The department currently maintains 11 major systems for administering student financial aid programs. Education’s Year 2000 Program Started Very Slowly

Education was very slow to establish a comprehensive, timely Year 2000 program. The fourth manager, during his 4-month tenure, initiated many awareness and assessment activities. Education Has Recently Accelerated Its Progress

With its slow start, Education has been playing catch up and working to accelerate its progress. Key Issues Remain That Threaten Education’s Delivery of Student Financial Aid

While there has been recent progress, the Department of Education must mitigate critical risks that affect its ability to award and track billions of dollars in student financial aid. Education officials stated that they are working on these plans and intend to have them completed shortly, pending discussion with the student financial aid community. Business Continuity and Contingency Planning: A Necessary Safety Net

Given the challenges Education faces in making sure that all of its mission-critical systems are adequately tested and in addressing the complexities of the massive number of data exchanges, it will be difficult for the department to enter the new century without some problems. Therefore, it is critical that Education initiate the development of realistic contingency plans to ensure continuity of core business processes in the event of Year 2000-induced failures. According to department officials, Education is committed to developing business continuity and contingency plans for each mission-critical business process and supporting systems. While the department has made progress in preparing its systems for the year 2000, initial delays have left it with significant risks—risks that must be effectively managed. Year 2000 Computing Crisis: Risk of Serious Disruption to Essential Government Functions Calls for Agency Action Now (GAO/T-AIMD-97-52, February 27, 1997).
Why GAO Did This Study

Pursuant to a congressional request, GAO discussed year 2000 (Y2K) computing crisis risks to the Department of Education, focusing on: (1) student financial aid systems; (2) actions the department has taken in recent months to address these risks; and (3) key issues the department must deal with if its systems are to be ready for the century change: testing of systems, exchanging data with internal and external partners, and developing business continuity and contingency plans.

What GAO Found

GAO noted that: (1) Education faces major risks that Y2K failures could severely disrupt the student financial aid delivery process, including delaying disbursements and application processing; (2) further, because of systems interdependencies, repercussions from Y2K-related problems could be felt throughout the student financial aid community--a network including students, institutions of higher educations, financial organizations, and other government agencies; (3) the department was very slow in implementing a comprehensive Y2K program to address these risks--basic awareness and assessment tasks were not completed until recently; (4) Education is now accelerating its program, but with the slow start, it remains in a position of playing catch up; (5) accordingly, the department has major challenges ahead but limited time remaining to adequately deal with them; and (6) therefore, it must also focus on developing appropriate contingency plans to ensure business continuity in the event of key systems failures.