I In late March, a programmer made a minor change in the program that was

used to update the New York City Welfare Department’s master file. Because the
revision was “trivial”, the program was not tested. In the ensuing months, welfare
recipients died, moved away, or lost their eligibility to receive further payments.
Delete transactions were prepared in each case and processed as part of the
normal master file update.
The update program received both batch and on-line updates. Because of the
program change, however, it no longer was able to handle batch transactions. The
“trivial” change caused the update program to ignore batch-entered deletions to
the master file, so closed cases remained open. During April, May and June, the
printers on the system kept spewing out checks. After they were burst and stuffed
into envelopes, they went winging on their way to dead men, people who were
long gone from the city, and those no longer entitled to receive payments. Finally,
field workers started to report payments on closed cases. By this time, $7,500,000
had been disbursed to people who should have been deleted from the files.
Now it is possible to go back and find which checks should have not been written.
Getting the money back is another question. Most of the checks are in low three
figures. It costs about $150 to file the legal papers to bring suit for recovery of the
funds. Collecting the $7,500,000 might end up costing $7,500,000. Oh well, it
wasn’t real money! It came out from the taxpayers’ pockets.
What systems development controls would have prevented this loss of
assets?