Year 2000 Computing Crisis:

Actions Needed on Electronic Data Exchanges

AIMD-98-124: Published: Jul 1, 1998. Publicly Released: Jul 31, 1998.

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Pursuant to a congressional request, GAO provided information on actions taken to address year 2000 issues for electronic data exchanges, focusing on the: (1) key actions taken to date to address electronic data exchanges among federal, state, and local governments; (2) actions the federal government has taken to minimize the adverse economic impact of non-compliant year 2000 data from other countries' information systems corrupting critical functions of the United States; and (3) international forums where the worldwide economic implications of this issue have been or could be addressed.

GAO noted that: (1) key actions to address year 2000 data exchange issues are still in the early stages; however, federal and state coordinating organizations have agreed to use a 4-digit contiguous year format and establish joint federal and state policy and working groups; (2) to implement these agreements, the Office of Management and Budget (OMB) issued instructions in January 1998 to federal agencies to inventory all data exchanges with outside parties by February 1, 1998, and coordinate with these exchange partners by March 1, 1998; (3) at the time of GAO's review, no actions had been taken to establish target dates for additional key tasks; (4) about half of the federal agencies reported during the first quarter of 1998 that they have not yet finished assessing their data exchanges to determine if they will be able to process data with dates beyond 1999; (5) two of the 39 state-level organizations reported having finished assessing their data exchanges; (6) for the exchanges already identified as not year 2000 ready, respondents reported that little progress has yet been made in completing key steps such as reaching agreements with partners on date formats, developing and testing bridges and filters, and developing contingency plans for cases in which year 2000 readiness will not be achieved; (7) most federal agency actions to address year 2000 issues with international data exchanges have been in the financial services area; (8) ten federal agencies reported having a total of 702 data exchanges with foreign governments or the foreign private sector; (9) these foreign data exchanges represented less than 1 percent of federal agencies' total reported exchanges; (10) federal agencies reported reaching agreements so far on formats of 98 of the foreign data exchanges; (11) international organizations addressing year 2000 issues have been the most active in the financial services area; and (12) during 1997, several international organizations initiated activities to increase awareness, provide guidance, and monitor the status of year 2000 efforts.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: In July 1998, OMB instructed federal agencies to include in their quarterly Year 2000 status reports descriptions of: (1) the method for ensuring that data exchange partners are contacted; and (2) the progress on making data exchanges compliant. OMB had placed particular emphasis of data exchanges with states and, as stated for the first recommendation above, asked the CIO Council to establish a directory of federal exchanges with states and develop requirements for reporting the status of the exchanges.

    Recommendation: The Director, OMB, in consultation with the Chair of the President's Council on Year 2000 Conversion, should issue the necessary guidance to require federal agencies to report, as part of their regular year 2000 status reports, their status in completing key steps for data exchanges, such as the percent of exchanges that have been inventoried, the percent of exchanges that have been assessed, the percent of exchanges that have agreements with exchange partners, the percent of exchanges that have been scheduled for testing and implementation, and the percent of exchanges that have completed testing and implementation.

    Agency Affected: Executive Office of the President: Office of Management and Budget

  2. Status: Closed - Implemented

    Comments: In April 1998, after GAO provided OMB a draft of this report, OMB instructed federal agencies to develop continuity of business plans using GAO's business continuity and contingency planning guide. GAO's business continuity and contingency planning guide specifies that organizations should develop and implement, as part of their overall business continuity and contingency planning efforts, specific provisions for the data exchanges that may fail, including the approaches to be used to mitigate operational problems if their partners do not make date conversion corrections when needed.

    Recommendation: The Director, OMB, in consultation with the Chair of the President's Council on Year 2000 Conversion, should issue the necessary guidance to require federal agencies to develop and implement, as part of their overall business continuity and contingency planning efforts, specific provisions for the data exchanges that may fail, including the approaches to be used to mitigate operational problems if their partners do not make date conversion corrections when needed.

    Agency Affected: Executive Office of the President: Office of Management and Budget

  3. Status: Closed - Implemented

    Comments: In April 1998, after GAO provided OMB a draft of this report, OMB instructed federal agencies to develop continuity of business plans using GAO's business continuity and contingency planning guide. GAO's business continuity and contingency planning guide specifies that organizations should install the filters necessary to prevent the corruption of mission-critical systems from data exchanges with non-compliant systems.

    Recommendation: The Director, OMB, in consultation with the Chair of the President's Council on Year 2000 Conversion, should issue the necessary guidance to require federal agencies to give priority to installing the filters necessary to prevent the corruption of mission-critical systems from data exchanges with non-compliant systems.

    Agency Affected: Executive Office of the President: Office of Management and Budget

  4. Status: Closed - Not Implemented

    Comments: In its comments on the draft report, OMB did not agree with this recommendation. OMB stated that exchange partners are well aware of the implications of failing to make date conversions.

    Recommendation: The Director, OMB, in consultation with the Chair of the President's Council on Year 2000 Conversion, should issue the necessary guidance to require federal agencies to notify exchange partners of the implications to the agency and the exchange partners if they do not make date conversion corrections in time to meet the federal schedule for implementing and testing year 2000 compliant data exchange processes.

    Agency Affected: Executive Office of the President: Office of Management and Budget

  5. Status: Closed - Implemented

    Comments: OMB said that it had asked the CIO Council to establish a directory of federal exchanges with states and develop requirements for reporting the status of the exchanges. Although OMB stated that national test days for end-to-end testing would be impractical, in 1999 it instructed agencies to conduct end-to-end testing for data exchanges for "high impact" programs. In March 1999, OMB designated federal programs that have a high impact on the public and instructed agencies to develop plans to ensure that the programs operate effectively, including public events to demonstrate Year 2000 readiness. Many of the programs rely on partners such as state and local governments, and private-sector organizations; therefore, OMB specified that the plans might include testing of data exchanges across partners. In August 1999, OMB further clarified the instructions by saying that federal agencies should take the lead in coordinating the end-to-end testing and demonstrating that programs will work.

    Recommendation: The Director, OMB, in consultation with the Chair of the President's Council on Year 2000 Conversion, should issue the necessary guidance to require federal agencies to establish schedules for testing and implementing new exchange formats prior to the March 1999 deadline for completing all data exchange corrections; such schedules may include national test days that could be used for end-to-end testing of critical business processes and associated data exchanges affecting federal, state, and local governments.

    Agency Affected: Executive Office of the President: Office of Management and Budget

  6. Status: Closed - Implemented

    Comments: In its comments on the draft report, OMB said that the CIO Council would not be the right place to begin addressing these problems. Instead, The President's Council on Year 2000 Conversion took the lead in establishing forums to address Year 2000 problems. The President's Council established working groups to focus on 27 critical sectors, including international communication, international relations, and international trade. The working groups' efforts were designed to promote sharing of information and increase the level of activities on the Year 2000 problem. The Council also worked with the United Nations to organize meetings of national Y2K coordinators from around the world to address cross-border issues. In addition, the Council is supporting the International Y2K Cooperation Center, sponsored by the World Bank, that plans international initiatives in areas such as telecommunications and transportation.

    Recommendation: The Director, OMB, should ensure that the federal Chief Information Officer Council: (1) identifies the areas in which adequate forums on year 2000 issues are not available for U.S. international trade partners; and (2) develops an approach to promote year 2000 compliance activities by these trading partners.

    Agency Affected: Executive Office of the President: Office of Management and Budget

 

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