<DOC>
[106th Congress House Hearings]
[From the U.S. Government Printing Office via GPO Access]
[DOCID: f:63439.wais]
THE STATUS OF THE DISTRICT OF COLUMBIA'S YEAR 2000 CONVERSION
COMPLIANCE AND TECHNOLOGY IMPROVEMENT PLAN
=======================================================================
HEARING
before the
SUBCOMMITTEE ON THE
DISTRICT OF COLUMBIA
of the
COMMITTEE ON
GOVERNMENT REFORM
HOUSE OF REPRESENTATIVES
ONE HUNDRED SIXTH CONGRESS
FIRST SESSION
__________
SEPTEMBER 24, 1999
__________
Serial No. 106-101
__________
Printed for the use of the Committee on Government Reform
Available via the World Wide Web: http://www.gpo.gov/congress/house
http://www.house.gov/reform
______
U.S. GOVERNMENT PRINTING OFFICE
63-439 CC WASHINGTON : 2000
COMMITTEE ON GOVERNMENT REFORM
DAN BURTON, Indiana, Chairman
BENJAMIN A. GILMAN, New York HENRY A. WAXMAN, California
CONSTANCE A. MORELLA, Maryland TOM LANTOS, California
CHRISTOPHER SHAYS, Connecticut ROBERT E. WISE, Jr., West Virginia
ILEANA ROS-LEHTINEN, Florida MAJOR R. OWENS, New York
JOHN M. McHUGH, New York EDOLPHUS TOWNS, New York
STEPHEN HORN, California PAUL E. KANJORSKI, Pennsylvania
JOHN L. MICA, Florida PATSY T. MINK, Hawaii
THOMAS M. DAVIS, Virginia CAROLYN B. MALONEY, New York
DAVID M. McINTOSH, Indiana ELEANOR HOLMES NORTON, Washington,
MARK E. SOUDER, Indiana DC
JOE SCARBOROUGH, Florida CHAKA FATTAH, Pennsylvania
STEVEN C. LaTOURETTE, Ohio ELIJAH E. CUMMINGS, Maryland
MARSHALL ``MARK'' SANFORD, South DENNIS J. KUCINICH, Ohio
Carolina ROD R. BLAGOJEVICH, Illinois
BOB BARR, Georgia DANNY K. DAVIS, Illinois
DAN MILLER, Florida JOHN F. TIERNEY, Massachusetts
ASA HUTCHINSON, Arkansas JIM TURNER, Texas
LEE TERRY, Nebraska THOMAS H. ALLEN, Maine
JUDY BIGGERT, Illinois HAROLD E. FORD, Jr., Tennessee
GREG WALDEN, Oregon JANICE D. SCHAKOWSKY, Illinois
DOUG OSE, California ------
PAUL RYAN, Wisconsin BERNARD SANDERS, Vermont
HELEN CHENOWETH, Idaho (Independent)
DAVID VITTER, Louisiana
Kevin Binger, Staff Director
Daniel R. Moll, Deputy Staff Director
David A. Kass, Deputy Counsel and Parliamentarian
Carla J. Martin, Chief Clerk
Phil Schiliro, Minority Staff Director
------
Subcommittee on the District of Columbia
THOMAS M. DAVIS, Virginia, Chairman
CONSTANCE A. MORELLA, Maryland ELEANOR HOLMES NORTON, Washington,
STEPHEN HORN, California DC
JOE SCARBOROUGH, Florida CAROLYN B. MALONEY, New York
EDOLPHUS TOWNS, New York
Ex Officio
DAN BURTON, Indiana HENRY A. WAXMAN, California
Howie Denis, Staff Director
Anne Barnes, Professional Staff Member
Bob Dix, Professional Staff Member
Melissa Wojciak, Professional Staff Member
Jenny Mayer, Clerk
Jon Bouker, Minority Counsel
C O N T E N T S
----------
Page
Hearing held on September 24, 1999............................... 1
Statement of:
Williams, Anthony, Mayor, District of Columbia; Constance
Newman, vice chairman, District of Columbia Financial
Responsibility and Management Assistance Authority;
Kathleen Patterson, councilmember, ward 3, District of
Columbia City Council; Suzanne Peck, chief technology
officer, District of Columbia; Jack Brock, Director,
Information Management Issues, Accounting and Information
Management Division, U.S. General Accounting Office; and
Gloria Jarmon, Director, Health, Education and Human
Services Accounting and Financial Management Issues,
Accounting and Information Management Division, U.S.
General Accounting Office.................................. 12
Letters, statements, et cetera, submitted for the record by:
Brock, Jack, Director, Information Management Issues,
Accounting and Information Management Division, U.S.
General Accounting Office, prepared statement of........... 52
Davis, Hon. Thomas M., a Representative in Congress from the
State of Virginia, prepared statement of................... 3
Jarmon, Gloria, Director, Health, Education and Human
Services Accounting and Financial Management Issues,
Accounting and Information Management Division, U.S.
General Accounting Office, prepared statement of........... 70
Newman, Constance, vice chairman, District of Columbia
Financial Responsibility and Management Assistance
Authority, prepared statement of........................... 33
Norton, Hon. Eleanor Holmes, a Representative in Congress
from the District of Columbia, prepared statement of....... 8
Patterson, Kathleen, councilmember, ward 3, District of
Columbia City Council, prepared statement of............... 23
Peck, Suzanne, chief technology officer, District of
Columbia, prepared statement of............................ 37
Williams, Anthony, Mayor, District of Columbia:
DC Millennium Celebration Executive Summary.............. 89
Prepared statement of.................................... 16
THE STATUS OF THE DISTRICT OF COLUMBIA'S YEAR 2000 CONVERSION
COMPLIANCE AND TECHNOLOGY IMPROVEMENT PLAN
----------
FRIDAY, SEPTEMBER 24, 1999
House of Representatives,
Subcommittee on the District of Columbia,
Committee on Government Reform,
Washington, DC.
The subcommittee met, pursuant to notice, at 11 a.m., in
room 2154, Rayburn House Office Building, Hon. Thomas M. Davis
(chairman of the subcommittee) presiding.
Present: Representatives Davis, Morella, Horn, and Norton.
Staff present: Howie Denis, staff director/counsel; Anne
Barnes, Bob Dix, and Melissa Wojciak, professional staff
members; David Marin, communications director; Jenny Mayer,
clerk; Jean Gosa, minority clerk; and Jon Bouker, minority
counsel.
Mr. Davis. Good morning and welcome.
The meeting will come to order. The hearing is taking place
at a very critical time for the District of Columbia. Our
bipartisan legislation to expand higher educational opportunity
is poised for passage in the Senate next week. I look forward
to very prompt House concurrence in the transmittal to the
White House.
The D.C. budget containing the funds for this I understand
is going to be vetoed and sent back here, and that's going to
be a struggle to keep those dollars in quite candidly. But we
will do everything that we can because it's a great program.
I think the difficulty with the subject of today's hearing
is, is the city able to manage the money correctly that is sent
from the Federal Government, and this just adds another wrinkle
into how Congress will react to money coming back here under a
veto at a time when budgets are very, very tight. My assurance
that I will do everything I can to keep those dollars here for
the city as we try to work through this difficulty.
But I have to be candid, there are a lot of competing
consistencies up here for those dollars. And so let's try to
work together and do the best we can. A lot of progress has
been made. Private sector investment decisions now include the
District as a viable regional partner. Wall Street has
acknowledged this improvement. Population enhancement and
stability remain one of our top goals. So far as Y2K is
concerned, it's my understanding that there is a supplemental
budget request pending with the White House's Office of
Management and Budget.
Assuming the pending budget itself becomes law, eventually,
this would provide additional Federal funds to address the
city's Y2K mitigation effort. For all of these reasons and
more, I again would hope that we can find a way to let this
budget go into effect. Otherwise, losing dollars in one area
means we have to cut and paste, and it's just not a good thing
for the city or the region.
The District's Y2K compliance program is mixed. The team
which has been assembled is doing a good job under very
difficult circumstances, but the mitigation project started
late, and it's been forced to play catchup. Consequently, the
risk and the cost is higher than usual. Effective contingency
planning is essential to minimize the potential for serious
service interruptions.
While most of the District's leadership has proclaimed its
Y2K commitment as a high priority, the evidence suggests that
not everybody has followed through. I am concerned and troubled
by the GAO report that documents serious problems. Especially
troubling is the fact that a contract with the prime Y2K
consultant was recently allowed to lapse. So we're going to try
to find answers to those today.
Also troubling is a report from the District's Inspector
General identifying major concerns. These include funding,
training, and agency compliance problems, along with poor
communication, cooperation and coordination.
I certainly acknowledge that progress though has been
achieved, and we can't lose sight of that fact. I don't want to
minimize the accomplishments that have been made to date, but
we can't afford to lose our focus and tenacity as time's swift
chariot draws near. Now is the time to reaffirm our commitment
to achieving a favorable outcome.
And today we will try to hone in on those issues and as we
have on so many tough issues facing the city try to work
together to work on appropriate solutions. We expect that the
lights will stay on after midnight on New Year's Eve, and other
municipal services will continue without interruption.
In that regard, I want to note that a New Year's Eve
millennium celebration of some sort is being planned for the
District at the urging of the White House and others. We want
to look forward to learning how this event could impact the
ability of various local agencies to respond to potential Y2K
problems.
