DOCUMENT PZSUSE 04549 - [BZ634868] Additional Precious Metals Can Be Recovered. LCD-77-228; B-163084. December 28, 1977. 27 pp. + 6 appendices (10 pp.). Report to Secretary, Department of Defense; Administrator, General Services Administration; by Fred J. Shafer, Director, Logistics and Communications Div. Issue area: Facilities and Materiel management (700); materials: Conserving Scarce awm materials (1805). Contact: Logistics and Communications Div. Budget Function: National Defense: Department of Defense - Military (except procurement E contracts) (051). Congressional Relevance; House Committee on Armed Services; Senate Committee on Arm4d Services. The Federal Government is a large user of items containing gold and silver. in fiscal year (FT) 1976, Federal agencies recovered S20. 2 millioa in gold and silver from materials used in day-to-day operations. Additional gold and silver estimated at $15.6 million could have been recovered. Demonstration projects have shown that the Department of Defense (LOD) can identify, segregate, and sort gold and silver items in electronic scrap and reclaim them economically. DOD is the largest recoverer of gold. Silver is used more extensively than gold, photographic and x-ray film contains silver, and film is used by all agencies. Findings/Conclusions: The Department of Defense recovers very little gold and silver from electronic scrap even though it has demonstrated that recovery is economically feasible. Instead, it continues to study the feasibility of such recovery and is selling items with gold and silver at scrap prices. Recovery from scrap in w! 1976 could have yielded an estimated additional $11.6 Tventy-six Twllion. Federal agencies recovered only 36% of the recoverable silver from photographic solutions. The other 64%, valued at an estimated $4 million, was not recovered because some agencies do not have recovery programs and others arc recovering less silver than they should. Federal agencies have not diligently managed recovery programs. Recommendations: The Secretary of Defense should: direct the Defense Logistics Agency to take the actions necessary to segregate precious-metal-bearing electronic scrap, accumulate it at selected locations, and extract the available gold and silver. The Administrator of the General Services Administration should require all agencies to immediately, and annually thereafter, survey their cosponents to identify those using fixer and its estimated silver content. The Administrator should initially require these agencrea to report semiannually to GSA on specified types of inforsmtion and should follow up with these organizations to determine reasons why the agencies are not recovering the maximum amount of silver and the actions planned for doing so. (Author/SV) UNITED STATES GENERAL ACCOUNTING OFFICE .4 Additional Precious Metals Can Be Recovered Federal agencies in fiscal year 1976 recovered $20.2 mill.)n in gold and silver from materials used in day-to-day operations. But additional gold and silver estimated at $15.6 million could havetbeen recovered. --The Department of Defense recovers very little gold and silver from elec- tronic scrap even though it has demon- strated that recovery is economically feasible. Instead, it continues to study the feasibility of such recovery and is selling itermr with gold and silver at scrap prices. Recovery from scrap in tis- cal ·,'ear 1976 could have yielded an estimated additional $11.6 million. --Twenty-sixi Federal agencies recovered only 36 percent of the recoverable silver from photographic solutions. The other 6X percent, valued at an esti- mated $4 million, was not recovered because some agencies do not have recovery programs and others are recov'- ering less silver than they should General Services Administration needs to forcefully exercise its authoriT'/ under its Government-wide responsibility for precious metals programs to insure that agencies are diligently recovering the maximum gold and si Iver. LCD-77-228 DECEMBER 28, 1977 UNITED STATES GENERAL A&COUNTING OFFICE WASHINGTON, D.C. 20548 '_OGISTIC8 ANn COMMUNIC.TIONS DIVISION B-163084 To the Secretary of Defense and the Administrator of General Services This report discusses the potential for Federal agencies to recover precious metals from material destined for dis- posal. Also discussed is a need for increased management attention by the Department of Defense, the General Services Admi: istration, and all Federal agencies having potential to recover precious metals. The report contains recommendations to the Secretary of Defense on page 13 and to the Administrator of General Serv- ices on page 24. As you kncw, section 236 of the Legislative Reorganization Act of 1970 requires the head of a Federal agency to submit a written statement on a.tions taken on our recommendations to the House Committee on Government Opera- tions and the Senate Committee on Governmental Affairs not later than 60 days after the date of the report and to the House and Senate Committees on Appropriations with the agency's first request for appropriations made more than 60 days after the date of the report. We are sending copies of this report to the Acting Director, Office of Management and Budget; the Senate Committee on Governmental Affairs; the House Committee on Government Operations; and the Senate and House Committees on Appropriations and Armed Services. Sincerely yours, F. J. Shafer Director GENERAL ACCOUNTING OFFICE ADDITIONAL PRECIOUS METALS REPORT TO THE SECRETARY O" CAN BE RECOVERED DEFENSE AND THE ADMINISTRATO'CR OF' GENERAL SERVICES DIGEST Recognizing the need to remove gold and silver from such used items as batteries, electronic components, photographic and X-ray films, Federal agencies over the years established recovery programs under the Government-wide Auspices of the Gen- eral services Administration. In 1976, S20 million in silver and $436,000 in gold . were recovered under these programs. Additional gold and silver in the Depart- ment of Defense's electronic scrap-- estimated at $11.6 million--and silver in many Federal agencies' photographic solutions--estimated at $4 million--could have been recovered in fiscal year 1976 but were not. GOLD AND SILVER RECOVERY FROM DEFENSE'S ELECTRONIC SCRAt Demonstration projects have shown that Defense can identify, segregate, and sort gold and silver items in electronic scrap and reclaim them economically. In 1975, items containing gold and silver were sort. from scrap at Hill Air Force Base, Utah, at a cost of $27,000. Market value of this sorted scrap was $154,000-- over six times its normal sales value of $25,000. (See p. 10.) Another project in early 1976 showed recovery of gold and silver to be profit- able. Electronic scrap from Hill Air Force Base was smelted and assayed, and $46,000 in gold and silver was recovered. The value of the recovered metals was four times the recovery costs of $11,600. (See p. 10.) .St. Talr Upon removal, the repo., COwr should b noted hereon. i LCD-77-228 These projects demonstrate the feasibility of recovering gold and si'ver from elec- tronic scrap. Defense, instead of recover- ing the metals, has continued testing such recovery. In the meantime, much electronic scrap is being sold -t n3minal prices. GAO recommends that the Spcretary direct the Defense Logistics Agencyof Defense to segre- gate and recover gold and silver from elec- tronic scrap. The Defense Dcwartment stated that Logistics Agency's responsibility the to es- tablish standards for recovery ar. to meas- ure the efficiency and cost effectiveness of recovery efforts is alreadN well de- fined. It said further that changes needed in the program would be determined consideration of this report and of after a re- port being prepared by the Defense Audit Service. The issue is not whether resoonsibilitv been defined, it is the continuing has inaction of Defense in not insisting on Departmnent- wide implementation of a demonstrated profit- able recovery program. (See p. 13.) SILVER RECOVERY FROM FIXER SOLUTION In fiscal year 1976, Federal agencies recovered only 36 percent of the recover- able silver from fixer solution--a poor record. General Services has not force- fully exercised its role as monitor of Government-wide precious metals recoverythe program. Nor has General Services itself that Federal agencies are in assured fact recovering the metals and that recovery maximum. It receives data on silver re- is covered but not on how much could have been recovered. If General Services had pursued its role vigorously, it would have been aware that: ii -- Some agencies that should have had re- covery programs, did not. (See p. 17.) -- There is a lack of cooperation within and among agencies to increase recovery. (See pp. 17 and 18.) -- Man-- components of agencies with recovery projrams are recovering less than they should, (See p. 18.) -- Agencies using contractor services in the Washington, D.C., area are not recovering all silver in fixer. (See p. 18.) Federal agencies have not diligently managed their recovery programs. 