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B-115369, JAN 14, 1959

B-115369 Jan 14, 1959
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THE GENERAL ACCOUNTING OFFICE IS CONTINUING TO STUDY THE IMPLICATIONS OF NEW TECHNIQUES WITH RESPECT TO FINANCIAL RESPONSIBILITIES. DEPARTMENTS AND AGENCIES ARE INVITED TO DISCUSS SPECIFIC PROBLEMS RELATED TO DATA PROCESSING WITH REPRESENTATIVES OF THE GENERAL ACCOUNTING OFFICE. GENERAL ACCOUNTING OFFICE REPRESENTATIVES WILL REVIEW FEASIBILITY AND APPLICATION STUDIES. A FEASIBILITY STUDY IS AN ANALYSIS OF DATA PROCESSING REQUIREMENTS. EQUIPMENT TO DETERMINE WHETHER NEW EQUIPMENT WITH AN APPROPRIATE SYSTEM WILL BE MORE EFFICIENT THAN THE PRESENT DATA PROCESSING SYSTEM. AN APPLICATION STUDY IS AN EXTENSION OF THE FEASIBILITY STUDY IN WHICH THE DETAILED PROCEDURES AND SPECIFIC EQUIPMENT REQUIRED FOR A SPECIFIC FUNCTION OR OPERATION ARE DETERMINED.

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B-115369, JAN 14, 1959

SUBJECT: AUTOMATIC DATA PROCESSING SYSTEMS: FEASIBILITY AND APPLICATION STUDIES AND RETENTION OF RECORDS

TO THE HEADS OF DEPARTMENTS AND AGENCIES:

OUR CIRCULAR LETTER (B-115369, SEPTEMBER 18, 1957) ON ACCOUNTING AND AUDITING ASPECTS OF AUTOMATIC DATA PROCESSING DISCUSSED SOME BASIC CONSIDERATIONS ON WHICH IT NOW APPEARS THAT ADDITIONAL REMARKS MAY BE USEFUL. THE GENERAL ACCOUNTING OFFICE IS CONTINUING TO STUDY THE IMPLICATIONS OF NEW TECHNIQUES WITH RESPECT TO FINANCIAL RESPONSIBILITIES. DEPARTMENTS AND AGENCIES ARE INVITED TO DISCUSS SPECIFIC PROBLEMS RELATED TO DATA PROCESSING WITH REPRESENTATIVES OF THE GENERAL ACCOUNTING OFFICE.

FEASIBILITY AND APPLICATION STUDIES

AS A PART OF THE AUDIT WORK IN AGENCIES WHICH USE ADP EQUIPMENT, GENERAL ACCOUNTING OFFICE REPRESENTATIVES WILL REVIEW FEASIBILITY AND APPLICATION STUDIES. A FEASIBILITY STUDY IS AN ANALYSIS OF DATA PROCESSING REQUIREMENTS, METHODS, AND EQUIPMENT TO DETERMINE WHETHER NEW EQUIPMENT WITH AN APPROPRIATE SYSTEM WILL BE MORE EFFICIENT THAN THE PRESENT DATA PROCESSING SYSTEM. AN APPLICATION STUDY IS AN EXTENSION OF THE FEASIBILITY STUDY IN WHICH THE DETAILED PROCEDURES AND SPECIFIC EQUIPMENT REQUIRED FOR A SPECIFIC FUNCTION OR OPERATION ARE DETERMINED. BECAUSE OF THE SIGNIFICANCE OF THE DECISIONS INVOLVED, AGENCIES SHOULD HAVE REASONABLE DOCUMENTATION PERTAINING TO THESE STUDIES AVAILABLE FOR REVIEW. GENERAL ACCOUNTING OFFICE REVIEWS OF THESE STUDIES WILL BE DIRECTED PRIMARILY TOWARD DETERMINING WHETHER ADEQUATE PLANNING AND CONSIDERATION OF ALL RELEVANT FACTORS DID IN FACT PRECEDE THE DECISION TO UTILIZE COSTLY EQUIPMENT.

A SATISFACTORY STUDY REPORT SHOULD INCLUDE A DESCRIPTION OF THE OBJECTIVE OF THE STUDY, THE METHOD BY WHICH IT WAS CONDUCTED (INCLUDING SOME INDICATION OF THE QUALIFICATIONS OF THE PARTICIPANTS), THE ALTERNATIVES CONSIDERED, COMPARATIVE COST ANALYSES, AND THE SPECIFIC RECOMMENDATIONS MADE. THE RECOMMENDATIONS SHOULD BE DIRECTED BOTH TOWARD THE SPECIFIC PROBLEMS INVOLVED IN GETTING STARTED AND TOWARD THE PROPOSED REGULAR OPERATION UNDER THE NEW SYSTEM. THE KIND AND AMOUNT OF COVERAGE ON THESE AND OTHER IMPORTANT POINTS SHOULD BE APPROPRIATE TO THE IMPORTANCE OF THE DECISIONS INVOLVED.

