Year 2000 Computing Crisis

Readiness Improving, But Much Work Remains to Avoid Major Disruptions Gao ID: T-AIMD-99-50 January 20, 1999

The United States, with close to half of all computer capacity and 60 percent of Internet assets, is the world's most advanced--and most dependent--user of information technology. Failure of these systems as a result of the Year 2000 computing problem could cause widespread disruptions in both government and the private sector. GAO has included the Year 2000 problem on its list of high-risk areas in the federal government. This testimony highlights the Year 2000 risks confronting the nation; discusses the federal government's progress and remaining challenges to correcting its systems; identifies Year 2000 issues in state and local governments; and provides an overview of the available information on the readiness of key public infrastructure and economic sectors.

GAO noted that: (1) the public faces a risk that critical services provided by the government and the private sector could be severely disrupted by the year 2000 computing problem; (2) key sectors that could be seriously affected if their systems are not year 2000 compliant include: (a) information and telecommunications; (b) banking and finance; (c) health, safety, and emergency services; (d) transportation; (e) power and water; and (f) manufacturing and small business; (3) to meet the year 2000 challenge and monitor individual agency efforts, the Office of Management and Budget directed the major departments and agencies to submit quarterly reports on their progress; (4) these reports contain information on where agencies stand with respect to the assessment, renovation, validation, and implementation of mission-critical systems, as well as other management information on items such as business continuity and contingency plans and costs; (5) while the federal government's most recent reports show improvement in addressing the year 2000 problem, 39 percent of mission-critical systems were reported as not yet compliant; (6) state and local governments also face a major risk of year 2000-induced failures to the many vital services that they provide; (7) a recent survey of state year 2000 efforts indicated that much remains to be completed; (8) the President's Council on Year 2000 Conversion established over 25 sector-based working groups and has been initiating outreach activities since it became operational last spring; (9) the Council's January 7, 1999, report summarizes information collected to date by the working groups and various trade associations; (10) based on the information available at the time, it concluded that: (a) virtually all of the industry areas reported high awareness of the year 2000 and its potential consequences; (b) participants in several areas are mounting aggressive efforts to combat the problem; (c) it is increasingly confident that there will not be large scale disruptions in the banking, power, and telecommunications areas and, if disruptions do occur, they are likely to be localized; (d) large organizations often have a better handle on the year 2000 problem than do smaller ones; and (e) international failures are likely since, despite recent increased efforts, a number of countries have done little to remediate critical systems; and (11) however, the picture remains substantially incomplete because assessments were not available in many key areas.


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