The sleepy, politics-obsessed town of Ottawa woke up a week ago to stories of missing gold from the Royal Canadian ...



The sleepy, politics-obsessed town of Ottawa woke up a week ago to stories of missing gold from the Royal Canadian Mint. Reporters at the Ottawa Citizen broke the story on June 3, writing that a "significant quantity" of precious metals is unaccounted for.


Later the newspaper reported that the unreconciled difference between the 2008 financial accounting and the examination of the physical stockpile may be as much as $20 million.


An accounting error or brilliant heist? The Royal Canadian Mounted Police (RCMP) intends to find out.


Needless to say the missing metal has tarnished the Mint's reputation as one of the world's premier repositories and creator of collectible coins. It is a regular on the list of Canada's best 100 places to work. The Mint has thus far failed to make a public statement about the missing metal.


This writer has been to the Mint more than once for a shop-floor tour of the facilities. I can vouch for the stringent security that all employees and visitors must navigate before entering the work areas. And the measures are even tougher when you leave to ensure no metal finds its way out in someone's pocket. It's a good thing, too, because it was possible to riffle my fingers through thousands of Gold Maple Leaf rejects, just like cartoon character Scrooge McDuck does in his vault.


I have also seen the physical gold that the Mint stores for clients. Many of the gold bars are the size of railway ties. The sight of them in three-metre-tall stacks almost defies belief. I couldn't contemplate slipping one of those out from under the noses of watchful guards.


So what is the problem: theft or poor accounting?


If it is theft, the metal must have been removed in small amounts at a time and not through the exits used by employees. That someone would pull up in an armoured truck and make an unauthorized withdrawal is beyond comprehension. If I let my imagination wander, I might think the metals were removed in solution somehow or other. I know they did not just "go down the drain" because the Mint makes a point to remove all metals from its effluent before releasing it into the Ottawa River.


If it is poor accounting, the discrepancy is so large as to make me wonder if it is the culmination of several years of mistakes. To make a $20-million error in one year would take some doing. If, however, a physical count of the metals is not done every year, then the shortage might be the result of several years of small mistakes. I doubt the problem is as simple as a misplaced decimal point.


The Citizen reported the error was discovered in October 2008. Since then neither the Mint's nor outside auditors have been able to solve the discrepancy. Now the RCMP's commercial crime section has been called in to investigate.


The loss of $20 million did little to dull the Mint's financial picture. Unaudited numbers put its 2008 profit at a record $44.2 million, well above the $36.3 million target. Until Auditor General Sheila Fraser signs off on the year-end financials, staff bonuses have been frozen. She cannot do that until the RCMP probe is complete. Getting their bonuses should provide an incentive for Mint personnel to co-operate in the investigation.


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