<DOC>
[106th Congress House Hearings]
[From the U.S. Government Printing Office via GPO Access]
[DOCID: f:61232.wais]
STATE OF THE STATES: WILL Y2K DISRUPT ESSENTIAL SERVICES?
=======================================================================
JOINT HEARING
before the
SUBCOMMITTEE ON GOVERNMENT MANAGEMENT,
INFORMATION, AND TECHNOLOGY
of the
COMMITTEE ON GOVERNMENT REFORM
and the
SUBCOMMITTEE ON TECHNOLOGY
of the
COMMITTEE ON SCIENCE
HOUSE OF REPRESENTATIVES
ONE HUNDRED SIXTH CONGRESS
FIRST SESSION
__________
OCTOBER 6, 1999
__________
Committee on Government Reform
Serial No. 106-56
Committee on Science
Serial No. 106-56
__________
Printed for the use of the Committee on Government Reform and the
Committee on Science
Available via the World Wide Web: http://www.house.gov/reform
______
U.S. GOVERNMENT PRINTING OFFICE
61-232 CC WASHINGTON : 1999
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-HAGE, 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 Government Management, Information, and Technology
STEPHEN HORN, California, Chairman
JUDY BIGGERT, Illinois JIM TURNER, Texas
THOMAS M. DAVIS, Virginia PAUL E. KANJORSKI, Pennsylvania
GREG WALDEN, Oregon MAJOR R. OWENS, New York
DOUG OSE, California PATSY T. MINK, Hawaii
PAUL RYAN, Wisconsin CAROLYN B. MALONEY, New York
Ex Officio
DAN BURTON, Indiana HENRY A. WAXMAN, California
J. Russell George, Staff Director and Chief Counsel
Matt Ryan, Senior Policy Director
Bonnie Heald, Communications Director/Professional Staff Member
Chip Ahlswede, Clerk
Trey Henderson, Minority Counsel
COMMITTEE ON SCIENCE
HON. F. JAMES SENSENBRENNER, Jr., (R-Wisconsin), Chairman
SHERWOOD L. BOEHLERT, New York RALPH M. HALL, Texas, RMM**
LAMAR SMITH, Texas BART GORDON, Tennessee
CONSTANCE A. MORELLA, Maryland JERRY F. COSTELLO, Illinois
CURT WELDON, Pennsylvania JAMES A. BARCIA, Michigan
DANA ROHRABACHER, California EDDIE BERNICE JOHNSON, Texas
JOE BARTON, Texas LYNN C. WOOLSEY, California
KEN CALVERT, California LYNN N. RIVERS, Michigan
NICK SMITH, Michigan ZOE LOFGREN, California
ROSCOE G. BARTLETT, Maryland MICHAEL F. DOYLE, Pennsylvania
VERNON J. EHLERS, Michigan* SHEILA JACKSON-LEE, Texas
DAVE WELDON, Florida DEBBIE STABENOW, Michigan
GIL GUTKNECHT, Minnesota BOB ETHERIDGE, North Carolina
THOMAS W. EWING, Illinois NICK LAMPSON, Texas
CHRIS CANNON, Utah JOHN B. LARSON, Connecticut
KEVIN BRADY, Texas MARK UDALL, Colorado
MERRILL COOK, Utah DAVID WU, Oregon
GEORGE R. NETHERCUTT, Jr., ANTHONY D. WEINER, New York
Washington MICHAEL E. CAPUANO, Massachusetts
FRANK D. LUCAS, Oklahoma BRIAN BAIRD, Washington
MARK GREEN, Wisconsin JOSEPH M. HOEFFEL, Pennsylvania
STEVEN T. KUYKENDALL, California DENNIS MOORE, Kansas
GARY G. MILLER, California VACANCY
JUDY BIGGERT, Illinois
MARSHALL ``MARK'' SANFORD, South
Carolina
JACK METCALF, Washington
Subcommittee on Technology
CONSTANCE A. MORELLA, Maryland, Chairwoman
CURT WELDON, Pennsylvania JAMES A. BARCIA, Michigan**
ROSCOE G. BARTLETT, Maryland LYNN N. RIVERS, Michigan
GIL GUTKNECHT, Minnesota* DEBBIE STABENOW, Michigan
THOMAS W. EWING, Illinois MARK UDALL, Colorado
CHRIS CANNON, Utah DAVID WU, Oregon
KEVIN BRADY, Texas ANTHONY D. WEINER, New York
MERRILL COOK, Utah MICHAEL E. CAPUANO, Massachusetts
MARK GREEN, Wisconsin BART GORDON, Tennessee
STEVEN T. KUYKENDALL, California BRIAN BAIRD, Washington
GARY G. MILLER, California
Ex Officio
F. JAMES SENSENBRENNER, Jr., RALPH M. HALL, Texas+
Wisconsin+
C O N T E N T S
----------
Page
Hearing held on October 6, 1999.................................. 1
Statement of:
Benzen, Mike, president, National Association of State
