U.S. GOVERNMENT PRINTING OFFICE

63–868 CC WASHINGTON : 2000

Y2K: A THREAT TO U.S. INTERESTS ABROAD?

HEARING

BEFORE THE

COMMITTEE ON

INTERNATIONAL RELATIONS

HOUSE OF REPRESENTATIVES

ONE HUNDRED SIXTH CONGRESS

FIRST SESSION

THURSDAY, OCTOBER 21, 1999

Serial No. 106–92

Printed for the use of the Committee on International Relations

(

(II)

COMMITTEE ON INTERNATIONAL RELATIONS

BENJAMIN A. GILMAN, New York, Chairman

WILLIAM F. GOODLING, Pennsylvania

JAMES A. LEACH, Iowa

HENRY J. HYDE, Illinois

DOUG BEREUTER, Nebraska

CHRISTOPHER H. SMITH, New Jersey

DAN BURTON, Indiana

ELTON GALLEGLY, California

ILEANA ROS-LEHTINEN, Florida

CASS BALLENGER, North Carolina

DANA ROHRABACHER, California

DONALD A. MANZULLO, Illinois

EDWARD R. ROYCE, California

PETER T. KING, New York

STEVE CHABOT, Ohio

MARSHALL ‘‘MARK’’ SANFORD, South

Carolina

MATT SALMON, Arizona

AMO HOUGHTON, New York

TOM CAMPBELL, California

JOHN M. MCHUGH, New York

KEVIN BRADY, Texas

RICHARD BURR, North Carolina

PAUL E. GILLMOR, Ohio

GEORGE RADANOVICH, California

JOHN COOKSEY, Louisiana

THOMAS G. TANCREDO, Colorado

SAM GEJDENSON, Connecticut

TOM LANTOS, California

HOWARD L. BERMAN, California

GARY L. ACKERMAN, New York

ENI F.H. FALEOMAVAEGA, American

Samoa

MATTHEW G. MARTINEZ, California

DONALD M. PAYNE, New Jersey

ROBERT MENENDEZ, New Jersey

SHERROD BROWN, Ohio

CYNTHIA A. MCKINNEY, Georgia

ALCEE L. HASTINGS, Florida

PAT DANNER, Missouri

EARL F. HILLIARD, Alabama

BRAD SHERMAN, California

ROBERT WEXLER, Florida

STEVEN R. ROTHMAN, New Jersey

JIM DAVIS, Florida

EARL POMEROY, North Dakota

WILLIAM D. DELAHUNT, Massachusetts

GREGORY W. MEEKS, New York

BARBARA LEE, California

JOSEPH CROWLEY, New York

JOSEPH M. HOEFFEL, Pennsylvania

RICHARD J. GARON, Chief of Staff

KATHLEEN BERTELSEN MOAZED, Democratic Chief of Staff

RONALD C. CRUMP, Counsel

MARILYN C. OWEN, Staff Associate

(III)

C O N T E N T S

WITNESSES

Page

Richard C. Nygard, Chief Information Officer, U.S. Agency for International

Development ......................................................................................................... 3

John O’Keefe, Special Representative for the Year 2000, United States Department of State ................................................................................................. 5

Lawrence K. Gershwin, National Intelligence Officer for Science and Technology, Central Intelligence Agency ................................................................... 7

The Honorable Jacquelyn L. Williams-Bridgers, Inspector General, United

States Department of State ................................................................................. 13

Theodore Alves, Director, Assistant Inspector General for Audits, U.S. Agency

for International Development ............................................................................ 16

Linda D. Koontz, Associate Director, Accounting and Information Management Division, U.S. General Accounting Office ................................................. 17

APPENDIX

Prepared statements:

The Honorable Benjamin A. Gilman, a Representative in Congress from New

York and Chairman, Committee on International Relations ........................... 32

Richard C. Nygard, U.S. Agency for International Development ........................ 34

John O’Keefe, United States Department of State ............................................... 39

Lawrence K. Gershwin, Central Intelligence Agency ........................................... 47

The Honorable Jacquelyn L. Williams-Bridgers, U.S. Department of State ...... 57

Theodore Alves, U.S. Agency for International Development .............................. 70

Linda D. Koontz, U.S. General Accounting Office ................................................ 88

Additional material:

Public Announcement, Y2K Worldwide Notice dated January 29, 1999, from

the Office of the Spokesman, U.S. Department of State .................................. 109

Public Announcement, Y2K Worldwide Notice dated July 26, 1999, from

the Office of the Spokesman, U.S. Department of State .................................. 111

Y2K Sections of Consular Information Sheets (U.S. Department of State) ........ 113

Y2K Post Reporting Times (U.S. Department of State) ....................................... 137

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Y2K: A THREAT TO U.S. INTERESTS ABROAD?

House of Representatives,

COMMITTEE ON INTERNATIONAL RELATIONS,

WASHINGTON, D.C.

The Committee met, pursuant to notice, at 10:07 a.m. In Room

2172, Rayburn House Office Building, Hon. Benjamin A. Gilman

(Chairman of the Committee) Presiding.

Chairman GILMAN. The Committee on International Relations

will come to order.

Our Committee on International Relations has engaged in a comprehensive oversight of a number of issues affecting the foreign interests of our Nation and on the Administration’s policies that

identify and advance those interests.

In so doing, we have a further fiduciary duty to make certain

that the agencies charged with protecting and advancing our interests are themselves in the position to do so effectively. In meeting

our oversight responsibility in that regard, I have asked the U.S.

General Accounting Office to do a study of the readiness of our Department of State and our Agency for International Development

to meet any Y2K challenges when the year 2000 begins.

GAO was specifically requested to study three things: The first

was whether the State Department, through its leadership of the

President’s Year 2000 Council International Relations Working

Group, has an adequate strategy in place to assess and address

international year 2000 risks.

Second, we wanted GAO to ascertain whether the State Department has an adequate strategy in place to ensure the safety of

Americans overseas who may face risks from year 2000 failures.

Last, we need to answer the question of whether our U.S. Agency

for International Development has taken the necessary appropriate

steps to address with foreign nations whether year 2000 risks associated with information technology projects and systems that

USAID has funded.

We are here today to hear not only their report, but just as importantly, to ascertain on the record the Administration’s position

and views as to its readiness for problems that may come its way

because of the Y2K phenomenon. The Administration will now be

on the record as to its readiness.

It is important that we press for this status report and an accounting for any state of unreadiness by either State or USAID.

Now I will invite Mr. Gejdenson, our Ranking Minority Member,

to present any opening remarks that he may have.

[The prepared statement of Chairman Gilman appears in the appendix.]

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Mr. GEJDENSON. Thank you, Mr. Chairman. I commend you for

holding these hearings. Clearly we are going to be dealing with

Y2K issues long after January 1st, particularly for Americans overseas and for American national security. We may have more work

to be done on the Y2K issue in other countries than we do here at

home. I have seen the reports that State and USAID are well on

their way to dealing with the Y2K issues and commend both of

these organizations for their efforts here.

What concerns me is whether American officials overseas will be

in a position to help Americans who may find themselves in some

kind of jeopardy. Whether a medical device fails overseas, whether

countries overseas have failures in their cash machines, their

phone systems, will American embassies have the personnel in

place and the inclination to provide assistance to Americans who

are in trouble.

Of course, we are concerned about nuclear power plants and military systems, ballistic missiles and weapons of mass destruction in

other countries. I think one of the things we have to make sure we

focus on is that American expertise and Western European expertise is available, especially, to countries of the former Soviet Union

and some of the less developed countries to help these countries

deal with potential disasters. I am hopeful that the witnesses today

will give us some assurances in these areas, but particularly again

that we will have a system in place when an American citizen

shows up at an embassy, that the American embassy will be able

to help them, whether it is a medical or financial emergency where

the systems have not yet been adapted to deal with the Y2K crisis.

My son is now in Bolivia, and his girlfriend is in New York. She

happens to live in a part of New York that has an area code that

Bolivia still does not recognize. Now, he has been there for 3

months, and she can call him but he cannot call her. That is not

exactly an international crisis, but if we have somebody with a

medical emergency in a country where a Y2K problem has affected

the ability to communicate, that could be something that we must

be able to deal with.

So I hope we hear from the witnesses today on those matters.

Thank you very much.

Chairman GILMAN. Thank you, Mr. Gejdenson. This morning we

have two panels of three witnesses each. The first panel consists

of Mr. John O’Keefe, Special Representative for Year 2000, United

States Department of State; Mr. Richard Nygard, Chief Information Office for the U.S. Agency for International Development; and

Lawrence Gershwin, National Intelligence Officer for Science and

Technology, Central Intelligence Agency.

The second panel consists of Ms. Jacquelyn Williams-Bridgers,

Inspector General of the Department of State; Mr. Theodore Alves,

Assistant Inspector General for Audits, United States Agency for

International Development; and Ms. Linda Koontz, Associate Director, Accounting and Information Management Division at the U.S.

General Accounting Office.

Chairman GILMAN. We welcome all of our witnesses. Mr. Nygard,

you may open, but before we begin, you may put your full statement in the record and summarize. Without objection your full

statement will be made a part of the record. Mr. Nygard.

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Mr. NYGARD. Thank you, Mr. Chairman. I appreciate the opportunity to appear before you this morning to describe the response

of USAID’s to potential Y2K disruptions that may affect our agency’s systems, our programs, and the countries in which we operate.

As you suggested, I have submitted a written statement for the

record and will summarize it here.

Chairman GILMAN. Without objection.

STATEMENT OF RICHARD C. NYGARD, CHIEF INFORMATION

OFFICER, U.S. AGENCY FOR INTERNATIONAL DEVELOPMENT

Mr. NYGARD. I will cover three main topics: The condition of our

internal information systems, the steps we are taking to ensure our

programs and operations will continue into 2000, and third, the

work we are doing to prepare for possible humanitarian assistance

early next year.