My thanks as always to my ranking member of this
subcommittee, Eleanor Holmes Norton, for her continuing
leadership and guidance through this. The city has been, I
think, blessed with her leadership through some very difficult
times over the last 5 years. I also want to thank the vice
chairman of the subcommittee Connie Morella and, of course,
Steve Horn, who has shown national leadership on the Y2K
compliance matters.
I look forward to hearing from our distinguished panel. And
I now yield to my friend the delegate from the District of
Columbia, Ms. Norton for her opening statement.
[The prepared statement of Hon. Thomas M. Davis follows:]
[GRAPHIC] [TIFF OMITTED] T3439.144
[GRAPHIC] [TIFF OMITTED] T3439.145
Ms. Norton. I want to thank Chairman Davis for his
consistent attention to Y2K in the District. I also want to
thank District officials for a phenomenally improved job of
meeting the unprecedented Y2K challenge they have faced.
This week the Washington Post reported what amounted to a
C-plus, maybe even a B-minus for D.C. Y2K readiness compared of
course to higher marks for Virginia and Maryland. The
difference is that the District did not even report to class
until late, a problem of the District's own making to be sure,
and had a lot of makeup work to do.
Mayor Anthony Williams' interim City Administrator Norman
Dong and Chief Technology Officer Suzanne Peck and her staff
had no responsibility for the late start, but they have moved
forward without excuses to achieve what appears to be a photo
finish that should avoid a crisis.
Thanks also are due to the Clinton administration,
beginning with the President, who included the District in the
Federal Government's Y2K budget. The administration agreed that
it was in the interest of the Federal Government to give this
assistance to the District as the seat of government and work
with me to have D.C. receive Federal Y2K funding. Without
quickly funding the District's startup effort, a Y2K
catastrophe in the city seemed inevitable only a few hearings
ago. Not only did the District receive an initial grant of
$61.8 million in fiscal year 1999, the city got another $20
million in extra funds from the District appropriation when it
was negotiated by the White House as a part of the omnibus
appropriation bill for fiscal year 1999.
This morning embargoed GAO testimony was leaked to shift
the emphasis from the District's extraordinary success in
making up for lost time in a way no one predicted at our last
hearing. According to the GAO, the District has not been able
to track and account for all the money allocated thus far.
However, OMB and the District have been consistently working on
this problem, despite the concern that personnel necessary for
the Y2K effort not be drawn into important but not nearly as
critical auditing matters.
OMB assured me several months ago that there was no
evidence that money was being misspent. The District took the
sensible step of commissioning an outside audit to resolve
financial tracking issues rather than side tracking its
critical high-level Y2K personnel into financial tracking
duties.
We are grateful not only for the original Y2K grants and
the extra funds included in the Y2K 1999 appropriation by the
President, but also for the active participation of the Office
of Management and Budget in assisting the District. Expert
assistance has come from the top of the President's Council on
Year 2000 Conversion, including frequent meetings and advice
and counsel involving John Koskinen, chair of the President's
Council on Y2K Conversion, Diedre Lee, administrator of Federal
Procurement Policy, and OMB and Sally Katzen, counselor to the
Director of OMB.
The important news for today's hearing surely is that the
District has done far better at achieving Y2K compliance than
most anticipated. It was always clear that the matter would go
down to the wire and that as in other cities, emphasis had to
be placed on contingency planning. Among the most important
tasks that remain is to avoid contributing to the problem by
public actions and statements that distract from the success
that is clear and that can panic the public.
Rather the example to be followed was set by Federal
Reserve Chairman Alan Greenspan a few days ago, who warned
against actions such as withdrawal of funds from banks or ATMs
and other actions that create problems that will be of our own
making.
In the District, Members of Congress, local officials,
business people and civic and community leaders have an
obligation to speak responsibly about Y2K, pressing local
officials hard to attend to the task that remain is part and
parcel of assuring accountability.
Actions and talk that do not take account of progress made
and precautions taken could lead to a rush to banking
institutions, food stores, gas stations and other hoarding that
could promote scarcity, inflate pricing artificially and cause
disruption needlessly. The District is doing its part very well
against all the odds, and the city deserves as much praise from
us today as it has gotten criticism in the past.
I look forward to testimony from today's witnesses who have
the responsibility, have accepted it and are closest to the
facts we need to hear.
Mr. Chairman, if I may, I understand that you spoke of the
pending appropriation before I came to this hearing. I believe
it is irresponsible to engage in threats concerning the D.C.
appropriation. And I want to say to all within the call of my
voice that the only way for the District of Columbia to lose
any money in the appropriation is for the President of the
United States to give it up.
Throughout the appropriation process, when the Democrats in
the House and the Democrats in the Senate felt they had to vote
against our appropriation because of the way money was
manipulated, because of the way the District appropriation
was--the in-state tuition was being treated and because of the
attachments.
Throughout that time, I have been every step of the way in
touch with the highest levels of the White House who every step
of the way have assured me that the District's appropriation
was not in danger. If it is in danger, it will be because the
Republican majority chooses to fight to punish the District for
standing up for its rights when it handed the Congress a
balanced budget with a surplus and the tax cuts.
Now, we would like to read a statement from the spokesman
for Jack Lew, the highest official at OMB: Funding levels are
really not in dispute here. The issue at hand is resolving the
problem presented by a wide array of riders that would keep the
District from running its business freely in a way that is
consistent with home rule.
On the specific issue of funding, Congressman Davis' own
record shows that he is a strong advocate and ally in keeping
the District meeting its funding needs. By the same token, our
commitment on
funding is unwavering. There is no reason that a possible CR
should lead to a situation that would deprive the District of
funding.
Thank you, Mr. Chairman.
[The prepared statement of Hon. Eleanor Holmes Norton
follows:]
[GRAPHIC] [TIFF OMITTED] T3439.001
[GRAPHIC] [TIFF OMITTED] T3439.002
Mr. Davis. Thank you, Ms. Norton. And I commented on this,
not just before you came in, but over the last few weeks, and
not in any threatening manner. I think anybody who heard my
comment made it clear that sometimes you have to let people
know where your judgment leads you in conversations.
Unfortunately, I'm not the appropriator or I could assure you
that every dollar would come back to the city. As I said
before, we're going to fight for it.
But as you know we had a struggle with many of the
appropriators to get the money that we got earlier this year in
this legislation. Other budgets are tight, education is tight,
environmental legislation, NASA, all of these budgets are being
cut and slashed.
And my fear, and I think it's an important sometimes for
elected officials to share concerns, not in a threatening
manner, but in a very realistic legislative way to say that
these dollars are going to be quickly reclaimed by other
committees.
I will continue to do everything I can to protect those
dollars for the District of Columbia. But I think it will be
naive of me to sit up here and smile and just try to cover
myself that somehow this did not take place. The two riders
that are on the bill this year that were not on the bill the
President signed last year call for forbidding the legalization
of marijuana and the cell towers in Rock Creek Park, which were
put on by the Democratic leader in the U.S. Senate. These are
the items.
I did not support all of these riders, and in fact I spoke
against some of them on the floor. And I would like to see some
of them go off. But you have to understand there is a process
where we get a lot of people into the mix sometimes who don't
always agree with us, and we have to give our best judgment in
trying to get the best results for this city in the region.
I now recognize Vice Chairman Mrs. Morella.
Ms. Norton. Mr. Chairman. Mr. Chairman, if I may, I believe
if you would put this matter into play at this hearing, as the
representative of the District I should at least be able to
respond to the comments you made.
Mr. Davis. You responded earlier.
Ms. Norton. You're the one that put this into play, Mr.
Chairman. And it is your comments that are seeking to
intimidate the District and I intend to use my time in order to
respond to those comments.
Mr. Davis. Mrs. Morella.
Mrs. Morella. Thank you, Mr. Chairman, back to the subject
of Y2K. And I appreciate the timing of your holding this
important hearing. I think we've got 98 days after today when
we will be celebrating January 1, 2000, and we want to make
sure that the Nation's Capital is fully prepared. Steve Horn
and I remember 3\1/2\ years ago when we had the first joint
subcommittee's hearing on Y2K. That was the time when everybody
thought Y2K, with the exception of a few, was a breakfast
cereal, well, it's not. And the time is now.
And we determined that the Federal Government is working
much too slowly on that. We've been working with the
administration since then to ensure that the Federal Government
will operate without interruption, and there will be end-to-end
contracts to make sure that there is compliance. And we helped
to create a national Federal strategy, finally happened.
We've had agencies reporting to us on a quarterly basis and
moving out to contractors, State and local government and
internationally. It was just a year since this Subcommittee on
the District of Columbia, the Subcommittee on Government
Management, Information, and Technology and the Subcommittee on
Technology conducted an oversight hearing to examine the status
of the District of Columbia's Y2K compliance efforts.
At that time it was determined that the District had only
begun to address the year 2000 problem, and in June 1998, that
was much later than the surrounding metropolitan jurisdictions
and aroused some concern with us. The District had made only
limited progress in addressing the year 2000 problem. It lacked
both a structure and the resources necessary to do so. Well,
according to an article in the Washington Post earlier this
week, although the District is less than 90 percent complete on
their Y2K work, expectations are that city residents will enter
the millennium without major disruptions.
I know there is still concerns, including insufficient
funding for Y2K, the unmet needs, slow procurement processes,
ineffective communication and coordination among District
agencies.
