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088927 1 (1972-02-14)

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                                                         FEB 1 4 1972




Mr. Robert P. Mayo, President
Federal Reserve Bank of Chicago
230 South La Salle Street
Chicago, Illinois 60690

Dear Mr. Mayo:

     We have reviewed  the activities of the Federal Reserve Bank
of Chicago relating  to the cancellation, verification, destruction,
and accounting  for currency unfit for circulation.  The review,
which was completed  in January 1972, was made pursuant to Public
Law 89-427, approved May  20, 1966.

     Our review was directed  primarily toward an evaluation of
(1) the existing controls  relating to the cancellation, verifica-
tion, and destruction  of unfit currency, (2) the related account-
ing and other records,  and (3) the reports and supporting working
papers for several audits made  by the General Auditor.

     We found that  the activities reviewed were conducted in a
generally satisfactory manner.

     We thank you  for the courtesy and cooperation given to our
representatives.

                                    Sincerely yours,




                                    M. R. Wo_ son
                                    Regional Manager


UNITED STATES GENERAL  ACCOUNTING  OFFICE
            REGIONAL  OFFICE
  ROOM 403. U.S. CUSTOMHOUSE, 610 SOUTH CANAL STREET
           CHICAGO, ILLINOIs 60607

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