Year 2000 Computing Crisis

The Federal Reserve System's Year 2000 program is on schedule with Office of Management and Budget milestones. In addition, the Fed has effective controls to help ensure that its Year 2000 progress is reported accurately and reliably. The Fed also is effectively managing the renovation and the testing of its internal systems and the development and the testing of contingency plans for continuity of business operations. Despite this progress, the Fed has much to accomplish before it is fully ready for January 1, 2000. The Fed needs to complete the validation and implementation of all of its internal systems and complete its contingency plans to address both unexpected internal system failures and potential failures of external business partners and public infrastructure. However, the Fed has plans to complete the remaining tasks and has introduced management controls to help ensure that they are accomplished. Although there is no way to guarantee that significant Year 2000-induced business failures will not occur, the Fed's plans, if implemented, should effectively reduce the risk of such failures.

GAO noted that: (1) FRS' year 2000 progress reports and plans show that its Year 2000 program is on schedule with Office of Management and Budget milestones; (2) further, GAO found that FRS has effective controls to help ensure that its year 2000 progress is reported accurately and reliably; (3) GAO also found that FRS is effectively managing the renovation and testing of its internal systems and the development and planned testing of contingency plans for continuity of business operations; (4) despite its progress, FRS has much to accomplish before it is fully ready for January 1, 2000, such as completing validation and implementation of all its internal systems and completing its contingency plans to address both unexpected internal system failures and potential external business partner and public infrastructure system failures; (5) however, FRS has plans for completing remaining tasks, and has implemented management controls to ensure that they are accomplished; and (6) while there is no way to guarantee that significant year 2000-induced business failures will not occur, if FRS implements its plans, it will have effectively reduced the risk of such failures.