Like many organizations, VA faces the possibility of computer system failures at the turn of the century due to incorrect information processing relating to dates. The reason for this is that in many systems, the year 2000 is indistinguishable from 1900, since the year is represented only by “00.” This could make veterans who are eligible for benefits and medical care appear ineligible. If this happens, the issuance of benefits and the provision of medical care that veterans rely on could be delayed or interrupted. As we reported last August, VBA had made progress in addressing the recommendations in our May 1997 report and making its information systems Y2K compliant. It reported it had renovated 75 percent of its mission-critical applications as of June 1998. At the same time, VHA reported it had assessed all and renovated the vast majority of its mission- critical information systems. Despite this progress, VBA was making limited progress in renovating two key mission-critical applications--the compensation and pension online application and the Beneficiary Identification and Record Locator Sub- System. And, except for its Insurance Service, VBA had not developed business continuity and contingency plans for its program services-- Compensation and Pension (the largest), Education, Loan Guaranty, and Vocational Rehabilitation and Counseling--to ensure that they would continue to operate if Y2K failures occurred. VHA’s Y2K program likewise had areas of concern. For example, although VHA’s medical facilities had hospital contingency plans, as required by the Joint Commission on Accreditation of Healthcare Organizations, they had not yet completed Y2K business continuity and contingency plans. To address these areas and to reduce the likelihood of delayed or interrupted benefits and health care services, we recommended that VA reassess its Y2K mission-critical efforts for the compensation and pension online application and the Beneficiary Identification and Record Locator Sub-System, as well as other information technology initiatives, such as special projects, to ensure that the Y2K efforts have adequate resources, including contract support, to achieve compliance in time; establish critical deadlines for the preparation of business continuity and contingency plans for each core business process or program service so that mission-critical functions affecting benefits delivery can be carried out even if software applications and commercial-off-the- shelf (COTS) products fail, including a description of resources, staff roles, procedures, and timetables needed for implementation; and ensure rapid development of business continuity and contingency plans for each medical facility so that mission-critical functions affecting patient care can be carried out if software applications, COTS products, and/or facility-related systems and equipment do not function properly, including a description of resources, staff roles, procedures, and timetables needed for implementation. VA has been responsive to our recommendations. For example, VBA reassessed its mission-critical efforts for the compensation and pension online application and the Beneficiary Identification and Record Locator Sub-System, as well as other information technology initiatives. It also reallocated resources to ensure that the Y2K efforts had adequate resources, including contract support, to achieve compliance. In addition, VBA completed a draft business continuity and contingency plan in January 1999 for its core business processes, as well as a related planning template for its regional offices. The plan provides a high-level overview of the resources, staff roles, procedures, and timetables for its implementation. It addresses risks, including mitigation actions to reduce the impact of Y2K-induced business failures, and analyzes the effect on each business line of a number of potential Y2K disasters--such as loss of electrical power, loss of communications, loss of data processing capabilities, and failure of internal infrastructure. According to VBA, the plan, which it expects to test this August, is an evolving document, to be revised and updated periodically until January 1, 2000. VBA’s plan makes no reference to contingencies for the failure of three of VBA’s benefit payment systems--Compensation and Pension, Education, and Vocational Rehabilitation and Counseling. However, it is currently developing a payment contingency plan for these systems and expects this to be completed in May 1999. A VBA official told us that the payment contingency plan should have been referenced in VBA’s business continuity and contingency plan and will be in future versions. The current plan also does not contain the designation of an information technology security coordinator and a physical security coordinator--individuals that VBA acknowledges are essential to the agency’s Y2K efforts--with responsibility for ensuring overall security for VBA's network and web site and backing up data storage before, during, and following January 1, 2000. This type of information will be necessary if security-related failures occur. According to VBA, it expects to designate these individuals by August 1999. VHA has also made progress in developing business continuity and contingency plans for its medical facilities. Last month, VHA issued its Patient-Focused Year 2000 Contingency Planning Guidebook to its medical facilities describing actions