Summary: Comments by the Department of Defense (DOD) and the Federal Emergency Management Agency (FEMA) on an earlier GAO report have raised new issues concerning the disposal of stockpile silver. GAO evaluated the DOD and FEMA positions to determine whether they warranted revising any of the conclusions and recommendations of the earlier report and identified new issues that must be addressed and resolved in reevaluating the need for the stockpile silver.
The Department of Defense Appropriation Act of 1982 suspended the weekly auctions of silver stockpiles pending a redetermination that the silver intended for disposal is excess to stockpile requirements and congressional approval of any proposed disposal method. However, GAO believes that other unresolved disposal issues remain, including: (1) the lack of consideration of defense-related monetary uses of silver; (2) inadequacies in the decisionmaking database relating to legislatively mandated supply factors; (3) the lack of consideration of the estimated cost of alternative sources of silver and the impact of proposed disposal methods on foreign relations; and (4) the viability of various alternative disposal methods, such as bullion coins and convertible bonds backed by silver.