First, on our internal systems, we have a total of seven missioncritical systems, two of which have been replaced. Of the remaining

five, four have been repaired and implemented. The fifth system,

USAID’s New Management System (NMS), is on schedule for completion at the end of this month. We are continuing to test the Y2K

readiness of our other noncritical agency systems. In repairing and

testing our systems, USAID’s prime systems contractor has used

sophisticated techniques for detailed measurement of Y2K progress

and comprehensive testing.

USAID is also working with our Inspector General and our prime

systems contractor to expand and improve technical discipline

throughout our information systems management. One important

effort in this area is documenting the results of Y2K testing. We

realize the importance not only of conducting the tests but also assuring that written records permit independent verification that

the testing was done. We have made significant progress and will

continue to seek improvements in this area.

Second, on business continuity planning, USAID is carrying out

three forms of such planning. First, formal planning for our critical

internal business systems; third, program assessments to assure

that ongoing USAID activities will continue after January 1st; and

3rd, external coordination with the Department of State’s contingency planning at each overseas’ post. Business continuity planning for our mission-critical systems focuses on critical financial

functions: payments, obligations, and funds control.

Starting last fall, USAID staff, supported by contractors, analyzed financial processes and ranked the importance of each process. Next, detailed work-around techniques for the business processes were identified. Manual procedures and local spreadsheet applications were developed to facilitate interim operations if disruption to normal operations occurs.

As of October 15th, all 44 of our overseas missions that perform

accounting functions for USAID reported that their rehearsals of

Y2K contingency plans for core financial functions are complete

and reported as successful by the mission controllers. All reported

no notable startup errors when fiscal 2000 operations were commenced in early October. Documentation of these rehearsals is still

in process.

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Second, while USAID cannot assure that each of the countries

where we operate won’t be affected by Y2K disruptions, we have

taken significant actions to assure program continuity after January 1st. Five percent of the fiscal 1999 development assistance and

child survival funding for each of our regional bureaus was set

aside to be used as necessary for Y2K Program repairs. Before the

funds could be used for purposes other than Y2K, the bureau assistant administrators had to affirm that all prudent steps had

been taken to make programs Y2K compliant.

The USAID Administrator met with each regional assistant administrator twice this year to discuss Y2K compliance and the continuity of mission and program operations. Heads of all bureaus indicated that necessary steps had been taken by the end of fiscal

1999 to assure continuity of program operations.

A number of actions were also taken to assist missions and programs in assuring program continuity. These included: performing

independent Y2K assessments on critical infrastructure and government systems in 50 countries; training program and host country managers on Y2K methodologies; making available contingency

planning consulting and workshops for embassies, missions, and

host countries; cooperating with other donors such as the World

Bank; participating in governmentwide international groups addressing the Y2K problem; and developing a Y2K management tool

kit, which I have a copy of here, to help system managers, government planners, business owners, and community readiness leaders

in the developing world. I will be prepared to talk about that more

in the question session if there is a desire to do so.

Externally, we are working with the Department of State’s Y2K

Committee under the authority of the chief of mission at each overseas post. Embassy Y2K Committees with the participation of

USAID mission staff continuously evaluate host nation Y2K readiness. To provide additional support of mission program and host

country Y2K issues, we have established Y2K resource centers in

Washington, Russia, Ukraine and Egypt and have developed business continuity and contingency plans at individual missions in Europe.

The third category is humanitarian assistance. I will summarize

that briefly. We have taken a number of actions to ensure that we

will be able to respond after the first of the year should the situation require it. We sent out a worldwide guidance cable. We have

improved our communications systems internally. We have worked

with our humanitarian assistance partners, PVO’s and others, to

ensure that they are Y2K compliant. We will keep our operations

center open 24 hours a day, 7 days a week at the beginning of January. We are making sure that strategically located stockpiles of

food, blankets, and emergency supplies are at capacity levels; and

we are working closely with the Department of State and the Department of Defense in preparing for activities that may happen

early next year.

We are concerned that the potential need for Y2K-related humanitarian aid coming on top of Kosovo, Central America, and the

ongoing African crisis may exceed the capacity of USAID and other

donors. We will do everything possible, but out resources are limited.

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In closing, Mr. Chairman, let me repeat that we at USAID, working with our colleagues at the Department of State and other Federal agencies and partners, have made major progress in assuring

that our people and our programs won’t be seriously affected by

Y2K. I cannot guarantee that there will be no disruptions because

of the conditions in the countries where we operate, but I believe

that the actions we and others have taken will provide the safety

of our people and the continuity of our programs.

Chairman GILMAN. Thank you.

[The prepared statement of Mr. Nygard appears in the appendix.]

Chairman GILMAN. Our next witness is John O’Keefe, Special

Representative for the Year 2000 from the United States Department of State. Mr. O’Keefe, you may summarize as you deem appropriate.

Mr. O’KEEFE. Thank you, Mr. Chairman. As you suggest, I will

summarize from the full testimony and submit that full testimony

for the record.

Chairman GILMAN. Without objection.

STATEMENT OF JOHN O’KEEFE, SPECIAL REPRESENTATIVE

FOR THE YEAR 2000, UNITED STATES DEPARTMENT OF STATE

Mr. O’KEEFE. Those working on the Y2K problem are confronted

with limited resources, limited time, imperfect information, and uncertainty regarding the scope and duration of its potential effects.

Despite these difficulties, the State Department has used its existing infrastructure and experience in crisis management and diplomacy to prepare for the potential impact of Y2K problems overseas.

We have not done this alone, however. Work on the international

aspects of the Y2K problem has truly been an interagency and multilateral cooperative effort as well as a public and private sector

partnership.

As reflected in the State Department’s Y2K preparations, one of

our highest priorities is ensuring the safety of Americans living

and traveling abroad, including our own employees. We have done

this by focusing our Y2K efforts in three key areas.

First, we have worked to make sure that our mission-critical systems all over the world are themselves Y2K compliant so that we

can continue to provide critical services to Americans overseas and

domestically. The Department has fully remediated and implemented 100 percent of its mission-critical systems deployed both

domestically and internationally.

Second, we have been coordinating closely with our missions

abroad to assure their continued safe operation despite any potential Y2K-related disruptions in the host country infrastructure. We

have taken similar backup precautions for our domestic facilities.

Third, we have conducted a dialogue and continue to cooperate

with other countries to encourage their efforts to prepare for Y2K.

The Department is in the process of exercising its remediated

systems to ensure that our business processes are maintained in

the event of any Y2K failures.

In addition to systems readiness, our posts have taken numerous

steps to assure that their core functions including the protection of

American citizens, can continue uninterrupted. We have used existVerDate 11-SEP-98 12:32 May 01, 2000 Jkt 000000 PO 00000 Frm 00008 Fmt 6633 Sfmt 6633 63868.TXT HINTREL1 PsN: HINTREL1
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ing emergency plans as a base and modified them to reflect some

of the unique challenges posed by Y2K. Preparations overseas have

followed a multiphased approach. In February 1999, all posts received a contingency planning tool kit to assist in their planning

for the rollover. Then in May 1999, all chiefs of mission certified

post readiness for the transition to the Year 2000 and identified resources required to ensure operational readiness. Based on this information, the Department prepared a request and received some

funding for generators and fuel in addition to the funds for systems

remediation.

The final critical element in the post contingency planning strategy is the contingency plan validation process. Using a web-based

tool organized by post business processes, posts are consolidating

previous tool kit responses, preexisting emergency planning, and

guidance from the department into a standardized format for a

Y2K contingency plan. By October 27th, posts will complete the

contingency plan validation process.

Preparation for our domestic facilities has been equally thorough.

The Department has inventoried operating equipment in all of our

buildings, 23,000 items from elevators to pumps, lights, fans, and

valves and verified reliability with manufacturers, with GSA, and

our own experts. Our preparation to ensure the safety of Americans

overseas who may face risks from Year 2000 failures has been extensive. Our efforts have focused on providing information to the

public, being open about our preparation, and ensuring backups for

key consular services.

The January, 1999 announcement to the public alerted traveling

Americans to the Y2K phenomenon in general. It was followed in

July with guidance for personal preparedness in areas such as

health-related issues and noted the inability of our missions to directly provide food, water, and shelter to the millions of Americans

abroad.

[The information referred to appears in the appendix.]

On September 14th, the Department issued updated consular information sheets for every country in the world. I am pleased to

provide you a summary of our country by country Y2K consular information sheet. Each sheet contains a section assessing potential

for disruptions, remediation efforts, and possible impact in a specific country. So our citizens are informed of potential risks.

[The information referred to appears in the appendix.]

Mr. O’KEEFE. At the end of October, we are anticipating issuing

strengthened consular information sheets for a small number of

countries which have not made the anticipated progress on their

remediation efforts. Furthermore, if any authorized departure decisions are made for nonemergency personnel at posts, the U.S. public will be notified in the form of a travel warning immediately.

Finally, if serious disruptions occur, we will prioritize consular

services to American citizens, focusing in particular on evacuations,

if necessary, medical emergencies, welfare and whereabouts inquiries, and deaths. We have coordinated with other agencies regarding

emergency services for Americans abroad during the rollover period.

Since time is up, I will just summarize the fact that the Department has successfully tested our reporting plan. This was the most

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comprehensive worldwide Y2K reporting exercise within the U.S.

Government and that in the international sphere, which you noted

in your opening remarks. The interagency working group on international matters is cochaired by the Department of State and the

Department of Defense, and we have been meeting regularly since

February 1999. It serves both to exchange information and to develop policy.

Our Members have been involved in a number of international

initiatives to mitigate the potential effects on Y2K on aviation safety, ports and maritime, nuclear power plants, small- and mediumsized businesses and operational readiness of our military forces

abroad.

