GAO tepid on feds' Y2K progress

The General Accounting Office last week gave lukewarm praise to the departments of Education and Labor for fixing their Year 2000 computer problems.

Both departments have made substantial improvements since last year, said Joel Willemssen, GAO's director for civilian agencies information systems, testifying before the Oversight Subcommittee of the House of Representatives' Education and the Workforce Committee. "We're much more optimistic on Education and Labor than we were when we testified last fall," Willemssen said.

The subcommittee's chairman, Rep. Peter Hoekstra (R-Mich.), also praised the agencies. "It looks like you've made significant progress from where you were last fall, and that is to be applauded," Hoekstra told officials from both departments.

Last fall, Rep. Stephen Horn (R-Calif.), chairman of the House Government Management, Information and Technology Subcommittee, had given both agencies poor grades for their progress on Year 2000. Using data provided by the agencies, Horn assigned Labor a grade of D and Education a grade of F.

In February, Horn gave Education an A-minus and Labor a B. Still, critical Year 2000 work remains to minimize the agencies' risk, Willemssen said.

Education needs to focus on having its Year 2000 work independently verified, Willemssen said. The department also needs to focus on making sure a new system, the Recipient Financial Management System, is Year 2000-compliant, he said. Moreover, according to Willemssen, the department should:

* Resolve issues that delay Year 2000 certification on four of its mission-critical systems.

* Continue end-to-end testing of critical business processes involving Education's systems and those of the department's data-exchange partners, such as universities.

* Continue outreach with universities and other participants in the student financial aid process to make sure systems are Year 2000-compliant.

* Continue to refine contingency plans and business continuity plans to cope with Year 2000-related failures.

Marshall Smith, acting deputy secretary for Education, said his agency continues to press its data-exchange partners to cooperate with Year 2000 tests. "There have been fewer people testing with us than we would have liked to have seen," Smith testified. Smith also told congressional overseers that the department would be posting its contingency plans on its World Wide Web site in coming weeks.

Theresa Shaw, a vice president at Sallie Mae Inc., a lender in Education's Federal Family Education Loan Program, said even small problems with managing information in the wake of the Year 2000 problem could have a widespread impact. "Even minor federal delays in processing [student] aid information could cause enormous ripple effects in the industry, driving up workloads and, in many cases, actually preventing students who had counted on federal aid from enrolling," she testified.

For Labor, GAO's Willemssen emphasized correcting problems that may threaten the agency's ability to pay benefits to laid-off workers and its ability to produce labor and economic statistics.

Labor's systems for paying unemployment benefits depend on state-run systems running reliably, Willemssen said. Data links with 53 state-run offices help Labor calculate and distribute unemployment insurance benefits. But some states' systems are not fully fixed and tested for the Year 2000, Willemssen said. Moreover, Labor's Bureau of Labor Statistics has Year 2000 loose ends to tie up. The bureau has nine systems that need to be independently validated for Year 2000 compliance, Willemssen testified.

Patricia Lattimore, Labor's chief information officer, testified that her department "is closely monitoring each state's efforts to remediate the remaining systems and will establish a 'risk list' for additional attention should any [state office's] progress fail to keep pace with its milestones."

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