Harrison University is a large university with about 30,000 students offering a wide range of courses in the humanities and the physical, social, behavioral, health, agricultural, biological, and engineering sciences. The existing computing facilities are divided between two groups: an academic computing center and an administrative computing center. Each group has its own hardware, software, personnel, and so on, and each operates independently of the other group. The academic computing center services all teaching and research needs. The administrative computing center services all other computing needs-payroll, student records, budgeting, financial planning, and so on.

Currently the facilities of the administrative computing center are heavily overloaded. A steering committee of the university has been formed to examine the problem. The steering committee has been given wide terms of reference. In recent years, the university has found it increasingly difficult to find sources of private funding and to obtain federal funding. The president of the university has asked the steering group to consider the possibility of amalgamating the academic and administrative computing groups, selling off the existing hardware, and purchasing a large machine that will service both groups. He feels that centralizing computer facilities could produce economies of scale. Because the academic computer will have substantial excess capacity during the interim period, he also questions whether some administrative applications might not be shifted to the academic computer.

Required. You are a member of the internal audit staff of the university. The chair of the steering committee has asked the manager of internal audit for his views on the proposed changes, and he has asked you to brief him. Prepare a memo outlining the advantages and disadvantages of the change from an internal audit viewpoint.