Year 2000 Computing:
EFT 99 Is Not Expected to Affect Year 2000 Remediation Efforts
AIMD-98-272R: Published: Aug 28, 1998. Publicly Released: Aug 28, 1998.
- Full Report:
Pursuant to a congressional request, GAO reviewed whether the Electronic Funds Transfer 99 (EFT 99) program is interfering with the capacity of the Financial Management Service (FMS) and financial institutions to complete year 2000 remediation efforts.
GAO noted that: (1) EFT 99 requirements are not expected to affect FMS' year 2000 remediation efforts; (2) FMS has made payments electronically for many years and thus the applications software and telecommunications infrastructure necessary for initiating electronic payments and transmitting them to financial institutions are already in place; (3) the process of converting recipients from paper to electronic payment is relatively easy and is done by the program agencies; (4) FMS does not expect to make any system changes in preparation for EFT 99; (5) EFT 99 requirements should also not affect FMS year 2000 efforts because converting benefit recipients from paper to electronic payment is a relatively easy process that is conducted by program agencies, not FMS; (6) the volume of unbanked benefit recipients who will need to be switched from paper to electronic payments is likely to be much less than originally planned because of the Department of the Treasury's recently announced waivers to the regulation; (7) initially, FMS and Treasury expected that when the electronic transfer accounts (ETA) became available, most benefit recipients without a bank account would be converted from paper to electronic payment; (8) FMS' Assistant Commissioner for Federal Finance said that given the new waiver policy, he estimates that prior to the year 2000 only 20 to 30 percent of recipients without bank accounts will switch to using ETAs; (9) like FMS, the year 2000 conversion efforts of financial institutions are not expected to be affected by EFT 99; (10) the systems infrastructure for receiving electronic payments from FMS through the Federal Reserve is already established and many institutions already offer accounts that are similar to those being proposed for the ETAs; (11) the financial institutions said that if conflicts do arise between completing year 2000 efforts or offering ETAs, they will not offer ETAs; (12) some financial institutions expressed concern that because the account structure for ETAs has not yet been announced, they cannot determine how much system development will be necessary to tailor their accounts to meet ETA account specifications; (13) these institutions said that the longer that the definition of ETAs is delayed, the more likely it is that banks will not initially offer the accounts; (14) Treasury originally expected to announce the ETA account structure in the spring of 1998, then delayed it until the summer of 1998; and (15) Treasury officials now expect to announce the structure in the fall of 1998 and estimate that accounts will become available in 1999.