And then today, we read in the paper that the District of
Columbia has lost track of how some of this money has been
spent, particularly the $120 million that was allocated for its
late start in Y2K. I firmly believe that with the strength,
expertise and management capabilities of the District
leadership, such as the distinguished panel before us, that we
can together overcome these deficiencies in correcting the year
2000 problem, and that we will have answered today the extent
of the problem, the solution, where the money has come from,
how it has been used.
So I look forward to hearing from our distinguished
panelists. I thank you, Mr. Chairman, for having this meeting
at this time and for your excellent oversight over the District
of Columbia, our Capital City, of which I'm very proud. Thank
you.
Mr. Davis. Thank you very much.
And now I would yield to the gentleman from California, who
has shown a lot of leadership on the Y2K issue nationally.
Mr. Horn. Well, I thank the chairman. I will yield any time
I might have spent listening to myself to the Mayor of
Washington, DC, and his fine team so we can hear what's going
on. Thank you.
Mr. Davis. Thank you very much.
Let me call our panel of witnesses up to testify Mayor
Anthony Williams, Connie Newman, vice chairman of the Control
Board, Kathy Patterson of the D.C. City Council, Susan Peck,
the District's chief technology officer, and two
representatives of the General Accounting Office, Jack Brock,
who will report on operational issues, and Gloria Jarmon, who
will address financial issues.
As you know, it's the policy of this committee that all
witnesses be sworn before they testify. So if you could rise
with me and raise your right hands.
[Witnesses sworn.]
Mr. Davis. I thank you. You can be seated.
To afford sufficient time for questions, we'll have the
testimony, if you could limit yourselves to no more than 5
minutes, we will have a light on. And at the end of 4 minutes,
the yellow light will go on and it will give you a minute to
sum up. We will open it up for questions.
Mr. Horn. Mr. Chairman, if I might, can we also limit
ourselves to 5 minutes. We do that in our own subcommittee.
Mr. Davis. We can go to an additional round if we need to,
and we will do that.
Mr. Horn. Thank you.
Mr. Davis. All written statements from witnesses will be
made a part of the permanent record, and we will begin with
Mayor Williams, followed by Councilmember Patterson, Control
Board Chairman Newman, the CTO, Susan Peck, and the GAO
Directors Jack Brock and Gloria Jarmon.
Mayor Williams, thank you very much for being with us. I
think Ms. Norton made it clear that a lot of these problems
didn't begin on your watch. You, in fact, if anything, have
given it appropriate focus since you've been here, and we
appreciate it. Thank you.
STATEMENTS OF ANTHONY WILLIAMS, MAYOR, DISTRICT OF COLUMBIA;
CONSTANCE NEWMAN, VICE CHAIRMAN, DISTRICT OF COLUMBIA FINANCIAL
RESPONSIBILITY AND MANAGEMENT ASSISTANCE AUTHORITY; KATHLEEN
PATTERSON, COUNCILMEMBER, WARD 3, DISTRICT OF COLUMBIA CITY
COUNCIL; SUZANNE PECK, CHIEF TECHNOLOGY OFFICER, DISTRICT OF
COLUMBIA; JACK BROCK, DIRECTOR, INFORMATION MANAGEMENT ISSUES,
ACCOUNTING AND INFORMATION MANAGEMENT DIVISION, U.S. GENERAL
ACCOUNTING OFFICE; AND GLORIA JARMON, DIRECTOR, HEALTH,
EDUCATION AND HUMAN SERVICES ACCOUNTING AND FINANCIAL
MANAGEMENT ISSUES, ACCOUNTING AND INFORMATION MANAGEMENT
DIVISION, U.S. GENERAL ACCOUNTING OFFICE
Mayor Williams. Right. But, Mr. Chairman, Congressman
Norton, and members of the committee, as Congresswoman Norton
has stated, you accept everything on your watch, because I'm
here now. And so this is a top priority, and we're going to see
it through.
But I appreciate the opportunity to appear before you to
discuss our readiness efforts for Y2K. And before I begin, I
would like to take a moment and thank our Congresswoman,
Eleanor Holmes Norton for her assistance in facilitating the
approval of the Federal OMB funds for this effort, because we
would not be where we are now, where I think we are, which is
substantial progress, but for that funding. And we appreciate
it, and it is acknowledged.
In our February testimony, we stated and we recognize that
the District was behind almost every comparable municipality in
its Y2K compliance and stated that our late start would not
prevent us, however, from successful completion of the Y2K
project. And while we're still committed to that promise, we
must acknowledge that there is much work to be done in a very
short time. Throughout my testimony, I'm going to discuss steps
that we've taken to ensure that there is no disruption in
District services on January 1, 2000.
Despite the serious challenges that we face, including a
late start, significantly outdated technology and a broken
governmental structure, I believe much progress has, in fact,
been made. Many agencies, particularly the public safety
agencies, Metropolitan Police Department, Fire and Emergency
Services, Department of Corrections, Emergency Management
Agency, are well on their way toward Y2K compliance, and that
is detailed in my written testimony. And I won't go into it in
detail, but I do refer you to it.
In her testimony, Susan Peck, our chief technology officer,
will provide specific details regarding our Y2K remediation
efforts. Y2K is a top priority, and we are treating it as such.
We've instituted a monitoring function to track the progress of
our activities and eliminate obstacles to their success.
The status of the Y2K project is on the agenda of every
weekly cabinet meeting that I personally chair. Since May, I
have also in addition to this conducted an executive steering
committee meeting every 2 weeks specifically to review the
progress on Y2K. In addition to all of our agency heads that I
mandate that each of them personally attend this meeting, John
Koskinen, the President's Y2K chair, and representatives from
the GAO and OMB attend these meetings.
Additionally, the city administrator has daily meetings
with key project and supply line staff to review the activities
required to ensure that the District is functioning as we
intend. In addition, we have initiated a resource review panel
to conduct detailed implementation reviews.
We're working closely with this panel, which reports
directly to the city administrator, and is comprised of the
agency senior managers in charge of major Y2K efforts, the
chief technology--excuse me, chief financial officer, as well
as our chief procurement officer.
The resource review panel charter is to, No. 1, assess the
state of Y2K readiness of the District's most critical business
processes; and, two, prioritize the allocation of resources to
the tasks which remain in order to ensure continuity and
operations.
The panel's initial reviews were completed earlier this
week, and in the coming days we will have their report
depicting a more clear view of the scope and priorities of the
work that remains.
Let me say a word about contingency planning. We believe
that the most critical agencies have a low risk of failure;
however, we are taking nothing for granted and have conducted
extensive contingency planning in all of the mission critical
agencies. Additional work is scheduled for rigorous testing of
these contingency plans. Our contingency planning is being
performed in two phases within each agency. In phase 1, we're
formulating our alternative means of doing business should a
failure occur; and in phase 2, we rehearse what is necessary
should any contingencies be needed.
Specifically, the second phase consists of making sure that
plans are feasible, resources are in place to implement the
plans and the plans are tested. We're being proactive in our
contingency planning by ensuring that funding is in place and
appropriate procurement actions are taken. We've completed
phase 1 contingency planning except in a few isolated instances
and have begun phase 2 planning in many areas.
For example, in Department of Public Works, we've conducted
simulations as well as field tests. Tomorrow, Saturday, we will
test the administrative aspects of business processes for snow
removal, and a field test will be conducted later this year.
Now as you can imagine, this process has been made even more
important by special events that will be held on the Mall on
New Year's Eve, such as the millennium event. So what is
already logistically challenging has now increased in geometric
proportion, but I believe we will be prepared for that.
We're also planning and practicing for less visible but
equally important business processes. I believe we have sound
plans for payroll and pensions. We have detailed procedures for
Medicaid payments, disability compensation and other related
financial systems. We have plans for emergency procurements and
facilities management. And we have plans for health and medical
processes.
In fact, of the 86 business processes that we have
identified as critical, we have contingency plans completed for
all but three, two of which will be complete this month, and
the remaining one will be completed next month.
While the contingency plans are critical to our Y2K
success, they will also serve as foundation for future business
process improvement efforts. Now, in terms of various areas of
concern, while I am pleased with our progress, we take nothing
for granted; therefore, we have tasked our city administrator
with conducting an independent review, and this is typical of
all major systems efforts and independent verification
validation of our District's Y2K efforts.
An international accounting and management consulting firm
conducted this and delivered a preliminary draft of their
findings earlier this month. Given their findings, we have two
areas of concern. The first concern and most troubling to me as
a former CFO is a lack of stringent financial management and
tracking for the Y2K effort. While the bulk of costs have been
incurred for IBM services and these costs can be tracked at the
various levels, the District currently cannot frankly and
candidly attribute expenditures to specific agencies or Y2K
functions.
This Wednesday, September 22nd, a new financial team was
put in place to, one, support day-to-day operations, and within
the coming weeks, give us a detailed depiction of these
expenditures.
Second, because of our late start, we were forced to deploy
numerous resources simultaneously and conduct many activities
in parallel. Specifically, responsibility for mediation and
testing of mission critical systems and applications is shared
by both the Y2K project office and individual agencies.
This strategy has led to a somewhat fragmented management
structure and inconsistencies in reporting of progress. We will
continue conducting the resource review panel in daily city
administrator's Y2K meetings; in the coming days, we will take
the necessary actions to strengthen the program management for
this critical close of this activity.