Mr. Chairman, this concludes my testimony. Thank you for the

opportunity to speak to the Committee today. I will be happy to answer any questions the Members may have.

Chairman GILMAN. Thank you, Mr. O’Keefe.

[The prepared statement of Mr. O’Keefe appears in the appendix.]

Chairman GILMAN. We now proceed to Lawrence Gershwin, National Intelligence Officer for Science and Technology at our Central Intelligence Agency.

Mr. GERSHWIN. Thank you. Mr. Chairman and Members of the

Committee, I am pleased to have the opportunity today to provide

the Committee with the intelligence community’s latest assessment

of the status of foreign preparedness for Y2K. I will submit my full

statement for the record, and I will summarize the rest of it now.

Chairman GILMAN. Without objection.

STATEMENT OF LAWRENCE K. GERSHWIN, NATIONAL INTELLIGENCE OFFICER FOR SCIENCE AND TECHNOLOGY, CENTRAL INTELLIGENCE AGENCY

Mr. GERSHWIN. Our assessment is essentially a snapshot of the

current state of international preparedness for Y2K. As countries

continue their remediation, testing and contingency planning, and

as we get more information, some of our observations will change.

Y2K is a particularly challenging issue for analysis because of

the uneven understanding around the world of the vulnerabilities

of computer hardware and software, the unpredictability of failures

among interconnected systems, and the wide variation in reporting

and assessments of Y2K preparedness worldwide.

A quick tour around the world: Russia, Ukraine, China, and Indonesia are among the major countries most likely to experience

significant Y2K-related failures. Many developing countries are

having problems with a late start and with insufficient funds to

carry out a strong remediation and testing effort. Countries in

Western Europe are generally better prepared although we see the

chance of some significant failures in countries such as Italy. Major

economic powers such as Germany and Japan are making great

strides in Y2K remediation, but even for them their late start and

the magnitude of the effort suggests that even these countries are

at risk of some failures.

Canada, the United Kingdom, Australia, Singapore, and Hong

Kong are very well prepared and have a lower chance of experiencing Y2K failures.

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While the United States probably will not be directly impacted

by foreign Y2K failures, breakdowns in foreign infrastructure could

impact our interests overseas. Disruptions and failures in telecommunication, electricity generation, and transmission and transportation pose the greatest threat because of their fundamental importance to all other critical services. Although a high priority for

most countries, we estimate that only a few are on target in remediating and testing their telecommunications systems. Networks

are likely to experience problems ranging from minor inconveniences to serious disruptions.

Experts are concerned that minor failures could cascade causing

a network to become degraded over time. We are concerned about

the safety of Soviet-designed nuclear plants due both to inherent

design problems and to the lack of detailed data on Y2K remediation and contingency plans. Nonetheless, we judge that the chance

of a nuclear accident on the scale of Chernobyl is extremely low.

The chance of a lower level nuclear incident involving a Soviet-designed nuclear reactor is also low; but it is, however, higher than

normal because of the fact that the power grid could experience

failures, auxiliary generators could be inoperable due to maintenance problems or a lack of sufficient fuel, and erroneous data

could lead to operator error.

Now we are highly confident that Y2K failures will not lead to

the inadvertent or unauthorized launch of a ballistic missile by any

country. We have been concerned about the potential for Russia to

misinterpret early warning data because of Y2K-induced failures,

especially if we were in a period of increased tension brought on

by some international political crisis. However, Russia has agreed

to cooperate with the United States on shared early warning data

in order to prevent any misunderstandings resulting from Russian

early warning failures.

Public behavior in response to Y2K-generated failures will vary

widely. In developing countries, populations have minimal access to

Y2K-vulnerable public services, and those who do are accustomed

to frequent breakdowns. But countries with crowded, urban populations could experience significant unrest if outages are prolonged.

The reactions of urban populations in developed countries are harder to gauge because of widespread media attention and high public

awareness of the issue. We expect that the risks of panic are higher

in countries with lower interest in Y2K.

We are, for example, concerned about possible Y2K-related interruptions in countries planning major tourist events such as Italy,

Egypt, Brazil, and the Caribbean, should local infrastructures experience significant failures.

Y2K-related malfunctions have the potential to cause or exacerbate humanitarian crises through prolonged outages of power and

heat, breakdowns in urban water supplies, food shortages, degraded medical services, and environmental disasters resulting

from failures in safety controls. Russia, Ukraine, China, Eastern

Europe, India, and Indonesia are especially vulnerable due to their

poor Y2K preparations and, in some cases, the difficulty of coping

with breakdowns in critical services in the middle of winter.

Few governments outside the West would be capable of managing widespread humanitarian needs. Although many have sysVerDate 11-SEP-98 12:32 May 01, 2000 Jkt 000000 PO 00000 Frm 00011 Fmt 6633 Sfmt 6633 63868.TXT HINTREL1 PsN: HINTREL1
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tems experienced in delivering medical and social services following

natural disasters, Y2K failures present a more complex challenge

because of the potential for multiple and simultaneous disasters

within specific countries and around the world taxing the ability of

international organizations to help.

Y2K failures in necessary communications system and in needed

medical and social service would compound difficulties in mobilizing emergency responses. We have seen, in different months, an

increasing number of statements by countries and commercial enterprises that they are now prepared for Y2K. We expect to see

more such claims as the end of the year approaches. While progress

has certainly been made on many fronts, not all of these readiness

claims are credible, and it is a challenge for us to sort out the

truth. Some governments and commercial enterprises have an incentive to overstate the Y2K problem while others are likely to

downplay the risks of Y2K failures.

We are continuing to focus heavily on this evolving issue to ensure that our policymakers are as prepared as possible for the potential consequences for the United States and our allies of international Y2K failures. Thank you, Mr. Chairman.

Chairman GILMAN. Thank you Mr. Gershwin.

[The prepared statement of Mr. Gershwin appears in the appendix.]

Chairman GILMAN. Our panelists have certainly given us some

food for thought. Let me start the questioning, and this is directed

to our State Department representative, Mr. O’Keefe. GAO has reported that it has not seen well-documented and thoroughly tested

Y2K emergency plans in place for overseas embassies, consulates,

and missions.

Mr. O’Keefe, what assurance does the Department of State have

that these posts can continue to perform key operation during the

rollover, including providing services and information to Americans

who live outside of our embassy confines?

Mr. O’KEEFE. Mr. Chairman, as I mentioned in my testimony, we

have based the preparations for Y2K on existing procedures. As

you well know, our embassies, throughout the years, have experienced earthquakes, civil disturbance, bombings, civil war, and we

manage crises on a regular basis. In any particular year, we have

20 to 30 task forces for whatever emergencies that occur. So it is

something that we do regularly.

But just to provide you the kinds of assurances which I think you

and the American public deserve, I would note, first of all, that we

have done crisis management exercises with Y2K, as part of that,

at over 90 embassies already this year to make sure that they have

their emergency plans ready and take into account Y2K problems.

Beyond that, as I had also mentioned, because GAO had pointed

out that we had not well-documented the contingency plans and

how they were going to function, we have instituted this validation

process which embassies have to provide to us by the end of this

month. Then by November 11th, we will have reviewed and provided comments back.

Chairman GILMAN. Thank you, Mr. O’Keefe. Has the Department

distributed any extra resources to help the posts prepare for any

possible Y2K failures?

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Mr. O’KEEFE. Yes, sir, we have provided approximately $6 million for generators. We will also be providing another million for

fuel. So that will allow all the posts abroad to operate for a minimum of 15 days should the local power grid fail. That will in turn

allow us to communicate, will allow us to provide those essential

services to U.S. citizens and continue the command and control

function.

Chairman GILMAN. Thank you. Mr. Nygard, with regard to

USAID, according to the 10th quarterly report that was issued

mid-September of this year, six of AID’s seven mission-critical systems are Y2K compliant. When will the New Management System

be remediated, tested independently, validated, and certified as

Y2K compliant? Are there any contingency plans for NMS if it is

not Y2K compliant by the turn of the century?

Mr. NYGARD. Mr. Chairman, as I indicated in my testimony, we

are in the very final stages of testing the NMS, and we expect it

will be fully implemented by the end of this month—that is to say

within another week and a half. We do not anticipate the need for

contingencies, but the financial contingency plans that we have and

that I described in some detail would cover the NMS as well as our

other management systems should there be a failure. So we do not

anticipate a problem and expect to have NMS fixed by the end of

this month.

Chairman GILMAN. Thank you, Mr. Nygard. Mr. Gershwin, any

special arrangements with your station chiefs overseas to make

certain that communications won’t be disrupted?

Mr. GERSHWIN. Obviously I cannot talk about all of that in an

open session; but, yes, our own presence overseas is being worked

very carefully for Y2K. We are thoroughly involved with helping

with the embassy preparations themselves.

Chairman GILMAN. Thank you. Mr. Nygard, one more question.

Why does only one mission in AID, Cairo, have a Y2K contingency

plan? What assurances does AID have that its overseas missions

are ready for Y2K and can continue to perform any critical assistance operations?

Mr. NYGARD. Mr. Chairman, while Cairo is the only mission that

has a formally documented contingency plan, we do have contingency plans in all of our overseas operations. The levels of these

have varied based on the size and complexity of the programs. As

you know Egypt is our largest mission and our largest program.

We have also done very detailed contingency plans in most of Eastern Europe and the former Soviet Union. For our other missions

in Africa, Asia, and Latin America, similar kinds of contingency

plans have been done, but not documented and not done in the detail that Cairo has been done.

Chairman GILMAN. Thank you, Mr. Nygard. Mr. Hastings.

Mr. HASTINGS. Thank you, Mr. Chairman. In a country like Pakistan that is recently in turmoil, has nuclear facilities, and we have,

at least up to a certain point, had interaction with them, what, if

anything, are we able to do or are we doing, taking into consideration that kind of government that is in a state of flux?