't-at are aware of how much silver they recover bit are unaware of the efficiency of their programs. (See p. 19.) Had each agency management estab- lished the means to evaluate its programs, it could have identified problems related the recovery of silver and taken correctiveto action. The Administrator of General Services should -- require each agency to survey its compo- nents, set goals, and monitor recovery in relation to goals; -- require more stringent reporting by agen- cies that would enable it to evaluate individual agency silver recovery pro- grams, thus causing agency management to focus more attention on its silver re- covery programs; and -- follow up with agencies to determine why the agencies are not recovering the maxi- mum amount of silver and the actions these agencies plan to take to do so, (See p. 24.) Although the Administrator did not disrute GAO's findings and conclusions and agreed that the recommendations could be adopted, he set forth no positive plans to implement the recommendations. (See p. 27.) Z~~P~~hS~as~~ iii Co n t e n t s Page DIGEST i CHAPTER 1 INTRODUCTION 1 Use and recovery of gold and silver 1 Program responsibility 3 Scope of review 4 2 DOD'S ELECTRONIC SCRAP CONTAINS GOLD AND SILVER 5 Identifying, segregating,.and sorting is economical g Reclaiming precious metals is economically feasible 10 Total reclaimable metals 11 Recent DOD actions 11 Conclusions 12 Recommendation. 13 Agency comments and our evaluation 13 3 IMPROVE SILVER RECOVERY FROM FIXER SOLUTION 14 Maximum recoverable silver 14 Need for GSA to better manage Government-wide program 17 Need for agencies to better manage recovery from fixer 19 Data can be obtained for evaluation purposes 19 Evaluation can help identify program problems 20 Agency actions to improve silver recovery 23 Conclusions 23 Recommendations 24 Agency comments and our evaluation 24 Page APPENDIX I Letter dated October 11, 1977, from the Principal Deputy Assistant Secretary of Defense (MRA&L), Department of Defense 28 II Letter dated August 22, 1977, from the Administrator of General Services 30 III Locations visited to observe operation of recovery programs 33 IV GAO computation of market value of metals recovered during Ogden Region project and estimated costs of recovery 35 V GAO computation of estimated net addi- tional revenue had precious metals been reclaimed from electronic scrap sold by the Disposal Service in fis- cal year 1976 36 VI Principal officials responsible for administering activities discussed in this report 37 ABBREVIATIONS DOD Department of Defense DLA Defense Logistics Agency GAO General Accounting Office GSA General Services Administration VA Veterans Administration CHAPTER 1 INTRODUCTION The Federal Government is a large user of items containing gold and silve:. These prerious motals are used in batteries, electronic components, uniform buttons and insignias, and photographic and X-ray film. Recognizing the need to recover gold and silver, the Federal Government has become more involved in recovering them over the years. -- In 1954, the Navy began recovering silver from torpedo batteries. -- In the early 1960s, the Veterans Administration (VA) began recovery of silver from X-ray film. --In 1968, the Department of Defense (DOD) began a worldwide silver recovery program. And in 1969, DOD started a gold recovery program. -- Finally .n 1969, all Federal precious metals recovery programs were placed under the General Services Administration (GSA). How well these programs are working and what benefits are resulting from them are the subject of this report. USE AND RECOVERY OF GOLD AND SILVER Gold is used as a thin coating over some other base metal such as copper because it does not corrode. Much gold is used in electronic components; also some is used in uni- form buttons and insignias, eyeglass frames, and other items used by the military services. DOD is the largest recoverer of gold. In fisca' year 1976, it recovered 3,219 troy ounces valued at $436,000. Most of DOD's gold is recovered at a facility in Pueblo, Colorado, by using various chemical processes to strip gold off base metal. Gold can also be recovered by smelting and then separating the base metals. DOD contracts with indus- try for the latter process. Silver is used more extensively than gold. All film-- photographic and X-ray--contains silver, and film is used by all agencies. Much silver is used by the Navy in bat- teries for submarines, torpedos, sonobuoys, etc. Silver is 1 also used in dental amalgams, electronic components, alloys, and solder. brazing Silver recovery methods depend on the source. cially available equipment is used to recover Commer- silver film that goes into solution during the development from Silver remaining on the film is recovered by process. incineration and smelting the ash. Most other silver undergoes smelting. In fiscal year 1976, the Federal Government recovered 4.4 million ounces of silver valued at $19.8 million. DOD-- the largest consumer of photographic materials--recovered $17.1 million of silver mainly from these materials and from batteries used by the military services. VA with health facilities and associated X-ray units its many largest recoverer with $2.1 million of silver.was the second Most other agencies reclaimed silver but in lesser amounts, all of it from photographic materials. virtually Estimated silver recovered in fiscal year 1976 on agency data and its market value follows. based Troy Market Agency ounces value (thousands) DOD 3,788.3 VA $17,066.7 487.6 2,140.8 GSA 47.5 Energy Research and 208.6 Development Administra- tion 33.6 National Aeronautics and 147.3 Space Administration 11.3 49.8 Interior 10.2 Health, Education, and 44.9 Welfare 10.0 Agriculture 44.1 8.2 36.0 Smithsonian Institution 2.4 Government Printing Office 10.5 2.2 9.6 Library of Congress 2.1 Central Intelligence Agency 9.1 1.9 8.1 Commerce 1.8 State 8.0 0.4 1.9 Justice 0.2 Environmental Protection 1.0 Agency 0.2 0.8 Total 4,407.9 $19787.2 2 Incentive to recover gold and silver is limited. DOD and the agencies which participate in its precious metals recovery program may use the precious metals as Government- furnished material on their contracts for manufactured goods and thereby reduce procurement costs. Other agencies gen- erally sell reclaimed silver through GSA on the open market to the highest bidder. Some receive the sales revenue. For example, VA deposits this revenue in its revolving supply fund to benefit all its hospitals and clinics. Most others do not receive the revenue and it is deposited in the Treasury. (See p. 26 for further discussion of this subject.) PROGRAM RESPONSIBILITY GSA is responsible for initiating Government-wide precious metals recovery programs. In the Federal Property Management Regulations, GSA directs each agency to evaluate recovery potential, implement recovery procedures, monitor recovery programs, and submit a consolidated annual report to GSA. Further, GSA directs each agency to establish and maintain a program for silver recovery from used fixer solu- tion and scrop film. Management of the recovery program varies among Federal agencies. Within DOD, program management is the responsi- bility of the Defense Logistics Agency (DLA). The Defense Property Disposal Service within DLA operates the program through its five regional offices--three in the continental United States and two overseas. The regional offices have a global network of 193 property disposal offices and re- covery facilities at Colts Neck, New Jersey, and Pueblo, Colorado. The VA silver recovery program management, policy, and direction is under the Department of Medicine and Surgery. Operational responsibility for recovery at the 170 VA hospitals/clinics is assigned to three VA supply depots in the continental United States. Each supply depot evaluates recovery potential, implements recovery procedures, and monitors program results at hospitals in its service area. The remaining Federal agencies do not have extensive management organizations for their recovery programs. Gen- erally, each has designated a silver monitor responsible for assuring recovery of si.ver from photographic materials and preparing consolidated reports to GSA. Program management and daily operations have been delegated to the many 3 components having recovery potential. These components determine the economic feasibility of recovering silver and the method of recovery and report their results to the agency silver monitor. SCOPE OF REVIEW We evaluated the Federal agencies' efforts in maximiz- ing recovery of precious metals. This evaluation required reviewing agency policies, procedures, and practices, as well as interviewing agency officials and personnel operating these programs. Our evaluation was limited to recovery of precious metals from twc major sources--electronic scrap and photo- graphic material--because these sources offered potential to immediately increase recovery yields and could serve as examples of need for management improvement. Because mos- civil agencies have decentralized program management, ie used a questionnaire to obtain data from 251 components of these agencies to help us identify the maxi- mum recoverable silver. In addition, we visited 44 DOD in- stallations and Federal agencies to observe and inquire into the daily operations of their recovery programs. (See app. III.) Most of our fieldwork was performed between May 1976 and Jar uary 1977. 