United States General Accounting Office

GAO Testimony

Before the Committee on Resources, 

House of Representatives

For Release on Delivery

Expected at

11 a.m.

Wednesday,

April 22, 1998

DEPARTMENT OF THE

INTERIOR

Year 2000 Computing Crisis

Presents Risk of Disruption

to Key Operations

Statement of Joel C. Willemssen

Director, Civil Agencies Information Systems

Accounting and Information Management Division

GAO/T-AIMD-98-149

Mr. Chairman and Members of the Committee:

We are pleased to be here today to discuss the computing challenges that

the upcoming change of century poses to virtually all major organizations,

public and private, including the Department of the Interior. As the world’s

most advanced and most dependent user of information technology, the

United States possesses close to half of all computer capacity and

60 percent of Internet assets.1

 As a result, the coming century change

presents a particularly sweeping and urgent challenge for entities in the

United States.2

For this reason, we have designated the Year 2000 computing problem as a

high-risk area3

 for the federal government, and have published guidance4

to help organizations successfully address the issue. Since early 1997 we

have issued over 30 products detailing specific findings and

recommendations related to the Year 2000 readiness of a wide range of

federal agencies.5

The common theme of these reports has been that serious vulnerabilities

remain in addressing the federal government’s Year 2000 readiness. Much

more action is needed to ensure that federal agencies satisfactorily

mitigate Year 2000 risks to avoid debilitating consequences. Vital

economic sectors of the nation are also vulnerable. These include state

and local governments; telecommunications; banking and finance; health,

safety, and emergency services; transportation; utilities; and

manufacturing and small business.

While actions by government and industry are underway throughout the

nation, the recent creation of the President’s Council on Year 2000

Conversion represents an opportunity to orchestrate the leadership and

public/private partnerships essential to confronting the unprecedented

1

Critical Foundations: Protecting America’s Infrastructures (President’s Commission on Critical

Infrastructure Protection, October 1997).

2

For the past several decades, automated information systems have typically represented the year

using two digits rather than four in order to conserve electronic data storage space and reduce

operating costs. In this format, however, 2000 is indistinguishable from 1900 because both are

represented only as 00. As a result, if not modified, computer systems or applications that use dates or

perform date- or time-sensitive calculations may generate incorrect results beyond 1999.

3

High-Risk Series: Information Management and Technology (GAO/HR-97-9, February 1997).

4

Year 2000 Computing Crisis: An Assessment Guide (GAO/AIMD-10.1.14, September 1997) and Year

2000 Computing Crisis: Business Continuity and Contingency Planning (GAO/AIMD-10.1.19, Exposure

Draft, March 1998).

5

A listing of our publications is included at the end of this statement.

Page 1 GAO/T-AIMD-98-149
challenges we face. My testimony today will briefly outline where the

federal government stands in its efforts to lessen Year 2000 risks. I will

then present our preliminary observations on Year 2000 activities at the

Department of the Interior.

Risk of Year 2000

Disruptions Requires

Leadership

The public faces the risk that critical services could be severely disrupted

by the Year 2000 computing crisis. Financial transactions could be

delayed, airline flights grounded, and national defense affected. The many

interdependencies that exist among the levels of governments and within

key economic sectors of our nation could cause a single failure to have

wide-ranging repercussions. While managers in the government and the

private sector are acting to mitigate these risks, a significant amount of

work remains.

The federal government is extremely vulnerable to the Year 2000 issue due

to its widespread dependence on computer systems to process financial

transactions, deliver vital public services, and carry out its operations.

This challenge is made more difficult by the age and poor documentation

of many of the government’s existing systems and its lackluster track

record in modernizing systems to deliver expected improvements and

meet promised deadlines.

Year 2000-related problems have already occurred. For example, an

automated Defense Logistics Agency system erroneously deactivated

90,000 inventoried items as the result of an incorrect date calculation.