Mr. O’KEEFE. Mr. Hastings, we do obviously continue to have

diplomatic relations with Pakistan; we do have our Ambassador

there. One of our goals is stability. We do have certain legal restricVerDate 11-SEP-98 12:32 May 01, 2000 Jkt 000000 PO 00000 Frm 00013 Fmt 6633 Sfmt 6633 63868.TXT HINTREL1 PsN: HINTREL1
11

tions because of the nuclear testing that both Pakistan and India

conducted, so we cannot provide direct assistance to those governments. However, we can, through diplomatic means, continue the

dialogue on the issue of safety and security of those weapons that

they do have.

Mr. HASTINGS. Let me ask you two quick questions. What are the

United States Government’s greatest concerns for American citizens, both tourists and those living abroad? How successful have

you been in convincing foreign governments of the seriousness of

the Y2K problem? How closely have they worked with us, and

which countries have done best and which have been the least responsive?

Mr. O’KEEFE. Sir, I would say that when you take a look across

the spectrum of potential problems that, first of all, electric power

grids tend to be a little more sensitive; and if you are in a cold

country, that presents a little more problem. But for U.S. citizens

abroad, probably the most difficult sector to get into and to fix is

the medical sector. Because of that, we have instructed our embassies to consult doctors, hospitals, ambulance services, and local authorities regarding their contingency plans. We have an outreach

strategy to the American public to tell them that if you have a

medical condition, especially if you rely on electrical medical devices, you should be very careful about where you are going to travel.

With regard to heightening awareness of other countries, as I

said at the beginning, it certainly is not a lone wolf effort. We have

worked with the President’s Council in Year 2000, with the U.N.

through the G8, through APEC, through OAS, all of these international organizations to heighten awareness. It really has been

quite a difference from the time I started on this about this time

last year to right now. There is not only more awareness but there

has been a lot more remediation and certainly a lot more contingency planning. In terms of worst and best, I wouldn’t want to

characterize one way or another.

Mr. HASTINGS. Mr. Gershwin, regarding nuclear power plants,

even if Y2K does not cause them to fail and pose a danger, some

of us are concerned about the synergistic effect of Y2K disruptions

to emergency response infrastructures that would have to deal with

a nuclear plant accident. Many states that have the old Soviet-designed reactors don’t have the best safety culture or emergency

plans in the best of times. Is there a risk? If there is a problem

with a plant, that problem could become magnified by Y2K disruptions of emergency responders. Do countries like Ukraine have

enough backup generators and fuel necessary for the remediation

that I keep hearing about.

Mr. GERSHWIN. The issue that you raise is clearly the issue of

the day for that part of the Y2K problem. We, both the U.S. Government and international bodies, have been very active in the

former Soviet Union and in a variety of countries, working with the

operators of nuclear reactors on surveying their Y2K preparedness,

surveying the adequacy of their backup, the adequacy of fuel and

so on.

The issue has gotten a great deal of attention this year, and

there has been a very good response, in fact, from both the RusVerDate 11-SEP-98 12:32 May 01, 2000 Jkt 000000 PO 00000 Frm 00014 Fmt 6633 Sfmt 6633 63868.TXT HINTREL1 PsN: HINTREL1
12

sians and some of the other countries that have these reactors. The

Department of Energy has been active, as well as the International

Atomic Energy Agency. A great deal of attention is being paid to

it. The problem is that these are necessarily very complex facilities

that they operate in order to provide power. So, yes, as I indicated

in my statement, there is concern about this. We don’t think the

chances are very high that anything very serious will take place.

But there is somewhat greater risk just because of the interaction

with the Y2K problem, particularly if power goes off and they have

to start dealing with contingencies for which there hasn’t been

enough time to prepare.

Mr. HASTINGS. One very brief question, and maybe some of you

can give me a followup and not bother to respond right now; but

when the rollover occurs, some of us are wondering when do we

consider that there will be quietus? Assuming everything goes well

all over the world, when will it stop? I will get that answer from

you subsequently.

My bigger question for government is, have we prioritized in a

coordinated manner specific areas of specific countries that, if they

went down, would adversely affect United States interests? Toward

that end, Mr. O’Keefe, I heard you mention task forces. Are they

being regionalized such that they are positioned to move where the

problem may exist, and are there plans to anticipate where the

greatest problems might exist?

Mr. O’KEEFE. Mr. Hastings, we have done this process of identifying countries where there was a fairly high potential for failure

and also U.S. interests which could be affected by those failures,

and this has been a process which has been ongoing since February.

Yes, we have. I can, in broad terms, say that areas where we do

have U.S. forces stationed are obviously very key to our national

interest and our security. Areas where we have a lot of U.S. citizens residing, they also are places where we are very concerned.

With regard to task forces, we have a rollover task force; and in

that task force, we have regional representatives from each area of

the world. In addition, we have the functional groups political, military bureau, the consular affairs bureau, and some that usually

don’t join in, like our financial management and planning to make

sure that we can keep functioning in terms of payment and that

sort of thing.

The way it would work would be if, in fact, we have a crisis

point. Let’s say our reporting would start at 7 a.m., December 31st

from Fuji and New Zealand. As it rolls through, if we see a crisis

point at that time, we will have the regional representative, and

we would bring in more people. We would also coordinate very

closely with the Department of Defense. Because, as this issue develops, I think that we are going to have a problem of resources.

We would want to make sure that we rope everyone in, FEMA, Defense, domestic agencies.

Mr. HASTINGS. Thank you, Mr. Chairman. I am going to go vote.

Chairman GILMAN. Thank you, Judge Hastings. We will probably

try to continue. We have asked one of our Members to go over now

and we will continue with our hearing. I want to thank our panelists for being here with us this morning and giving us important

13

information with regard to our preparations for the Y2K. The panel

is dismissed, and we thank you again for your patience.

We will now proceed to panel No. 2. The second panel, as I indicated earlier, consists of Ms. Jacquelyn Williams-Bridgers, Inspector General, Department of State; Theodore Alves, Assistant Inspector General for Audits for U.S. Agency for International Development; and Ms. Linda Koontz, Associate Director, Accounting and

Information Management Division of the United States General Accounting Office.

If our panelists would be kind enough to take their places at the

witness table, we will proceed. I welcome our panelists and again

remind them that they may put their full statement in the record

and summarize as they deem appropriate.

I will have to temporarily put the panel in recess until Mr. Burr

returns; he is on his way back, so if you would just stand by, thank

you.

[Recess.]

Mr. BURR. [presiding] The hearing will come back to order. At

this time I think we have called up the second panel, and I apologize for votes and hopefully that will be the last interruption that

we will have. I am sorry that I did not have an opportunity to ask

questions of the first panel, so I will try to use those that were appropriate and maybe ask the second panel double questions. Let

me at this time welcome the Honorable Jacquelyn WilliamsBridgers, Inspector General, United States Department of State;

Mr. Theodore Alves, Director Assistant Inspector General for Audits United States Agency for International Development; Ms.

Linda Koontz, Associate Director Accounting and Information Management Division United States General Accounting Office.

Mr. BURR. Welcome to all three of you. We will start with Ms.

Williams-Bridgers. You are recognized for an opening statement.

Ms. WILLIAMS-BRIDGERS. Thank you very much, Mr. Burr, for

the opportunity to testify before this Committee on the results of

our most recent analysis of global Y2K preparedness. My statement

will address the OIG’s oversight of Y2K remediation efforts by

countries that host our embassies and consulates and by the U.S.

Department of State.

With the permission of the Chair, I will provide a summary of

my statement and request that the full statement be made a part

of the record.

Mr. Burr. All full statements will be.

STATEMENT OF THE HONORABLE JACQUELYN L. WILLIAMSBRIDGERS, INSPECTOR GENERAL, UNITED STATES DEPARTMENT OF STATE AND THE BROADCASTING BROAD OF GOVERNORS

Ms. WILLIAMS-BRIDGERS. Thank you. Over the past year, our

work has revealed some key themes. Industrialized countries are

well ahead of the developing world in their readiness to meet the

Y2K challenge. Developing countries are generally lagging behind

and are struggling to find the financial and technical resources

needed to solve their Y2K problems, especially in the telecommunications, transportation, and energy sectors. Key sectors in the

Newly Independent States and other former Eastern bloc nations

14

are a concern because of the relatively high probability of Y2K related failures. Our assessments have suggested that the global

community will likely experience varying degrees of Y2K-related

failures in key sectors such as energy, telecommunications, and

transportation in every region and at every economic level.

We are also assisting the Department in certification of its mission-critical systems’s compliance with Y2K requirements by ensuring that every feasible step has been taken to prevent Y2K failures.

We will review the adequacy of documentation for all mission-critical systems’ certification packages which, by agreement with

Under Secretary for Management Bonnie Cohen, must pass

through OIG before submission for Y2K certification. OIG has evaluated one half of the 54 mission-critical certification packages prepared to date.

In this statement, I will discuss the results of recent OIG visits

to a number of countries to assess their Y2K readiness, the need

to better inform the public about host country readiness and potential disruptions of services and, last, the need for a post-Y2K assessment in order to identify lessons learned and best practices

that may be applicable to government agencies and private sector

organizations.

Over the past year and a half, my office has actively engaged

with our embassies and host country government and industry representatives to establish venues for information sharing and cooperation. To give you a sense of our visits over the past 2 months:

In Saudi Arabia, we found that the Saudi petroleum sector began

its Y2K efforts in 1994 and has since completed remediation, testing and certification of its systems. Saudi Arabia has one of the

most advanced telecommunications systems in the world and will

reportedly be 100 percent compliant by the end of this month.

