Do I understand that, and right now we do not because of the accounting procedures?

Ms. POPE. Well, I think GAO is saying right now you do not because of the manual accounting systems at the Mint where it is very difficult to get. And every Mint facility had been really kind of doing their own system. We are scattered across the Nation, as you know. Certainly having a revolving fund will make it cleaner and calls for an audit by an independent agency. So I think that will be helpful. I am not sure, however, that simply having two bank accounts rather than one in itself gives better information.

Ms. KAPTUR. Just a ball-park figure. In the most recent fiscal year, you or one of your staff members might recall, if you were to take all of your numismatic operations that could make money for the Government of the United States, what would be the amount of revenue to the Treasury not counting seigniorage and some of the things we talked about, but the actual sales versus the cost of production of coins and medals, all of them accumulated over the year? Can you give us a ball-park figure of what that would-the actual sales to the public of all of those commemoratives, medals? Ms. POPE. Gene is telling me about $80 million, but it changes so dramatically from year to year, and also in addition to the profit, we are generating surcharges to be turned over to organizations. So there is profit and there are also surcharges.

Ms. KAPTUR. It was $80 million.

Ms. POPE. Yes. Ball-park.

Ms. KAPTUR. All right. Thank you very much. Thank you, Mr. Chairman.

Chairman LEHMAN. Thank you. I want to thank the witnesses, and we will follow up on Mr. Hiler's suggestion and possibly take another look at this in about a month. Thank you very much.

[Whereupon, at 11:30 a.m., the hearing was adjourned, subject to the call of the Chair.]

APPENDIX

TUESDAY, AUGUST 1, 1989

1

DEPARTMENT OF THE TREASURY

UNITED STATES MINT

INTRODUCTORY STATEMENT OF THE HONORABLE DONNA POPE

DIRECTOR OF THE MINT

FOR PRESENTATION TO THE

HOUSE BANKING, FINANCE AND URBAN AFFAIRS

SUBCOMMITTEE ON CONSUMER AFFAIRS AND COINAGE

GOOD MORNING! IT IS MY PLEASURE TO BE HERE TO TESTIFY ON

BEHALF OF THE UNITED STATES MINT'S AUTHORIZATION FOR FY 1990. TODAY, I AM PREPARED TO DISCUSS A NUMBER OF INITIATIVES THAT WERE PRESENTED IN THE BUDGET SUBMITTED IN JANUARY.

FY 1988/1989 ACTIVITIES

BEFORE I SUMMARIZE OUR FY 1990 REQUEST, I WOULD LIKE TO

HIGHLIGHT A FEW FY 1988/1989 ACTIVITIES:

WE PRODUCED 14.7 BILLION COINS FOR DOMESTIC CIRCULATION IN

FY 1988. THIS RESULTED IN SEIGNIORAGE TO THE FEDERAL
GOVERNMENT OF $468 MILLION. IN FY 1989 WE ARE BUDGETED TO
PRODUCE 18.0 BILLION COINS WHICH WILL RESULT IN AN ESTIMATED

$540 MILLION IN SEIGNIORAGE.

THE BICENTENNIAL OF THE CONGRESS COIN PROGRAM WAS

INAUGURATED ON JUNE 14, 1989.

SURCHARGES THROUGH JULY 26,

1989 GENERATED BY THE SALE OF THESE COINS ARE $9.4 MILLION. THE UNITED STATES OLYMPIC COIN PROGRAM RAISED APPROXIMATELY $23 MILLION IN SURCHARGES FOR THE UNITED STATES OLYMPIC

COMMITTEE.

THE SILVER FOR THE OLYMPIC PROGRAM COMES FROM

JUL 27 1989

THE STRATEGIC STOCKPILE AND THE PROFIT TO THE DEFENSE

LOGISTICS AGENCY (DLA) STOCKPILE IS $6 MILLION ON SILVER.
THE AMERICAN EAGLE GOLD BULLION PROGRAM CONTINUES INTO ITS
THIRD YEAR OF OPERATION.

