Alleged Abuses in the U.S. Savings Bond Division of the Department of the Treasury

AFMD-82-70: Published: Jun 26, 1982. Publicly Released: Aug 25, 1982.

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GAO was requested to review allegations of abuses in the Department of the Treasury's Savings Bond Division that were made by a former bond salesperson. Specifically, GAO was asked to obtain information about: (1) the Treasury's Office of the Inspector General's approach to identify the salespeople who have submitted falsified reports; and (2) the system used to measure a salesperson's performance.

GAO found that the Inspector General's investigation confirmed the existence of serious abuses prior to the individual's allegations, and available information shows that some abuses continue despite the Division's efforts to discourage them. The Division's performance measurement system contains serious shortcomings and does not provide the data necessary to establish the cost effectiveness of a salesperson's efforts. Although the question regarding the effectiveness of the Division's promotional efforts was raised in 1976 by the Office of Management and Budget and a major public accounting firm, data are still not available to show that the promotional efforts have a significant impact on sales volume. The Division's management recognizes that the individual's allegations surfaced serious problems. It has established new control procedures to verify the calls which savings bond salespeople report on their accounts and has forcefully dealt with those specifically found to be involved in abusive and fraudulent practices. It also contends, along with the Inspector General's office, that the new procedures are effectively deterring abusive and fraudulent practices from continuing.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: The Secretary of the Treasury should implement the alternative found to be the most cost effective.

    Agency Affected: Department of the Treasury

  2. Status: Closed - Implemented

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: The Secretary of the Treasury should study alternatives that would provide better control over the salesforce's activities (if Congress continues funding them), including implementation of a productivity measurement system and the expansion of procedures to check accuracy of work reports.

    Agency Affected: Department of the Treasury

  3. Status: Closed - Implemented

    Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

    Recommendation: The Secretary of the Treasury should provide Congress with specifics on benefits that will result from continuing the promotional efforts.

    Agency Affected: Department of the Treasury

 

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