In Egypt, our government is strongly supporting the Egyptian government’s Y2K Program. This effort includes nearly $16 million

in U.S. assistance targeting, among others the power, telecommunications, health, water, wastewater, and civil aviation sectors. The

Suez Canal Authority says that it will keep the canal clear of ships

from around 11 p.m. on December 31st through the early morning

hours of January 1st. During this transition period, canal pilots

will inspect shipboard navigation and other systems of transiting

vessels.

In Nigeria, infrastructure is not heavily dependent on computers

and thus is not at a high risk of failure due to Y2K. Much of the

emphasis on Y2K remediation in Nigeria has centered on the banking and petroleum sectors. The latter appears to be the best prepared.

In South Africa, we learned that their efforts have focused on six

potentially high risk areas including electricity, water, communications, and health services. The biggest problem is that Y2K-related

disruptions in other African countries might result in an influx of

refugees similar to that which occurs when there is political instability in the region. But the government is prepared to deal and

monitor with such developments.

While in South America we visited Brazil, which has made good

progress in the Y2K Program in the areas of banking and finance,

electricity, and communications. There is less certainty about the

15

Y2K readiness in two key areas: Water sewage, wastewater treatment is one; the second, small- and medium-sized businesses. Although these businesses are suffering the effects of an economic recession in Brazil they remain a critical link in its trade network

and account for approximately 70 percent of the nation’s economy.

Yet small- and medium-sized businesses have generally gotten off

to a very late start in their Y2K efforts.

A critical step in fully addressing the Y2K challenge over the

next several weeks will be to get what we know about country

readiness into the hands of U.S. citizens. The Department’s recently issued consular information sheets serve as a useful tool to

provide critical information to U.S. citizens. However, based on a

review of sample information sheets my office has concerns about

their adequacy. Some of the information sheets are too vague, contain too much boilerplate language, and do not fully capture the

scope and content of the Y2K information collected by our overseas

posts.

We recognize that in many countries information concerning the

level of Y2K readiness is sensitive given the potential impact that

Y2K might have on the country’s economy, its reputation, and even

its internal political stability. Nonetheless, so that Americans can

make informed decisions about where they plan to be on December

31st, we recommend that the Department release additional information on country readiness as it becomes available.

Before closing, I would like to turn to the matter of what happens after Y2K, assuming the worst case scenarios do not come to

pass. By January 1st, organizations around the world will have

spent hundreds of billions of dollars to resolve the Y2K problem.

Given this cost and the disruption that Y2K has produced over the

past 2 years, we have to ask ourselves what have we gained from

this investment besides the ability to continue operations as usual?

The other question is how can we avoid the next Y2K-like technology glitch?

I would suggest that we have much to learn from the Y2K experience. Indeed, the collective efforts of both public and private sector organizations worldwide to resolve the Y2K problem may provide some important lessons, including best practices that may be

applicable both to government and industry. My office is planning

to address these issues over the coming year, and we would welcome any suggestions that the Committee might have to offer.

In conclusion, between now and the end of the year, the Department faces a difficult challenge of maintaining the momentum that

it has developed and keeping the world focused on the Y2K problem. While much progress has been made by a large part of the

international community to prepare for Y2K and to develop contingency plans, much of this effort will be for naught if complacency

is allowed to take hold. The Department has a clear role to play

over the next 2 months through its efforts to continue to fine tune

its own contingency plans, to collect information on host country

Y2K readiness, and to assure the American public is adequately informed about global Y2K readiness.

That concludes my summary statement, and I will await questions at the appropriate time.

16

[The prepared statement of Ms. Williams-Bridgers appears in the

appendix.]

Mr. BURR. The Chair will recognize Mr. Alves.

STATEMENT OF THEODORE ALVES, DIRECTOR, ASSISTANT INSPECTOR GENERAL FOR AUDITS, U.S. AGENCY FOR INTERNATIONAL DEVELOPMENT

Mr. ALVES. Thank you, Mr. Burr, for the opportunity to testify

before this community about our oversight of USAID’s efforts to address Year 2000 challenges. As you suggested, I will summarize my

prepared testimony highlighting the most significant issues.

My testimony today focuses on USAID management efforts to

prepare business continuity and contingency plans. To summarize,

our audits have found that after a slow start, USAID has made significant progress to mitigate the risks posed by Y2K. However, our

work also shows that USAID has not prepared contingency plans

for some important development activities. As a result, it faces increased risks that it could encounter disruptions that would limit

its ability to continue providing humanitarian aid and development

assistance. This situation exists primarily because USAID has not

clearly assigned responsibility and authority for developing contingency plans.

Before I describe our audit results, I would like to highlight some

important USAID efforts to address the international implications

of Y2K. These include developing contingency plans for its financial

management operations, conducting detailed assessments of about

50 USAID missions, and creating tools to help developing countries

address Y2K challenges.

Regarding prior OIG audit results, we have issued several reports and other products that have helped USAID management

focus its attention to Y2K issues. In July 1997, we reported that

USAID had not implemented GAO’s suggested practices for addressing Y2K issues. In addition to implementing several specific

recommendations, USAID committed, at that time, to follow GAO’s

guidance in its Y2K efforts.

In September 1998, we reported that USAID had strengthened

its program but that it had not completed some important assessment phase activities. We recommended that the Administrator

clearly assign responsibility to implement an effective program and

that the responsible official direct USAID bureaus and missions to

develop and test contingency plans. USAID agreed to implement

our recommendations, but has yet fully done so. As a result the actions taken did not fully correct the problems.

We also devoted resources to ensure that USAID considered the

impact of Y2K problems could have on developing countries.

Regarding contingency planning, our current work shows that

USAID faces increased risks of encountering disruptions to its development assistance programs because bureaus and missions have

not completed contingency plans. We found that USAID did not follow GAO’s guidance for three of the four business areas we reviewed. Only the Office of Financial Management had prepared a

contingency plan.

My prepared testimony includes three examples of bureaus and

offices that are at risk because they have not prepared contingency

17

plans. Responsible officials were relying on an expectation that existing procedures would be adequate. One official told us that he

did not think Y2K would create significant problems. Given the

risks involved and USAID’s prior commitment to complete plans,

these responses were disappointing.

The problem occurred primarily because USAID has not clarified

responsibility to ensure that contingency plans are completed as we

had previously recommended. According to a senior USAID official,

the Administrator met with the head of each bureau to emphasize

the importance of completing contingency plans and subsequently

received assurance that the bureaus had adequate plans in place.

Although this action partially addressed the recommendations, it

did not correct the problem because USAID did not identify a single manager to be responsible and held accountable for ensuring

that plans were completed.

Because little time remains to prepare for Y2K disruptions, we

believe USAID needs to focus now on completing contingency plans.

Specifically, USAID needs to make a senior executive responsible

and accountable and require bureaus and missions to prepare contingency plans for their development assistance program functions.

In conclusion, Mr. Chairman, USAID has made significant

progress addressing the Y2K challenge but needs to now focus its

attention to developing business continuity and contingency plans

in order to ensure that its important humanitarian and development assistance activities will not be disrupted.

This concludes my remarks, and I will be pleased to answer any

questions you or other Members of the Committee may have.

Mr. BURR. Mr. Alves, thank you for your testimony.

[The prepared statement of Mr. Alves appears in the appendix.]

Mr. BURR. I am going to quickly go back and reread some testimony from the group before this. Is Mr. Nygard still in the room?

I will assure you, from some of the things that I heard you say,

he is going to have another opportunity to come back up here.

The Chair recognizes Ms. Koontz.

STATEMENT OF LINDA D. KOONTZ, ASSOCIATE DIRECTOR, ACCOUNTING AND INFORMATION MANAGEMENT DIVISION, U.S.

GENERAL ACCOUNTING OFFICE

Ms. KOONTZ. Thank you, Mr. Burr, I appreciate the opportunity

to participate in today’s hearing on State and USAID’s efforts to

address the Year 2000 technology problem. I would like to summarize my statement briefly.

We have already heard from both State and USAID on the positive steps they have taken to increase worldwide awareness of the

Y2K problem, assess international preparedness, and inform American citizens of Year 2000 related risks. Further, you have heard

of USAID’s efforts to mitigate Year 2000 risks associated with

USAID-funded development projects.

Based on our review, we believe that State and USAID generally

have reasonable strategies in place to deal with these issues. However, they have been much less effective in the area of business

continuity and contingency planning, and I would like to spend the

balance of my time focusing on this issue.

18

Despite extensive remediation and testing of mission-critical systems by State and USAID, there is a very real possibility that

problems may occur in the millions of lines of code that were fixed

or in overlooked embedded chips or commercial products. In addition, outside systems that exchange data with these agencies or infrastructure services like power or telecommunication may fail.

These risks, coupled with the risk of Year 2000-related failures in

foreign countries, mandate that these agencies develop comprehensive business continuity and contingency plans to ensure that core

business processes can be continued both domestically and internationally. GAO has developed guidance on this topic, and OMB

has adopted it as the standard to follow.

As required by OMB, State developed an enterprise-wide business continuity and contingency plan in June, 1999. However, we

found that State’s plan does not follow the mission-based approach

which we recommend. For example, the plan does not identify

State’s core business processes or the minimum acceptable level of

service for these processes during an emergency, and it does not

identify the impact of the failure of mission-critical systems on core

business processes.

In addition, the plan didn’t indicate when or how State will test

and evaluate its plan. As such, we do not believe this plan provides

adequate assurance that the department is prepared to continue

critical business functions in the face of Year 2000 failures. State

officials told us that they plan to complete Department-wide contingency plan testing around mid-November, 1999. In addition, according to State officials, they will be issuing a revised plan next

week which they believe will meet all the OMB requirements. However, we have not yet had a chance to review this revised plan.