According to the agency, if the problem had not been corrected (which

took 400 work hours), the impact would have seriously hampered its

mission to deliver materiel in a timely manner.6

Our reviews of federal agency Year 2000 programs have found uneven

progress, and our reports contain numerous recommendations, which the

agencies have almost universally agreed to implement. Among them are

the need to establish priorities, solidify data exchange agreements, and

develop contingency plans.

One of the largest, and largely unknown, risks relates to the global nature

of the problem. With the advent of electronic communication and

international commerce, the United States and the rest of the world have

become critically dependent on computers. However, with this electronic

6

Defense Computers: Issues Confronting DLA in Addressing Year 2000 Problems (GAO/AIMD-97-106,

August 12, 1997).

Page 2 GAO/T-AIMD-98-149
dependence and massive exchanging of data comes increasing risk that

uncorrected Year 2000 problems in other countries will adversely affect

the United States. And there are indications of Year 2000 readiness

problems internationally. In September 1997, the Gartner Group, a private

research firm acknowledged for its expertise in Year 2000 computing

issues, surveyed 2,400 companies in 17 countries and concluded that

“[t]hirty percent of all companies have not started dealing with the year

2000 problem.”7

Additional Actions Can Be

Taken to Reduce Nation’s

Year 2000 Risks

As 2000 approaches, the scope of the risks that the century change could

bring has become more clear, and the federal government’s actions have

intensified. This past February, an executive order was issued establishing

the President’s Council on Year 2000 Conversion. The Council Chair is to

oversee federal agency Year 2000 efforts as well as be the spokesman in

national and international forums, coordinate with state and local

governments, promote appropriate federal roles with respect to

private-sector activities, and report to the President on a quarterly basis.

As we testified last month,8

 there are a number of actions we believe the

Council must take to avert this crisis. We plan to issue a report later this

month detailing our specific recommendations. The following summarizes

a few of the key areas in which we will be recommending action.

• Because departments and agencies have taken longer than recommended

to assess the readiness of their systems, it is unlikely that they will be able

to renovate and fully test all mission-critical systems by January 1, 2000.

Consequently, setting priorities is essential, with the focus being on

systems most critical to our health and safety, financial well being,

national security, or the economy.

• Agencies must start business continuity and contingency planning now to

safeguard their ability to deliver a minimum acceptable level of services in

the event of Year 2000-induced failures. Last month, we issued an

exposure draft of a guide providing information on business continuity

and contingency planning issues common to most large enterprises.9

Agencies developing such plans only for systems currently behind

schedule, however, are not addressing the need to ensure business

continuity in the event of unforeseen failures. Further, such plans should

7

Year 2000-World Status (Gartner Group, Document #M-100-037, November 25, 1997).

8

Year 2000 Computing Crisis: Strong Leadership and Effective Public/Private Cooperation Needed to

Avoid Major Disruptions (GAO/T-AIMD-98-101, March 18, 1998).

9

GAO/AIMD-10.1.19, Exposure Draft, March 1998.

Page 3 GAO/T-AIMD-98-149
not be limited to the risks posed by the Year 2000-induced failures of

internal information systems, but must include the potential Year 2000

failures of others, including business partners and infrastructure service

providers.

• The Office of Management and Budget’s (OMB) assessment of the current

status of federal Year 2000 progress is predominantly based on agency

reports that have not been consistently verified or independently

reviewed. Without such independent reviews, OMB and the President’s

Council on Year 2000 Conversion have little assurance that they are

receiving accurate information. Accordingly, agencies must have

independent verification strategies involving inspectors general or other

independent organizations.

• As a nation, we do not know where we stand with regard to Year 2000

risks and readiness. No nationwide assessment—including the private and

public sectors—has been undertaken to gauge this. In partnership with the

private sector and state and local governments, the President’s Council

could orchestrate such an assessment.

Observations on

Interior’s Year 2000

Approach

Ensuring that information systems are made Year 2000 compliant is an

enormous, difficult, and time-consuming challenge for a large organization

such as the Department of the Interior. Interior’s systems support a wide

range of programs; unless they can function into the next century, the

department is at risk of being unable to effectively or efficiently carry out

its critical missions.