4 CHAPTER 2 DOD'S ELECTRONIC SCRAP CONTAINS GOLD AND SILVER DOD has electronic scrap containing gold and silver located in the United States and overseas. Some of the scrap we observed is shown in the photographs below and on the next page. DAVIS - MONTHAN AIR FORCE BASE TUCSON, ARIZONA NAVAL AMMUNITION DEPOT EARLE, COLTS NECK, NEW JERSEY HILL AIR FORCE BASE OGDEN, UTAH Gold and silver in this electronic scrap is in the form of plated pins, circuit boards, connectors, and contact points, as shown in the photographs below and on the next page. ELECTROI:IC CONNECTORS CIRCU!T BOARD CONTACT POINTS AND PINS While DOD recovers large amounts of silver from batteries and other sources and some gold from uniform buttons and insignias and eyeglass frames, it has to recovev precious metals from its largest source hesitated of gold-- electronic scrap. The Defense Property Disposal Service assisted by the Bureau of Mines, Department of the has studied how to reclaim gold and silver from thisInterior, and found that it can be done at a reasonable cost. scrap Despite this finding, the Disposal Service continues to study feasibility of such recovery. the In the meantime, much elec- tronic equipment is being sold as scrap without recovering the gold and silver. We estimate that in fiscal year about $11.6 million in additional revenue was lost 1976 because the gold and silver was not recovered. IDENTIFYING, SEGREGATING, AND SORTING IS ECONOMICAL The key to recovering precious metals from scrap is identifying, segregating, and sorting, electronic according to Disposal Service officials and researchers. Two posal Service offices have demonstrated that these Dis- func- tions are simple and economically feasible. First, gold and silver in the Information on identifying gold and scrap must be identified. silver has been dissem- inated to the disposal offices by the Disposal Service series of memorandums entitled, "Tips on in a Precious Metal Recovery," and in a kooklet containing pictures of items containing precious metals. A Disposal Service official stated that this information is all a person needs to iden- tify gold and silver in electronic scrap. Once identified, items containing gold and silver be segregated and sorted. Segregating means screening can com- ponents being scrapped and setting aside those containing items with precious metals. Sorting means extracting containing plecious metals from a component using items and simple tools, like screwdrivers, pliers, common and punches. By disassembling the frame of awire cutters, console, cir- cuit boards may be pulled out by hand. Connectors cut from wires. Pins can be punched out of plastic can be holders. Electronic scrap that is not segregated and sorted sold for about 10 cents a pound. When segregated is and sorted, this same scrap can be sold at a substantially higher price or the precious metals can be recovered. 9 Example A Electronic scrap (273,000 pounds) was segregated and sorted at Hill Air Force Base, Utah, in 1974 and 1975. Items containing gold and silver were sorted from this scrap at a cost of $27,000. The market value of this sorted precious metals scrap was $154,000 or over six times its normal sales value ($25,000). Example B At the Army Ammunition Depot, Pueblo, Colorado, in 1976, items containing precious metals were sorted from general electronic scrap. During a 3-month period over 1,500 ounces of gold were recovered from this scrap. The gold valued at $139 an ounce resulted in a return of over 300 percent on recovery costs of $45 an ounce. Included was a nominal sorting cost of about $2 an ounce. (This particular project benefited from a student employment grant under which university students sorted the electronic scrap. The Disposal Service paid only a portion of its normal labor costs as the remainder was paid from grant funds. However, we estimate that if regular Disposal Serv- ice employees were used, recovery costs would have been about $64 an ounce. This would still have resulted in a return of over 200 percent on recovery costs. RECLAIMING PRECIOUS METALS IS ECONOMICALLY FEASIBLE The Ogden Region of the Disposal Service in early 1976 completed a project to ascertain the feasibility of reclaim- ing gold and silver from electronic scrap. Gold, silver, and ccpper worth over $46,000 were recovered from scrap which ordinarily would have sold for $800. After spending $11,600 to recover the metals, DOD realized a net of almost $34,000. (See app. IV.) The project involved the Ogden Region providing administrative support and coordination, the Disposal Of- fice at Hill Air Force Base segregating and sorting the electronic scrap, and the Bureau of Mines at Salt Lake City analyzing the reclaimed metal in bar and slag form to deter- mine the precious metals content. While the overall project was profitable, different types of items showed different results. Four items were 10 profitable and two were not. as the quantity recovered of The profit or loss as well follows. gold, silver, and copper Profit TyEe of item Gold or loss(-) Silver C oper per ton (oz.) (oz.) (lbs.) (percent) Electronic pins, chassis parts, and hardware 178 289 1,285 894 Contact connector strips with gold-plated pins in plastic 200 Circuit boards 173 612 712 38 168 313 Plugs and con- 64 nectors 74 130 228 184 Black boxes intact (electronic sys- tems in aircraft) .4 Black boxes par- 77 89 -70 tially disas- sembled 1 98 63 -68 In April 1976, the Ogden Region, notified the Disposal based on its project, metals was feasible andService that: recovery of precious economical for most items. cooperation with the Bureau DLA, in economical ways to recover of Mines, is trying to develop precious metals from black boxes. TOTAL RECLAIMABLE METALS We estimated the total additional have been realized in fiscal revenues that could recovered from electronic 1976, had gold and silver been scrap. This was done by project- ing the results of the previously covery projects at Hill Air mentioned sorting and re- Force Base and the Ogden Region over the entire 12.2 million sold by the Disposal Service pounds of electronic scrap net additional revenue could in 1976. About $11.6 million app. V.) have been realized. (See RECENT DOD ACTIONS In December 1976, 6 months after our initial inquiries into precious metals recovery, DOD formalized its 11 January 16, 1974, memorandum with the issuance of a dire-tive establishing policy and assigning management for the precious metals recovery program responsibility directive, DLA was to establish standards to DLA. Under this efficiency and cost effectiveness of to measure the on quantity and value of precious metalrecovery efforts based content of items. DLA has taken some recent actions to from electronic scrap on a larger scalerecover aold and silver prior to the Ogden Region project. than was being done DLA officials have stated, however, that they are not ready to take the final step of directing full reco,very on a DOD-wAde basis. The Ogden Region has directed disposal offices to sort electronic scrap. An Ogden off will tame time for all the disposal i stated that it -- Ices to begin sort- ing but that some have begun. We visited fices and found they were sorting. two disposal of- awards a contract for the recovery Until the Ogden Region of gold and silver, all disposal offices are to stockpile the sorted scrap. Several disposal offices in the Memphis Disposal Service have also segregated Region of the and sorted electronic scrap. This, however, was a limited effort to support a one-time project to further demonstrate the economic feasi- bility of recovering rather than part of a DOD-wide attempt to recover gold and silver from electronic scrap. Officials of the Disposal Service are judgment on the feasibility withholding of recovering from all elec- tronic scrap until the results are obtained stration project in the Memphis Region. from the demon- mhis project, how- ever, is behind schedule by believe that, on the basis ofseveral months. DLA officials the two projects discussed in this report, the Disposal Service metals from all electronic should recover precious scrap. However, it has yet to direct recovery DOD-wide. CONCLUSIONS Recovery of gold and silver from electronic been demonstrated by the Disposal Service scrap has cally and economically feasible. While to be both physi- moved toward large-scale recovery, the Ogden Region has DLA is reluctant to di- rect recovery DOD-wide. Until this is done, electronic scrap will continue to be sold without being recovered. When considering the precious metals the volume scrap sold annually--12.2 million pounds of electronic in fiscal year 12 1976--millions of dollars in additional revenue could be realized annually if DOD would reclaim the total gold and silver from this source. RECOMMENDATION We recommend that the Secretary of Defense direct DLA to take the actions necessary to segregate precious-metal- bearing electronic scrap, accumulate it at selected loca- tions, and extract the available gold and silver. AGENCY COMMENTS AND OUR EVALUATION In commenting on a draft of this report, DOD has reasserted its requirement that