Also, because of the varying conditions around the world, State

also required that each embassy and consulate develop a business

continuity and contingency plan. To assist, State developed a Y2K

contingency plans tool kit in early 1999. The tool kit provided an

appropriate and detailed methodology for identifying critical business processes, assessing Year 2000 related risks, linking the many

existing emergency procedures the embassies already to have to

Year 2000 failure scenarios, and identifying any additional resources that would be needed.

We reviewed the tool kit submissions prepared by ten embassies

located in countries that were of particular interest to this Committee and found that all were incomplete. Although most of the

submissions identified critical business processes as well as additional required resources, only two linked existing contingency procedures to Y2K failures or identified any additional procedures that

would be needed. Further, there was no evidence that any of the

plans had been tested.

Without the kind of thorough analysis called for in State’s tool

kit, there is no assurance that embassies and consulates are fully

prepared for Y2K failures. State officials, however, have been responsive to our concerns and have developed a web-based tool that

will be used to review and evaluate contingency plans at each post.

They expect this validation to be completed by November 11th.

Let me briefly turn to USAID. You have already heard from a

representative of USAID’s Office of Inspector General, who gave a

19

detailed assessment of the agency’s Y2K business continuity and

contingency planning efforts. We also reviewed USAID’s enterprisewide business continuity and contingency plan dated June, 1999.

We found that USAID’s plan is incomplete and found little evidence that the GAO methodology was followed. Furthermore, only

one mission, Cairo, has prepared a Year 2000 contingency plan for

its specific location. USAID officials stated that despite the absence

of documented plans, some business continuity and contingency

planning activity has been under way. However, they could not

validate the extent to which the planning activity had actually occurred.

Given the results of our and the IG’s work, we are very concerned about USAID’s ability to sustain its core business functions

during the rollover and protect its overseas personnel from Year

2000-related failures.

In conclusion, in the remaining days ahead, State and USAID

will need to marshal their resources, strengthen their business continuity and contingency plan to help mitigate Year 2000 related

failures and work toward maximizing assurance that they can perform their core business functions and maintain their overseas

business operations during the rollover.

This concludes my remarks, and I am happy to answer any questions that you might have.

[The prepared statement of Ms. Koontz appears in the appendix.]

Mr. BURR. Thank you, Ms. Koontz. Thank you to all of our witnesses. I am going to turn the clock off, since it is just the Chairman and me. I think he has to take a phone call.

Let me start with you, Ms. Koontz. Is it safe to say that any

agency that is focused on compliance as a new aspect of what they

are doing should realize that it is too late and that that effort could

best be spent on contingency?

Ms. KOONTZ. Are you talking specifically about the State Department or just in general?

Mr. BURR. I am talking about in any area where they have not

identified a problem or are currently working on a solution to a

problem, is it not too late? Don’t we need to be more concerned

with the contingency?

Ms. KOONTZ. Absolutely at this late date, we are about 2 months

away from the Year 2000. At this point, the best bet is to concentrate even more greatly on contingency planning.

Mr. BURR. In your estimation as it relates to State, how far do

we have to go before we can have contingency plans for all areas

that we should?

Ms. KOONTZ. Although we found some deficiency in both the enterprise-wide and embassy plans, I think that if the State Department follows through with what they have told us that they were

going to do, that is to validate the embassy plans and draft a new

enterprise-wide plan, I believe that they will be able to complete

these efforts in time.

Mr. BURR. Ms. Williams-Bridgers, if I understood you correctly,

you said that the Inspector General’s Office has had an opportunity

to review one half of the mission-critical package.

Ms. WILLIAMS-BRIDGERS. That is correct.

Mr. BURR. What is the timeframe for the second half?

20

Ms. WILLIAMS-BRIDGERS. We are hopeful that the Department

will present the certification packages to us so that we can complete our review of those packages prior to the end of the year.

Mr. BURR. So the holdup is not on the part of the Inspector General looking at the packages; it is on the part of State’s supplying

the package?

Ms. WILLIAMS-BRIDGERS. We have reviewed all of the packages

that have been submitted to us. We are currently reviewing one

package right now and are awaiting the remainder of the certification packages from the Department.

Mr. BURR. With every day that ticks by, if your conclusion of that

package is a flunking grade—insufficient, with every day that ticks

by what are our options?

Ms. WILLIAMS-BRIDGERS. The grades that have been given to

agencies in the past have been based on their implementation of

certified Y2K compliant systems. The Department recently received

an A grade from Congressman Horn because they have implemented 100 percent of their systems. They are considered to be

Y2K compliant.

Mr. BURR. I think there is a big distinction there that I want to

draw. There is a big distinction between compliant and contingency.

Ms. WILLIAMS-BRIDGERS. Correct, absolutely. There is a very big

distinction.

Mr. BURR. I think the focus of his efforts and the efforts of that

Committee has been are we doing the things that we have identified, and do we have a game plan as to how we fix them by a certain date. Now let me ask you relative to contingency.

Ms. WILLIAMS-BRIDGERS. OK.

Mr. BURR. Where is your comfort level relative to contingency

plans that exist for the functions of State and all the different

areas?

Ms. WILLIAMS-BRIDGERS. I would agree entirely with the GAO

that contingency planning is very important at this late stage in

the year. That is where our attention should be focused. We are

quite hopeful that the Department will be able to prepare and complete all of its contingency plans and test those contingency plans

within the next several weeks, and we will be continuing to monitor that.

Mr. BURR. I have looked back in my own files, because earlier

this year I did not feel that anybody was dealing with contingency,

so I met with every department and I asked for their contingency

plans on March 2nd. I wrote the Speaker, the Minority Leader,

Congressman Bliley, and Congressman Horn, a memo that was

sort of my overview, having met with all of the different agencies

as to where they were specifically with regard to contingency plans.

Hearing what you both have shared with me about State and looking back at what I wrote based upon what I was told, one might

read this and believe that it was a fictional piece, because I actually raved about what they told me they were going to accomplish

as it related to contingency. I don’t get the impression you are here

raving today.

What do we need to do? What can Congress do, if anything, to

make sure that we are prepared whether there is or is not a probVerDate 11-SEP-98 12:32 May 01, 2000 Jkt 000000 PO 00000 Frm 00023 Fmt 6633 Sfmt 6633 63868.TXT HINTREL1 PsN: HINTREL1
21

lem? It would concern me, Mr. Alves, if there is, I think you said,

a responsible person who suggested there is not a problem and he

is a key link to both compliance and contingency. I would hope that

we could have some influence on at least his willingness to carry

forth.

But what can we do?

Ms. WILLIAMS-BRIDGERS. I think the most important thing for

the Congress is to continue to provide oversight over the efforts of

the various agencies. The continued encouragement, the continued

monitoring of agencies’ attention to contingency planning. In the

case of the State Department, continued monitoring of the types of

information we get into the hands of U.S. citizens is most important, particularly when there is a balance that must be maintained

between the sensitivity of giving out information to the public and

the need for the public to have critical pieces of information in

hand so that they can make informed decisions.

Mr. BURR. I would take it that State is no different than every

other agency. There was a time line that was established for everyone to be required to turn in contingency plans and for those to be

tested. Am I correct?

Ms. WILLIAMS-BRIDGERS. Yes, I believe that that is correct. That

there was a time line for contingency planning as well.

Mr. BURR. You have reviewed 50 percent of the mission-critical

issues. Have they already passed the time line that was set?

Ms. WILLIAMS-BRIDGERS. Actually we are right on schedule with

our time line expected for review of those mission-critical systems.

Mr. BURR. Let me go to your example that you used on the Suez

canal, that shipping would stop and they would take the responsibility to review the navigational equipment on each vessel to make

sure that from a safety standpoint, I would take it that they felt

comfortable 6 hours later when everything started to move.

Let me ask you as it relates to international waters; if they have

that concern with the vessels that exist in the Suez canal, who is

going to check the ones that are on the open water?

Ms. WILLIAMS-BRIDGERS. Actually, there has been much attention in the international community and among international professional associations governing maritime industry and the ports

and canals, and there is a similar strategy being employed in many

of the canals that they will not allow ships into the canals unless

they have been given some prior assurance by the ship owners that

they are Y2K compliant. They don’t want to create bottlenecks in

the canals. There will be onsite inspections of many of the vessels

before they are allowed to enter to give that added assurance.

Mr. BURR. I also serve on the Commerce Committee, and one of

the reasons I am a little preoccupied is that I have a Y2K hearing

going on at the same time across the courtyard on medical devices.

But one of the areas in which we have acknowledged concern is the

flow of petroleum for that period, because we are concerned with

the computer capabilities of a lot of the tankers—genuine concern,

do you think?

Ms. WILLIAMS-BRIDGERS. Yes, I think there is a concern, and

that is why the United States is looking particularly at those countries that provide a key link in our trade networks in the transportation of goods and services, including fuel, and the readiness of

22

countries as well as the port authorities to handle that Y2K problem. So, yes, that is an area to which we would pay particularly

close attention.

Mr. BURR. Given that you have reviewed a lot of the mission-critical things for State and, I think, understand their contingency efforts, let me ask as it relates to international finance. There are

trillions of dollars that are transferred on a daily basis in the international markets. How involved, if any, is State in the review of

those systems and their compliant status, and is that an area that

we should be concerned on?

Ms. WILLIAMS-BRIDGERS. The State Department is not directly

involved, of course, in the banking networks. But in the course of

the work that we have done in our meetings that we have held incountry with host country officials, we have also met with some

representatives of the banking industry. We reviewed all open

source materials that reflect on the readiness of the finance sector

and generally the finance sector got a very early start. We have

some assurances that they are fairly well prepared to deal with the

Y2K problem.

Even in regions of the world, even in countries where other sectors are significantly lagging and are considered at medium or

high-risk of failure, their finance sectors generally tend to reflect

a relatively low-risk of failure.

Mr. BURR. How involved is State relative to its advice, its response to questions by U.S. companies that might have interests

abroad relative to the Y2K compliance of the country in which they

might have interest?