Information Resource Executives............................ 129
Callahan, John, Chief Information Officer, Department of
Health and Human Services.................................. 94
Hugler, Edward, Deputy Assistant Secretary for Information
Technology and Acting Deputy Assistant Secretary for
Administration and Management, U.S. Department of Labor.... 118
Spotila, John, Administrator, Office of Information and
Regulatory Affairs, Office of Management and Budget........ 85
Watkins, Shirley R., Under Secretary for Food, Nutrition, and
Consumer Services, U.S. Department of Agriculture.......... 106
Willemssen, Joel, Director, Civil Agencies Information
Systems, U.S. General Accounting Office.................... 10
Letters, statements, etc., submitted for the record by:
Benzen, Mike, president, National Association of State
Information Resource Executives, prepared statement of..... 130
Biggert, Hon. Judy, a Representative in Congress from the
State of Illinois, prepared statement of................... 193
Callahan, John, Chief Information Officer, Department of
Health and Human Services:
Inserts for the record........................... 177, 183, 187
Prepared statement of.................................... 97
Horn, Hon. Stephen, a Representative in Congress from the
State of California, prepared statement of................. 3
Hugler, Edward, Deputy Assistant Secretary for Information
Technology and Acting Deputy Assistant Secretary for
Administration and Management, U.S. Department of Labor,
prepared statement of...................................... 120
Morella, Hon. Constance A., a Representative in Congress from
the State of Maryland, prepared statement of............... 6
Spotila, John, Administrator, Office of Information and
Regulatory Affairs, Office of Management and Budget,
prepared statement of...................................... 88
Watkins, Shirley R., Under Secretary for Food, Nutrition, and
Consumer Services, U.S. Department of Agriculture:
Nutrition program information systems chart.............. 108
Prepared statement of.................................... 110
Willemssen, Joel, Director, Civil Agencies Information
Systems, U.S. General Accounting Office, prepared statement
of......................................................... 12
STATE OF THE STATES: WILL Y2K DISRUPT ESSENTIAL SERVICES?
----------
WEDNESDAY, OCTOBER 6, 1999
House of Representatives, Subcommittee on
Government Management, Information, and
Technology, Committee on Government Reform,
joint with the Subcommittee on Technology,
Committee on Science,
Washington, DC.
The subcommittees met, pursuant to notice, at 10 a.m., in
room 2154, Rayburn House Office Building, Hon. Stephen Horn
(chairman of the Subcommittee on Government Management,
Information, and Technology) presiding.
Present from the Subcommittee on Government Management,
Information, and Technology: Representatives Horn, Biggert,
Ose, and Turner.
Present from the Subcommittee on Technology:
Representatives Morella, Bartlett, Baird, Gutknecht, Wu,
Barcia, and
Staff present from the Subcommittee on Government
Management, Information, and Technology: J. Russell George,
staff director and chief counsel; Matt Ryan, senior policy
director; Bonnie Heald, communications director and
professional staff member; Chip Ahlswede, clerk; P.J. Caceres
and Deborah Oppenheim, interns; Trey Henderson, minority
counsel; and Jean Gosa, minority staff assistant.
Staff present from the Subcommittee on Technology: Jeff
Grove, staff director; Ben Wu, counsel; Joe Sullivan, staff
assistant; Michael Quear, professional staff member; and Marty
Ralston, staff assistant.