As the nation’s principal conservation agency, Interior has responsibility

for managing most of our nationally owned public lands and natural

resources, protecting our fish and wildlife, and preserving the

environmental and cultural values of our national parks and historic

places. The department’s core business processes could fail—in whole or

in part—if supporting information systems are not made Year 2000

compliant in time. These include systems that

• account for and disburse mineral royalties of about $300 million each

month,

• support the management of the nation’s lands and mineral resources,

• account for and maintain records on over $2.5 billion of American Indian

trust fund assets, and

• detect and analyze ground motion and provide early warnings of

earthquakes.

Page 4 GAO/T-AIMD-98-149
A detailed example of this kind of risk can be seen in recent work we

performed for the House Committee on Appropriations, Subcommittee on

Interior and Related Agencies, where we concluded that recent and

potential future delays in the Bureau of Land Management’s (BLM)

Automated Land and Mineral Record System (ALMRS) introduce the risk

that BLM will lose information systems support for some core business

processes. Two systems that ALMRS is scheduled to replace, the Case

Recordation System and the Mining Claim Recordation System, are

currently not Year 2000 compliant. BLM uses these two systems to create

and manage land and mineral case files. They capture and provide

information on case type, customer, authorizations, and legal descriptions.

Without these systems, BLM cannot create and record new cases, such as

mining claims, or update case information.

Delays in implementing ALMRS introduce the risk that BLM will be forced to

continue using these two systems beyond 2000. To mitigate this risk, BLM

has begun planning to ensure that these two systems can run in 2000 and

beyond, if necessary. BLM has not yet, however, completed its assessment

to determine what specific actions are needed to accomplish this, nor has

it developed a contingency plan to ensure the continuity of core business

processes in the event that ALMRS is not fully deployed by 2000. In a draft

report to be released soon, we are recommending that BLM assess the

systems to be replaced by ALMRS to determine what actions are needed to

ensure their continued use after January 1, 2000, and develop a

contingency plan should ALMRS not be fully and successfully deployed in

time.

Interior officials have stated that they recognize the importance of

ensuring that their systems are Year 2000 compliant. The Secretary has

said that identifying and correcting Year 2000 computer problems is a

priority, and the former Chief Information Officer called this challenge one

of the most serious operational and administrative problems the

department has ever faced. In assessing the magnitude of the problem, the

department’s bureaus and offices identified 95 mission-critical systems,10

with a total of about 18 million lines of software code, all of which must be

examined. Interior estimates that correcting these 95 systems will cost

$17.3 million, as shown in the following table.

10Interior defines mission-critical systems to be those that, when their capabilities are degraded, the

organization realizes a resulting loss of a core capability or life or property are threatened.

Page 5 GAO/T-AIMD-98-149
Table 1: Number of Interior

Mission-Critical Systems as of

February 1998 Component organization

Total number of

mission-critical systems

Estimated cost

to correct

Bureau of Indian Affairs 15 $5,545,000

U.S. Geological Survey 15 2,706,000

Office of the Secretary 11 2,503,000

National Park Service 2 2,310,000

Minerals Management Service 4 2,060,000

Office of Surface Mining 16 850,000

Bureau of Land Management 15 690,000

Bureau of Reclamation 16 439,000

U.S. Fish and Wildlife Service 1 246,000

Total 95 $17,349,000

Source: Department of the Interior. We did not independently verify these data.

In addition to these systems, the department is also assessing its

communications systems and embedded computer chip technologies to

determine whether they will be affected by the coming century change.

Embedded systems are special-purpose computers built into other

devices. Many facilities used by the federal government that were built or

renovated within the last 20 years contain embedded computer systems to

control, monitor, or assist in operations. If the embedded chips used in

such devices contain two-digit date fields for year representation, the

devices could malfunction. For example, control systems that regulate

water flow and generators in our nation’s dams, which produce over

42 billion kilowatts of energy each year, could fail.