Ms. WILLIAMS-BRIDGERS. Again, in our meetings in 31 countries

over the past year, we have met with representatives of the American business community in many countries and found that there

has been a good dialogue not only between the American business

community and U.S. embassies, but also other English-speaking

embassies in the country. We have found, in fact, as some best

practices where the U.S. Embassy has developed consortiums, if

you will, with representatives of the business community meeting

with embassy representatives, to have discussions about what actions need to be taken, what kind of collaboration could occur within the business community between the business community and

the diplomatic community.

Mr. BURR. Is that exchange taking place in your mind?

Ms. WILLIAMS-BRIDGERS. Yes it has.

Mr. BURR. Let me read a statement to all of you and ask you to

comment if you agree, disagree, or if you have any comment:

‘‘Working with our colleagues at the Department of State with

Federal agencies and with our partners in the United States and

overseas, we have made major progress in working to assure that

our people and our programs won’t be adversely affected by Y2K’’.

That is comments by the USAID. Do you agree or disagree with

that statement?

Mr. ALVES. The focus of our work on contingency planning was

on USAID’s ability to continue with its business functions, carrying

out its development assistance. USAID has worked closely with the

State Department both at headquarters and at missions overseas

to ensure the safety of USAID’s employees. They have been workVerDate 11-SEP-98 12:32 May 01, 2000 Jkt 000000 PO 00000 Frm 00025 Fmt 6633 Sfmt 6633 63868.TXT HINTREL1 PsN: HINTREL1
23

ing on developing specific contingency plans. But the focus of those

plans has been limited to safety of employees rather than ensuring

that we can continue to conduct our business of providing sustainable development assistance.

Ms. WILLIAMS-BRIDGERS. Most of our attention also has been focused on the Department’s contingency planning for its own systems and delivery of services to Americans, and we have quite honestly in our oversight efforts not looked at the linkages with the

USAID Programs. I would not be in a position to comment on the

statement.

Mr. BURR. Is it naive of me to believe that if there are concerns

about the core functioning, which I think are concerns that you

have raised, Mr. Alves.

Mr. ALVES. Yes, that is our concern.

Mr. BURR. How can the services from that be expected to operate

without adversely—how can the programs not be affected if we

have a fundamental problem at USAID? I mean, am I misstating

your concerns that exist there?

Mr. ALVES. No, you are not misstating our concerns. We believe

that USAID’s development assistance objectives are placed at risk

because USAID has not focused its contingency planning efforts on

being able to continue to provide that development assistance.

Mr. BURR. This is the testimony of Mr. Nygard right before you,

and he said that the programs won’t be adversely affected by Y2K.

Mr. ALVES. We may disagree on the extent to which USAID’s

Programs will be affected. We have discussed the issue with

USAID officials including Mr. Nygard, and other officials have

made a commitment to strengthen their contingency planning to

focus on development assistance efforts.

Mr. BURR. Ms. Koontz?

Ms. KOONTZ. I would like to add, we agree with what USAID’s

IG has done, and it is true that USAID has done a lot of work overseas to work with foreign governments to ensure that development

projects that have been funded by USAID are Y2K compliant. However on the issue of USAID’s ability to continue its business processes and provide critical services, it has not done enough planning

in my view to assure us that they are going to be able to do that.

Mr. BURR. Have they done enough planning to say at this hearing that they won’t be adversely affected by the Y2K?

Ms. KOONTZ. I would have to say no, based on what we have reviewed.

Mr. BURR. Do they know how the Y2K issue is going to affect

them yet?

Ms. KOONTZ. I don’t believe so. Part of the contingency planning

process is to assess the risk to your programs. Until USAID goes

through that process, I would have to say they would not know

what the risks are to their programs at this point. So they need

to go through the contingency planning process to arrive at that

conclusion.

Mr. BURR. How having not identified it yet, it is pretty tough to

make the claim that nothing would be adversely affected. The State

Department has a tool kit. Does USAID have a tool kit? Do they

have anything?

Mr. ALVES. AID is using the State Department tool kit.

24

Mr. BURR. They are using the same one?

Mr. ALVES. Yes they are. While we talk about focusing on business processes, USAID has done some work focusing on financial

systems. I think what happened is that early in the contingency

planning process, they ended up shortcutting the process of identifying their core business. Early in the process USAID managers

have identified the ability to obligate money, award contracts, and

make payments as their core business process. They then focused

their attention on developing contingency plans for these processes

without having looked at their development assistance activities,

where they are actually providing the assistance. I think that is

part of the flaw of what happened here. Responding to our audit

findings, USAID managers have committed to pay special attention

at this point to focusing on the development assistance activities.

Mr. BURR. Let me just ask Ms. Williams-Bridgers, any feedback

from the overseas posts relative to the tool kit, and have there been

any significant changes made to it over time?

Ms. WILLIAMS-BRIDGERS. With regard to the contingency plans,

we are waiting to get some information back from the Department

on this web-based tool that Mr. O’Keefe offered earlier today. We

have not gotten feedback on the implementation of that tool kit.

However, on our most recent visit to posts, we were anxious to see

that contingency plans were being completed and tested at our

posts; and they had not been as recently as the last couple of

weeks.

Mr. BURR. I am sure this is not a surprise to any of our witnesses as I am reminded daily when I call home, Christmas is right

around the corner. I guess it is just 60 days now or fairly close to

it, as my wife likes to remind me as we miss targets of when we

are going to adjourn up here. Sixty days is a very short time with

a tremendous amount to accomplish. I would urge each of you that

you remain as vigilant as possible. Where this Committee, where

this Congress can help to increase the level of intensity to make

sure that if there are problems, that we have a plan to address

them and that, therefore, the services and the functions of that

area are affected as minimally as they can be, that is the objective

of what we are after. If, on January 1st later in the morning we

all wake up and find that we don’t have a problem, I think that

there will be a lot that we have learned. There will be money that

has been spent to further develop technology and, more importantly, the human mind.

Thomas Jefferson said, I am not an advocate of frequent changes

in laws and constitutions, but laws and institutions must advance

to keep pace with the progress of the human mind. This is really

a process of our keeping pace with where the human mind has

taken us, and I thank each of you for your willingness to testify.

Does the Chairman have questions?

Chairman GILMAN. Yes, thank you very much. Thank you, Mr.

Burr, for taking over while I was detained.

Ms. Williams, according to GAO and OMB, the Department’s

Y2K business continuity and contingency plan is too high level to

determine if risks have been fully addressed or are incomplete, and

does not link State’s core business processes to its contingency

25

plans. What is the Department doing to better prepare and plan for

the Y2K rollover?

Ms. WILLIAMS-BRIDGERS. Mr. Chairman, we would agree with

GAO’s assessment of the lateness and the incompleteness of the

contingency planning effort by the Department of State. We are

hopeful that within the next 3 to 4 weeks that the Department will

complete its worldwide contingency planning efforts and will begin

testing contingency plans—something that we have not yet seen

evidence of yet here or abroad.

Chairman GILMAN. Are you satisfied that they are going to be

able to meet the problems?

Ms. WILLIAMS-BRIDGERS. I am quite hopeful. Given the level of

effort, given the very reasoned and strategic approach that the Department has taken to date to its Y2K efforts, I think the Department has realized extraordinary progress, given the formidable

challenge that was before it in looking at Y2K remediation efforts

at some 260 locations around the world.

So we are quite optimistic that the Department will be able to

accomplish all that needs to be done in order to overcome the Y2K

challenge.

Chairman GILMAN. Inspector General, the Department issued

consular information sheets for 172 countries in September of this

year which included information on Y2K risks, but that information was fairly general in comparison to other actions. What is

State doing to provide more detailed information that would allow

the reader to discern differences between the countries, in other

words, one that is generally prepared for Y2K from one that is

somewhat prepared?

Ms. WILLIAMS-BRIDGERS. We, too, were quite concerned about the

vagueness of many of the consular information sheets that we saw.

We just looked at samples, about 29 of the consular information

sheets issued, because we had direct knowledge based on our own

visits in countries in those locations.

We do understand that the Department does intend to reissue or

issue more updated consular information sheets within the coming

months, and that they intend to provide more information than

they previously did if they have evidence that there will be potential disruptions in country. We are hoping that the Department will

be much more specific in the kinds of advice and counsel that they

would give to U.S. citizens about what precautions they might

take, given potential failures of certain critical services that they

would come to expect.

Chairman GILMAN. With regard to that, has the State Department issued any travel warnings yet? Does it plan to do so? If so,

what countries are they thinking about?

Ms. WILLIAMS-BRIDGERS. They have not issued any travel warnings which would advise the traveling public to defer travel to any

country. We would hope, however, given that certain countries will

not be able to overcome potential failures of some of their key sectors, that the Department would issue such travel warnings for

those countries.

Chairman GILMAN. Thank you. Mr. Alves, with regard to USAID,

since completing its evaluations of overseas missions on Y2K preparedness and the status of USAID-funded development projects in

26

foreign countries infrastructure vulnerabilities, what has USAID

done to assure that the problems identified are going to be corrected in time?

Mr. ALVES. USAID has made a commitment to us that they will

focus their attention to completing contingency plans that address

development assistance. We believe that time is short.

USAID has developed, to help developing countries, actually, a

tool kit that provides a shortcut method to develop contingency

plans. The intent was to use this for developing countries, and we

believe that they can use the same approach for themselves to be

able to complete contingency plans as quickly as possible and,

hopefully, in time to be effective.

Chairman GILMAN. The Committee is aware of the problems

USAID has experienced during the development of the New Management System. Aside from Y2K, what is the status of NMS?

When will the system be fully operational?

