The Government and the Nation Face High Risk of Service Disruption Due to the Year 2000 Problem

The public faces a high risk that critical services provided by the government and the private sector could be severely disrupted by the Year 2000 computing crisis. The many interdependencies that exist among governments and within key economic sectors could cause a single failure to have adverse repercussions. While managers in the government and the private sector are taking many actions to mitigate these risks, a significant amount of work remains, and time frames are unrelenting. As discussed below, some agencies are significantly behind schedule and are at high risk that they will not fix their systems in time. Growing Concern Led to Increased Federal Role

As the Year 2000 has grown nearer and the scope of the problem has become clearer, the federal government’s response to the crisis has grown as well. At the urging of congressional leaders and others, OMB and the federal agencies have dramatically increased the amount of attention and oversight given to this issue in the last year. Moreover, last month the President issued an executive order establishing a President’s Council on Year 2000 Conversion and recognizing the national and international aspects of the problem. Accordingly, it is critical that the Executive Branch identify those systems that are of the highest priority. Recommendations

To more effectively oversee the activities of federal agencies to address the Year 2000 crisis, we recommend that the Chairman of the President’s Council on Year 2000 Conversion establish governmentwide priorities, and ensure that agencies set agencywide priorities, for the most mission-critical business processes and supporting systems, using criteria such as the potential for adverse health and safety effects, adverse financial effects on American citizens, detrimental effects on national security, and adverse economic consequences; for the selected priorities, designate a lead agency to be responsible for ensuring that end-to-end operational testing of these processes and supporting systems occurs across organizational boundaries, and that independent verification and validation of such testing has been performed; identify all federal agencies beyond the departments and agencies currently reporting that are central to the success of Year 2000 readiness and require them to provide regular reports to OMB; require, as part of the quarterly reporting requirement, agencies to report to OMB on their progress in implementing systems intended to replace noncompliant systems; identify and publicize expectations on the key activities that should be accomplished for each of the assessment, renovation, validation, and implementation phases, and direct agencies to adhere to these expectations in reporting on the status of their programs; require agencies to develop contingency plans for all critical core business require agencies to develop an independent verification strategy to involve inspectors general or other independent organizations in reviewing agency Year 2000 progress, to include (1) assessing whether the agency has developed and is implementing a comprehensive and effective Year 2000 program, (2) providing an independent assessment of the agency’s quarterly report to OMB, (3) assessing whether the agency has a reasonable and comprehensive testing approach, and (4) assessing the completeness and reasonableness of the agency’s business continuity and contingency planning; ensure that agencies participate in the CIO Council’s Year 2000 Committee and that the CIO Council’s Year 2000 Committee subcommittees establish and publicize plans, milestones, and enforcement mechanisms; and develop a personnel strategy which includes (1) determining the need for various information specialists, (2) identifying any administrative or statutory changes that would be required to waive reemployment penalties for former federal employees, and (3) identifying ways to retain key Year 2000 staff in agencies through the turn of the century. To describe the evolution of the federal government’s Year 2000 strategy and identify additional actions that can be taken to prepare the nation for the Year 2000, we evaluated the Year 2000 efforts of OMB and of the CIO Council, including reviewing OMB’s quarterly reports and other documents. It is available upon request. Year 2000 Computing Crisis: Strong Leadership Needed to Avoid Disruption of Essential Services (GAO/T-AIMD-98-117, March 24, 1998).
Why GAO Did This Study

Pursuant to a congressional request, GAO reviewed the year 2000 computing crisis facing the nation, focusing on: (1) the year 2000 risks facing the government and nation; (2) the evolution of the federal government's year 2000 strategy; and (3) additional actions that can be taken by the Executive Branch to prepare the nation for the year 2000.

What GAO Found

GAO noted that: (1) while progress has been made in addressing the federal government's year 2000 readiness, serious vulnerabilities remain; (2) many agencies are behind schedule; (3) at the current pace, it is clear that not all mission-critical systems will be fixed in time; (4) much more action is needed to ensure that federal agencies satisfactorily mitigate year 2000 risks to avoid debilitating consequences; (5) vital economic sectors of the nation likewise remain vulnerable to problems that the change of century will bring; (6) moreover, a high degree of information and systems interdependence exists among various levels of government and the private sector in each of these sectors; (7) these interdependencies increase the risk that a cascading wave of failures or interruptions of essential services could occur; (8) as the change of century grows closer and the breadth of year 2000 work that remains has become known, the federal government's response to the crisis has increased; (9) originally, the Office of Management and Budget (OMB) expressed a high degree of confidence about the federal government's ability to meet the year 2000 deadline; (10) more recently, as many agencies have reported their limited progress in solving the year 2000 problem, OMB has become increasingly concerned; (11) accordingly, at the urging of key congressional leaders, OMB has improved its response to the crisis by issuing much needed policies and increasing its monitoring of agencies; (12) most encouraging is the President's recent announcement of the establishment of a President's Council on Year 2000 Conversion to oversee federal efforts and promote public/private relationships; and (13) the establishment of the President's Council on Year 2000 Conversion provides an opportunity for the Executive Branch to take further key implementation steps to avert disruptions to critical services.