Year 2000 Computing Crisis:

Readiness Improving, But Much Work Remains to Avoid Major Disruptions

T-AIMD-99-50: Published: Jan 20, 1999. Publicly Released: Jan 20, 1999.

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Pursuant to a congressional request, GAO discussed: (1) the year 2000 risks facing the nation; (2) the federal government's progress and remaining challenges in correcting its systems; (3) state and local government year 2000 issues; and (4) the readiness of key public infrastructures and economic sectors.

GAO noted that: (1) the public faces a risk that critical services provided by the government and the private sector could be severely disrupted by the year 2000 computing problem; (2) key sectors that could be seriously affected if their systems are not year 2000 compliant include: (a) information and telecommunications; (b) banking and finance; (c) health, safety, and emergency services; (d) transportation; (e) power and water; and (f) manufacturing and small business; (3) to meet the year 2000 challenge and monitor individual agency efforts, the Office of Management and Budget directed the major departments and agencies to submit quarterly reports on their progress; (4) these reports contain information on where agencies stand with respect to the assessment, renovation, validation, and implementation of mission-critical systems, as well as other management information on items such as business continuity and contingency plans and costs; (5) while the federal government's most recent reports show improvement in addressing the year 2000 problem, 39 percent of mission-critical systems were reported as not yet compliant; (6) state and local governments also face a major risk of year 2000-induced failures to the many vital services that they provide; (7) a recent survey of state year 2000 efforts indicated that much remains to be completed; (8) the President's Council on Year 2000 Conversion established over 25 sector-based working groups and has been initiating outreach activities since it became operational last spring; (9) the Council's January 7, 1999, report summarizes information collected to date by the working groups and various trade associations; (10) based on the information available at the time, it concluded that: (a) virtually all of the industry areas reported high awareness of the year 2000 and its potential consequences; (b) participants in several areas are mounting aggressive efforts to combat the problem; (c) it is increasingly confident that there will not be large scale disruptions in the banking, power, and telecommunications areas and, if disruptions do occur, they are likely to be localized; (d) large organizations often have a better handle on the year 2000 problem than do smaller ones; and (e) international failures are likely since, despite recent increased efforts, a number of countries have done little to remediate critical systems; and (11) however, the picture remains substantially incomplete because assessments were not available in many key areas.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: In subsequent quarterly reports, the President's Council on Year 2000 Conversion provided Year 2000 readiness data on sectors in which data had been previously lacking. For example, in the fourth quarterly report, the President's Council included readiness information on the rail industry, health care providers, pharmaceuticals, and 911 services.

    Recommendation: To further reduce the likelihood of major disruptions, the President's Council on Year 2000 Conversion may wish to consider other actions. The Council must continue to aggressively pursue readiness information in the areas in which it is lacking, such as the railroad industry, health sector, and local law enforcement. If the current approach of using associations to voluntarily collect information does not yield the necessary information, the Council may wish to consider whether legislative remedies (such as requiring disclosure of year 2000 readiness data) should be proposed.

    Agency Affected: President's Council on Year 2000 Conversion

  2. Status: Closed - Implemented

    Comments: In response to the testimony, the Chair of the President's Council on Year 2000 Conversion stated that the Council has encouraged associations to disclose publicly the names of those companies that participate in assessments. According to the Chair, some associations are disclosing names of participants, which has resulted in increased participation in assessments.

    Recommendation: To further reduce the likelihood of major disruptions, the President's Council on Year 2000 Conversion may wish to consider other actions. To encourage the reporting of more complete information, the Council should consider requesting that the national associations publicly disclose, at a minimum, those companies that have responded to surveys.

    Agency Affected: President's Council on Year 2000 Conversion

  3. Status: Closed - Implemented

    Comments: In response to the testimony, the Chair of the President's Council on Year 2000 Conversion stated that the Council's April 1999 report provided details "to the extent possible" and organized the information by component for those sectors with clearly distinguishable major components. Subsequent reports also provided additional readiness data.

    Recommendation: To further reduce the likelihood of major disruptions, the President's Council on Year 2000 Conversion may wish to consider other actions. In its January 1999 meeting, the Chair provided Council members with items to consider when preparing the working groups' input into the April 1999 assessment report. These items included the key facts to obtain from survey information and information on the group conducting the assessment, and number surveyed/number that responded. This type of data should help the Chair and the Council evaluate the readiness of the sectors. The Council should include this same information in the April assessment report to the public. In addition, to ensure that the Council's working groups have adequately covered the nation's sectors, another goal for the next quarterly assessment report could be for the working groups to identify each sector's major components and report summary readiness information, including significant trends, by major component to the Chair for inclusion in the report to the public.

    Agency Affected: President's Council on Year 2000 Conversion

  4. Status: Closed - Implemented

    Comments: The President's Council on Year 2000 Conversion took a variety of actions to assess sector contingency plans prior to the century rollover. For example, according to the President's Council, its Senior Advisors Group, which was comprised of heads of companies in key infrastructure sectors, agreed to share industry emergency response plans with the Council. In addition, the Council held sector roundtables in sectors such as transit, food supply, pharmaceuticals, and consumable medical and surgical supplies in which contingency planning was discussed. Further, the Council discussed government and industry contingency planning with Mexico and Canada.

    Recommendation: To further reduce the likelihood of major disruptions, the President's Council on Year 2000 Conversion may wish to consider other actions. Since the international arena carries some of the greatest year 2000 risks and uncertainties, the Council could prioritize trade and commerce activities that are critical to the nation's well-being (e.g., oil, food, pharmaceuticals) and, working with the private sector (perhaps using the Senior Advisors Group), identify options to obtain these materials through alternative avenues in the event that year 2000-induced failures in the importing country or in the transportation sector prevent these items from reaching the United States.

    Agency Affected: President's Council on Year 2000 Conversion

 

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