirement for each department and agency of the executive 

branch to maintain a comprehensive and effective continuity 

capability composed of Continuity of Government and Continuity of 

Operations (COOP) programs. 

 Continuity of Government refers to a coordinated effort 

within the executive branch to ensure that National Essential 

Functions (NEFs) continue to be performed during a 

catastrophic disaster or emergency.25

 COOP refers to an effort within individual executive 

departments and agencies to ensure that Primary Mission 

Essential Functions (PMEFs) continue to be performed during 

a wide range of disasters or emergencies.26

These programs are to ensure the preservation of our form of 

government under the Constitution, including the functioning of the 

three separate branches, and the continuing performance of NEFs 

under all conditions. The eight NEFs are as follows: 

1. Ensuring the continued functioning of our form of government 

under the Constitution, including the functioning of the three 

separate branches of government; 

2. Providing leadership visible to the Nation and the world and 

maintaining the trust and confidence of the American people; 

3. Defending the Constitution of the United States against all 

enemies, foreign and domestic, and preventing or interdicting 

attacks against the United States or its people, property, or 

interests; 

 

25 NEFs, as defined in NSPD-51/HSPD-20, represent the overarching responsibilities of the Federal 

Government to lead and sustain the Nation during a catastrophic emergency and will be the primary 

focus of the Federal Government’s leadership during and in the aftermath of an emergency.

26 PMEFs, as defined in NSPD-51/HSPD-20, are those department and agency Mission Essential 

Functions that must be performed to support or implement the performance of the National Essential 

Functions before, during, and in the aftermath of an emergency. They are required to be performed 

continuously during an event or resumed within 12 hours of an event, and to be maintained for up to 

30 days after an event or until the resumption of normal operations. 
Appendix 2 

Background on the National Continuity Policy and Federal Continuity Directives 

BEP Needs To Finalize Its COOP Plan (OIG-18-037) Page 21

4. Maintaining and fostering effective relationships with foreign 

nations; 

5. Protecting against threats to the homeland and bringing to 

justice perpetrators of crimes or attacks against the United 

States or its people, property, or interests; 

6. Providing rapid and effective response to and recovery from the 

domestic consequences of an attack or other incidents; 

7. Protecting and stabilizing the nation’s economy and ensuring 

public confidence in its financial systems; and 

8. Providing for critical Federal Government services that address 

the national health, safety, and welfare needs of the United 

States. 

National Continuity Policy Implementation Plan 

In August 2007, the President approved the National Continuity 

Policy Implementation Plan (NCPIP). This plan augments the 

National Continuity Policy and provides guidance to executive 

branch departments and agencies on how to implement the 

National Continuity Policy, established in NSPD-51/HSPD-20, 

which includes identifying and carrying out their PMEFs that 

supports the eight NEFs. 

The NCPIP is intended to be a comprehensive and integrated list of 

directives for the Federal executive branch in order to ensure the 

effectiveness and survivability of our national continuity capability. 

Also, the NCPIP directs that continuity planning occur 

simultaneously with the development of Federal department and 

agency programs and that organizations must incorporate 

redundancy and resiliency as a means and an end.27

The NCPIP also defines the roles, functions, and action items of the 

Nation’s senior continuity officials, as follows:

 The National Continuity Coordinator is responsible for 

coordinating, without exercising directive authority, the 

 

27 The National Continuity Policy makes clear that continuity planning for execution of Federal 

executive branch essential functions must be integrated into daily operations, functions, plans, and 

mission areas.
Appendix 2 

Background on the National Continuity Policy and Federal Continuity Directives 

BEP Needs To Finalize Its COOP Plan (OIG-18-037) Page 22

development and implementation of continuity policy for 

executive departments and agencies; 

 The Secretary of Homeland Security serves as the 

President’s lead agent for coordinating continuity operations 

and activities; and

 Continuity Coordinators at each executive department and 

agency are the senior accountable officials at the Assistant 

Secretary level (or equivalent) responsible to work with their 

department or agency head to ensure effectiveness and 

survivability of the organization’s continuity capability.

Under the NCPIP, the Federal Emergency Management Agency 

(FEMA) is responsible for coordinating the implementation, 

execution, and assessment of continuity activities and programs. 

This includes developing and promulgating Federal Continuity 

Directives (FCD) that establish continuity planning requirements, 

including continuity plan templates to assist departments and 

agencies and others in developing internal continuity processes and 

procedures; Tests, Training, and Exercises (TT&E) programs; and, 

assessment criteria for executive departments and agencies. 

Federal Continuity Directive 1 

Federal Continuity Directive 1, Federal Executive Branch National 

Continuity Program and Requirements (2012), provides operational 

direction for the development of continuity plans and programs for 

the Federal executive branch.28 

FCD 1 states that a viable COOP program will include the following 

10 primary elements: 

1. Essential Functions – Those functions an organization must 

continue in a continuity situation.29 These essential functions 

are then used to identify supporting activities and resources 

 

28 FCD 1 was updated by FEMA on January 17, 2017, subsequent to the scope of our audit. The 

updates reflected in the January 17, 2017, version of FCD 1 do not change the results of our audit. 

