	IRS’ Year 2000 Efforts: Status and Risks

Madam Chairman and Members of the Subcommittee: We are pleased to be here today to discuss the results of our work to date on the Internal Revenue Service’s (IRS) efforts to have its information systems function correctly when processing dates beyond December 31, 1999. telecommunications is at the highest risk for not being completed by January 31, 1999. In addition to converting systems, IRS is undertaking two major system replacement projects as part of its Year 2000 efforts. Both of these projects have encountered some schedule delays. The first was the lack of a master conversion and replacement schedule. However, we remain concerned that IRS’ current approach to contingency planning does not address the likelihood that system failures could occur once systems are implemented. Conversion of Existing Systems

According to IRS, before January 1999, it needs to complete 12 steps of its 14-step process for converting (1) the applications for its existing systems; (2) telecommunications networks; and (3) systems software and/or hardware for mainframes, minicomputers/file servers, and personal computers. IRS has made more progress in converting its applications than in converting its information systems infrastructure. IRS has completed its assessment of the hardware and systems software for its mainframe computers. IRS Is Taking Actions to Develop a Master Conversion and Replacement Schedule

In our January briefing to your office, we identified two major risk areas for IRS’ Year 2000 effort: (1) the lack of an integrated master conversion and replacement schedule and (2) a limited approach to contingency planning.
Why GAO Did This Study

GAO discussed the results of its work to date on the Internal Revenue Service's (IRS) efforts to have its information systems function correctly when processing dates beyond December 31, 1999.

What GAO Found

GAO noted that: (1) for its existing systems, IRS has made more progress in converting application software than converting its information systems infrastructure, which includes hardware, systems software, and telecommunications; (2) despite its progress on converting applications, IRS fell short of its goal to have the applications for 66 of the 127 systems that it considers mission-critical converted by January 1998; (3) IRS is still assessing or in the early stages of converting its hardware and systems software for two of its three levels of computing operations--minicomputers/file servers and personal computers; (4) of all the infrastructure areas, according to IRS' tracking systems, telecommunications is at the highest risk for not being completed by January 31, 1999; (5) in addition to converting systems, IRS is undertaking two major system replacement projects as part of its year 2000 efforts; (6) both of these projects have encountered some schedule delays; (7) GAO identified two significant risk areas to IRS' year 2000 efforts; (8) the first was the lack of a master conversion and replacement schedule; (9) the second was a limited approach to contingency planning; (10) IRS is taking actions to address GAO's concerns regarding the lack of a master conversion and replacement schedule; and (11) however, GAO remains concerned that IRS' current approach to contingency planning does not address the likelihood that system failures could occur once systems are implemented.