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WE HAVE REVIEWED THE REPORT OF FORD. THE CONSULTANTS DO NOT APPEAR TO HAVE TAKEN INTO CONSIDERATION ALL THE PERTINENT FACTORS INVOLVED IN EVALUATING OUR UNADOPTED RECOMMENDATIONS. THE STATEMENT ON PAGE 53 THAT EFFORT WAS NOT BEING DUPLICATED BECAUSE THE INSPECTIONS OF SECURITIES MADE BY THE BUREAU OF ENGRAVING AND PRINTING AND THE DIVISION OF LOANS AND CURRENCY WERE MADE FOR DIFFERENT PURPOSES APPARENTLY DOES NOT TAKE INTO ACCOUNT THE FACT THAT A SINGLE EXAMINATION WOULD ADEQUATELY SERVE BOTH PURPOSES AND ELIMINATE SOME HANDLING OF INDIVIDUAL SECURITIES. THE FACT THAT CONTROL OVER THE SECURITIES SHOULD BE ESTABLISHED TO THE FULLEST EXTENT PRACTICABLE AT THE EARLIEST POSSIBLE POINT IN THE OPERATIONS WAS NOT MENTIONED.

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B-45109, JUN. 29, 1955

TO THE HONORABLE W. T. HEFFELFINGER, FISCAL ASSISTANT SECRETARY OF THE TREASURY:

IN ACCORDANCE WITH THE REQUEST MADE IN MR. BARTELT'S LETTER OF FEBRUARY 3, 1955, WE HAVE REVIEWED THE REPORT OF FORD, BACON AND DAVIS, MANAGEMENT CONSULTANTS, ON THE ORGANIZATION AND OPERATION OF THE FISCAL SERVICE, MAINLY FROM THE VIEWPOINT OF THE CONSULTANTS' EVALUATION OF OUR UNADOPTED RECOMMENDATIONS.

FROM OUR REVIEW OF THEIR REPORT, THE CONSULTANTS DO NOT APPEAR TO HAVE TAKEN INTO CONSIDERATION ALL THE PERTINENT FACTORS INVOLVED IN EVALUATING OUR UNADOPTED RECOMMENDATIONS.

FOR EXAMPLE, THE CONCLUSION REACHED BY THE CONSULTANTS IN CONNECTION WITH UNADOPTED RECOMMENDATION NO. 1 RELATING TO THE FINAL EXAMINATION OF SECURITIES APPEARS TO BE BASED ON THE PREMISE THAT CHARGES TO THE DIVISION OF LOANS AND CURRENCY WOULD BE INCREASED RATHER THAN ON THE FACT THAT OVER -ALL COSTS TO THE GOVERNMENT WOULD BE REDUCED. THE STATEMENT ON PAGE 53 THAT EFFORT WAS NOT BEING DUPLICATED BECAUSE THE INSPECTIONS OF SECURITIES MADE BY THE BUREAU OF ENGRAVING AND PRINTING AND THE DIVISION OF LOANS AND CURRENCY WERE MADE FOR DIFFERENT PURPOSES APPARENTLY DOES NOT TAKE INTO ACCOUNT THE FACT THAT A SINGLE EXAMINATION WOULD ADEQUATELY SERVE BOTH PURPOSES AND ELIMINATE SOME HANDLING OF INDIVIDUAL SECURITIES. THE FACT THAT CONTROL OVER THE SECURITIES SHOULD BE ESTABLISHED TO THE FULLEST EXTENT PRACTICABLE AT THE EARLIEST POSSIBLE POINT IN THE OPERATIONS WAS NOT MENTIONED.

IN CONNECTION WITH UNADOPTED RECOMMENDATION NO. 2, RELATING TO MICROFILMING OF SERIES E BOND STUBS, THE CONSULTANTS BASED THEIR RECOMMENDATION TO CONTINUE PRESENT PROCEDURES ON THE FACT THAT SOME ISSUE OR REDEMPTION INFORMATION REQUESTED BY INDIVIDUALS WOULD BE MORE DIFFICULT OR IMPOSSIBLE TO OBTAIN. THIS WAS CONSIDERED WHEN OUR RECOMMENDATION WAS MADE. THE POINT TO BE DETERMINED, IN OUR OPINION, IS THE EXTENT TO WHICH THE FURNISHING OF SUCH INFORMATION IS ESSENTIAL OR REASONABLE, CONSIDERING THE COST, IN ORDER TO FULFILL THE OBLIGATIONS OF THE TREASURY DEPARTMENT TO THE BOND-PURCHASING PUBLIC. THE BOND OFFERING CIRCULARS AND OTHER DESCRIPTIVE MATTER DISTRIBUTED IN CONNECTION WITH SERIES E BOND SALES DO NOT SEEM TO IMPLY THAT THE GOVERNMENT WILL GO TO ANY LENGTH FOR ALL TIME TO FURNISH ALL INFORMATION TO ANY PERSON WHO MAY POSSIBLY HAVE PURCHASED A BOND. THE MATTER TO BE RESOLVED IS: WHAT TYPE OF INFORMATION WILL THE GOVERNMENT FURNISH? THE ANSWER TO THIS QUESTION SHOULD BE BASED ON DATA WITH RESPECT TO THE FREQUENCY OF REQUESTS FOR SPECIFIC TYPES OF INFORMATION, ETC. THE CONSULTANTS' REPORT DOES NOT DISCUSS THIS PROBLEM IN RELATION TO THIS TYPE OF DATA.

IN OUR OPINION, THE CONCLUSIONS OF THE CONSULTANTS ON OUR OTHER RECOMMENDATIONS WERE SIMILARLY DEFICIENT. IN BRIEF, WE DO NOT FEEL FROM OUR REVIEW OF THEIR REPORT THAT THE WORK OF THE CONSULTANTS CONTRIBUTED GREATLY TO AN EFFECTIVE CONSIDERATION OF OUR RECOMMENDATIONS. WE SHALL, OF COURSE, BE PLEASED TO DISCUSS OUR RECOMMENDATIONS WITH YOU OR YOUR STAFF IN DETAIL AT ANY TIME.

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