the costs of segregating scrap and recovering precious metals be compared to costs of alternative methods of disposition. (See app. I.) Ac- cording to a DOD directive, DLA, as the program manager, is responsible for establishing standards to measure the effi- ciency and cost effectiveness of recovery efforts. It points out that this responsibility is well defined in the DOD directive issued in December 1976. Furthermore, accord- ing to DOD, changes needed in the program will be determined after it considers our report and a report being prepared by the Defense Audit Service concerning the precious metal recovery program. We recognize the DOD directive has defined, and given to DLA, the responsibility for managing the recovery program which includes comparing the costs of alternative methods of disposing of precious-metal-bearing materials. The issue is not whether responsibility has been defined; it is the con-- tinuing inaction on the part of DOD to exercise its authority and to insist on Department-wide implementation of a recovery program that has demonstrated its profitability. Although components of the Disposal Service have demonstrated that re- covery of gold and silver from electronic scrap can be a source of net revenues, DLA has not established a DOD-wide program to accomplish such recovery. Therefore, we believe that the Secretary of Defense should direct DLA to immedi- ately establish Procedures and controls which will insure the recovery of gold and silver from electronic scrap-- already proven profitable--at all locations throughout the disposal system and measure the results. 13 CHAPTER 3 IMPROVE SILVER RECOVERY FROM FIXER SOLUTION Our review into the programs of 26 Federal agencies for recovering silver from photographic fixer showed that almost $4 million of silver--64 solution total recoverable silver--went down the drainpercent of the in fiscal year 1976. Although GSA has Government-wide responsibility for precious metals recovery, it has not insured cies (1) are in fact recovering precious metals that agen- and (2) are recovering maximum amounts. Further, agencies responsible for the actual recovery do not know how efficient programs are because they (1) do not know who their the recovery, (2) have not established program should make (3) do not monitor results. Until GSA and goals, and focus their attention on this program, most these agencies silver recover- able from fixer will continue to be lost. MAXIMUM RECOVERABLE SILVER We estimate that in fiscal year 1976, 26 Federal cies could have recovered from fixer solutions agen- of about 1.4 million troy ounces of silver. a maximum Actual re- covery, based on agency data, was 507,000 36-percent rate of efficiency. troy ounces--a We estimated the maximum recoverable silver from the number of gallons of fixer used, as reported cies, and potential recoverable silver data by the agen- provided by the manufacturers of silver recovery equipment. to us The equipment manufacturers gallon of used fixer contains 0.5 said that the average ounce of silver. The industry uses this figure as a rule of thumb on the manufacturers' analysis of several that is based thousand of used fixer from Gove.nment and commercial samples firms. This average was substantiated by our analysis vice data for certain DOD photographic and of Disposal Ser- X-ray facilities consuming 584,00U gallons of fixer annually. The equipment manufacturers advised batch processing with electrolytic silver us that centralized recovery equipment is the most efficient method for extracting silver from fixer. Und':r this method, used fixer is transported central point and placed into the tank of to a the electrolytic 14 recovery unit where the silver is drawn out of fixer. manufacturers stated that this method can recover up to These percent of the silver and that other methods will be 95 efficient. A Bureau of Mines investigation of health less facili- ties in the Salt Lake City area confirms this efficiency. Metallic replacement cartridges are widely used and if used properly can, according to manufacturers, also recover up to 95 percent of the silver from fixing solutions. cartridge is a plastic container packed with iron in The the form of steel wool. The fixer flows through the steel on the way to the drain. Through chemical reaction, wool the iron replaces the silver in the solution and the silver drops out and falls to the bottom as metallic sludge. cording to experts in the field, the most effective way Ac- use cartridges is to have them connected in tandem so to the fixer rlows through both cartridges before it goes into the drain. When only one cartridge is used in the recovery operation, it is necessary to frequently test the off-flow with litmus paper to assure that it does not contain silver. While the 26 agencies recovered 36 percent of the maxi- mum recoverable silver, the rate of recovery for individual agencies ranged from zero to 90 percent. DOD had the recovery potential but had one of the lowest rates of largest recovery--2. percent. VA had the second largest potential and recovered 79 percent. Agencies potentials generally did not recover with small recovery any silver. The follow- ing table shows the individual agencies' maximum recoverable silver, 1/ efficiency rate, and the market value of silver. 1/Computed as follows: Gallons of fixer consumed X 95 percent Yield per galionecn 15 oOII U NO C~~NI~QtfOt00~~ ai1 ~ 4.1' C'J0 0 aoo·~~-On C~O·IPP- VINNNN I m -'NO-·cr~D '01 apID N Qt;,LI W %I 01 INN a t' C4I M'D~~~~~~~~~~~~~~~~~~~~~~~e t>. %C W ~cf,_ - r Ln * . ~~~~~~~~~~~~~~~~~~~~~~~~~ 1 I I 0 U '' -.... .. NI NI I>,0 'Gil 0-4V -Itf ~ - - Wat IDW0 WC OatIF 41~0I I N 0O at' I -n 01 InI aN · · z· r r i Cr · l `-l· I* I I 00 W r. ", N Nm v I., i Girl 101; Ct U : 4v 4 fix In it~~~~~~~~~~~~~~~~~~~~~~~~~~' u',l 0 a,31~~~~~~~~~~~~,' ~ ' e' C4r ON In .. 0 - OD ' N 0~' II ,-4 0 , ' i 'I Iff' OD C 'IN In CM fO I CI I 0i 0 U.. I I. I II III' 141 01L I, .I M ...- ,.4 ) el I In U~~~~~~~~~~~~~~~~~O 4,' 0~I W.I I fN1 O)D 0 N M Nl ' XI;. 14110'Gil ' II'Gl 4I In a, 1 0 0 0 W C4 A.-.~ r. eL,at--- N -l NI ~ enl.i I N 'U' I t~~~dOI (U or INa -wl~ CIC NfI ' 4 UC :! 'Il) Q OtIN ~~ CWI~)P~-~*~\DC~~1NI- C a, h~t -U UIUIO~~~~~~~~~~~~~~~~~~tlA U N?-W N I~~~~~~~~I ~. I f0 (~10I I I /)~ >1,1 GI' W I >. t u 0~~~~~~~~0 in 0 - W co n - o0coWVI I.10lr- NN.iUV t o W' WI Vc U~~t I..II ttI1 MI t ~~~ 0. l0 t N~% N e, l N.-4.-...-I- - 1LA- .- t CO'W,. ODUI-Wt M!I mlI 4C 4 ' 0.I>0 14M 'Ut InC 0 OOW WUtftfOUCUM-Nr- NN t cr W, ,- 0 Y~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~- W, -rl CM - r (.11 -t~~nt Oat ID -t~~~~~tWMMNcl I -- I NI- n-i l ,., Ut W I= I ~O U I 1 G C4 I NIJ W4 · ~~~I ~ · ~~~~~·"~~~~`5L ~~~ ea~~0M 0to 4 L'f0 0 ) : 4)~~~~~~~~~~~~~~~~~~~~~~4. 14 ~~~CC 4 i Cl0 a'C Oo I 0.II W 'a~nrtNOt U C~ >. ~ )(AGIa Gi~~~~~~~0 0m I C 4, - I 4 -tGi ;ei~~~~~~~~~~~~~~~~~~~~>A C U ~ ~~~~~~~ 14 14 G .- 'U G Q Gi0 -) C aceC avLa CC : a'.4 -t0 4414.-I Om C to i - tnUCDG W0tI . I 0C C Ci 4 0 >.-. QOGC 4i U2. 0 to cGi)4.' UC Gi W O G) W 41IV C CWGi Ai ) Cn1 -t00 . -41410.a44 .. -0In0' C 0. CC r- W 44 0 - In0 00 0r 1 .I4- .-0 -ltnC U *C I Ai U CiGI 0.-.4 IU)i VUGIEC G 0' 'U0 iEW-\ ~Gi 44E~ 44 JC '0 014 Ai O L)-tGI ' 141 ~~~~~GiV~0'0InW~ 44' In-I W 44 Ctfat- ! 0IO '"C 0o 44to C4i Git.>.nt C-' Wi~to E~ CW to F. Wi00 144M .(J I -I to 44 00 o C NI C~~~~~n~4i 0.- W-C0 ~ . ~) C '-4~ -In 44 C U ml1 G-0. L.GiGiI -UqI444A.4 1 4 C1n o t4'-- 0GiG-'0 U'4 04'M~~~~~~Vl~~iU4Jnw C V-.0) G n nf V4) W i 4) e C C 4 r) N .J 10 AiC ea40GC-4 16 NEED FOR GSA TO BETTER MANAGE GOVERNMENT-WIDE PROGRAM As the Government-wide manager of silver recovery from photographic materials, GSA requires annual reports front the agencies on how much silver was recovered from fixer. These reports are received, but they are not sufficient for G3A to determine if all agencies that should be recovering are doing so and to evaluate whether maximum recovery is achieved. GSA has not established the necessary management controls and reporting to assure itself that the recovery program is effective. Had GSA required agencies to report on the number of components using fixer and what was being done with the fixer, it would have been aware that some agencies were re- covering a large percentage of silver and some were not. With adequate reporting, GSA would have had a basis for determining how the good performers do it and would have been able to inform other agencies of the more successful techniques. Silver monitors within each agency would have been able to better evaluate recovery results from indivi- dual photographic processing facilities. Further, if GSA had required data enabling it to evaluate agency recovery programs, it would have been in a position to inquire of the agencies why maximum recovery was not achieved and what actions were planned to achieve it. Such inquiries in fiscal year 1976 would have disclosed the following conditions. Example A There is a lack of intra-agency cooperation to increase recovery results. -- The Energy Research and Development Administration at Oak Ridge, Tennessee, has 17 components that process film and use fixer. Although all components are at Oak Ridge, 5 recover silver and 12 do not. We estimate that over 2,100 ounces of silver annually are not being recovered. --At Fort Carson, Colorado, the Army hospital is re- covering silver from fixer solution. At the same time, we found two other components at this mili- tary installation not recovering. We estimate the two components annually use 1,150 gallons of fixer having a silver content of 264 ounces. 