Interior’s Year 2000 program operates in a decentralized fashion as its

bureaus and offices are responsible for identifying and assessing their

mission-critical systems, determining correction priorities, and making

their own mission-critical systems Year 2000 compliant. Departmental

oversight is provided by Interior’s Year 2000 Project Office. This office

reports directly to the Chief Information Officer.

The Year 2000 Project Team consists of a Year 2000 coordinator from the

department and a representative located in each bureau or office. The

bureaus and offices maintain information used to manage their Year 2000

activities. Bureau and office representatives submit monthly milestone and

status information to the coordinator, which he analyzes and compiles

manually. The coordinator tracks major milestones, such as systems

assessments completed, Year 2000 renovations completed, and systems

Page 6 GAO/T-AIMD-98-149
implemented. The information is forwarded to the Chief Information

Officer and, each quarter, to OMB.

According to Interior’s Year 2000 coordinator, he tracks the 95

mission-critical systems and maintains status information in a word

processing table that lacks the capability for automated tracking or

analysis. He stated that he notifies the Chief Information Officer of any

reported milestone delays, which are then discussed at senior-level

management meetings. Table 2 shows the status of the 67 mission-critical

systems that are being renovated, as reported to OMB on February 15, 1998.

(This table does not include the other 28 mission-critical systems, which

are considered already compliant or are being replaced.)

Table 2: Status of 67 Mission-Critical

Systems Being Renovated, as of

February 15, 1998

Assessment Renovation Validation Implementation

Number

Completed

67 32 22 19

Percentage

Completed

100% 48% 33% 28%

Source: Department of the Interior. We did not independently verify these data.

Accurate reporting is critical to ensuring that executive management

receives a reliable picture of the Year 2000 progress of component

organizations. This is particularly important at Interior, where much of the

Year 2000 program responsibility is delegated to the individual bureaus

and offices. Although the department relies on its bureaus to provide

monthly reports on the status of their Year 2000 renovation actions, to

date it has not verified the accuracy and reliability of the reported

information.

As the only staff member in Interior’s Year 2000 Project Office, the

department’s coordinator does not have the ability to verify the accuracy

of reported information on the bureaus’ and offices’ mission-critical

systems. Therefore, the Chief Information Officer requested that Interior’s

Inspector General assist in monitoring the progress of the individual

bureaus in achieving Year 2000 compliance.11 It is important to verify

because if the data are inaccurate, it will be more difficult to identify and

correct problems promptly.

11The Inspector General began reviews of the Bureau of Indian Affairs, National Park Service, and

Bureau of Reclamation in 1998; these are the department’s first attempts to verify the status of the

bureaus’ and offices’ Year 2000 efforts and management information.

Page 7 GAO/T-AIMD-98-149
Interior regularly exchanges data with other organizations. In many

instances, these data are critical to the department’s operations. In

response to a recent survey we conducted, Interior reported that 40 of its

95 mission-critical systems exchange electronic data with other federal,

state, and local agencies; domestic and foreign private sectors; and foreign

governments. Although the bureaus have identified over 2,900 incoming

and outgoing external data exchanges, the department does not have a

central inventory. While it has asked each bureau and office head to certify

that date-sensitive data exchanges have been identified and data exchange

partners contacted to begin resolving date-format issues, the lack of a

centralized inventory and an automated way to maintain it means that

Interior could be missing key information showing whether exchange

agreements are proceeding as scheduled. Failure to reach such

agreements raises the risk that Interior’s systems will receive

noncompliant data that can corrupt its databases.

The risk of failure is not limited to an organization’s internal information

systems, but includes the potential Year 2000 failures of others, such as

business partners. One weak link in the chain of critical dependencies and

even the most successful Year 2000 program will fail to protect against

major disruption of business operations. Because of these risks, agencies

must start business continuity and contingency planning now in order to

reduce the risk of Year 2000-induced business failures.

