	Risk of Year 2000 Disruptions Requires Leadership

The public faces the risk that critical services could be severely disrupted by the Year 2000 computing crisis. Our reviews of federal agency Year 2000 programs have found uneven progress, and our reports contain numerous recommendations, which the agencies have almost universally agreed to implement. As we testified in March, there are a number of actions we believe the Council must take to avert this crisis. We see significant progress at SSA, and it is essential that this progress continue. SSA has been anticipating the change of century since 1989, initiating an early response to the potential crisis. We found that HCFA had not required systems contractors to submit Year 2000 plans for approval. Further, it did not have contracts or other specific legal agreements with any contractors, other than one recently selected contractor, stating how or when the Year 2000 problem would be corrected, or whether contractors would certify that they would correct the problem. HCFA had also not identified critical areas of responsibility for Year 2000 activities. We are currently evaluating the effectiveness of HCFA’s actions, at the request of the Senate Special Committee on Aging. Department of the Treasury

With respect to the Department of the Treasury, we must first point out that—unlike with Social Security and Medicare—we have not completed a thorough assessment of the Department’s Year 2000 readiness. However, the Department’s progress in making systems Year 2000 compliant has been mixed. Treasury Year 2000 program officials are aware of these and other related risks facing the Department, and have established program management structures and processes to address them, which we are presently evaluating. As our guidance points out, business area priorities and system dependencies must be examined in light of possible Year 2000-induced failures; contingency planning to help ensure continuity of business operations must then be developed and tested.
Why GAO Did This Study

Pursuant to a congressional request, GAO discussed the computing challenges that the upcoming change of century poses to virtually all major organizations, public and private, including government programs with a high degree of interaction with the public.

What GAO Found

GAO noted that: (1) the public faces the risk that critical services could be severely disrupted by the year 2000 computing crisis; (2) GAO's reviews of federal agency year 2000 programs have found uneven progress, and GAO reports contain numerous recommendations, which the agencies have almost universally agreed to implement; (3) there are a number of actions GAO believes the President's Council on Year 2000 Conversion must take to avert the year 2000 crisis; (4) GAO has seen significant progress at the Social Security Administration (SSA), and it is essential that this progress continue; (5) SSA has been anticipating the change of century since 1989, initiating an early response to the potential crisis; (6) GAO found that the Health Care Financing Administration (HCFA) had not required systems contractors to submit year 2000 plans for approval; (7) further, it did not have contracts or other specific legal agreements with any contractors, other than one recently selected contractor, stating how or when the year 2000 problem would be corrected, or whether contractors would certify that they would correct the problem; (8) HCFA had also not identified critical areas of responsibility for year 2000 activities; (9) GAO is currently evaluating the effectiveness of HCFA's actions to make their systems year 2000 compliant; (10) with respect to the Department of the Treasury, GAO must first point out that--unlike with Social Security and Medicare--GAO has not completed a thorough assessment of the Department's year 2000 readiness; (11) Treasury year 2000 program officials are aware of these and other related risks facing the Department, and have established program management structures and processes to address them, which GAO is presently evaluating; and (12) as GAO guidance points out, business area priorities and system dependencies must be examined in light of possible year 2000-induced failures; contingency planning to help ensure continuity of business operations must then be developed and tested.