31 U.S.C. § 5120

(a) (1) The Secretary of the Treasury shall melt obsolete and worn United States coins withdrawn from circulation. The Secretary may use the metal from melting the coins for reminting or may sell the metal. The Secretary shall account for the following in the coinage metal fund under section 5111(b) of this title : (A) obsolete and worn coins and the metal from melting the coins. (B) proceeds from the sale of the metal. (C) losses incurred in the sale of the metal. (D) losses incurred because of the difference between the face value of the coins melted and the coins minted from the metal. (2) The Secretary shall reimburse the coinage metal fund for losses under paragraph (1)(C) and (D) of this subsection out of amounts in the coinage profit fund under section 5111(b) of this title . (b) The Secretary shall— (1) cancel and destroy (by a secure process) obsolete, mutilated, and worn United States currency withdrawn from circulation; and (2) dispose of the residue of the currency and notes. (c) The Comptroller General shall audit the cancellation and destruction of United States currency and the accounting of the cancellation and destruction. Records the Comptroller General considers necessary to make an effective audit easier shall be made available to the Comptroller General.