Ms. POPE. Well, of course. I think just as a matter of course you can always say that people can be more supportive. But everybody has a budget to work within. The Treasury Department and OMB for many years was very reasonable in the handling of our budget. But you have to remember that we were not going full blast into asking for automated cost accounting systems until just recently. We were getting some of our order processing and customer service things geared up and that computerized. And in that they were very supportive. That is a very difficult question to answer. They are not saying have more money, no. But they have not specifically cut a request for money for automated accounting systems.

Mr. HILER. I think one of the things we have found over the last few years is that in the tight budget era that we have been in that money that is expended today that will have payoffs 3 or 4 years from now is likely not to be spent today. I mean that has just been the case across Government, and when we talk about a plan that will not be fully in place for 4 years, obviously I would think it would be easy for someone to say, well, gosh, we will just put this off another year because we have got to save across Government "x" number of dollars, and from the Mint we can get $473,000 or something.

I mean it just seems to me natural that that would occur. We do it with our infrastructure, and clearly internal accounting procedures in Government is the infrastructure of Government just as roads or bridges or waterways are the infrastructure of the movement of materials. This is the movement of ideas and concepts and cost figures, and I just would think you would see that same thing. Have you got enough at 888 average-I think it was 888 average-employees that you project over the fiscal year 1990 budget, is that enough employees to get the job done and including these accounting things?

Ms. POPE. That is, of course, on the appropriated side. There are 1,257, on the numismatic side, the reimbursable side, and of course, the major portion of the accounting systems is the reimbursable side.

Mr. HILER. Thank you.

Ms. POPE. I should also say, and I do not want to be flip about this, but we are very careful how we price our coins. Certainly we make a profit. I would venture to guess that the Treasury Department would not be anxious to support commemorative coin measures if the Treasury did not realize some profit on coin measures. The question was do the coin collectors pay more than they may need to pay. I should point out that of all the mints, marketing mints in the world, we probably have the lowest priced similar products. I should also bring to mind that I suppose if the accounting is so terrible that you worry about the collectors paying more, how do we know that they are not paying enough? I just wanted to throw the other side of the coin, forgive me, in there.

Mr. HILER. Thank you. Yield back, Mr. Chairman.

Chairman LEHMAN. Thank you. The Numismatic News, I am sure, will pick up that comment.

Ms. POPE. Yes, I was hoping they were writing it down.

Chairman LEHMAN. Mr. Price.

Mr. PRICE. Thank you, Mr. Chairman. Ms. Pope, the GAO report indicates that after experiencing two thefts, the Mint did strengthen its controls and its security over the shipment of dies. When did that occur?

Ms. POPE. By the way, they were not thefts. They were never reported as thefts. And the Secret Service has never said they were thefts. They were reported as missing dies. There is a difference between saying they were stolen and missing. Do you have the dates, Gene? One was the Statue of Liberty coins, a shipment to the Canadian Mint for chrome-polishing that got taken off of Air Canada and put in a warehouse, and then they disappeared.

Chairman LEHMAN. Probably a baggage claim.

Ms. POPE. What year was that, Gene?

Mr. ESSNER. That was the fall of 1987. I am sorry. I am looking at the report. That was in 1986.

Ms. POPE. Statue of Liberty dies.

Mr. ESSNER. Statue of Liberty dies were shipped to Canada for chrome-plating and polishing, and they did not arrive from the carrier. That was reported then to Secret Service, and they just could not locate them. They thought they were simply, as you said, stored away in some warehouse someplace. And then it was only, I think, last year that one die from that shipment, there was an attempt to sell that die at a numismatic show, I think, in Atlanta. That is when the issue resurfaced.

a

Ms. POPE. I might also say-

Mr. PRICE. Excuse me. There was an attempt to sell the die at

Mr. ESSNER. Yes. Some lady from Canada, I believe, came to the ANA convention, I believe, in Atlanta, and attempted to sell that die as a numismatic item, not as an item to be used to make counterfeit coins, but as a numismatic item. It was reported to the Mint, and the die was confiscated.

