Veterans Benefits Computer Systems:

Risks of VBA's Year-2000 Efforts

AIMD-97-79: Published: May 30, 1997. Publicly Released: Jun 26, 1997.

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Pursuant to a congressional request, GAO reviewed the Veterans Benefits Administration's (VBA) actions to address management and technical weaknesses reported in a June 1996 hearing on VBA's modernization efforts, focusing on GAO's assessment of VBA's actions to ensure that the year-2000 computing problem will be adequately addressed.

GAO noted that: (1) correcting the year-2000 problem is critical to VBA's mission of providing benefits and services to veterans and their dependents; (2) if not corrected, calculations based on incorrect dates could result in inaccurate and late payment of benefits to veterans, prompting financial stress to millions across the country; (3) VBA has acted to address the problem, but can do more; (4) the year-2000 management office structure and technical capabilities are insufficient; (5) key year-2000 readiness assessment processes--determining the potential severity of the year-2000 impact on VBA's operations, inventorying its information systems and their components, and developing contingency plans--have not been completed; (6) both VBA's initial and revised strategies are risky in that without sufficient information on the costs or potential problems associated with its approach to making systems year-2000 compliant, it cannot make informed choices as to which systems must be funded to avoid disruptions in service, versus which can be deferred; (7) deficiencies in these three areas add risk to an already difficult challenge; (8) addressing these problems will require close and continual top management attention and leadership; (9) contributing to the challenge facing VBA are the loss of key computer personnel, difficulties in obtaining necessary information from external sources on whether interfaces and third-party products are year-2000 compliant, and delays in upgrading systems at VBA data centers; (10) the issue of whether third-party products are year-2000 compliant is being faced by other federal agencies as well; (11) the Department of Veterans Affairs' (VA) chief information officer told GAO that VBA will: (a) revise its year-2000 strategy to focus on converting the existing noncompliant benefits payment systems rather than replacing them; and (b) acquire contractual support to assist in managing the year-2000 effort and in making necessary changes; (12) these are positive developments, and GAO looks forward to seeing VBA's plans to implement these steps; and (13) the implementation of these recommendations will put VBA in a better position to avoid these types of problems in the future.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: As a result of the concerns expressed in the report, VBA changed its year 2000 strategy from developing new applications to renovating its applications. This action partially responded to the recommendation because VBA did not develop an integrated architecture.

    Recommendation: In light of the serious risks associated with VBA's year-2000 activities, the Secretary of Veterans Affairs should direct and ensure that VBA's acting under secretary for benefits, in conjunction with VBA's chief information officer, develop a complete, integrated systems architecture for its new systems development activities, including a security architecture, performance characteristics and standards, and change management policy.

    Agency Affected: Department of Veterans Affairs

  2. Status: Closed - Implemented

    Comments: VBA agreed with the recommendation and completed its Business Continuity and Contingency Planning document in January 1999. In this document, the business impact of Y2K problems--including loss of electric power, loss of data processing capability, and failure of internal infrastructure--is addressed.

    Recommendation: In light of the serious risks associated with VBA's year-2000 activities, the Secretary of Veterans Affairs should direct and ensure that VBA's acting under secretary for benefits, in conjunction with VBA's chief information officer, assess how its major business areas would be affected if the year-2000 problem is not corrected in time and use the results of this assessment to help prioritize the agency's year-2000 activities, as well as a means of obtaining and publicizing management commitment and support for necessary year-2000 initiatives.

    Agency Affected: Department of Veterans Affairs

  3. Status: Closed - Implemented

    Comments: VBA has completed inventories for all information systems and their components. VBA's centralized information systems, interfaces and third-party products were inventoried in 1997 and regional office applications were inventoried in 1998.

    Recommendation: In light of the serious risks associated with VBA's year-2000 activities, the Secretary of Veterans Affairs should direct and ensure that VBA's acting under secretary for benefits, in conjunction with VBA's chief information officer, complete inventories of all information systems and their components, including data interfaces and third-party products by June 30, 1997.

    Agency Affected: Department of Veterans Affairs

  4. Status: Closed - Implemented

    Comments: During the past year, VBA analyzed its internal applications, interfaces, and third-party products for compliance. VA agreed with the recommendations and made the necessary plans to address all internal applications, interfaces, and third-party products. In March 1999, VA reported to the Office of Management and Budget that all of VBA's internal applications were renovated and implemented. GAO observed a successful dry run demonstration of VBA benefits processing, using 2000 dates in a compliant environment, during the week of May 17, 1999.