17 Example B There is a lack of interagency cooperation to improve upon program results. In Manila, for example, the VA Out- patient Clinic and the printing plant for the U.S. Informa- tion Service recover silver from used fixer. Yet, in the same location, we found the U.S. Embassy dispensary discards fixer without recovering the silver. Example C Many components within various agencies are not recover- ing because they (1) consider it uneconomical to do so, (2) have not been provided equipment, or (3) are unaware of the silver recovery program. -- For the 20 agencies surveyed by our questionnaire, 103 of the 251 components responding are not recover- ing. These components consume about 30,000 gallons of fixer annually with an estimated silver content of 15,000 ounces. -- We visited 13 military installations and found 14 components not recovering. We estimate these com- ponents annually use 5,100 gallons of fixer with a silver content of 3,600 ounces. Example D Agencies using contractor services in the Washington, D.C., area are not recovering all the silver from fixer solutions. Under the GSA contract, the contractor recovers the silver, refines it, and pays the Government a percentage e the current market price for silver. We checked conLractor-installed equipment at 10 facilities and observed five instances of silver going down the drain because con- tractor personnel did not adequately monitor the equipment. The contract does not require the contractor to pay for the lost silver. The above-mentioned data would provide GSA with insights into agency efficiency and the causes underlying low efficiency rates. In addition, it would cause agen- cies to focus more management attention on their silver recovery programs. The agencies are responsible for manag- ing their own programs efficiently and using the most effec- tive means for recovering silver. 18 NEED FOR AGENCIES TO BETTER MANAGE RECOVERY FROM FIXER GSA's stated policy is that for its own program for recoveringeach agency is responsible silver from fixer solu- tion. Such responsibility requires identifying agency ponents using fixer, implementing recovery methods, com- monitoring program results. Most agencies are aware and much silver they recover. of how But most are unaware of how effi- cient their programs are because they do not know who should make the recovery, have not established program goals, do not monitor results by component. Further, had and sisted that agency management establish the means GSA in- to ate its program, GSA and the agencies could identify evalu- lems related to the actual recovery of silver and prob- take corrective action. DATA CAN BE OBTAINED FOR EVALUATION PURPOSES To evaluate silver r3covery programs for fixer, an agency needs data on the amounts of fixer and film used, the silver content of fixer, and the silver recovered. We found that this data is easy to obtain within Lne agencies. VA has demonstrated that agencies can evaluate silver programs. It sets annual goals for each of their the 170 VA hospitals. The goals are set by the supply depots on X-ray film data supplied by the hospital and film based manu- facturers' information on the quantity of silver recoverable from fixer used to develop films. Recovered silver is shipped to the depots by the hospitals. Supply depots monitor the operations by ing results to goals. When necessary, supply depot compar- person- nel examine the hospitals' recovery operations to improve efficiency. DOD's Property Disposal Service goals--maximum recoverable silver--forhas not set recovery the many DOD facili- ties using fixer, but it has demonstrated that it can the data needed to set goals. We found also that 'tu obtain identify the silver recovered by facility. Therefore,can believe the Disposal Service has the means to evaluate we DOD silver recovery program. the The Disposal Service has some data on fixer usage 228 locations around the globe which, collectively, for use 19 1.1 million gallons of fixer annually. For many of the DOD facilities at these locations, a simple litmus paper test was used to determine the silver content of the fixer. The Disposal Service could set recovery goals for these facilities. It cannot, however, set DOD-wide goals because it does not have fixer and silver content data for all DOD facili- ties. The records maintained at the Disposal Service's recovery office at Colts Neck, New Jersey, show that 192 additional locations recovered silver from fixer in fiscal year 1976. Further, our analysis of the data for the 228 locations showed many instances where data was included for medical and dental components but not for other components normally found at military installations, such as photo- grnphic laboratories, industrial X-ray laboratories, print- inj plants, and hobby shops. Disposal Service officials are aware of the lack of data for many DOD components consuming hundreds of thousands of gallons of fixer annually with some silver content. They had placed high priority on obtaining such data in fiscal year 1977. This data, however, was to be used to make sure that each facilitL had adequate recovery equipment rather than to set goals. Our visits to other Government agencies and the responses received to our questionnaire showed that these agencies can determine the amount of fixer used annually. With little additional effort, silver content can be deter- mined either by the method VA uses or that used by some of the DOD activities as discussed above. EVALUATTSIN CAN HELP IDENTIFY PROGRAM PROBLEMS The ability to evaluate the silver recovery program can assist in identifying problems precluding recovery of the maximum amounts of silver. We believe program evaluations would have enabled the agencies to identify problems hamper- ing recovery of silver and would have irovided a basis for takirg corrective action. Some proble - . we identified follow. Cartridges used to recover silver Much silver is lost when metallic replacement cartridges are used because personnel do not adequately mon- itor their use. When fixer passes through the cartridge too 20 fast or when most of the steel recoverable silver flows throughwool has disintegrated, the cartridge and down the drain. The effectiveness of cartridges frequently through the use of litmus paper. must be tested Knowledgeable individuals infor-med us that they can determine cartridges have been used effectively whether from physical examina- tion of their contents. -- in 1974 silver was recovered from 885 cartridges used by 123 DOD facilities. Silver recovered averaged 35 ounces a cartridge and ranged zero to 122 ounces. Of the 885 cartridges,from or 6 percent, contained no silver. 54, Based dustry's rule of thumb that the average on in- gallon of used fixer contains 0.5 ounce of silver manufacturers' recommendations and that 220 gallons should pass through most cartridges are depleted, we believe that averagebefore they should be near 100 ounces of silver perrecovery cartridge. --In 1976 the Disposal Service recovery operation at Colts Neck opened 140 cartridges received the preceding 2 years to determine whether in they had been used properly. Most cartridges--103, or 74 percent--had not been used properly. -- At 7 DOD facilities visited, we checked cartridges and found 12 instances where 29 was flowing down the drain. The silver silver of the fixer going into the drain from content these cartridges ranged from 0.1 to 1.25 ounces gallon. a -- At 7 locations serviced under the GSA contract, we found three instances where the fixer from the cartridge to the drain contained going silver. Most technicians we visited at DOD facilities aware that periodic testing of the cartridge were to prevent loss of silver but few were was necessary silver was being lost. Generally, theirable to explain why cated a lack of understanding on when the explanations indi- be changed. cartridge should 21 Electrolytic recovery equipment on line with processors Silver was being lost when electrolytic recovery equipment was hooked directly to the film developing proces- sor. We attributed the losses to inefficiencies in the method itself and inaction by personnel operating the equipment. When electrolytic equipment is attached directly to the processor, fixer flows from the processor to tie electro- lytic equipment where it is to be desilvered. Whenever the electrolytic equipment is full and silver-laden fixer con- tinues to flow into it, the fixer containing silver over- flows into the drain. -- Disposal Service data for the 228 locations identi- fied 127 online electrolytic units. This data shows that 14 units had silver in the fixer going to the drain. -- During our visits to DOD installations, we observed five recovery units. Our tests of the fixer at the drain disclosed two instances of silver being lost. -- In similar tests for 11 facilities at