Mr. Horn. The joint hearing of the House Subcommittee on
Government Management, Information, and Technology, and the
House Subcommittee on Technology will come to order.
These programs, which include Medicaid, temporary
assistance for needy families, food stamps, child support
enforcement, serve millions of Americans each day.
This spring, the President's Office of Management and
Budget identified 43 ``high impact,'' or essential Federal
programs. Of these 43 programs, 10 are administered by State
and local governments.
In August, we found that only seven of these will be
completely ready for the new year until December. That is
simply not acceptable. Millions of American lives will be
harshly disrupted if these vital programs fail. It is time to
start naming names. We must know now whether States such as
Alabama, Oklahoma, and California, among others, are ready.
Will they be able to provide essential services without a
severe degradation of services because of potential Y2K
failures?
The Office of Management and Budget has charged three
Federal departments with ensuring that these State-run programs
are ready. Representatives from these departments are with us
today.
The Department of Health and Human Services is responsible
for six State-run programs, including Medicaid, the health care
safety net for 33 million of the Nation's most vulnerable
citizens; its children, its elderly, and its poor. This
department is also responsible for the Nation's welfare
program, called temporary assistance for needy families. The
$16.5 billion program shores up families who have fallen on
hard times through the loss of a job or an illness and helps
them return to the work force.
The Department of Health and Human Services supplements
these two major programs with its programs for child care,
child support enforcement, child welfare, and low-income home
energy assistance. Will States be able to deliver these
services after the clock ticks past midnight on January 1st?
That is what we will be asking our panel.
The Department of Agriculture is responsible for three
State-run food programs--child nutrition, food stamps, and
special supplemental nutrition program for women, infants, and
children [WIC]. In the year 2000, the child nutrition program
will serve more than 27 million lunches a day.
Could a State's year 2000 failures result in some of these
lunches not being served to the school children who need them?
Could such failures prevent families from obtaining the food
stamps they dependent on? Or deprive nourishment from the women
and their very young or unborn children? We need to know the
answers to those questions.
The Department of Labor is responsible for only one State-
run program, unemployment insurance. In the year 2000, an
estimated 8 million people for one reason or another will lose
their jobs and rely on this program to supplement their
incomes. Could year 2000 failures degrade States' abilities to
pay this benefit?
Together, these State-run programs affect millions of
people and cost the Federal Government in excess of $125
billion a year. Today, we want to provide an accurate portrayal
of the States' year 2000 readiness. In just 86 days we will
witness the dawn of the new millennium. The American public
deserves to know which States are ready and which, if any, are
at risk of failure.
I welcome today the panel of expert witnesses, and look
forward to their testimony.
[The prepared statement of Hon. Stephen Horn follows:]
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Mr. Horn. I will now turn to my colleague, the co-chairman
for this hearing, Mrs. Morella, the gentlewoman from Maryland,
the Chair of the House Subcommittee on Technology.
Mrs. Morella.
Mrs. Morella. Thank you, Mr. Chairman. Mr. Chairman, in the
past 3\1/2\ years that our two subcommittees have been engaged
in the review of the year 2000 computer problem, we have pushed
for a greater Federal Y2K focus in correcting the millennium
bug. Since we first began our oversight hearings, we have seen
vast progress from our Federal agencies, in most instances. Y2K
was finally mandated as an agency-wide priority and management
leadership was required where previously there was none.
While we have been comforted by the actions of the great
majority of Federal agencies, unfortunately, just as you said,
with 86 days remaining before the January 1, 2000 deadline,
there is still much to be concerned about. For example, as of
this past August, only 7 of the 43 essential Federal programs,
or a mere 16 percent, are Y2K ready in a timely manner. This is
troublesome because these 43 essential programs, referred to by
the Office of Management and Budget as ``high impact
programs,'' collectively affect the lives of virtually every
single American.
It appears as if the main reason for such a low level of
Y2K readiness is that key supply chain partners, including
State and local governments and the private sector, are simply
not yet ready. And especially troubling is the fact that of the
43 ``high impact'' Federal programs, not one of the 10
essential programs administered by the States was Y2K
completed. These include such important Federal programs as
food stamps, food safety inspections, child nutrition, child
support enforcement, temporary assistance for needy families,
child welfare, and Medicaid.