We are committed to implementing a sound process to not
only get this project done in a timely fashion, get it done in
an effective fashion, but get it done in terms of financial and
management reporting that gives everyone the confidence and
comfort level that I think this project deserves.
I have additional testimony, but it's in writing and will
be submitted for the record. And I thank the committee for the
opportunity to appear today and answer later any questions you
may have.
[The prepared statement of Mayor Williams follows:]
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Mr. Davis. Thank you very much.
Ms. Patterson.
Ms. Patterson. Thank you, Mr. Chairman. Good morning, I am
Kathy Patterson. I'm the chairman of the D.C. Council's
Committee on Government Operations which has oversight
responsibility for information technology. Chairman Linda Cropp
asked me to testify on her behalf on the District's efforts to
ensure Y2K compliance.
We have made considerable progress during the last year,
and we have adhered closely to the timetables set out by Mrs.
Peck when she became chief technology officer last year. In the
final months of the project, we have very little margin for
error, with remediation targeted for completion at the end of
this month and the implementation of fully compliant and tested
systems scheduled for November. Yet there has been abiding
strengths in this process.
The District's Y2K project has demonstrated the ability to
track progress or the lack thereof very closely and to take
quick and effective corrective action when needed.
At one point or another, for example, the District's
information technology systems for payroll, unemployment
insurance and criminal justice systems have verged on Y2K
failure. But the project staff have intervened and resolved
those problems. To date the District has not experienced any
Y2K-related failures. This is important empirical evidence
because many programs have already begun inputting dates into
the year 2000 and beyond.
Although the outcome of Y2K project is largely in the hands
of agency managers, the legislature has a continuing and
important role. The Council and its committees must maintain
oversight of this effort. And we have used our law making
powers to aid in the conversion. During the past year and a
half the Committee on Government Operations has held a regular
series of oversight hearings on Y2K and has also reviewed the
progress of the project in budget performance review and
management reform hearings.
We've had joint hearings this year, three to date, on Y2K
and human services, public safety and public utilities in
partnership with relevant other council committees. Our final
Y2K hearing on contingency planning is set for November 17th.
This past Wednesday we had an overview of Y2K readiness on the
part of public utilities, specifically Pepco, Washington Gas
and Bell Atlantic; each witness representing each utility
testified that they are Y2K ready.
One concern I have coming out of that hearing is the
oversight to date by the Public Service Commission. The PSC
began its Y2K oversight last year but did not until this
September contract with a consultant for independent
verification, and validation of all the readiness statements
made by the utilities themselves. The commission's consultant
is scheduled to report in mid-November on that effort.
Another concern raised by public witnesses Wednesday
concerns areas of readiness in areas that are not strictly
speaking government responsibilities, such as the supply chain
for food, health equipment and medicine and other critical
commercial goods, and we are adding such issues to the schedule
for our November oversight hearing.
One concern raised by the utility witnesses was the impact
of the celebrations on the Mall on other public safety
resources. The ability of a Pepco repair truck to get to the
hospital with a power outage will depend on police assistance,
for example, and ongoing discussions among the utilities, the
public safety agencies, facilitated by our emergency
preparedness agency and the technology office, will address
these concerns.
We cannot rely on self reports. We must insist on
independent verification and validation for utilities as well
as our own government agencies. I am pleased that the
District's chief technology officer, earlier contracted for two
different sources of independent verification and validation,
using alternate test methodologies for its own Y2K project, and
we will continue to monitor the ongoing work of the District's
Public Service Commission in this regard.
In addition to oversight, the Council has also used its
legislative powers to support the successful Y2K conversion. In
1998, we established the Office of the Chief Technology Officer
as a separate agency with authority for information technology
policy standards and technical assistance.
We also enacted legislation, the Year 2000 Government
Computer Immunity Act of 1998, which immunizes the District
against any lawsuit or administrative action arising from Y2K
failure. More recently, we acted swiftly to streamline our own
contract review process to expedite Y2K procurements. In July
again the Council acted to allow the receipt and approval of
contracts during our legislative recess.
This rule change allowed several important Y2K contracts to
go forward, including a 4.2 million contract for a unified
computer aided 911 dispatch system for police and fire
departments. The Council has been a partner in the Y2K effort
in providing oversight and clearing away statutory and
regulatory roadblocks.
Let me conclude my testimony with a note of optimism. The
District's investment in the Y2K project and the anxiety and
hard work that has accompanied it will pay off long after the
final data field is fixed. Through this particular trial by
fire, we have developed capacity in the information technology
field that we simply did not have before.
We now have a strong and effective central technology
office. We have technology standards to ensure that new systems
and equipment are state-of-the-art. We have an inventory of all
information technology systems and equipment. We've developed
contingency plans that can serve as the basis for disaster
recovery. We've replaced obsolete systems and are consolidating
and upgrading our data centers.
We need to preserve and extend these gains by developing
applications that will improve public services and by exploring
new technologies such as electronic commerce.
Finally, I would like to comment very briefly on the
article in today's Washington Post relative to Y2K funding and
tracking. I do anticipate that the GAO witnesses will correct
any of the overstatements contained in that news article. But I
just would like to share a concern. There has been a tension
evident in our government that derives from the extraordinary
independence granted the chief financial officer by Congress
during the control year.
That independence means that an operating agency director
does not have a financial officer reporting to him or her. The
agency CFO reports instead to the District CFO. In the case of
Y2K expenditure tracking, the Inspector General has noted
difficulties in sharing data, and I suspect that this results
at least in part from the fragmented responsibility.
The issue of the independence of the CFO is something we
need to carefully consider as we contemplate moving out of the
control year. It is my own view that in a reform government,
financial officials should report to elected officials so we
all know whom to hold accountable.
I would also just point out for the record that the
Inspector General is also under my committee's oversight
purview, and among our audit plans right now is an audit to
determine whether the Office of the Chief Technology Officer
has controls in place to ensure the reasonableness of
expenditures and to properly account for and monitor funding
amounts, so that audit work is ongoing.
Thank you very much.
[The prepared statement of Ms. Patterson follows:]
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Mr. Davis. You summed up just as the red light turned. Good
timing, that's experience.
Ms. Newman, thank you for being with us.
Ms. Newman. Good morning, Chairman Davis and Congresswoman
Norton and members of the subcommittee. I am representing the
Financial Authority, and we're pleased to appear before you
today to offer an update on the District of Columbia's progress
achieving Y2K conversion compliance.
I will also address briefly the District's overall
readiness and the challenges that remain. Achieving Y2K
readiness is of critical importance to the District's ability
to provide services to the city's residents and visitors alike.
The authority's role in the District Y2K readiness is to
provide this city with financial oversight and--you've got a
red light on, I will talk fast though--financial oversight and
technical review of key systems.
Technical review consists primarily for us identifying at
risk systems and monitoring the status of their repair or
replacement. In addition, preparation for the new millennium
must include the development and testing of contingency plans
to address the possibility that certain systems will not work
as anticipated. System failures could result either from
unforeseen problems in the District's own computer hardware and
software or from glitches and service provided to the District
such as telecommunications or electricity.
Recent reports indicate that marked progress has been made
on a variety of critical projects under way to ready the
District for January 1, the development of an inventory of all
District computer systems and identification of systems within
the inventory that are vulnerable to Y2K problems is complete.
In addition, nearly two-thirds of those assets either were
found to be fully compliant, have been fixed and tested or were
replaced with Y2K compliant systems. We expect to receive
additional positive reports during the next few weeks as the
District's aggressive schedule for the final phases of repair
and testing is completed.
Finally, contingency plans have been developed for 89 of
the 94 mission critical business processes that were identified
within the District, and we understand that the remaining 5
will be submitted for review by the end of October.
With respect to the work that remains to be completed, the
Authority is working with District officials to ensure that the
highest priority be given to achieving Y2K readiness of all
systems impacting, health, safety and economic welfare. In
addition, we are monitoring the testing of contingency plans
and working with the Mayor's office to ensure that adequate
resources will be in place to respond to any emergencies that
may arise on New Year's Day.
On the financial front, it is fair to say that the District
was late in instituting rigorous financial accounting and
reporting to account for the Y2K expenditures. We really should
not offer and cannot offer an excuse for this, but to a
significant extent this delay is simply a reflection of the
District's late start overall in addressing Y2K problems.
A tight timeframe necessitated an extremely aggressive
schedule of work in which securing resources to begin
addressing Y2K took precedence over other considerations,
including financial accounting and reporting. In spite of the
tight schedules, however, the Authority's determined to arrive
at detailed accounting of the resources expended to address Y2K
readiness. To this end, we are working closely with the Y2K
program office, the chief financial officer and the principal
vendors to identify all Y2K expenditures and relate them to
work accomplished.
This concludes my prepared statement. I will have a couple
of comments I would like to make in response to my friend the
honorable Kathy Patterson, but I will do it later.
[The prepared statement of Ms. Newman follows:]
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Mr. Davis. Your green light is on.
Ms. Patterson. It's OK, I will do it later.
Mr. Davis. I wish Eleanor would have waited until later. I
guess we can go to Susan Peck. Thank you.
Mrs. Peck. Chairman Davis, Representative Norton, members
of the subcommittee, I'm Susan Peck, the chief technology
officer for the District of Columbia. At the outset I would
like to thank Mayor Williams for his strong leadership of the
District's Y2K efforts.