civil agencies, we found 4 cases where silver was being lost. Our review of Disposal Service data and visits to military installations also disclosed instances where silver was lost because of a lack of action by operating and main- tenance personnel. --At the 228 locations, the Disposal Service identified 8 electrolytic recovery units losing silver because they needed repair or replacement. Five of eight were inoperable. -- At one Army hospital audited by the Army Audit Agency, 1,433 ounces of silver were lost in 1976 because (1) recovery units were not turned on, (2) a recovery unit was not repaired for 2 months, and (3) silver sludge in the holding tanks was not reclaimed. -- A Navy hospital we visited had two recovery units broken down, one for 8 months and the other 2 months, in fiscal year 1976. Because these breakdowns 22 were not corrected promptly, we estimated 1,420 ounces of silver went down the drain. -- We found a Navy dispensary had one recovery unit to service two X-ray machines, but only one was hooked up to the unit. About 480 ounces of silver annually was being lost. AGENCY ACTIONS TO MPROVE SILVER R COVERY Some actions are underway in the agencies to improve silver recovery in the future. Not in all instances, how- ever, will the actions enable management to evaluate their programs. VA, which makes extensive use of the centralized batch processing method of recovery and has set goals for each hospital, is conducting pilot programs at a few hospitals see if additional internal controls are needed. These con-to trols are intended to insure that all fixer is in fact being processed through silver recovery equipment and that equip- ment is used properly to recover the maximum silver. Tne Disposal Service is doing two things that should increase program results. First, it is exploring with few military installations the feasibility of using the a tralized batch processing method of recovery. Second, it cen- is trying to identify all facilities using fixer and make sure they have adequate equipment. CONCLUSIONS Although GSA has Government-wide responsibility for silver recovery programs from fixer, it does not require sufficient data from the agencies to evaluate their pro- grams. It does receive data on silver recovered but does not receive data on each agencies' maximum recoverable sil- ver. Without such data, GSA cannot be sure that agencies are recovering the silver or that recovery is maximum. Most agencies need to improve their recovery results. They have not established program goals against which to compare results. Such comparison is needed to identify program inefficiencies. 23 RECOMMENDATIONS We recommend that the Administrator of General Services require all agencies to immediately, and annually there- after, survey their components to identify those using fixer and its estimated silver content. Further, the Administrator should initially require these agencies to report semiannually to GSA. These reports should show the following data, as well as any other information which GSA believes is necessary for better management of the program. -- Gallons of fixer used. -- Types and amounts of film processed. -- Estimated maximum recoverable silver. -- Method of estimation. --Silver recovered. -- Explanations of significant differences between estimated recoverable silver and silver actually recovered. -- Actions planned to maximize recovery. -- Type of recovery equipment. We also recommend that the Administrator follow up with these organizations to determine reasons why the agencies are not recovering the maximum amount of silver and the actions planned for doing so. AGENCY COMMENTS AND OUR EVALUATION The Administrator of General Services commented on our findings and proposed recomnendations, and his letter is included as appendix II. In response to our proposal that GSA require each agency to survey its components and identify those using fixer and the estimated silver content, GSA replied that it has encouraged this but could make the survey mandatory. The reply stated, however, that an annual survey would be unnecessary because our proposal for more frequent and de- tailed reporting by agencies would, in itself, require such surveys. We believe that the intent of the surveys is to 24 search for and identify potential recovery locations. The intent of the reporting is to monitor these locations. We believe that the progress made by the surveys should be made mandatory. Most agencies currentl.y surveys and, as a result, have not do not perform such accLmulated the basic data they need to identify potential of silver. We also believe that locations for recovery trols to insure that the surveys GSA should establish con- are made. The Administrator suggested that GSA semiannually rather than quarterly,the agencies report to earlier draft report. We concur as suggested in our and reporting be semiannual. We further are recommending that agree that when GSA is able to show that its silver recovery carried out efficiently by the Federal program is being ing could be made an annual requirement.agencies, the report- GSA also suggested that our recommendations to all Federal agencies rather than be directed General Services. We are making to the Administrator of our recommendations to GSA because GSA, by statutory authority, Government-wide management of preciousis responsible for programs. metal recovery On our proposal that followup by determine why agencies are not recoveringGSA would be needed to of silver and to ascertain agency the maximum amount ery, GSA responded that it would plans for improving recov- follow present resources. The Administrator up to the extent of ity for the Government-wide precious has given responsibil- metals recovery program to his Property Rehabilitation Division. not established a followup procedure This Division has gram is being carried out as directed to insure that the rro- Management Regulations. We believe in the Federal Property to be an essential ingredient of positive-action followup any program. By adopting the recommendations in this report, GSA should be in a posi- tion to evaluate agency recovery actions, compare results with goals, identify successful and results. In cases where re:;ults less than successful are less than successful, followup by the Government-.wide manager is, in our opinion, the key element of silver recovery compliance with the program. needed to insure agency GSA has commented on three additional that we advocate centralized batch areas. It states trolytic silver recovery equipment, processing with elec- while other methods can be as efficient. We recognize that metallic replacement cartridges or online electrolytic equipment can be effective if properly managed. We believe that the system installed 25 should be compatible with the facility, the quantities of fixer to be processed, and other factors peculiar to each installation. We have found, however, that at the facili- ties we visited, those with central batch processing were generally most efficient in recovering silver. Central batch processing facilities also offer the advantage of being able to service any number of photographic development labora- tories. For example, a large processor of film who has cen- tral batch processing with electrolytic recovery equipment is in a position to accept fixer solution from nearby smaller units. GSA also questions why we do not discuss the limited incentives to most Government agencies to recover gold and silver. Most agencies we reviewed also voiced the opin- ion that recovery yields would be greater if incentives were incorporated in the recovery programs. VA does have direct incentive to recover, since legislation allows it to directly receive proceeds from the sale of silver. Those proceeds are deposited in their re- volving supply fund. VA is also among the most efficient agencies in the recovery of silver from film and photo- graphic material. In most other agencies, the proceeds from sale of silver are deposited in the Treasury. We believe that incentives would probably increase recovery. Also we recognize that although the law now re- quires agencies to recover precious metals, it has assigned Government-wide responsibility for precious metal recovery to GSA. Therefore, if GSA believes an incentive, such as receipt of proceeds from recoveries, is needed to motivate agencies to improve their programs, it should request the necessary legislation. In fact, GSA should be the agency that would initiate any legislative action or policy changes necessary to improve the program. However, before GSA can effectively implement any plans to improve silver recovery, it needs the information and the basic data which is not now accumulated but would be if the recommendations in this report are adopted. Finally, GSA notes that we criticize the effectiveness of a GSA contract to recover silver in the Washington, D.C., area but do not make conclusive judgments nor recommend al- ternatives. This was only one of several examples we are presenting where we found agencies either not recovering silver or losing silver even though recovery attempts were being made. We believe that GSA and the agencies need to 26 establish