No agency can take pride in their Y2K efforts, however
remarkable their progress over the past 3\1/2\ years, if the
delivery of one of their essential Federal programs is
impaired. Even for those Federal agencies that have received a
high Y2K grade by Congress, it is a hollow victory if they do
not have effective interoperability with key program partners
such as the 50 States.
Today we are going to hear from representatives of the
three Federal agencies that oversee the 10 State-administered
programs. I am looking forward to hearing their testimony, as
well as the General Accounting Office, and the National
Association of State Information Resources Executives. I look
forward to hearing from our distinguished panel, a number who
have been here before, certainly GAO. I was on a program, Mr.
Chairman, with Mr. Hugler just the other evening on this Y2K,
and Labor Department has an excellent booklet that he will
probably refer to.
We want to hear from our distinguished panelists so that we
can move expeditiously to confidently reassure the American
people that our Federal Government will not be subject to
catastrophic Y2K glitches and will be able to proceed with all
essential programs, especially the 10 that are State-
administered. Thank you, Mr. Chairman.
[The prepared statement of Hon. Constance A. Morella
follows:]
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Mr. Horn. Thank you.
I now yield for an opening statement to the gentleman from
Texas, Mr. Turner, a distinguished member of the Subcommittee
on Government Management, Information, and Technology.
Mr. Turner.
Mr. Turner. Thank you, Mr. Chairman. I want to commend you
and Mrs. Morella for our continuing joint efforts of the
Government Management, Information, and Technology Subcommittee
and the Technology Subcommittee of the Science Committee in
trying to continue to beat the drum to encourage all of our
Federal agencies and their partners to be Y2K ready.
As was noted, many of our essential or so-called ``high
impact'' Federal programs rely on partners, both in the public
sector through State and local governments and in the private
sector. And not having direct control over them, we can only
continue to urge them to join with our Federal agencies in
continuing to be prepared for January 1st.
It is interesting, as Mrs. Morella noted, that as of August
13th, there were only 7 of the 43 programs deemed by OMB to be
``high impact'' that were ready for January 1st. Of course, the
chairman's latest Y2K report card which was issued earlier this
month indicated that the status of the programs in question had
not changed. So the failure to become compliant is due in large
part to the fact that there are many public and private sector
partners who must also be prepared for Y2K.
Our hearing today is simply to focus upon the progress that
the States have made in becoming Y2K compliant, and to hear
from our Federal agencies regarding that partnership and that
joint effort. It is good to see all of our witnesses here
today, and we thank you for your participation.
Mr. Horn. I now yield time for an opening statement to Dr.
Roscoe Bartlett, distinguished member from Maryland, and a
member of the Science Subcommittee on Technology.
Dr. Bartlett.
Mr. Bartlett. Thank you very much. The question that I get
asked most by constituents is what is going to happen in the
Y2K. This Sunday I am speaking at a church. They want to know
what they ought to be doing in preparation for Y2K. My usual
response to all these people is that I just do not have the
foggiest idea what is going to happen; I hear a lot of
different things.
So I am here to be edified today. And I hope I will be able
to speak with more certainty when I am asked that question in
the future. Thank you very much.
Mr. Horn. Thank you.
I now will yield time for an opening statement to Mr. Baird
of the State of Washington. Welcome.
Mr. Baird. Thank you, Dr. Horn. I hope at some point you
will address the question of whether our voting machines in the
House are Y2K compatible on the off chance that we stay here
that long this session. But I hope that will not be necessary.
Mr. Horn. Thank you. That is under the jurisdiction of Mr.
Thomas and the Committee on House Administration. [Laughter.]
We all know that we have got little red cards, little green
cards, and little orange cards. So, if we can write, we can
vote. But it is a good thought.
As most of you know who have testified here, we have a
routine we go through, which is, No. 1, when we introduce you,
and we do in the order in which you are on the agenda, your
full testimony is immediately put in the hearing record, and
then we would sort of like you to summarize it, hopefully in
about 5 minutes, and that will leave us more time for a dialog
of you among the panel as well as those here on the rostrum and
the panel. And then since we are an investigating subcommittee
of the House Committee on Government Reform, we do swear in all
witnesses.