We focused our Y2K efforts in the District on those city
agencies that are most mission critical for the safety, health
and well-being of District residents. These are on the chart to
your left. We're tracking to a comprehensive aggressive plan to
ensure that District provided services in these mission
critical agencies are not----
Mr. Davis. Let me just interrupt you. I can't see anything.
That's a little better.
Mrs. Peck. They begin with agencies, No. 1, Metropolitan
Police Department, through No. 18, D.C. General Hospital, and
are the critical--are the mission critical public safety,
public health organizations in the city.
Mrs. Morella. Do we have a chart?
Mr. Davis. Let's turn them around. I think we've now
located the charts here. You're not being charged for the time,
and turn this around so the audience and the press can and the
cameras can see it.
Mrs. Peck. There's 18 because they are pneumonics on your
chart. The Metropolitan Police Department, No. 1; Fire and
Emergency Management, No. 2; Emergency Management Association,
No. 3; the Water and Sewer Authority; Department of Health; the
Department of Human Services; Department of Employment
Services; the chief financial officer; the Department of Public
Works; the Department of Corrections, D.C. Public Schools;
Consumer and Regulatory Authority; the lottery; contracts and--
Office of Contracts and Procurement; Office of Personnel; the
Mental Health Authority, which is St. Elizabeth's; University
of the District of Columbia; PBC; and No. 19 are agencies which
are not themselves mission critical, but have mission critical
functions.
Our plan for the District is on two tracks. First, we are
finding and fixing all date-related problems in the District's
mission critical computers and equipment. And second, we are
building and testing alternate operating plans, contingency
plans, for every mission critical business process that
delivers services to District residents.
Let me bring you up to date on where we are in our find and
fix plans for the systems and equipment in the District. Of 370
business applications in the District's inventory, 242 or 65
percent are Y2K ready as they stand, remediated, tested and
production ready. Of these same 370 systems, 223 have been
designated as mission critical. Of these, 130 are Y2K ready as
they stand; 23 remain to be remediated; 39 have been remediated
and are in testing; and 31 are in process of testing only.
The last of the 223 mission critical systems will be
completing their testing by the end of October with return to
production planned for November. We're remediating mission
critical systems in 38 partitions or packets of like systems.
Four of these partitions are on slippage watch, meaning that an
especially focused attention is being paid and substantial
resources infused to assure their schedule recovery and
timeliness.
Our current strategy is to focus even more now on
recovering any slippage watch systems in priority order on
using our management data to help us pay meticulous attention
to slippages when they first occur and to prioritizing our
resources to the District's most mission critical areas.
Of our embedded chip assets, including equipment as varied
as traffic control signals, utility meters, copiers, metal
detectors and defibrillators, as of August 30th, over 63,000 of
these assets were inventoried in the District; 25,000 of these
are mission critical, but as we stand today, only 368 or 1.5
percent still need to be fixed or repaired.
Contingency planning continues to be a major focus of the
District's Y2K initiative. We focused our planning on 94
critical services. I'm pleased to report that the phase 1
contingency planning activities, the writing of the contingency
plans, is completed for 90 of those 94 critical business
processes; plans for the remaining 4 processes will be
completed by the end of October.
Phase 2 contingency planning has begun and falls within the
scope of responsibility of the city administrator.
Implementation and testing of these plans in their agencies is
expected to complete in November.
The Y2K schedule we've managed is one we've maintained
despite numerous hurdles, impediments and discoveries that have
broadly expanded the scope of the project as it was originally
envisioned and defined. The extent of dedicated pre-remediation
technical assistance required in order for the actual systems
remediation to progress in the District was simply not
anticipated at the project's outset.
These activities have absorbed a substantial percentage of
the project's resources. We've also experienced substantial
challenges with our financial management.
With all of these challenges, however, and, nevertheless,
Y2K has had significant positioning advantages for the
District's future technology improvement plans. The presence of
over 300 business and technical professionals across the
agencies has infused new levels of technical expertise,
business planning, project management and task management into
agency structures.
And in many other ways, the Y2K project is also helping us
move to a performance-based technology culture for the future
in the District.
Thank you.
[The prepared statement of Mrs. Peck follows:]
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Mr. Davis. Suzanne, thank you very much.
Mr. Brock, thanks for being here.
Mr. Brock. Thank you, Mr. Chairman.
Good morning to the other members of the subcommittee. I've
also had the privilege of testifying before Mrs. Morella and
Mr. Horn on other Y2K issues such as the Postal Service and the
Department of Defense.
I would like to briefly go over three topics; the Y2K
status of the District, the challenges facing the District in
the remainder of the year and opportunities for lessons
learned.
In terms of the status, if you read my statement, you will
see differences in the numbers between mine and Mrs. Peck's. I
think this is largely attributable to, one, some differences in
coverage, and, second, our cutoff date for our data was largely
September the 16th, and she has had some updates since then.
In October, I testified before you, and I said that the
District was a year late. And in February I testified before
you, and I said the District was a year late. Today I'm
testifying and the District is late. There's nothing to do
about that. They started late and it's right against the wire,
as the witnesses from the District have said.
And just so there won't be any misunderstanding as I get
into my statement, I would like to say in our review of what
people are doing to remediate the system, that we find that the
District has an approach that's reasonable and that people in
the District are working very, very diligently to take
corrective action.
With that said, I would like to spend a little bit of time
talking about the status. We're primarily looking at 18 mission
critical departments. They are the top 18 agencies, and their
Y2K office tracks 70 critical projects within those agencies.
Right now, only 14, or at the time of the end of our review on
the 16th, only 14 of those projects were implemented. That
means we have another 56 that are still ready--that are still
in the wings. They're either being renovated or they're being
tested or they're in the final stages of implementation.
So there is still a significant amount of work to do before
the end of the year. In terms of the contingency planning, at
the time of our review the District still had 11 of their phase
1 plans to complete. Most of those were in the Office of
Consumer and Regulatory Affairs, and I understand that since
then several others have been completed.
The phase 2 planning, which is most important, that's when
you take a piece of paper and you say we're going to do
something to make it operational, we did not have the status of
these plans at the time of the end of our review. They're under
way, but we did not have the schedule as to when they're to be
complete. So that's the status.
I think the most important part today--the status, is the
status--are the challenges. And the District has 98 days, and
we think that it has two principal challenges. The first
challenge is that regardless of what's happened in the past
there's a lot of work to finish, and some of these tests are
scheduled late into November. A few are scheduled early in
December. There's very little room for error. There's no room
for error. If there are any additional slippages, then the
District could be in trouble on some of these.
Second, of the projects that have not yet been completed,
and our review of the schedules, shows some slippages. So
slippages have occurred. Now, the District has made adjustments
to their schedule to account for this, and they're still
scheduled to be complete before the end of the year. But I
bring this point up just to indicate that slippages can occur
in schedules. This makes the contingency planning for systems
and the business continuity planning all the more important.
So our recommendations to the District are ones that
they've already recognized, that, one, the District needs to
have a consistent source of information they use to make
management decisions. And they need to keep their eye on the
ball, as systems progress, as the projects progress, as the
contingency plans progress, to look for evidence of slippages,
to look for opportunities to reprioritize, if necessary to
redirect resources, and to direct attention on the most
important areas, so that in fact the District will have every
assurance at the end of the year that it will be ready.
Last, I would like to address the opportunities that the
District has, and I think these opportunities are significant.
Mrs. Patterson and Mrs. Peck both recognize that there were
things that occurred in the District in the past that were
really things that you could take advantage of to improve in
the future.
The simple reason the District is so far behind in
addressing the Y2K problem is it did not have effective
management at all over its information technology assets and
projects. It had no management processes in place that provided
adequate attention to the pending Y2K problem. As a result, it
started late. Further, as Mrs. Peck indicated, once they got
into the project, they found that there was no system
documentation for many systems. They didn't have a complete
inventory for systems.
It was difficult to get started by capitalizing on the
efforts that they've had to go through in order to get to the
stage they're at right now. The District has learned that Y2K
efforts cannot succeed without the involvement of top-level
managers at the agency level and at the city level.
The District has recognized that having complete and
accurate information on information systems can facilitate
remediation and testing and validation efforts. This is
critical for any system development effort, whether it's for
Y2K or otherwise. The District has developed a better
understanding of its core business processes and has made some
progress in prioritizing its mission critical systems based on
their impact on these processes.
And then, finally, the District, like many other
organizations that we've looked at, found that they needed to
take special steps in order to increase their technical
capabilities to address this problem, and they have in fact
done so. I think these measures are appropriate for the
District as they're looking for future technology management
and hopefully they can learn from this.
That concludes my summary, Mr. Chairman.
[The prepared statement of Mr. Brock follows:]
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Mr. Davis. Thank you, Mr. Brock.
Mrs. Jarmon, thank you for being here.
Mrs. Jarmon. Thank you. Mr. Chairman, and members of the
subcommittee, I'm pleased to be here today to respond to your
questions related to the financial management of the District's
Y2K effort. As several of the witnesses have mentioned, the
District is aware and has spoke to the fact that there have
been financial management problems related to this effort.
You asked us to respond to some specific questions related
to financial management and that's what my statement today will
address. It will primarily cover three points: One, the funds
provided in the District's reported expenditures to date; two,
the District's ability to track its Y2K costs; and, three, the
additional funding request requested by the District.