they can take to minimize Y2K-related disruptions to patient care. The guidebook discusses how the facilities should develop contingency plans for each major hospital function--such as radiology, pharmacy, and laboratory--as well as each major support function--such as telecommunications, facility systems, medical devices, and automated information systems. The guidebook also contains examples of plans, policies, and solutions for problems that a medical facility may face and provides Y2K templates describing the areas a facility should address by specific hospital function. VA provided this guidebook to the medical facilities early last month and expects the facilities to use it to prepare their individual business continuity and contingency plans, set to be completed by April 30. The guidebook stresses that these plans should be tested and suggests that the medical facilities begin testing in June. The guidebook addresses external emergency preparedness as well as internal operations. Specifically, it discusses three functions that medical facilities should perform in order to ensure that potential external hazards are considered and planned for. These are (1) performing an assessment of hazard vulnerabilities--that is, the types and kinds of Y2K problems that are anticipated within the community, (2) conducting an inventory of community resources--people, money, clinical space, supplies, and equipment--available to address these hazards, and (3) closing the gap between vulnerabilities and capabilities by putting into place measures that will mitigate potential disruptions in critical services by developing new working relationships with various government agencies, non-VA health care organizations, and vendors of critical supplies. In addition to implementing our recommendations, VA continues to make progress renovating, validating, and implementing its systems. On March 31, 1999, VA reported to the Office of Management and Budget (OMB) that the department has renovated and implemented all of the mission-critical applications supporting its 11 systems areas. As shown in table 1, VBA has six of these areas, and VHA has two. Complete and thorough Y2K testing is essential to providing reasonable assurance that new or modified systems will process dates correctly and will not jeopardize an organization’s ability to perform core business operations. Because the Y2K problem is so pervasive, potentially affecting an organization’s systems software, applications software, databases, hardware, firmware, embedded processors, telecommunications, and interfaces, the requisite testing can be extensive and expensive. Experience is showing that Y2K testing is consuming between 50 and 70 percent of a Y2K project’s time and resources. According to our Y2K guide, to be done effectively, testing should be planned and conducted in a structured and disciplined fashion. Our guide describes a step-by-step framework for managing Y2K testing, which includes the following key processes: Software unit testing to verify that the smallest defined module of software (individual subprograms or procedures) continues to work as intended. Software integration testing to verify that units of software, when combined, continue to work together as intended. Typically, integration testing focuses on ensuring that the interfaces work correctly and that the integrated software meets requirements. System acceptance testing to verify that the complete system--that is, the full complement of application software running on the target hardware and systems software infrastructure--satisfies specific requirements and is acceptable to users. This testing can be run separately or in some combination in an operational environment (actual or simulated) and collectively verifies that the entire system performs as expected. According to VBA and VHA officials, their testing criteria were based on their software development life cycle guidance documents. They said that upon completion of software unit and integration testing, a system is considered Y2K compliant. They said this type of testing had been completed for all of their mission-critical systems. As of March 31, 1999, neither VBA nor VHA had completed systems acceptance testing--which requires that each system be tested, including full forward-date testing, on a compliant platform--for all their mission- critical systems. Specifically, according to VBA officials, the agency had completed systems acceptance testing for half of its mission-critical systems--Insurance, Loan Guaranty, and Vocational Rehabilitation and Counseling. According to VBA’s March 1999 draft test plan, systems acceptance testing of the Compensation and Pension and most of the Education systems was to start in mid-April 1999. According to a VBA official, one of the reasons for the late systems testing was that the IBM platform at its Hines, Illinois, data center was not made Year 2000 compliant until the compiler was upgraded in February 1999. According to VBA, the Compensation and Pension and most of the Education systems will be future-date tested throughout April. VHA also plans to begin system acceptance testing of its mission-critical systems this month and complete it this June. According to VHA officials, they could not perform this type of testing before March of this year because VHA did not have a separate Y2K-compliant test environment to isolate the testing from the hospital systems in use.