ALTHOUGH A STUDY REPORT MAY LEAD TO A PROPOSAL FOR ACQUISITION OR UTILIZATION OF ELECTRONIC EQUIPMENT, A WRITTEN JUSTIFICATION FOR SUCH ACQUISITION IS NOT A SUBSTITUTE FOR A FEASIBILITY STUDY. A REPORT PREPARED TO DEFEND OR SUPPORT ACQUISITION IS NOT USUALLY OBJECTIVE. EXPERIENCE HAS SHOWN THAT SUCH REPORTS ARE LIKELY TO GIVE INSUFFICIENT RECOGNITION TO POSSIBLE ALTERNATIVES AND ALSO TO PROBLEMS OF CONVERSION AND OPERATION.

WHERE A FEASIBILITY STUDY INDICATES THAT SAVINGS WILL BE REALIZED BY CONVERSION TO AN ADP SYSTEM, AN EFFORT SHOULD BE MADE TO IDENTIFY CONCERNED:

PURSUANT TO THE PROVISION OF PUBLIC LAW 854, 84TH CONGRESS, APPROVED JULY 31, 1956, IT HAS BECOME NECESSARY TO REVISE THE FOLLOWING FORMS:

STANDARD FORM NO. 2800, APPLICATION FOR DEATH BENEFITS

CIVIL SERVICE RETIREMENT SYSTEM

STANDARD FORM NO. 2801, APPLICATION FOR RETIREMENT

CIVIL SERVICE RETIREMENT SYSTEM

THE SAID FORMS WILL BE AVAILABLE FROM THE GENERAL SERVICES ADMINISTRATION, FEDERAL SUPPLY SERVICE, BEFORE OCTOBER 1, 1956, THE EFFECTIVE DATE OF TITLE IV, PUBLIC LAW 854.

IN VIEW OF THE ABOVE ALL GOVERNMENT DEPARTMENTS AND AGENCIES ARE URGED TO IMMEDIATELY FILE REQUISITIONS WITH GENERAL SERVICES ADMINISTRATION FOR SUCH QUANTITIES OF THESE FORMS AS ARE DEEMED NECESSARY.

THE CURRENT STOCK OF THESE FORMS MAY BE USED FOR ALL SEPARATIONS FROM THE FEDERAL SERVICE PRIOR TO OCTOBER 1, 1956. THAT PORTION OF THE SAVINGS WHICH ARE RELATED TO SYSTEMS IMPROVEMENTS AS DISTINGUISHED FROM THOSE WHICH ARE RELATED TO THE PROPOSED USE OF ADP.

RETENTION OF RECORDS

EXPERIENCE WITH TRADITIONAL PAPER RECORDS HAS SHOWN THAT IN MANY SITUATIONS THERE IS A TENDENCY TO RETAIN EXCESSIVE AMOUNTS OF INFORMATION OR TO RETAIN INFORMATION LONGER THAN NECESSARY. RETENTION OF UNNECESSARY RECORDS IS EXPENSIVE PRIMARILY BECAUSE IT INFLATES THE NEED FOR STORAGE SPACE AND EQUIPMENT. IF THE SAME CONCEPT IS FOLLOWED WITH MAGNETIC TAPE, WHICH IS A RE-USABLE MEDIUM, THERE IS AN ADDITIONAL COST FACTOR IN THE NECESSITY TO PROCURE MORE TAPE FOR CURRENT OPERATING NEEDS. IT IS THEREFORE IMPORTANT THAT AGENCIES REVIEW CAREFULLY THE PURPOSES TO BE SERVED BY ANY INFORMATION STORED ON TAPE. THIS SUGGESTION DOES NOT IMPLY THAT ANY ESSENTIAL RECORDS SHOULD BE DESTROYED; IT DOES MEAN THAT A CAREFUL DETERMINATION AS TO THE NEED FOR RETENTION SHOULD BE MADE.

AGENCIES WHICH USE OR PLAN TO USE MAGNETIC TAPES IN AUTOMATIC DATA PROCESSING APPLICATIONS SHOULD DEVELOP RETENTION PLANS CONSISTENT WITH THE PROVISIONS OF TITLE 8, GAO POLICY AND PROCEDURES MANUAL FOR GUIDANCE OF FEDERAL AGENCIES.

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