First in regard to funds provided and reported as
expenditures. As shown in table 1 of my statement, on page 3,
the District's draft financial reports for a period from June
1998 to September 15, 1999 show that almost $100 million had
been provided for Y2K efforts during that time.
These reports show that of this amount about $42 million
had been spent and $54 million had been obligated, leaving
remaining funds of almost $2 million.
In regard to my second point, on the District's ability to
track Y2K costs, District officials told us, and they've
mentioned today, they have had significant problems in tracking
Y2K costs and expenditures. They attribute this primarily due
to significant turnover in key financial positions, and we were
aware of that and we noted that also.
Over the past few weeks, the District officials had spent
considerable resources in their efforts to better track their
Y2K costs. During this time, however, which is during the time
of our review, we received inconsistent and unreliable cost
data from them, and these schedules continued to change.
It was apparent that the District did not have reliable
financial data to manage the Y2K project costs and District
officials are currently reviewing their costs and have found
examples of invoices received and paid even though the
District's financial management system had no corresponding
purchase orders or contract-related information.
They found examples of invoices paid without adequate
documentation to justify the amounts paid, and they found
examples of contractor bills that were paid even though the
time charges were inaccurate. And from what we've seen, the
contractor bills have been adjusted for these inaccuracies that
the District found.
These practices seem to go on because the District had no
clear process for reviewing and verifying invoices submitted by
contractors prior to making payments. And I'm specifically
referring to the Y2K invoices.
These kinds of problems, however, with financial management
in the District are not new and have been reported by GAO, the
District's Office of Inspector General and the District's
external auditors. In addition, we were told yesterday, and
this was mentioned in the Post article this morning, that
because of these financial management problems the District
plans to hire a CPA firm to help it track its Y2K costs, and
also the District's Inspector General plans to begin audit work
in this area sometime this fall.
Meanwhile the District's difficulties in tracking its Y2K
costs make it impossible at this point to determine whether
these funds were spent properly.
In regard to my third point on the additional requests
fund, as shown in table 2 to my statement on page 7, the
District has requested about $91 million in additional funding
from OMB to complete its Y2K efforts. They were informed late
this week that $22 million of this amount is available, and the
remaining request is being reviewed by OMB.
In summary, the District cannot reliably track how the
funds that had been received have been spent, nor say with any
degree of certainty that the amounts have been spent properly.
Given the urgency of the tasks of addressing the Y2K problem
and the fact that the District is behind schedule, it is
essential that the District have accountability for Y2K funds
and to do careful planning, budgeting and tracking of
expenditures. Without this kind of discipline over its efforts,
it cannot assure the Congress that the additional funds
requested will be spent as intended.
Mr. Chairman, this concludes my statement. I will be happy
to answer questions from you or other members of the
subcommittee.
[The prepared statement of Mrs. Jarmon follows:]
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Mr. Davis. Thank you very much. I'm going to start the
questioning with the gentleman from California. I just make one
comment. I'm looking at the District of Columbia mission
critical business process, Y2K contingency planning, in terms
of where everything is, where the plans develop, where it's
tested, where it's implemented, and the one that is all green
is--fortunately, you have the eligibility benefits, and those
issues which are important to D.C. residents. But you also have
the revenue generated, because I noticed the lottery appears to
be Y2K compliant as well.
And I'll bet you, I can't find it, but I'll bet you that
the parking tickets are probably Y2K compliant. That has always
worked in the city even when everything else may be off.
But the gentleman from California, who, I might add, has
just been a national leader on the Y2K, will start the
questioning for 5 minutes, and then to Ms. Norton.
Mr. Horn. As I recall, at the last Y2K hearing in February
we were assured that the executive steering committee of the
District, which had some of the city's top officials, was
central to resolving the problems involved.
And I guess I'm asking, I'm told that the committee has not
met since December 1998 to June 1999. Can somebody explain that
to me?
Ms. Newman. I can start by saying that at the beginning of
this Mayor's administration, the decision was to honor his way
of managing these kinds of projects. This did not mean that the
people who were officially involved and listed on the committee
were not involved.
We have weekly meetings with the Mayor and his staff. I
must say that every week the issue of Y2K compliance comes up
in some form or another. There have been the meetings that the
Mayor has that I'm sure he will speak about, where there are
representatives from the Council and the Authority who meet on
a regular basis. So the fact that that formal group has not met
should not concern you, because the people who were----
Mr. Horn. Thank you.
Mr. Brock, I think you said that there was a lack of
management focus here. Is that part of it or are there other
things?
Mr. Brock. When we started this second or third review, Mr.
Horn, we did look for evidence of whether the steering
committee had met; it had not met. We knew that activities were
taking place. For example, I go to the DOD steering committee
every month. We also go to the IRS steering committee, et
cetera. These are very useful in terms of bringing issues to
the table and having all the parties there and resolving them
on the spot.
The initial meetings where we reviewed the minutes of those
meetings seem to be more oriented toward status checking as
opposed to using that as an opportunity to refocus priorities.
Since that time, there has now been an increased focus on using
forums like that to reach decisions and redirect resources.
Mr. Horn. Mrs. Peck, let me direct this to you. As I
understand, the contract with IBM, the prime Y2K contractor,
lapsed and many of the contract consultants were removed and
weeks of work were either interrupted or lost. How come?
Mrs. Peck. I think, Mr. Horn, you're probably referring to
a slight pause between phase 1 and phase 2 of the contingency
planning. There was a very, very substantial group of IBM
consultants helping the agencies on phase 1 of the plan. The
long-term strategy for phase 2 of the plan was that the actual
implementation of those written plans would be done principally
in the agencies. And so there was a planned withdrawal of a
substantial number of the consultants who had worked on phase
1. Our discovery was that----
Mr. Horn. Excuse me. Are those consultants the ones who
would be remediating the various codes and tapes?
Mrs. Peck. The consultants have various functions. Some
were code remediators. All of these that I'm speaking of were
contingency plan writers, helping the agencies write the
contingency plans.
Mr. Horn. Have you had a difficulty in getting people to
remediate the codes? Are we out of shortage of supply here?
Mrs. Peck. No.
Mr. Horn. OK. So you're OK on that because I would suggest
if you aren't, and a lot of them are in COBOL; is that not
correct?
Mrs. Peck. That's correct.
Mr. Horn. I would ask for the Office of Personnel
Management to run a tab on it and get those that are still
retired and not back in, and they've been very supportive in
terms of you can keep your pension, you can get your wonderful
contract. And it seems to me, if you're short there, that you
ought to call on them.
Let me ask you this, because I've got to move with the 5-
minute rule that I'm a strong believer in. To date only 130 or
58 percent by our math, of these systems that are year 2000
ready, how confident are you that you can fix, test, put the
remaining systems into production by November? Do you feel,
Mrs. Peck, you can do that?
Mrs. Peck. My arithmetic on the same figures is a little
different, because the 130--I count if they are remediated and
they are in testing, because the remediation is a very
substantive part. Of the mission critical systems, 90 percent
of those on the same numbers that you're counting, you're
counting 130 over 223, I count 200 over 223, because I count
all of those that have been remediated and are now in testing.
I am confident. We just yesterday had a very substantial----
Mr. Horn. I will take that answer. Let me, with one
question to go here, the District's unemployment benefit
program, have we looked at that? Because that's one of those
things that a lot of people would be hurt if they don't get
their check on time. How are we on that one?
Mrs. Peck. Both the employment benefits and the employment
tax system come out of our Department of Employment Services.
Both of those systems are on schedule. The legacy employment
benefits contingency remediation is complete and waiting on the
shelf, in case our new employment benefit system, which is
planned for production October 18th, is not ready. But in point
of fact we expect our legacy remediated system never to come
off the shelf because we expect the new system to be there. In
terms of the unemployment tax system, it will be in production
on October 4th.
Mr. Horn. I thank you all, and my colleagues can ask the
rest of the questions.
Mr. Davis. I thank the gentleman.
I now recognize the gentlelady from the District of
Columbia, Ms. Norton.
Ms. Norton. In terms of the difficulties that the city has
had in the financial management of the Y2K process, I recall
that with some difficulty we got a financial management system
authorization out of the Congress a couple of years ago. And so
you are, I take it, doing Y2K compliance at the same time
you're instituting a new financial management system.
I would like to know whether or not that has had anything--
how that system has worked with this process and whether that
has had anything to do with any of the problems encountered?
Mrs. Peck. Actually, one of the advantages that we have had
on this project is the fact that our new financial management
system, SOAR, is Y2K compliant. That is a very substantive
system for the city and the fact that it was compliant was an
advantage to us.
Ms. Norton. At the same time there have been indications
that there have been glitches in instituting the financial
management system in agencies around the city. That's what I'm
referring to. I recognize that was compliant.
How does that fit with tracking Y2K, the Y2K expenditures?
Mayor Williams. If I could speak to that. I think that, you
know, Congresswoman Norton, any kind of system in my mind is
not just hardware and software, it's people, it's operations,
it's process. Certainly instituting the new financial
management system, for example, a new financial management
system requires our agencies to do double entry bookkeeping,
which the old system, even though it was the old accounting
system, didn't do. So we were trained in a whole new world of
accounting. Enormous amount of training has gone into
instituting this system.
