3 agencies doubt they can meet Y2K deadlines

A group of inspectors general from several federal agencies last month told Congress that their agencies are seriously behind in efforts to fix computer systems so that they can properly process dates after Dec. 31, 1999, which could threaten to disrupt large government programs.

The officials told the House Appropriations Committee's Labor, Health and Human Services and Education Subcommittee that a lack of money, a shortage of skilled programmers, contractors who are slow to fix their systems for Year 2000 compliance and tight government deadlines are hampering efforts to fix the systems.

Charles Masten, the Labor Department's inspector general, told the subcommittee that the department's Year 2000 work has been "limited by resource constraints" and that he may have to redirect agency funds to deal with the issue.

"The resources that we will need to devote to this area may likely result in my having to terminate grant and contract audits to free up resources for Year 2000 activities," he said.

Masten said Labor has not made significant progress since its February report to the Office of Management and Budget, in which Labor identified only 13 of its 61 mission-critical systems as Year 2000-compliant. He said Labor programs may be adversely affected.

"I am especially concerned about [Labor] benefit payment systems for job corps students and injured coal miners, longshore and harbor workers, and federal employees and their families," Masten said.

Labor also is running low on funds to support Year 2000 fixes, having spent $160 million of the $200 million Congress gave it to help states convert computers that process unemployment insurance. Congress intended the money to last through fiscal 2000.

Patricia Lattimore, Labor's assistant secretary for administration and management, said Labor's Year 2000 costs had risen from last year's figure of $15.3 million to $26.9 million.

The Department of Health and Human Services also is behind schedule for its Year 2000 fixes, said Thomas Roslewicz, deputy inspector general for audit services at HHS. Roslewicz told the subcommittee he could not predict if HHS would have its computers fixed by December 1999 because of several unknowns, including the possibility of contractors' computer systems failing and competing workload demands.

Among the systems at risk are contractors' processing systems that pay more than $200 billion in Medicare health care services and the Program Support Center's Payment Management System, which pays more than $170 billion in grants and contracts to university researchers working on cures for cancer and other diseases.

The Education Department also reported it was far behind schedule. John Higgins, acting inspector general at Education, said in a report published March 31 that the department had not kept pace with OMB's steps to complete Year 2000 fixes, including completing assessment, renovation or testing plans. The report also noted that the department had not developed a comprehensive Year 2000 plan.

"Of the mission-critical systems we reviewed during our audit, we found that two of the systems that the department had reported to OMB to be compliant were not, in fact, compliant," Higgins said. "A third mission-critical system previously reported to be compliant has now also been determined to be noncompliant."

The Social Security Administration was the only agency that said its computers would be compliant by 2000. SSA reported that of its 308 mission-critical systems, 92 percent are Year 2000-compliant.

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