Mr. PRICE. And that was

Mr. ESSNER. That was one of the dies that

Ms. POPE. That is the only die that ever showed up from the shipment of how many?

Mr. ESSNER. Forty-four.

Ms. POPE. Forty-four.

Mr. PRICE. The others are still unaccounted for?

Ms. POPE. That is right. Secret Service has not gotten any other leads on where they could be.

Mr. PRICE. But there is at least good reason to assume in this one case that it was a theft?

Mr. ESSNER. I guess it eventually became a theft. But they are not sure that the dies originally were stolen.

Ms. POPE. Not a theft from the Mint, I think, is what they said. Mr. ESSNER. It may have simply been that somebody at a later point found them in the baggage claim area and took one of them or disposed of the others. I might also point out that this is only one side of a coin.

Ms. POPE. We do not ship obverses and reverses together so that someone can-unless they have both sides, they cannot counterfeit a coin.

Mr. PRICE. Now the report refers to two incidents. What is the second one?

Mr. ESSNER. The other incident was 11 boxes of dies that were being shipped from San Francisco Mint to the West Point Mint. This is after they had been chrome-plated and polished, and there was a box containing 24 dies for the one ounce American Eagle coin, and only 10 of the boxes arrived.

Mr. PRICE. Ten out of?

Mr. ESSNER. Ten out of the 11 boxes.

Mr. PRICE. Out of 11.

Mr. ESSNER. That was 24 dies. And again, one side.

Mr. PRICE. And no indication since then of what became of that

Mr. ESSNER. No indication. It is still under investigation.

Mr. PRICE. Missing die? After these two incidents, is the report correct in asserting that the Mint did tighten security on such shipments?

Ms. POPE. Yes, we have gone to armored carrier now. And with signature control with the armored carrier, and interestingly enough, the Treasury Inspector General folks are now questioning the added expenditure of the additional security saying that the added money spent might not be worth the possible security risk. Mr. PRICE. What is your view of that?

Ms. POPE. Well, I probably have a different view than the rest of my staff. Because it is Government property and because we are under the public scrutiny, I think we should pay the money and have the tightest security possible. If I had my own private company, I would not do it. I would not spend the money.

Mr. PRICE. Since this new practice has been instituted, have there been any incidents comparable to the ones you have just cited?

Ms. POPE. No, but there had not been any prior to that in the last 8 years anyway. It was just unfortunate those two happened the way they did when they did close together.

Mr. PRICE. A few moments ago the discrepancies in inventory control within the Mint were mentioned. As far as you can tell, are those aspects of the report accurate?

Ms. POPE. I really cannot comment. I want to say as far as I can tell they are. But I really do not know that.

Mr. PRICE. Well, Mr. Steinhoff's comment was that there, too, the discrepancies in inventory control posed some security danger, some danger of theft. Would you share that view?

Ms. POPE. Well, certainly if you do not know how many you have, you do not know whether any were stolen, sure, or missing or whatever.

Mr. PRICE. Have there been incidents of theft within the Mint at any point in the system since those we just discussed, any more recent incidents?

Mr. ESSNER. Of dies?

Mr. PRICE. Of dies, yes.

Ms. POPE. No, no.

Mr. PRICE. So the two incidents that you just recalled are the only incidents in recent years of missing or-I am sorry-of stolen dies?

Ms. POPE. That is right.

Mr. PRICE. Possibly stolen.

Ms. POPE. That is correct. Missing or stolen dies. That is correct. Chairman LEHMAN. If the gentleman would yield, I would point out that in the GAO testimony one of the concerns was the inventory methods, and the lack of real accountability for what is where does not give the most credibility to his statement as to whether or not any dies have been missing because the numbers do not match up anyway. We just assume that none have been stolen. That is another problem, right?

Mr. PRICE. Well, what I am asking really is if any thefts have come to light that could have been detected earlier, picked up earlier, had the inventory been tighter? That is really my question.

Ms. POPE. No. No, as a matter of fact I think that Ms. Condon-I was told at least that she had complimented the folks out in San Francisco because once the problem was pointed out to them, they put another system in place and have accounted for all the dies except two, and there seems to be some question as to whether they are just missing on paper or whether they are actually missing.