29 According to FEMA’s website, a continuity plan could be activated in response to a wide range of 

events or situations, including fires, natural disasters, and the threat or occurrence of a terrorist 

attack. Any event that makes it impossible for employees to work in their regular facility could result 

in the activation of the continuity plan. 
Appendix 2 

Background on the National Continuity Policy and Federal Continuity Directives 

BEP Needs To Finalize Its COOP Plan (OIG-18-037) Page 23

that must be included in the organization’s continuity 

planning process. 

2. Orders of Succession – A formal, sequential listing of 

organization positions (rather than specific names of 

individuals) that identify who is authorized to assume a 

particular leadership or management role under specific 

circumstances. 

3. Delegations of Authority – Identification, by position, of the 

authorities for making policy determinations and decisions at 

headquarters, regional and field levels, and all other 

organizational locations. Generally, pre-determined 

delegations of authority will take effect when normal 

channels of direction have been disrupted and will lapse 

when these channels have been re-established. 

4. Continuity Facilities – A comprehensive term, referring to 

both continuity and devolution sites, places other than the 

organization’s normal operating location, where essential 

functions are continued or resumed during a continuity 

event. 

5. Continuity Communications – An integrated, comprehensive, 

interoperable information capability, that describes the data, 

systems, applications, technical standards, and underlying 

infrastructure required to ensure that organizations can 

execute their essential functions and under all 

circumstances. 

6. Essential Records – Information systems and applications, 

electronic and hardcopy documents, references, and records 

needed to support essential functions during a continuity 

event. 

7. Human Resources – Provides guidance to all employees and 

specifically to employees who are activated by an 

organization to perform assigned duties during continuity 

operations. 

8. TT&E – Measures to ensure that an organization’s continuity 

plan is capable of supporting the continued execution of the 
Appendix 2 

Background on the National Continuity Policy and Federal Continuity Directives 

BEP Needs To Finalize Its COOP Plan (OIG-18-037) Page 24

organization’s essential functions throughout the duration of 

a continuity event. TT&E activities are designed to 

familiarize, impart skills and ensure viability of continuity 

plans. 

9. Devolution – Requires the transition of roles and 

responsibilities for performance of essential functions 

through pre-authorized delegations of authority and 

responsibility. Devolution is a continuity option instead of, or 

in conjunction with, relocation in order to ensure the 

continued performance of essential functions. 

10. Reconstitution – The process by which surviving or 

replacement organization personnel resume normal 

organization operations from the original or replacement 

primary operating facility. 

FCD 1 also includes four supportive elements of COOP planning 

that include Program Management, Risk Management, Budgeting, 

and Continuity Plan Operational Phases and Implementation. 

Federal Continuity Directive 2 

FCD 2, Federal Executive Branch Mission Essential Function and 

Candidate Primary Mission Essential Function Identification and 

Submission Process (July 2013), provides direction and guidance 

to Federal entities for identification of their mission essential 

functions (MEFs) and potential PMEFs.30 It also includes checklists 

to assist in identifying essential functions through a risk 

management process and identify potential PMEFs that support 

specific NEFs. 

 

30 MEFs are department and agency-level government functions that must be continued after a 

disruption of normal activities. MEFs may or may not be PMEFs. 
Appendix 3 

Management Response 

BEP Needs To Finalize Its COOP Plan (OIG-18-037) Page 25

 
Appendix 3 

Management Response 

BEP Needs To Finalize Its COOP Plan (OIG-18-037) Page 26
Appendix 4 

Major Contributors to This Report 

BEP Needs To Finalize Its COOP Plan (OIG-18-037) Page 27

Mark Ossinger, Audit Manager 

Richard Wood, Auditor-in-Charge 

Patrick Arnold, Auditor 

Andrea Meade, Auditor 

Adelia Gonzales, Referencer 

Justin Summers, Referencer 
Appendix 5 

Report Distribution 

BEP Needs To Finalize Its COOP Plan (OIG-18-037) Page 28

The Department of the Treasury

Counselor to the Secretary 

Assistant Secretary for Management 

Office of Strategic Planning and Performance Improvement 

Office of the Deputy Chief Financial Officer, Risk and Control 

Group 

Bureau of Engraving and Printing

Director 

OIG Audit Liaison 

Office of Management and Budget

OIG Budget Examiner 

U.S. Senate 

Chairman and Ranking Member 

Committee on Banking, Housing, and Urban Affairs 

U.S. House of Representatives 

Chairman and Ranking Member 

Committee on Financial Services 

Chairman and Ranking Member 

Subcommittee on Monetary Policy and Trade 

Committee on Financial Services 
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