Mr. ALVES. We have had issued a number of reports on the New

Management System, very critical reports, as you may recall. At

this point, USAID has reached the conclusion that the New Management System needs to be replaced. It is still in operation. It is

more stable than it was earlier so that there are fewer flaws, but

it still needs to be replaced.

USAID is working aggressively to replace the New Management

System with a suite of commercial off-the-shelf systems. At the end

of September, 1999 USAID awarded the first contract for the core

accounting system, a commercial off-the-shelf system.

Chairman GILMAN. So they are still using the old financial management system?

Mr. ALVES. Yes, they are still using the New Management System; and, in fact, they have had to repair it so that it would work

in Y2K.

Chairman GILMAN. According to the GAO and your office, AID’s

enterprise-wide and mission-level business continuity and contingency planning process needs to be greatly improved. At this late

stage, however, what can AID do to help assure that it is prepared

for Y2K failures here and abroad?

Mr. ALVES. As I mentioned a little earlier, USAID has prepared

a tool kit to help developing countries to do contingency planning,

and we believe that it can use that tool kit to focus attention on

priority development assistance functions and develop contingency

plans.

Chairman GILMAN. Ms. Koontz, you have reviewed the State Department’s consular information sheets which provide data on how

prepared foreign countries are on Y2K. What is your view of the

information presented in those sheets? Based on the data, can our

citizenry make informed decisions about whether they should be

traveling or remaining in certain countries?

Ms. KOONTZ. Just like State’s IG, we reviewed a sample of the

consular information sheets, and we also found them to be very

general in nature. Certainly the information that is presented is

not as specific as the information that is presented in other sections of the sheets that deal with things like crime and transportation.

27

Further, we thought it would be difficult for a reader to distinguish the relative risk among countries. For example, it may be difficult to make a distinction between a country that is characterized

as ‘‘somewhat’’ prepared as opposed to ‘‘generally’’ prepared.

Our understanding in our discussions with State is that they

have more detailed information now than when they originally

issued the sheets, and that they plan to update their web site with

this information to make it more specific. In addition, when other

information comes in, they plan to continue that updating process.

Chairman GILMAN. I assume that you are all part of a working

group; is that correct? For watching over Y2K? Are you all part of

a working group? Interagency working group?

Ms. WILLIAMS-BRIDGERS. Our office is not, but the Department

of State is part of an interagency working group. We have attended

some of these working group—interagency working-group sessions,

though, upon invitation of State Department but have not been active participants in the interagency discussions.

Chairman GILMAN. Will you be an active participant between

now and the end of this year?

Ms. WILLIAMS-BRIDGERS. We have been actively engaged with

our agency and have had much interaction and discussion about

the results of the interagency working group sessions. We intend

to continue to be actively involved with our agency’s Y2K efforts.

Chairman GILMAN. I would hope that all of you would be part

of that since there is so little time and so much to be done yet.

I address this to the entire panel. What do you see as the most

important thing we should be doing to bring us up to date?

Ms. WILLIAMS-BRIDGERS. I would say in the international arena,

we believe that at this point in time that most countries are seriously engaged in addressing the Y2K problem, and we take comfort

in that. Given that so many countries got such a very late start

and given that the amount of resources that are necessary to fully

remediate their systems will not be available to them in the form

of technical and financial resources, it is imperative that these

countries begin to triage their efforts to move toward contingency

planning and move toward testing.

Chairman GILMAN. What do you do to bring that about?

Ms. WILLIAMS-BRIDGERS. I think it is imperative that constant

consultation between the U.S. Government and host country governments continue.

Chairman GILMAN. Who does that consultation?

Ms. WILLIAMS-BRIDGERS. The embassies have been engaged in

those consultations with host country governments and through the

G8 sessions and other international forums.

Chairman GILMAN. Are the embassies making that a high priority?

Ms. WILLIAMS-BRIDGERS. Yes, they are. They have a huge stake

in this because they rely on host country government infrastructure to provide mission-critical services. There are two other areas

that we need to be particularly concerned about. The second is

probably the most pervasive problem of Y2K, but that which we

know the very least about are the embedded devices, the embedded

chips, and as Mr. Burr had alluded to in his other Committee

28

arena, in the health-care sector. We know that embedded chips prevail in a lot of the equipment which is Y2K dependent.

We know that there are hundreds of millions of these embedded

chips in power plants and nuclear reactors and telecommunications

switches, and we know very little about the potential impact of

those embedded devices on the failure or the continued operation

of their systems.

Chairman GILMAN. Are we providing information to other countries with regard to warning them about these embedded chips?

Ms. WILLIAMS-BRIDGERS. Yes.

Chairman GILMAN. How do we do that?

Ms. WILLIAMS-BRIDGERS. We have shared information in a variety of different forums through some of the professional associations, the international maritime associations, the port authority,

ICAO, the international civil aviation organization. There has been

much discussion about that very problem.

Last, I think that we have to guard against complacency; many

people now are quite tired of hearing about Y2K. We had the 9/9/

99 worldwide test, and that seemed to be rather uneventful. But

I think we need to keep our guard up, as you suggest, Mr. Chairman, with continued engagement on our part.

Chairman GILMAN. Mr. Alves, any recommendations as the highest priority issue we ought to be taking up.

Mr. ALVES. USAID obviously needs to focus on contingency planning, but USAID also has a role to play in helping developing countries deal with Y2K issues, and USAID has developed a tool kit

that is designed to help developing countries both remediate their

systems and deal with emergencies and contingencies.

Chairman GILMAN. Is that widely distributed?

Mr. ALVES. It has just completed being tested, and it is about to

be distributed. It is probably too late to help in remediating systems but it should be a help in contingency planning if it can be

distributed widely enough.

Chairman GILMAN. How long will it take to distribute it widely?

Mr. ALVES. I think that within a couple of weeks of getting it out.

Chairman GILMAN. So by November, we are giving some contingency information.

Mr. ALVES. I am sorry?

Chairman GILMAN. By November, you are providing some contingency information?

Mr. ALVES. Not exactly. What the tool kit will do is provide a

way for developing countries and organizations in developing countries to prepare contingency plans. So it is a road map to help them

to be able to do it as opposed to——

Chairman GILMAN. Is that enough time?

Mr. ALVES. They are very late, but contingency planning can continue up until you encounter an event. So while I would not say

that it is going to solve the problem because it is not a silver bullet

it does provide a contribution that should help.

Chairman GILMAN. Sixty days to go, apparently. That is pretty

short. Ms. Koontz, do you have any suggestions?

Ms. KOONTZ. There are a couple of priority areas particularly for

the State Department, and the first is for them to continue to make

29

the travel information in the consular information sheets more specific and more useful to the traveling public.

In addition, State needs to follow through on its business continuity and contingency planning, particularly for its overseas offices. The State Department has a tremendous advantage because

there is a lot of very good guidance both outside the State Department and that which they have developed themselves that is very

good, and if implemented, it should put them in a good position.

However up to this time, implementation and follow through has

not been what it should have been.

Chairman GILMAN. Who does the oversight on the implementation?

Ms. KOONTZ. To be frank, in terms of the embassy plans, I believe there was very little oversight of their preparation in this

area. The guidance was given out to the embassies, but I don’t believe that there was sufficient review of the plans that were generated.

Chairman GILMAN. Is there now sufficient review?

Ms. KOONTZ. I believe that what the State Department has told

us is that they have developed a validation tool. I do not have all

the details about that at this point in time. But anything that they

can do at this point to look more closely at those plans and encourage embassies to fully assess and plan for the Year 2000 is what

they need to do.

Chairman GILMAN. Are they preparing to do that? Is someone

working on that?

Ms. KOONTZ. They say that they are working on it.

Chairman GILMAN. Who is going to be——

Ms. KOONTZ. We will continue to followup, of course.

Chairman GILMAN. Will the Inspector General be following up?

Ms. WILLIAMS-BRIDGERS. Yes, we will, sir.

Chairman GILMAN. Thank you. Mr. Sherman.

Mr. SHERMAN. Thank you, Mr. Chairman. I am told that the

State Department has a system by which Americans abroad who

are in trouble can seek help. Their family can wire them funds, et

cetera.

It occurred to me that this system and many other services provided by our embassies and consulates could be very important to

persons in those countries that are not dealing with the Y2K problem effectively.

But then it occurred to me that the embassy is probably not open

on January 1st. January 2nd is going to be a Sunday, and I know

that we do not ask our government employees who are not engaged

in public safety and a few other emergency circumstances to work

on the first day of the year or to work on a Sunday. Will American

embassies and consulates in countries that are expected to have

Y2K problems be open and available to American tourists and

other Americans abroad or will there simply be a sign that says

come back to us 48 hours after Y2K has struck?

Ms. WILLIAMS-BRIDGERS. Mr. Sherman, if I might, our embassies

will be available. They will be staffed with personnel who have

been tasked with reporting back beginning 1 hour after midnight

and every hour for the next 24 hours.

30

The list of assignments and who should be in the embassies has

already gone out, and people have been told to cancel all leave

plans for essential personnel so that American citizen services will

be provided to any American in need.

Mr. SHERMAN. So this is not just a matter of reporting back to

Washington how things are going, but enough people to deal with

what may be the largest group of Americans ever to seek embassy

or consulate help in the absence of a political tumult at the same

time.

Ms. WILLIAMS-BRIDGERS. Absolutely.

Mr. SHERMAN. Good planning. I have no further questions.

Chairman GILMAN. Thank you, Mr. Sherman. Again I thank our

panelists for providing us your expertise and information. I hope

you are going to stay on top of all of this as we find that there is

a great deal more to be done. So with our admonition to keep on

top, we thank you again. There may be some questions that might

be submitted by some of our Members, and we would request that

you would respond to those. With that, the Committee stands adjourned.

[Whereupon, at 11:55 a.m., the Committee was adjourned.]

(31)

A P P E N D I X

OCTOBER 21, 1999

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