Interior has recognized, to some degree, the critical need for contingency

planning, and has asked its bureaus and offices to develop such plans for

all mission-critical systems that are behind schedule. However, it has not

instructed its component organizations to develop plans to ensure the

continuity of core business operations. As noted, agencies developing such

plans only for systems currently behind schedule are not addressing the

need to ensure business continuity in the event of unforeseen failures.

Further, such plans should not be limited to the risks posed by Year

2000-induced failures of internal information systems.

In conclusion, the change of century will initially present many difficult

challenges in information technology and continuity of business

operations, and has the potential to cause serious disruption to the nation

and to the Department of the Interior. These risks can be mitigated and

disruptions minimized with proper attention and management. While

Interior has been working to mitigate its Year 2000 risks, further action

must be taken to avoid losing the ability to continue mission-critical

business operations. Continued congressional oversight through hearings

Page 8 GAO/T-AIMD-98-149
such as this can help ensure that such attention continues and that

appropriate actions are taken to address this crisis.

Mr. Chairman, this concludes my statement. I would be happy to respond

to any questions that you or other members of the Committee may have at

this time.

Page 9 GAO/T-AIMD-98-149
GAO Reports and Testimony Addressing the

Year 2000 Crisis

Year 2000 Computing Crisis: Business Continuity and Contingency

Planning (GAO/AIMD-10.1.19, Exposure Draft, March 1998).

Year 2000 Computing Crisis: Strong Leadership Needed to Avoid

Disruption of Essential Services (GAO/T-AIMD-98-117, March 24, 1998).

Year 2000 Computing Crisis: Office of Thrift Supervision’s Efforts to

Ensure Thrift Systems Are Year 2000 Compliant (GAO/T-AIMD-98-102,

March 18, 1998).

Year 2000 Computing Crisis: Strong Leadership and Effective

Public/Private Cooperation Needed to Avoid Major Disruptions

(GAO/T-AIMD-98-101, March 18, 1998).

Post-Hearing Questions on the Federal Deposit Insurance Corporation’s

Year 2000 (Y2K) Preparedness (AIMD-98-108R, March 18, 1998).

SEC Year 2000 Report: Future Reports Could Provide More Detailed

Information (GAO/GGD/AIMD-98-51, March 6, 1998).

Year 2000 Readiness: NRC’s Proposed Approach Regarding Nuclear

Powerplants (GAO/AIMD-98-90R, March 6, 1998).

Year 2000 Computing Crisis: Federal Deposit Insurance Corporation’s

Efforts to Ensure Bank Systems Are Year 2000 Compliant (GAO/T-AIMD-98-73,

February 10, 1998).

Year 2000 Computing Crisis: FAA Must Act Quickly to Prevent Systems

Failures (GAO/T-AIMD-98-63, February 4, 1998).

FAA Computer Systems: Limited Progress on Year 2000 Issue Increases

Risk Dramatically (GAO/AIMD-98-45, January 30, 1998).

Defense Computers: Air Force Needs to Strengthen Year 2000 Oversight

(GAO/AIMD-98-35, January 16, 1998).

Year 2000 Computing Crisis: Actions Needed to Address Credit Union

Systems’ Year 2000 Problem (GAO/AIMD-98-48, January 7, 1998).

Veterans Health Administration Facility Systems: Some Progress Made In

Ensuring Year 2000 Compliance, But Challenges Remain (GAO/AIMD-98-31R,

November 7, 1997).

Page 10 GAO/T-AIMD-98-149
GAO Reports and Testimony Addressing the

Year 2000 Crisis

Year 2000 Computing Crisis: National Credit Union Administration’s

Efforts to Ensure Credit Union Systems Are Year 2000 Compliant

(GAO/T-AIMD-98-20, October 22, 1997).

Social Security Administration: Significant Progress Made in Year 2000

Effort, But Key Risks Remain (GAO/AIMD-98-6, October 22, 1997).

Defense Computers: Technical Support Is Key to Naval Supply Year 2000

Success (GAO/AIMD-98-7R, October 21, 1997).