management controls which will enable them to identify losses of precious metals, as cited in the examples, so that corrective actions can be initiated. Although the Administrator does not dispute our findings and conclusions and agrees that our proposals can be adopted, he set forth no positive plans to implement our proposals to improve the silver recovery program. We be- lieve that this is an excellent opportunity for GSA to take a leadership role and thereby not only increase the Govern- ment's recovery of silver but also demonstrate to all agen- cies the commitment of GSA to promotion of economy and ef- ficiency throughout the Government. The DOD comments (see app. I) to a draft of this report questioned our estimate that 2 million gallons of fixer so- lution are processed annually within DOD. They state that only 446,744 gallons were issued to DOD activities by DLA and that it would be unlikely that DOD could use four times the amount of fixer that had been supplied by DLA. We found that DOD users of fixer solution obtain the solutions through (1) DLA, (2) GSA contractors, and (3) local purchasers. We also found survey data available at the De- fense PreciousMetal Recovery Office, Colts Neck, New Jersey, which identifies over 1.1 million gallons of fixer being used annually by 228 activities which were included in the surveys We have identified an additional 192 activ- ities not included in the surveys, which ship silver flake from fixer solution and recovery cartridges to the recovery office. DLA is not the most frequently used source of fixer solution, particularly photographic fixer. Of the 446,744 gallons identified by DOD, only 1,940 gallons were of fixer solution used in photographic processing; the remainder was fixer used in X-ray processing. One DOD photo lab alone in the Washington, D.C., area uses over 2JL,000 gallons of photographic fixer solution. We realize that the 2-million-gallon estimate is an estimate and that development of exact figures would re- quire considerable effort. However, DLA officials of the precious metal recovery program have agreed that 2 million gallons is a reasonable estimate. If our recommendations in this report are adopted, using activities will be re- quired to accumulate and report on the amounts of fixer used and DOD will be in a position to establish goals, monitor recovery, and better evaluate its program. 27 APPENDIX I APPENDIX I ASSISTANT SECRETARY OF DEFENSE RWASHINGTON 0 C 20301 R MANPOWER. RESERVE AFFAIRS AND LOGISTICS 11 October 1977 Mr. Fred J. Shafer Director Logistics and Communications Division General Accounting Office Washington, D.C. 20548 Dear Mr. Shafer: This is in reply to your letter to the Secretary of Defense dated July 12, 1977 which forwarded your Draft Report entitled "Gold and Silver--Recover Them," LCD-77-228, for our review and comment (OSD Case #4666). The Draft Report implies; that the acted effectively in the recovery Department of Defense (DoD) has not of precious metals, noting a lack management direction in the segregation of and recovery of gold and silver from electronic scrap and stating that much of this scrap is being at nominal prices in lieu of recovery. sold large potential for recovering silver It also notes that DoD has a from photographic solutions but that the recovery rate is low. The that the Secretary of Defense direct Report contains a recommendation the Defense Logistics Agency (DLA) to take necessary actions to segregate precious metals and, at appropriately electronic scrap containing selected locations, accumulate it and extract the available gold and silver. We require the costs of segregating to be compared to alternative methodsscrap and recovering precious metals market value of the precious metals of disposition, considering the We attempt to reduce the degree of and the full costs of the program. subjectivity in judging whether or not to recover the precious metals Manager, to establish standards to by requiring DLA, as the Program measure the efficiency and cost effectiveness of recovery efforts based on the quantity and value of precious metals contained in the the items. A complete statement of DoD policies in the enclosed DoD Directive 4160.22,and responsibilities is contained Precious Metals," dated December "Recovery and Utilization of 1, 1976. (Enclosure 1.) We believe the 28 APPENDIX I APPENDIX I Directive adequately covers the area addressed by the above recommenda- tion. You may wish to revise the Draft Report to make it clear that such direction is presently in effect. Defense Audit Service is currently completing en audit of the management of the precious metals program. We will consider the restelts of that audit, as well as your findings, in determining what changes are required to enhance the effectiveness of the DoD recovery program. In addressing t'h recovery of silver from photographic solutions by all F-deral Agencies the Draft Report states "DoD had the largest recovery Potential, but had one of the lowest rates of recovery--21 percent." This conclusion appears to be based on DoD usage of 2,000,000 gallons of solution in FY 1976. Information provided to your staff in November 1976 indicated that DLA issues of photographic (hypo) solution totaled 446,744 gallons, or less than one fourth the quantity cited in the Report. It is recognized that all the solution requisitioned in FY 1976 was not necessarily used in FY 1976, and that other acquisition sources may have been utilized by some DoD units. However, it appears unlikely that the amount used could have been four times the issues made by DLA. It will be mutually beneficial if the figure of 2,000,000 gallons is verified for accuracy. At Enclosure 2 you will find comments not previously discussed which are intended to clarify specific portions of the Report. We appreciate the opportunity to offer comment on this Report in draft form. Sincerely, Enclosures ROBERT B. PIRIE, JR. As Stated Principal Deputy Assistant Seortary of Defense (MRA&L) .- GAO note: The two enclosures to this letter have not been included. Enclosure 1 was DOD Directive 4160.22 establishing responsibilities for the precious metals program. Enclosure 2 comprised specific comments relating to material in the draft report which has been revised or changed in the final report. 29 APPENDIX II APPENDIX II UNITED STATES OF AMERICA GENERAL SERVICES ADMINISTRATION WASHINGTON, D.C. SH August 22, 1977 Honorable Elmer B. Staats Comptroller General of the United States General Accounting Office '_ Washington, DC 20548 ru Dear Mr. Staatsu: Thank you foe the opportunity to comment on the General Accounting Office .. (GAO) report to the Congress entitled "Gold and Silver--Recover Them" cn (LCD-77-228) . Since there is a variance in the recomtundations to the General Services Administration (GSA) as cited in the digest, page "v," and page 30 of the text, we are responding primarily to the latter. -"...that the Administrator of GSA require all agencies \to immediately and annually thereafter, survey their com- ponents to identify those using fixer and its estimated silve7 content." We have endeavored to encourage agencies to survey their components in the past by prescribing a survey format in Federal Property Management RegulL-tons (FPMR) 101-42.4901, "Intra-agency survey format for evalu- ating the recovery potential of activities not n-w recovering precious metals." The survey format requests information from each activity on tie estimated generation of used fixer solution and the average silver content per gSllon. We can revise our FPMR to make this a mandatory survey. However, the reporting requirement recommended in your second recommendation requires the same type of information (i.e., gallons of fixer ,aa,, estimated maximum recoverable silver, and method of estimation) on a more frequent basis, and, in effect, requires that an agency survey its components every time it prepares a report to GSA (see comment on next recommendation). -"... (that) the Administrator should require quarterly reports by all alincies and co ponents showin at least, but not necessarily limited to, the following data: Gallons of fixer used; Types and amounts of film pro- tessed; Estimated maximum recoverable silver: Method of estimation; Silver recovered; Explanationn of signifi- cant differences between estimated recoverable silver and silver actually recovered: Actions planned to maxi- mize recovery; and Type of recovery equipaent." Keep Freedom its rour Future With U.S. Savings Bonds 30 APPENDIX II APPENDIX II FPMR 101-42.4902, "Format for annual consolidated report on activities generating p:ecious metals," section (1), requires that agencies report annually on some of the data described above. While our present report :oes not require all of the information recommended, if properly filled ort, we can determine whether all appropriate agency activities are recovering silver, how many gallons of solution are being processed, and the amount of silver recovered. We agree, however, that the data you suggest we require .in such a report would enable us and the agencies to better examine the efficiency of their components and, therefore, the agency as a whole. In light of efforts to