Risk of Disruption to Government Services Is High

The federal government is extremely vulnerable to the Year 2000 issue due to its widespread dependence on computer systems to process financial transactions, deliver vital public services, and carry out its operations. Unless this issue is successfully addressed, serious consequences could ensue. For example:
Unless the Federal Aviation Administration (FAA) takes much more decisive action, there could be grounded or delayed flights, degraded safety, customer inconvenience, and increased airline costs. Payments to veterans with service-connected disabilities could be severely delayed if the system that issues them either halts or produces checks so erroneous that it must be shut down and checks processed manually. The military services could find it extremely difficult to efficiently and effectively equip and sustain their forces around the world. Federal systems used to track student loans could produce erroneous information on loan status, such as indicating that a paid loan was in default. Internal Revenue Service tax systems could be unable to process returns, thereby jeopardizing revenue collection and delaying refunds. The Social Security Administration process to provide benefits to disabled persons could be disrupted if interfaces with state systems fail. In addition, the year 2000 also could cause problems for the many facilities used by the federal government that were built or renovated within the last 20 years that contain embedded computer systems to control, monitor, or assist in operations. Our reviews of federal agency Year 2000 programs found uneven progress. One of the largest, and largely unknown, risks relates to the global nature of the problem. Setting Priorities Is Critical

Agencies have taken longer to complete the awareness and assessment phases of their Year 2000 programs than is recommended. This leaves less time for critical renovation, validation, and implementation phases. Ability to Address Governmentwide Issues Could Be Strengthened

The CIO Council’s Subcommittee on the Year 2000 has been useful in addressing governmentwide issues. Success of the New Presidential Council Is Critical

Given the sweeping ramifications of the Year 2000 issue, other countries have set up mechanisms to solve the Year 2000 problem on a nationwide basis. While the Year 2000 problem could have serious consequences, there is no comprehensive picture of the nation’s readiness. As one of its first tasks, the President’s Council on Year 2000 Conversion could formulate such a comprehensive picture in partnership with the private sector and state and local governments.
Why GAO Did This Study

Pursuant to a congressional request, GAO discussed year 2000 risks and actions that should be taken by the President's Council on Year 2000 Conversion.

What GAO Found

GAO noted that: (1) the federal government is extremely vulnerable to the year 2000 issue due to its widespread dependence on computer systems to process financial transactions, deliver vital public services, and carry out its operations; (2) unless this issue is successfully addressed, serious consequences could ensue, for example: (a) unless the Federal Aviation Administration takes much more decisive action, there could be grounded or delayed flights, degraded safety, customer inconvenience, and increased airline costs; (b) payments to veterans with service-connected disabilities could be severely delayed if the system that issues them either halts or produces checks so erroneous that it must be shut down and checks processed manually; (c) the military services could find it extremely difficult to efficiently and effectively equip and sustain its forces around the world; (d) federal systems used to track student loans could produce erroneous information on loan status, such as indicating that a paid loan was in default; (e) Internal Revenue Service tax systems could be unable to process returns, thereby jeopardizing revenue collection and delaying refunds; and (f) the Social Security Administration process to provide benefits to disabled persons could be disrupted if interfaces with state systems fail; (3) the year 2000 could also cause problems for the many facilities used by the federal government that were built or renovated within the last 20 years that contain embedded computer systems to control, monitor, or assist in operations; (4) GAO's reviews of federal agency year 2000 programs found uneven progress; (5) one of the largest, and largely unknown, risks relates to the global nature of the problem; (6) agencies have taken longer to complete the awareness and assessment phases of their year 2000 programs than is recommended; (7) this leaves less time for critical renovation, validation, and implementation phases; (8) the Chief Information Officers Council's Subcommittee on the year 2000 has been useful in addressing governmentwide issues; (9) given the sweeping ramifications of the year 2000 issue, other countries have set up mechanisms to solve the year 2000 problem on a nationwide basis; and (10) there is no comprehensive picture of the nation's readiness and, as one of its first tasks, the President's Council on Year 2000 Conversion could formulate such a comprehensive picture in partnership with the private sector and state and local governments.