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GGD-81-27 1 (1981-02-23)

handle is hein.gao/gaobabbrm0001 and id is 1 raw text is: RELEASED S~rwuCrr L 11 740 LRCby thlO OfiiC,5.nIIi~t~l COMPTROLLER GENERAL OF THE UNITED STATES WASHINGTON, D.C. O4 B-201903 114740 FEBRUMRY 23, 1981 The Honorable Henry S. Reuss House of Representatives The Honorable Stewart B. McKinney House of Representatives SUBJECT: kederal Reserve Security Over Currency Transportation Is Adequat9 (GGD-81-27) On February 28, 1980, you requested that we review the Federal Reserve System's currency transportation operations. You indicated that you were interested in the adequacy of security the Federal Reserve required during its currency shipments and the Federal Reserve Banks' procurement of armored car services, especially compliance with the Ser- vice Contract Act and adherence to competitive bidding practices. During the initial stages of our audit, we learned that the 12 Federal Reserve Banks had initiated an antitrust com- plaint against the major carriers in the armored transporta- tion industry. Although this litigation did not directly involve the areas of concern you expressed, it hampered access to the records needed to audit the Banks' procurement prac- tices. As agreed, we have postponed our audit of the Federal Reserve's procurement practices until the antitrust suit is settled. To determine the adequacy of Federal Reserve security over currency transportation, we analyzed the security requirements and incident experience of the Federal Reserve Banks and the Board of Governors for the last 10 years. Because of our limited access to records, we used a ques- tionnaire to gather this information from the Reserve Banks. Our conclusions are based on information specially accumulated by the Federal Reserve Banks in response to our request. The Banks do not routinely gather and analyze this information. To assess industrywide standards and practices, we talked with armored carrier company officials and insurance brokers. We consulted with other government and private users of armored car services to assess the impact of the Federal Reserve's security decisions. In fulfilling its responsibilities for currency cir- culation, the Federal Reserve contracts with various armored carriers for transportation services. Universal security standards for armored transportation have not been estab- lished by government, the industry itself, or the Federal Reserve. In the last 10 years, the minimum security levels 6~/s6 3c.-'(233061)

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