    Recommendation: In light of the serious risks associated with VBA's year-2000 activities, the Secretary of Veterans Affairs should direct and ensure that VBA's acting under secretary for benefits, in conjunction with VBA's chief information officer, complete an analysis to determine whether VBA's internal applications, interfaces, and third-party products are compliant, and develop a plan for addressing them, by July 31, 1997.

    Agency Affected: Department of Veterans Affairs

  5. Status: Closed - Implemented

    Comments: As GAO reported in August 1998 (AIMD-98-237), VBA agreed with the recommendation and assessed the costs, benefits, and risks of competing information technology initiatives and prioritized them to ensure that critical Y2K efforts had sufficient resources. For example, VBA delayed the Education 1606 replatforming initiative and reallocated the staff to its Y2K renovation efforts.

    Recommendation: In light of the serious risks associated with VBA's year-2000 activities, the Secretary of Veterans Affairs should direct and ensure that VBA's acting under secretary for benefits, in conjunction with VBA's chief information officer, assess the cost, benefits, and risks of competing information technology projects and prioritize them to make effective use of limited staff and monetary resources, including deferring or cancelling new systems developments and reallocating the freed resources to achieving year-2000 compliance.

    Agency Affected: Department of Veterans Affairs

  6. Status: Closed - Implemented

    Comments: VBA agreed with the recommendation and assessed its resource needs. As a result of this assessment, VBA awarded a contract for year 2000 support to augment its in-house staff on its Compensation and Pension Y2K effort.

    Recommendation: In light of the serious risks associated with VBA's year-2000 activities, the Secretary of Veterans Affairs should direct and ensure that VBA's acting under secretary for benefits, in conjunction with VBA's chief information officer, assess the agency's personnel resource needs for achieving year-2000 compliance, and then develop a plan for obtaining these resources.

    Agency Affected: Department of Veterans Affairs

  7. Status: Closed - Implemented

    Comments: VBA completed its risk analysis in October 1997. However this risk analysis did not discuss costs or contingencies.

    Recommendation: In light of the serious risks associated with VBA's year-2000 activities, the Secretary of Veterans Affairs should direct and ensure that VBA's acting under secretary for benefits, in conjunction with VBA's chief information officer, develop a risk assessment, by June 30, 1997, that discusses the risks associated with each year-2000 project and its related costs.

    Agency Affected: Department of Veterans Affairs

  8. Status: Closed - Implemented

    Comments: VBA has provided a schedule for all of its applications for year 2000 compliance.

    Recommendation: In light of the serious risks associated with VBA's year-2000 activities, the Secretary of Veterans Affairs should direct and ensure that VBA's acting under secretary for benefits, in conjunction with VBA's chief information officer, develop a schedule for replacing and/or converting all year-2000 projects July 31, 1997.

    Agency Affected: Department of Veterans Affairs

  9. Status: Closed - Implemented

    Comments: VBA has strengthened its year 2000 program management office by assigning it oversight and coordination responsibilities for all year 2000 activities, including both system conversion and replacement projects in the three systems development centers, the regional offices, and the central office.

    Recommendation: In light of the serious risks associated with VBA's year 2000 activities, the Secretary of Veterans Affairs should direct and ensure that VBA's acting under secretary for benefits, in conjunction with VBA's chief information officer, strengthen VBA's year-2000 program management office by assigning this office oversight and coordination responsibilities for all year-2000 activities, including both system conversion and replacement projects in the three systems development centers, the central office, and the regional offices.

    Agency Affected: Department of Veterans Affairs

  10. Status: Closed - Implemented

    Comments: VBA agreed with the recommendations and completed a business continuity and contingency plan for its business lines and a related planning template for its 58 regional offices. This plan provides a high-level overview of the resources, staff roles, procedures, and timetables for its implementation. It also addresses risks, including mitigation actions to reduce the impact of Y2K-induced business failures.

    Recommendation: In light of the serious risks associated with VBA's year-2000 activities, the Secretary of Veterans Affairs should direct and ensure that VBA's acting under secretary for benefits, in conjunction with VBA's chief information officer, develop a year-2000 contingency plan for all critical information systems, including development and activation of manual or contract procedures.

    Agency Affected: Department of Veterans Affairs

 

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