DURING FY 1988 AND 1989 TO DATE,

WE HAVE SOLD APPROXIMATELY 1.2 MILLION OUNCES OF GOLD

BULLION UNCIRCULATED COINS AND APPROXIMATELY 383,000 OUNCES
OF GOLD BULLION PROOF COINS VALUED AT OVER $779 MILLION.
PROFITS FOR THIS PERIOD ON THE AMERICAN EAGLE UNCIRCULATED
PROGRAM ARE APPROXIMATELY $3.4 MILLION WHICH INCLUDES THE
PROFIT ON THE REPURCHASE OF GOLD ORIGINALLY BORROWED FROM
TREASURY RESERVES. PROFITS FOR THIS PERIOD ON THE AMERICAN
EAGLE GOLD PROOF PROGRAM ARE APPROXIMATELY $30.4 MILLION.
THE AMERICAN EAGLE SILVER BULLION PROGRAM ALSO CONTINUES
INTO ITS THIRD YEAR WITH FY 1988 AND 1989 SALES EXCEEDING
$127 MILLION. WE HAVE SOLD OVER 12.7 MILLION OUNCES OF
SILVER IN BULLION UNCIRCULATED COINS AND APPROXIMATELY
1,461,000 OUNCES OF SILVER IN PROOF COINS. TOTAL PROFITS
FOR FY 1988 AND 1989 FOR BOTH THE AMERICAN EAGLE SILVER
UNCIRCULATED AND PROOF PROGRAMS EXCEED $16 MILLION. THE
PROFIT ON THE SALE OF THIS SILVER, WHICH IS THE DIFFERENCE
BETWEEN MARKET VALUE AND TREASURY'S BOOK VALUE OF
APPROXIMATELY $1.29 PER OUNCE, IS IN EXCESS OF $65 MILLION.
THIS PROFIT GOES TO DLA. YOU MAY BE INTERESTED TO KNOW
SILVER EAGLE SALES SINCE 1986 HAVE RESULTED IN PROFITS TO
DLA OF APPROXIMATELY $132 MILLION ON THE SALE OF SILVER.

PROFIT ON THE SALE OF ANNUAL PROOF AND UNCIRCULATED SETS
EXCEEDED $13 MILLION.

THE MINT IS REQUIRED TO SELL 2.5 MILLION OUNCES OF SILVER
EACH YEAR FOR THE NEXT THREE YEARS, STARTING THIS YEAR. TWO
SALES TOTALLING 2.5 MILLION OUNCES WERE CONDUCTED THIS YEAR
RESULTING IN APPROXIMATELY $9 MILLION IN PROFITS TO BE
DEPOSITED TO THE GENERAL FUND OF THE TREASURY.

I WOULD LIKE TO SAY A FEW WORDS REGARDING OUR RECENT GAO

ACCOUNTING REVIEW. PRIOR TO FY 1981, THE PRIMARY MINT
ACTIVITY WAS THE PRODUCTION OF CIRCULATING COIN AND THE

ANNUAL PROOF AND UNCIRCULATED COIN SETS. THE COST

ACCOUNTING SYSTEM AT THE MINT WAS DONE MANUALLY, SIMILAR TO
MANY PRIVATE SECTOR INDUSTRIES AT THAT TIME. WITH THE
ADVENT OF COMMEMORATIVE AND BULLION COIN PROGRAMS EACH YEAR,
AND WITH THE ATTENDANT COMPLEXITIES, THE MANUAL SYSTEM WAS
OBVIOUSLY NOT KEEPING UP. IN-HOUSE ATTEMPTS AT UPDATING

ACCOUNTING SYSTEMS AND PROCEDURES WERE NOT MOVING FAST
ENOUGH SO THE MINT SOUGHT AN INDEPENDENT ACCOUNTING FIRM TO
LOOK AT COST DISTRIBUTION AND TO UPDATE ACCOUNTING MANUALS
AND PROCEDURES. AT ABOUT THE SAME TIME, GAO WAS ASKED TO

LOOK AT THE MINT'S SYSTEM. AFTER RECEIVING RECOMMENDATIONS
FROM THE ACCOUNTING FIRM, GRANT THORNTON, AND WITH

PRELIMINARY ASSESSMENTS FROM GAO, WE BROUGHT IN THE FIRM OF

BOOZ ALLEN AND HAMILTON TO EVALUATE AND ASSIST IN

IMPLEMENTING A MORE BUSINESS-LIKE MANUFACTURING COST

ACCOUNTING REPORTING SYSTEM.

FY 1990 BUDGET REQUEST

THE MINT'S FY 1990 BUDGET REQUEST FOR SALARIES AND EXPENSES

IS $50.735 MILLION AND 888 AVERAGE POSITIONS.