Improvements Needed in Managing Automated Decisionmaking by Computers Throughout the Federal Government

FGMSD-76-5: Published: Apr 23, 1976. Publicly Released: Apr 23, 1976.

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Federal agency computers cause more than 1.7 billion payments and other actions a year without any review or evaluation of whether they are correct. At a minimum, Government computers issue annually: (1) unreviewed authorizations for payments or checks totaling $26 billion; (2) unreviewed bills totaling $10 billion; and (3) unreviewed requisitions, shipping orders, repair schedules, and disposal orders for material valued at $8 billion.

Some agencies' internal audit reports show that unreviewed incorrect actions have been issued by several Government computers, incurring overpayments and unnecessary or premature costs of tens of millions of dollars annually. Incorrect computer actions occur because of software problems or data problems. The causes of these problems are numerous. There is no Federal-wide policy, guidance, or other instructions on how computers issuing unreviewed actions should be managed by Federal agencies. There is little checking or monitoring of output on an ongoing or short-term periodic basis. Internal audit reviews of these computer actions are made sporadically or not at all.

Recommendation for Executive Action

  1. Status: Closed

    Comments: Please call 202/512-6100 for additional information.

    Recommendation: The Director of the Office of Management and Budget, in his oversight capacity, should require that: (1) each agency determine whether any of its computer operations involve automated decisionmaking applications; (2) the agencies review each operation to determine whether incorrect actions are being taken as a result of these applications; (3) before any new automated decisionmaking applications are initiated by an agency, the proper steps are taken to insure correct decisions; and (4) agencies make reports on the actions taken and establish an appropriate mechanism for monitoring reports. Because the National Bureau of Standards has responsibilities for technical aspects of automatic data processing, the Secretary of Commerce should direct the Bureau to issue technical guidelines for developing, using, technically evaluating, documenting, and modifying these applications in the Federal Government. These guidelines would contain certain criteria for independent technical reviews and for monitoring of these applications to insure that problems are detected and corrected promptly. As the General Services Administration suggested, the Civil Service Commission should develop and add to its automated data processing training curriculum courses in automated decisionmaking applications so that managers, technical personnel, and auditors will become better equipped to deal with them in an appropriate manner. In addition, internal audit groups in agencies having automated decisionmaking applications should actively participate in the design, test, and reviews of such systems to carry out their responsibilities. Finally, the Joint Financial Management Program should consider this area for ongoing attention.

    Agency Affected:


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