reduce the number of reports required in the Fed- eral Government, we. feel that a semi-annual (which we required up until 2 years ago), rather than a quarterly report, would be sufficient for GSA and the agencies-,to monitor their progress. We propose that a semi- annual report would satisfy the "more stringent reporting" recommenda- tion noted on page. "v," and that your first two recommendations on page 30 be modified accordingly. We also feel that if and when Federal agencies' silver recovery programs are operating efficiently, it would be suffi- lient to require an annual report as we do now. -- "...that the:Administrator follow-up with these organi- zations to determine reasons why the agencies are not recovering the maximum amount of silver and the actions these agencies plan to take to do so." We plan to follow-up with agencies, to the extent that our present resources will allow, to urge them to recover the maximum amount of silver possible. We have attempted to encourage agencies to recover silver in the past by revising FPMR 101-42.3, "Recovery of Precious Metals and Critical Materials,"' hicb requires the report described above; by updating (to reflect new t ;hnology and program experience) our publication, a "Guide for the Recovery of Silver from Used Fixing Solution and Scrap Film," which was designed to be of use to activi- ties trying to determine the most effective methods of silver recovery for their situation; and by developing a service contract covering the eastern half of the United States which provides technical surveys of photographic processing facilities to determine silver recovery poten- tial and recommend methods for increasing the efficiency of silver recovery programs. We hope to offer this service nationwide following experience with the initial contract. We further suggest that the second recommendation on page "v," that the Administrator of GSA "require each agency to (1) survey its components, (2) set goals, and (3) monitor recovery in relation to goals," be reworded so that the recommendation is directed to all lederal agencies which generate silver scrap; and that (1) will read "survey its compo- nents semi-annually, preparatory to reporting to GSA." The GAO report could then be seat directly to heads of Federal agencies recommending corrective action. 31 APPENDIX II APPENDIX II With regard to the body of the report, there were several points made for which no conclusions or recommendations were drawn, and on which we would like to comment. Concerning the methods for extracting silver from fixer, the report appears to advocate centralized batch processing with electrolytic silver recovery equipment as the most efficient method for extracting silver from fixer. However, it is not always the most feasible due to the limitations of a facility or the lack of economical quantities. Since there will continue -o be situations where metallic replacement cartridges or electrolytic recovery equipment on-line with processors will be the most effective methods that can be used in a particular situation, we suggest that the report be modified accordingly. We feel that the report should also include mention of recovery systems in which the fixer solution, a source of potential pollutants, i& repeatedly reused rather than discarded. Mention is made of limited incentives to recover gold and silver, and that many agencies do not receive the sales revenue from reclaimed silver, but the issue is not discussed any further. Criticism of the effectiveness of GSA contractor recovery services in the Washington, D.C., area is made, but a conclusive Judgment or recom- mended alternative is not suggested. We would be happy to have representatives of our Property Rehabilitation Division (FWR) meet with GAO representatives to discuss the issues men- tioned above and any other aspects of the report. If this is agreeable, Mr. William S. Eckert, Director, Property Rehabilitation Division, may be coutacted (557-1743) to arrange such a meeting. cerely, 4I-M Je el/A olomon A nistrator GAO note: Page references in this appendix may not correspond to pages of final report. 32 APPENDIX III APPENDIX II WI Vi .9. 0WI# 0 10 I xxxxxxx XX XXX X C x ~ ~ x XX XXX a;IP1 .10(a0 01041~~~~~~~ r4 ~4I .wI 0 UOW V1 a 44 W aY C a~~~~~1 4 c3I 0 rq u rz)e 0 N LZ M) aj arr o tv, 4u u uW O U 4*, E~~~~~m W 01 %.r t a0 ) 0 w a r nl O a a~~~~~~~~~0 r-4 re q > a a W , LI 4) 1 0 - too u 4I 54 -- r r O t a)>ON ( ) 3 E- 81 ZI W 0 Ea 0) to W -4 4ty, m." I 0 0 IL) r =-4 4 rI~ ~~~ ~~~~~~~~H 4) C a 4) > · 04J!~ v)4 a nl n( 10~~~~~~~~~~~~~ Cl0 Q) m pi 1i X' LCO ~~ 410 r~~~cr i 3 a w L,) 04 o c P-46!cL) $ 0 4~~~EnA4 S · r. l~~w >4 4) I M -P4W 0 44 AJr c~~~l Ptl 3 ~~~~~~ a, co a ·r Le Ci Mc z) . .) .. oi~ ~ ~~~~~3 Da W % 0 -P4 i4 ) > 0 ow 0 ,w - 4 4 M r 1 4 . % 4 co P .-I 3 1 0W -10 a qa 41 r- w rq - q $4 O0-4 -14 O 4 - M laM4 C n r-C - - F-1 -f C -v r- -q mO Q I = O O = EL,1 '0 . 4 w it >. i 4) S -4 0) rl M a >4 I Ca Da Co 00 M MO -I :) 4 '"q 0 M n Cc X a 0 z z u En in lw z3 · >> a E-13pl:~ l mm m vc 35~ ~~~3 APPENDIX III APPENDIX III Vt 01 wI *> ,-4 1 0t o0 I xxx xx xx x x xxxxxxx xxx O 1 X WI 010 to i UlIm Utl t10 -4i 0W 44lI 0t Oe-4e-l- L 04 --- 4 C)1i"0 · 0 - O W, U. ra f--4 AJ e C 0 -H 4i 4 > 04 4-4 r ' C 4* C C tq C -4> u-401 Oj Z LaE. - 4 -- ' C. C 0.14 C - goU *.- .C 4. U .4.c *t0- c -4-4 o4 C. -C4 ca40W~ 4. C% . ,. ' C .0* C L .,-4 i-0 d 0 4*.,L ·)0 -*-¢ 04 .i Oc- Dr - t a oo .(U C w tr W c0i Ui 0>. t o' (a >0 V C -00 -. 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AwD O L D Z W v 01 34 APPENDIX IV APPENDIX IV GAO COMPUTATION OF MARKET VALUE OF METALS RECOVERED DURING OGDEN REGION PROJECT AND ESTIMATED COSTS OF RECOVERY (See p. 10.) Amounts Market value of metals: Gold - 327.912 oz. @ $130 (rote a) $42,628.56 Silver - 634.085 oz. @ $4.40 (note a) 2,789.97 Copper - 1,630.8 lbs. @ $.45 (note a) 733.86 Total market value $46,152.39 Estimated costs of recovery: Sorting (27,168 lbs. @ $.15) (notes b and c) $ 4,075.20 Smelting sorted scrap (note d) $4,616.75 Smelting slag (3,943 lbs. @ $.75) (note e) $2,957.25 7,574.00 Total estimated costs $11,649.20 Market value over costs $34,503.19 a/Data from Ogden Region, Defense Property Disposal Service, DLA. b/The estimated pounds of electronic scrap sorted was based on the weight of sorted items smelted and the sorting project at Hill Air Force Base. c/Sorting costs a pound taken from sorting project at Hill Air Force Base. d/Costs obtained from smelting contract for this project. e/Cost was determined based on slag resulting from this project and estimated cost to process slag furnished by Precious Metals Manager, Ogden Region of the Disposal Service. 35 APPENDIX V APPENDIX V GAO COMPUTATION OF ESTIMATED NET ADDITIONAL REVENUE HAD PRECIOUS METALS BEEN RECLAIMED FROM ELECTRONIC SCRAP SOLD BY THE DISPOSAL SERVICE IN FISCAL YEAR 1976 Amounts Revenues from estimated recoverable metals: Gold - 107,382 oz. @ $138.59 (notes a and b) $14,882,071 Silver - 207,646 oz. @ $ 4.39 (notes a and b) 911,566 Copper - 533,718 lbs. @$ .45 (notes a and b) 240,173 Total additional revenue 16,033,810 Estimated costs of recovery: Sorting - 12,192,121 lbs. 6 $.15 (notes a and c) 1,828,818 Smelting sorted scrap - 2,682,066 lbs. @ s.50 (notes a and d) $1,341,133 Smelting slag - 1,291,222 lbs. @ $.75 (note e) 968,417 2,309,550 Reduction in sales revenue (note f) ___268,227 Total estimated costs 4,406,575 Net additional revenue $11,627,215 a/The Disposal service sold 12,192,121 pounds of electronic scrap in fiscal year 1976. Using the sorting project at Hill Air Force Base as a basis for determining weight of items containing precious metals, it is estimated that 2,682,266 pounds of the electronic scrap, or 1,341 tons, contained gold and silver. The average yields of 80.076 ounces gold, 154.844 ounces silver, and 398 pounds of copper a ton from the smelting project in Utah were applied to the 1,341 tons. b/Market values for gold and silver are the average of those used by the Disposal Service in fiscal year 1976 to pre- pare management reports, specifically, Precious Metals Recovery Expense/Cost. Value of copper is the same as that used by the Ogden Region of the Disposal Service as shown in app. IV. ,/Sorting costs taken from sorting project at Hill Air Force Base. d,'Ccst to smelt was based on informal quotes obtained by the Disposal Service. e/Cost. based on percentage of slag under the smelting project in Utah and estimated cost tc process slag fur- nished by the Precious Metals Manager, Ogden Region of the Disposal Service. f/Based on actual sales of electronic scrap in fiscal year 1976. 36 APPENDIX VI APPENDIX VI PRINCIPAL OFFICIALS RESPONSIBLE FOR ADMINISTERING ACTIVITIES DISCUSSED IN THIS REPORT Tenure of office From To DEPARTMENT OF DEFENSE SECRETARY OF DEFENSE: Harold Brown Jan. 1977 Present Donald H. Rumsfeld Nov. 1975 Jan. 1977 GENERAL SERVICES ADMINISTRATION ADMINISTRATOR: Joel W. Solomon Apr. 1977 Present Robert T. Griffin (acting) Feb. 1977 Apr. 1977 Jack Eckerd Nov. 1975 Feb. 1977 (943174) 37
Additional Precious Metals Can Be Recovered
Published by the Government Accountability Office on 1977-12-28.
Below is a raw (and likely hideous) rendition of the original report. (PDF)