It's very, very important that for this system to work and
for any system of financial control and reporting to work that
there be in the chair of Council operations--Kathy Patterson
talked to this--that it is important that program and financial
management be--have a unity of purpose and work together.
And one of the reasons why I strongly believe we want to
bring this financial team in here is that someone everyone can
respect, everyone can appreciate, they can go out and get this
work done, and we don't have the finger pointing that none of
us want to see and none of us want.
Ms. Norton. Thank you.
Ms. Patterson, I must say, I was concerned that only in
March did the process that the Congress insisted be put in
place whereby contracts of $1 million and over had to go to the
Council, only in March was that--that the Council took an
effort to make sure that that process was not a part of the
problem. And in July, of course, another action was taken to
make sure that over the summer that process was not part of the
problem.
I just want to say that the Congress never put that process
in place because it believed that the Council should have
jurisdiction over contracts of $1 million or more. There is no
executive in the United States which has to go to its council.
It put it in place because there was no Financial Control Board
at the time or it was just starting up, because the Congress
had no way to check on what seemed to be out-of-control
contracting.
I, myself, must say I have not been very pleased with it,
not because the Congress--the Council hasn't taken action when
it had to, I was astounded in what we had to go through, and
the Council did take action on highways--and highways is
something that should never have had to go in the first place
because of the way that procurement takes place.
In any case, I believe that early on in the process that
the Council was part of the problem that should have been
waived instantly, some other way found if you needed a check.
And I need to know whether or not there is a process that is
automatically in place so that this million dollars and over
process, which was put in as an emergency, which I think should
be repealed at the end of the Control Board, whether or not, in
fact, we have in place things that can move more quickly to get
that process out of the way when it's part of the problem.
Ms. Patterson. Ms. Norton, as you know, the requirement
that the Council review contracts over a million or multiyear
is in the charter, so there's no legislation that we can do;
that is something that the Congress needs to act on.
Ms. Norton. I'm not asking about that. I'm saying you have
done things. You did something in March, and you did something
in July. I'm talking about precisely that kind of streamlining
when you have an emergency, and that's what Y2K was, and it
seems to me that there was--that March was too late to be
deciding that we're going to streamline a process. Nothing in
the charter kept that from happening.
Ms. Patterson. In terms of the streamlining effort, one of
the things that we talked about in the hearing that my
committee held on Wednesday with Mrs. Peck was just as we were
using the Y2K challenge to improve our IT systems broadly, this
streamlined procurement for Y2K can be a model for where we go
for the entire city, and that's something we will be looking at
over time.
Ms. Norton. That is something I would urge upon you. And I
appreciate that you are looking at that.
Could I ask a question about coordination with the region?
I know the way we're joined at the hip with the Federal
Government, and that's part of the reason that we got Federal
funds. When it comes to regional systems like Metro and water
and sewer, I'm sure they have their own systems. I need to know
whether or not in any other way they are tied into the
District, however, so that we need it or should be doing any
coordination with the region?
Mrs. Peck. We are doing two levels of coordination, Ms.
Norton. We are doing one level of coordination through the
Council of Governments, and we on September 1st had quite a
large regional Y2K exercise with seven local regional entities
and all of the District agencies that was quite successful and
gave us a good leg up on actual scenarios that might happen at
the date change.
We are also within the District doing a great deal of work
on interagency panels at a second level above individual units
and at a third level, in the Emergency Management Agency, the
District's entire plan across all agencies comes together and
from that plan we link to the FEMA and to the Presidential
levels if crisis management is necessary.
Ms. Norton. Thank you.
Thank you, Mr. Chairman, my red light is up.
Mr. Davis. Thank you. You will have another round. Let me
just ask a question if I can, and I think, Mrs. Peck, I will
address it first to you, and then I will allow the GAO to
respond.
Was there, in fact, a lapse in a contract with IBM due to a
lack of authorization or availability of funding that caused
the unplanned reduction of contract consultant resources?
Mrs. Peck. I would describe it as a pause as we understood
that we needed more resources in a successor phase of a project
than we had originally planned.
Mr. Davis. Let me ask you, Mr. Brock, what really happened
here that we can't account for all of the billings and the
hours? I mean what went wrong here? Can we get any idea?
Mr. Brock. Well, Mr. Davis, we don't have any specific
information on that lapse. We heard about it. One of the
advantages of a strong financial management system, however, it
allows you to have the checks and balances in there so that in
fact you can, one, track that as it goes on and, second, go
back and retroactively do any sort of analysis that you might
want to do to look at the issues such as this.
Mr. Davis. It could in fact just be bookkeeping at this
point in filling in the blanks and that nothing is amiss?
Mr. Brock. That's possible. But without further work, I
would be hesitant to say that.
Mr. Davis. There hasn't been any allegations of any
deliberate wrongdoing or anything like that at this point, it's
just----
Mr. Brock. We heard none during the course of our audit.
Mr. Davis. How much has been spent from June 1998 to now on
the District's Y2K effort, and do you know how much Federal and
how much local and how much more money you think will be needed
to get this--it probably will go past January 1, 2000?
Mrs. Jarmon. The draft reports that we received from the
District on Monday show that during that period of time from
June 1998 to September 15, 1999, that they had spent about $42
million and that they had obligated $54 million, and they
weren't able to tell us whether they thought more was going to
be needed, in addition to the supplemental requests that I
mentioned in my statement. There was a supplemental request of
about $6 to $8 million that is being reviewed by OMB, and $22
million was received as of this week.
Mr. Davis. I would just say on a supplemental request like
that, it would be wise to send it up here as well as OMB
because Congress appropriates it. It is good to work through
all that. But I think Mr. Istook and Senator Hutchinson would
like to be in that loop as early as possible and not get hit,
particularly in light of the budget negotiations and
everything.
Mrs. Peck, let me ask you, do you agree with those numbers
at this point and do you foresee about a $6 to $8 million range
for additional money to get this thing done on Y2K? Do you know
that?
Mrs. Peck. I know that we have----
Mr. Davis. $6 to $8 million, OK.
Mrs. Peck. I know that we have a total of $97.8 million now
in total funding with an additional $22 million in research
receipt.
Mr. Davis. An additional $22 million in what.
Mrs. Peck. That we just recently received.
Mr. Davis. Received. OK. And do you foresee more money
being needed to finish this?
Mrs. Peck. Yes.
Mr. Davis. How much more?
Mrs. Peck. We have an additional funding request before
OMB, who gets cranky if we say the number before they've done
their analysis.
Mr. Davis. What did you ask for? I'm not asking what they
said.
Mrs. Peck. We asked for $68 million additionally.
Mr. Davis. That was in the testimony. I want to make sure
we're singing off the same sheet. You won't have everything
done on January 1. You're on a tight timeline right now. And
you feel the critical structures, you feel reasonably we will
be in pretty good shape?
Mrs. Peck. I'm very confident that the mission critical
services will be delivered.
Mr. Davis. Some of the other items, you know, you want to
get them in as good shape as you can, but you don't have the
same level of confidence obviously, because you had to
prioritize; is that correct?
Mrs. Peck. I'm confident in those mission critical
services.
Mr. Davis. Right. But some of the other services they are
probably not going--some of them may not be ready, is that a
fair statement?
Mrs. Peck. There's surely going to be a handful that gets
out from under the rug, and that's why we've done all of the
extensive contingency planning that we have done.
Mr. Davis. It's not your fault. We knew you had a tight
timeline to get this done from day one and not a lot of room
for error, and this is pretty complex stuff and very time
intensive and everything else.
Do you have an explanation for what might have--where the
money that can't be accounted for in the IBM contract, and why
it's not accounted for and what we might do differently?
Mrs. Peck. We have gone over with the CFO extensively those
spends, and we find the IBM accounting to be accurate. They
now, when they submit their invoices, submit not only monthly
invoices, but submit inception to date statistics so that we
can see every one of their consultants for every month for
every hour, for every agency that they've worked at. So I think
we're closing in on the problem of having that information.
Mr. Davis. Do you have a good enough staff, competent
enough staff, understanding the complexities of this issue, to
sit over IBM and know if they're doing the right thing or not?
Mrs. Peck. Absolutely.
Mr. Davis. Let me just ask this. If you could rate it, how
effective does GAO believe the District has been in managing
the funds it's received?
Mrs. Jarmon. To date, based on what we've seen, and we've
primarily been looking at this over the last 2 or 3 weeks when
we received the questions, there have been a lot of problems,
and the management of the funds, you have to take into account
the emergency nature of this, have not been effective during
that time based on what we're looking at. We are encouraged by
the recent efforts and the plan to bring in additional
expertise, but it hasn't.
Mr. Davis. Thank you, my time is up. I'm going to yield to
Mrs. Morella. I will just say as often happens in emergencies
we find with FEMA and other groups, when you try and get the
money through and the contracts through sometimes the
formalities of accounting for it takes second place to getting
the mission done. And I'm encouraged by the city's attitude
here that we want to sit and make it right instead of just
being defensive. This is tough.
At the end of the day, we will want to solve this problem,
and we want to solve it in a timely manner, that's No. 1.
There's other stuff, I think we try and work as we can.
Mrs. Morella, I'm going to recognize you, and then back to
Ms. Norton.
Mrs. Morella. Yes, thank you, Mr. Chairman, I appreciate
it.
I appreciate all you coming here to discuss this very, very
important issue, and I think the eyes of the Nation are on the
District of Columbia.