Mr. PRICE. There is a disconcerting incident recounted on page 20 of the report. The San Francisco Mint had established adequate procedures for controlling bullion coins during coin production, but it had failed to follow one of its important controls by not notifying its security staff when coin shortages were identified. And that furthermore, it was unable to reconcile its physical inventories of coins and coin blanks with its records during the annual account settlement in 1988.

Do you have any particular response to that incident?
Ms. POPE. No. I am going to look into it.

Mr. PRICE. You will have a chance to look at that further. Let me ask just one concluding question. It has to do with the comments you made in passing about the number of commemorative coins which are authorized each year and the kind of burden that that has represented for the agencies. Could you elaborate on that? Is there some danger of excess coin programs saturating the market or overburdening your agency? What is the appropriate level of frequency for commemorative coin programs, and how much lead time does the Mint need to execute such programs?

Ms. POPE. How much lead time? As much as possible. The Royal Canadian Mint actually plans their coin programs years in advance. If they were sitting here, they could probably tell you exactly what they were doing commemorative-wise for the next 4 or 5 years. We, of course, do not have the authority to do that when Congress enacts legislation. We have always said that one commemorative coin program a year would probably be the most the Mint could really handle comfortably.

But what has happened is with the advent of the commemorative coin programs coming once a year, in some cases doubling up in a year, all resources of the Mint have been focused on those coin programs and circulating coinage, and not bringing the Mint up to date and fixing problems. We have been kind of running around with the hose, you know, keeping the fires out and trying to turn over profits to the Olympic Committee, the Statue of Liberty Com

mittee, or whatever group it is that, you know, wants the money immediately.

Mr. PRICE. Thank you. Thank you, Mr. Chairman.

Chairman LEHMAN. Mr. Hubbard.

Mr. HUBBARD. Thank you, Ms. Pope, for being with us today, and time is of the essence at this point because we have a roll call vote. Would you provide for the record an explanation of the happenings there in the San Francisco Mint?

Ms. POPE. Certainly.

Mr. HUBBARD. As best you can that Mr. Price touched on this earlier, and would you later submit for the record an explanation of the problem there in the San Francisco Mint where they omitted an essential step in the procedure for controlling coins and also their inventory showed more coins than they actually had.

Your numismatic programs seem to be similar to that of the postal service's programs. They are doing very well. The postal system seems to be doing very well. It is a semi-independent agency. In your opinion, should we begin to discuss making the Mint a similar type of entity?

Ms. POPE. Yes. You should have been begun discussing that a long time ago.

Mr. HUBBARD. This would be a good idea, in your opinion?

Ms. POPE. Very definitely. Very definitely. We are competing, in addition to the accounting situation, we are competing head to head with other mints in the world and Congress often compares us to other major marketing mints in the world, and we are under all of the Government rules and regulations which make it impossible to respond to the marketplace, to carry marketing allowances from year to year. There is no way we can compete equally with other marketing mints of the world.

My own opinion, my own, personal, Donna Pope opinion, is that the entire Mint should be in a revolving fund situation, more like a crown corporation like the British Royal Mint or the Canadian Mint. The proposal for GAO for a public enterprise fund really relates only to our numismatic side, but we will take that.

Mr. HUBBARD. Do you agree with what was said by Mr. Steinhoff in his testimony that a numismatic revolving fund should be established, and his comments under that topic?

Ms. POPE. A thousand percent.

Mr. HUBBARD. Thank you, Mr. Chairman.
Chairman LEHMAN. Ms. Kaptur.

Ms. KAPTUR. Thank you, Mr. Chairman. I wanted to ask the Director of the Mint-also, thank you for being so forthcoming with information that we requested from our own staff. I did have just one question on this suggestion for a revolving fund for your numismatic programs. I heard what you just said about the whole operation. But I am just curious. The information that you sent me which had to do with both coins and medals, you are suggestingor at least from the study that GAO did—that we do not fully understand as a Congress exactly what it cost us as well as what we make because of the way that that is accounted for, and that a revolving fund would help the Congress fully appreciate the amount of money that is being made by those operations?