According to VA’s August 14, 1997, quarterly report to OMB, the Department has made progress in addressing the Year 2000 problem. As noted in the report, 1 of its 11 mission-critical systems—the one serving the National Cemetery System—is already fully compliant. Of the 10 remaining mission-critical systems and their applications, 85 percent have been assessed and 51 percent have been renovated. In addition, VA has updated its total Year 2000 cost estimate from $144 million (May 1997) to $162 million; VA’s stated reason for the increase is the need for upgrades to its commercial off-the-shelf software and hardware and more contractual support. Further, VA’s current estimate shows that it expects systems assessment to be completed by the end of next January, renovation of systems by November 1998, validation by January 1999, and implementation by October 1999—2 months earlier than VA reported in May. VBA has responded to this challenge by initiating a number of actions, including developing an agencywide plan and a Year 2000 strategy, and creating a program management organization. However, several substantial risks remain. If VBA is to avert serious disruption to its ability to disseminate benefits, it will need to strengthen its management and oversight of Year 2000-related activities. Our May 30, 1997, report contained 10 specific recommendations to the Secretary of Veterans Affairs on actions that VBA needed to take to address the Year 2000 problem. Accordingly, it is essential that each of these 22 regional health care networks thoroughly assesses and plans for ensuring Year 2000 compliance so that service delivery is not interrupted. According to VA’s August 14, 1997, quarterly report to OMB, VHA is in the initial stages of assessing the compliance of its two mission-critical systems—the Veterans Health Information Systems and Technology Architecture (VISTA)—formerly known as the Decentralized Hospital Computer Program (DHCP)—and the VHA corporate systems. In order to effectively assess and renovate, it is necessary to understand how local facilities are using the national VISTA applications. In closing, Mr. Chairman, I want to stress that while our detailed review of the VHA area is just now underway, it is clear that for VA as a whole to have all of its mission-critical systems compliant by January 1, 2000, will entail a huge, well-coordinated effort.
Why GAO Did This Study

Pursuant to a congressional request, GAO discussed federal progress in addressing the Year 2000 problem, focusing on: (1) action taken by the Department of Veterans Affairs (VA) as a whole; (2) steps taken by the Veterans Benefits Administration (VBA) in response to recommendations contained in a GAO report; and (3) results of its review of the Veterans Health Administration's (VHA) Year 2000 activities.

What GAO Found

GAO noted that: (1) according to VA's August 14, 1997, quarterly report to the Office of Management and Budget, the Department has made progress in addressing the Year 2000 problem; (2) as noted in the report, one of its 11 mission-critical systems--the one serving the National Cemetery System--is already fully compliant; (3) of the ten remaining mission critical systems and their applications, 85 percent have been assessed and 51 percent have been renovated; (4) in addition, VA has updated its total Year 2000 cost estimate from $144 million (May 1997) to $162 million; (5) VA's stated reason for the increase is the need for upgrades to its commercial off-the-shelf software and hardware, and more contractual support; (6) VA's current estimate shows that it expects systems assessment to be completed by the end of next January, renovation of systems by November 1998, validation by January 1999, and implementation by October 1999--2 months earlier than VA reported in May; (7) VBA has responded to the Year 2000 challenge by initiating a number of actions, including developing an agencywide plan and a Year 2000 strategy and creating a program management organization; (8) however, several substantial risks remain; (9) if VBA is to avert serious disruption of its ability to disseminate benefits, it will need to strengthen its management and oversight of Year 2000-related activities; (10) VHA is in the initial stages of assessing the compliance of its two mission-critical systems; (11) it is essential that each of VHA's 22 regional health care networks thoroughly assesses and plans for ensuring Year 2000 compliance so that service delivery is not interrupted; (12) in order to effectively assess and renovate, it is necessary to understand how local customizations, software add-ons, external interfaces, and physical facilities may affect Year 2000 compliance; (13) VHA is assessing Year 2000 impact on medical devices; and (14) while GAO's detailed review of the VHA area is just now under way, it is clear that for VA as a whole to have all of its mission-critical systems compliant by January 1, 2000, will entail a huge, well-coordinated effort.