Defense Computers: LSSC Needs to Confront Significant Year 2000 Issues

(GAO/AIMD-97-149, September 26, 1997).

Veterans Affairs Computer Systems: Action Underway Yet Much Work

Remains To Resolve Year 2000 Crisis (GAO/T-AIMD-97-174, September 25,

1997).

Year 2000 Computing Crisis: Success Depends Upon Strong Management

and Structured Approach (GAO/T-AIMD-97-173, September 25, 1997).

Year 2000 Computing Crisis: An Assessment Guide (GAO/AIMD-10.1.14,

September 1997).

Defense Computers: SSG Needs to Sustain Year 2000 Progress

(GAO/AIMD-97-120R, August 19, 1997).

Defense Computers: Improvements to DOD Systems Inventory Needed for

Year 2000 Effort (GAO/AIMD-97-112, August 13, 1997).

Defense Computers: Issues Confronting DLA in Addressing Year 2000

Problems (GAO/AIMD-97-106, August 12, 1997).

Defense Computers: DFAS Faces Challenges in Solving the Year 2000

Problem (GAO/AIMD-97-117, August 11, 1997).

Year 2000 Computing Crisis: Time is Running Out for Federal Agencies to

Prepare for the New Millennium (GAO/T-AIMD-97-129, July 10, 1997).

Veterans Benefits Computer Systems: Uninterrupted Delivery of Benefits

Depends on Timely Correction of Year-2000 Problems (GAO/T-AIMD-97-114,

June 26, 1997).

Page 11 GAO/T-AIMD-98-149
GAO Reports and Testimony Addressing the

Year 2000 Crisis

Veterans Benefits Computers Systems: Risks of VBA’s Year-2000 Efforts

(GAO/AIMD-97-79, May 30, 1997).

Medicare Transaction System: Success Depends Upon Correcting Critical

Managerial and Technical Weaknesses (GAO/AIMD-97-78, May 16, 1997).

Medicare Transaction System: Serious Managerial and Technical

Weaknesses Threaten Modernization (GAO/T-AIMD-97-91, May 16, 1997).

Year 2000 Computing Crisis: Risk of Serious Disruption to Essential

Government Functions Calls for Agency Action Now (GAO/T-AIMD-97-52,

February 27, 1997).

Year 2000 Computing Crisis: Strong Leadership Today Needed To Prevent

Future Disruption of Government Services (GAO/T-AIMD-97-51, February 24,

1997).

High-Risk Series: Information Management and Technology (GAO/HR-97-9,

February 1997).

(511458) Page 12 GAO/T-AIMD-98-149
Ordering Information

The first copy of each GAO report and testimony is free.

Additional copies are $2 each. Orders should be sent to the

following address, accompanied by a check or money order

made out to the Superintendent of Documents, when

necessary. VISA and MasterCard credit cards are accepted, also.

Orders for 100 or more copies to be mailed to a single address

are discounted 25 percent.

Orders by mail:

U.S. General Accounting Office

P.O. Box 37050

Washington, DC 20013

or visit:

Room 1100

700 4th St. NW (corner of 4th and G Sts. NW)

U.S. General Accounting Office

Washington, DC

Orders may also be placed by calling (202) 512-6000 

or by using fax number (202) 512-6061, or TDD (202) 512-2537.

Each day, GAO issues a list of newly available reports and

testimony. To receive facsimile copies of the daily list or any

list from the past 30 days, please call (202) 512-6000 using a

touchtone phone. A recorded menu will provide information on

how to obtain these lists.

For information on how to access GAO reports on the INTERNET,

send an e-mail message with "info" in the body to:

info@www.gao.gov

or visit GAO’s World Wide Web Home Page at:

http://www.gao.gov

PRINTED ON RECYCLED PAPER
United States

General Accounting Office

Washington, D.C. 20548

Official Business

Penalty for Private Use $300

Bulk Rate

Postage & Fees Paid

GAO

Permit No. G100