Mr. Brock, as usual it's good to see you and to know that
we have with Mrs. Jarmon, we have GAO doing a lot of the
monitoring, and I would agree with what you said in your
testimony that the plan shows that four projects won't be
tested until November, and another seven in December. And as
you said in your oral testimony, all of this is pretty risky.
So I guess I would ask you, in addition to thanking you for
your candid assessment of the situation of the readiness, which
of the District's critical services could be jeopardized due to
potential year 2000 failures?
Mr. Brock. I think that any of the critical structures
could be in jeopardy because of the interrelationship among the
various services, which is one of the reasons the contingency
planning, the business continuity planning and the exercises
they're planning are so critical, that until you do these types
of exercises sometimes you don't recognize the
interrelationships that something occurring in one department
actually has a ripple effect in another department.
That's why fixing a system alone is not enough. Until you
do the, what we would call the end-to-end testing and test
those systems within a process, and then test the contingency
plans and the business continuity plans to see that they will
work, I would consider the systems at risk.
Mayor Williams. Could I augment that or chime in there?
Mrs. Morella. Certainly, Mr. Mayor.
Mayor Williams. I think we want to be conservative, because
I think you managed to hear the problem, and we've got some
problems and challenges that we recognize. But I think that,
you know, from the beginning of the year, we met with all of
the agencies in the cabinet once a week, you know, and queried
them on a number of top priorities, and in my world, everything
is a top priority, and you distinguish between the top
priorities that are blowing up and the top priorities that are
just a simple top priority.
So there's no--there is no excuse. I'm not going to sit
here and say there's an excuse for not having convened the
steering committee earlier. In hindsight I should have done
that, but the fact is you're just managing a number of
emergencies all the time, and I thought that the cabinet was
the right way to bring everything to the table on a regular
basis.
Second, we got information flow in terms of financial
management, in terms of program management. We managed that
information. The information we were getting is that the
project was challenging, but that it was on track. As we got
additional information that we needed to make some judgments,
we went out in the field and did those adjustments, and we will
continue to make those adjustments.
Third, I want to assure everyone on the committee and
everyone in our city that this city is going to be ready,
either because mission critical systems are going to work,
which I think by and large they will, I have confidence that
they will.
But even if they don't and to the extent other nonmission
critical systems don't, that this stage 1 and 2 contingency
planning that we're working very, very aggressively is
automatically going to happen, and I say that because I brought
in Peter LaPorte, who was a former emergency management
director in the State of Massachusetts, who worked with Chief
Braden in New York. He has got extensive emergency management
public safety experience. He is working on the scene with us on
this matter.
We also have Robert Fletcher from FEMA, who we have gotten
from Federal Emergency Management, who is working with us on
our contingency planning. We're working very aggressively on
this. I think we have some top flight people on the problem. So
I'm not disputing GAO that there is major challenges. But I
just want to give everyone a notion of assurance that, as John
Koskinen says, that we're managing to the problem because I
believe we are.
Mrs. Morella. I think we have to do that and I would agree,
as I have said before, I think that we shouldn't assume the
Chicken Little stance that the sky is falling, nor the
Pollyanna stance that there's nothing to worry about. But I
think it also links up to the coordination.
And I guess, Mrs. Peck, are you having difficulty
coordinating with the private vendors, your subcontractors?
What are you doing about that coordination?
Mrs. Peck. We really are not having difficulties in that
area. Every day is a challenge. Every day we need to get that
day's work fully done to go on to the next, and every day there
are difficulties, but there are not extensive coordination
difficulties. Our contractors have really been powerful in the
support of the District in this project.
Mrs. Morella. Which then leads to end-to-end testing. Have
you done some end-to-end testing then to make sure that you are
able to connect with the entities that you're dependent upon,
which includes subcontractors, which includes business
entities?
Mrs. Peck. We really--I'm sorry, I thought you meant our
Y2K contractors who have been extraordinarily supportive.
Independent supply line providers have their own independent
Y2K plans, while we have done the very--the very substantive
cog effort, we are depending on the assertions of those third-
party suppliers to a great extent that the compliance they
assert is the compliance they actually have.
For our non-IT assets, we have done, however, even with the
assertions of third-party suppliers, we have done a very
substantial amount of testing ourselves of all of the embedded
chip gear that the District has that's mission critical.
Mrs. Morella. Does the chief technology officer report
directly to the Mayor?
Mayor Williams. All of our agency heads meet with me
weekly. All of my agency heads have access to me whenever they
want that access. And I've told Susan personally she can talk
to me any time she needs to on whatever basis she needs to,
although in our city charter, our agencies report to the Mayor
through the city administrator.
Mrs. Morella. I want to give you an opportunity to respond.
But I want to thank you also, Mrs. Jarmon, for your concept and
the question about where this money is going and all of you as
we count down, we wish you well, we will be watching.
Mr. Davis. Thank you very much.
Ms. Norton.
Ms. Norton. Mr. Chairman, in order to allow those who have
the vote to be able to vote, I will be brief and confine myself
to two questions.
I think the public would like--we are using language that
we necessarily have to use by contingency planning. I think the
public might find it useful to have real world examples of
contingency plans for mission critical systems, you know,
suppose 911 goes out. You pick them. Give us some examples that
make us--that would give us some confidence that we're going to
be OK.
Mrs. Peck. I think 911 is a wonderful example. In the case
where--and the District is also in the situation where
historically, because of the lack of investment in technology,
we probably operated according to contingency plans more than
we would have liked. When the automatic 911 dispatch system
goes out, is not working, the function that that system does is
really to present the call dispatchers with the address of the
party who is--who is calling, to locate that caller.
When that cannot be done systematically, it is done with
substantial computer printouts of every address in the District
and the operational difference in 911 between having an
automated system and a manual system is that the dispatch is
approximately 30 to 60 seconds longer on the manual dispatch
than it is on the systems dispatch.
I was just handed, and if I may, Ms. Norton, I would like
to alert District residents that this Sunday in their
Washington Post supplement will be a Washington, DC, home guide
to emergency preparedness. It is for the District's residents,
not only a guide for Y2K preparatory activities, but it is also
a general emergency preparation guide that they can use in any
emergency, and that will be in their Washington Post supplement
this Sunday.
Ms. Norton. It will tell me if I call D.C. General and I
can't get through, it will tell me what you all have in place,
for example--and what do you have in place, because D.C.
General was supposed to be one of those mission critical
agencies that was not fully ready?
Mrs. Peck. Our expectation is that the D.C. General patient
care system, which we are now remediating, will indeed be
ready. But, again, D.C. General has full patient care
contingency plans in the alternative.
I might also mention that residents can, beginning on
October 1st, dial the Mayor's central citizen information
number, 727-1000, and that number will have all the
information, Y2K information, that citizens need and will be
able to respond to any Y2K questions that they have.
Mayor Williams. I want to echo on that, Congresswoman
Norton. We've also through our chiefs suspended our leave.
We've also sent out a Mayor's order that essentially largely
suspends any leave for many of our mission critical nonpublic
safety personnel. We're going to have fully staffed, not only
with District personnel, but with our Federal partners with
connection to the regional command center that it will be up
and operating days before the actual moment of truth, January
1st.
Ms. Norton. Finally, we've been talking about mission
critical systems. Has anything been done with nonmission
critical systems? Are we going to have a collapse of those
systems because we've put so much attention on mission critical
systems?
Mrs. Peck. This is why when Mr. Davis asked me the
question, I was so assertive that we would be ready. We speak
just to emphasize the priority of the 18--of the mission
critical systems at the 18 mission critical agencies, but to
Mr. Horn--in responding to Mr. Horn's question, my response was
to every system of the District, to all 370 systems of the
District, and while those are--many of those are priority 2 and
priority 3 systems, the remediation, the testing and the return
to production is of all of the systems and our report is on all
of the systems, not just the mission critical.
Ms. Norton. Thank you. That's important to know that even
with the priorities, you think all the systems are receiving
the same attention.
Thank you, Mr. Chairman.
Mr. Davis. Thank you very much.
Just a couple of questions before we wrap up. The District
discontinued its New Year's Eve event at the Old Post Office
due at least in part to crowd management issues. How will the
new millennium celebration be implemented? Can Congress be
ensured that crowd management will be sufficient? Have we
looked at this? And will this event interfere with routine or
emergency city services, and is it being taken into account in
the Y2K planning?
If you would like we can give you time to answer that in
writing if you want to do it.
Mayor Williams. If I can, the short answer, Mr. Chairman,
is that we've been working closely with the Federal authorities
as we did, for example, with NATO, it was very, very successful
working with them on the millennium. And I don't see that there
will be any impact on our government services, but we can get
you a detailed answer in writing.
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Mr. Davis. OK. Let me just ask, does anybody want to add
anything they didn't do? Is everybody OK?
I want to congratulate Susan Peck and her team on her
effort. There's always going to be glitches around. I want to
thank the GAO for their insights on this, everybody's
willingness to work together for our Nation's Capital, and I
appreciate it and I think it's going to make the big
difference.
Without objection, all written statements submitted by
witnesses will be made a part of the permanent record. The
record will remain open for 10 days. The subcommittee will
continue to work with all interested parties.
At our next hearing maybe we will deal with the Y3K issue.
These proceedings are closed.
[Whereupon, at 12:40 p.m., the subcommittee was adjourned.]
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