So if you will stand and raise your right hands, and your
subordinates that you brought with you that might give you
something, please have them stand. So we have eight backing up
the witnesses of six. That is almost like the Pentagon.
Do you swear the testimony you are about to give this
subcommittee is the truth, the whole truth, nothing but the
truth?
[Witnesses respond in the affirmative.]
Mr. Horn. I see those lips moving. The clerk will note they
have all taken the oath.
We will start with the person we usually start with on our
hearings of the Government Management, Information, and
Technology Subcommittee and that is Joel Willemssen, the
Director, Civil Agencies Information Systems, U.S. General
Accounting Office, part of the legislative branch and people we
depend on in terms of the marvelous job they do not simply in
financial audits, but in programmatic audits. Thank you, Mr.
Willemssen, for coming.
STATEMENT OF JOEL WILLEMSSEN, DIRECTOR, CIVIL AGENCIES
INFORMATION SYSTEMS, U.S. GENERAL ACCOUNTING OFFICE
Mr. Willemssen. Thank you, Mr. Chairman, Chairwoman
Morella, members of the subcommittees. Thank you for inviting
GAO to testify today. As requested, I will briefly summarize
our statement.
Of the 43 ``high impact'' governmentwide Y2K priorities
identified by OMB, 10 are State-administered Federal programs.
OMB reported data on the systems supporting these programs show
that numerous States are not planning to be ready until the
last quarter of 1999. However, because the information in the
OMB report was not verified, even some of that information may
not be accurate or up to date. For example, in five cases
programs listed as compliant by OMB in its June report now have
estimated compliance dates of October 1999, or later, in the
report issued in September.
In addition, the reported compliance dates for some States
are problematic because schedule delays or unexpected issues
could still arise. Reported schedule delays have now occurred
in 8 of the 10 programs since OMB's report in June. For
example, OMB's June report showed that three States had
estimated compliance in the last quarter of 1999 for food
stamps, while the most recent OMB report indicates that 7
States now have estimated last quarter compliance dates.
The three Federal departments responsible for oversight of
these 10 State-administered programs have taken different
approaches in assessing Y2K readiness of the States. For
example, Agriculture's approach includes actions such as having
its regional offices obtain State certifications of compliance.
At HHS, contractors have performed onsite reviews at all
States. In another approach, the Department of Labor is
requiring States to submit independent verification and
validation reports after declaring their systems compliant.
These Federal approaches yielded very beneficial
information to helping to target the needed actions by States,
while also pointing out some of the remaining risks. For
example, USDA is collecting information from States on Y2K
readiness and business continuity and contingency plans.
However, much work remains. For example, last month USDA
officials told us that only two States had submitted suitable
contingency plans.
At HCFA, a contractor has now completed a second round of
State visits. Despite this effort, several States are still
considered to be at high risk within the Medicaid area.
Specifically, four State eligibility systems were still
considered high risk, while five State systems responsible for
Medicaid payments were high risk. These risk ratings also
indicate that the information in OMB's report may have
overstated the compliance status of some of the States. For
examples, systems cited as compliant by two States were
considered to be at high risk by HCFA.
For the other five HHS State-administered programs, HHS'
Administration for Children and Families [ACF] has modelled its
assessment approach after that of HCFA's. However, because ACF
started later than HCFA, it is not as far along. Specifically,
while an ACF contractor has completed onsite reviews of all
States, only 19 draft reports have been provided to those
States.
At the Department of Labor, its contractor has reviewed
States' independent verification and validation reports of
unemployment insurance systems and rated them from low to high
probability of Y2K compliance. The contractor's review found 20
States' benefit systems to have a low probability of
compliance. Given the results of those reviews, the information
in last month's OMB report appears to overstate the readiness
of States because, of the 39 State unemployment insurance
programs cited in OMB's report as compliant, Labor's contractor
had rated 15 States as having low probability of compliance.
That completes a summary of my statement. After the panel
is finished, I would be pleased to address any questions. Thank
you.
[The prepared statement of Mr. Willemssen follows:]
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Mr. Horn. Thank you very much for that most helpful
statement. I am sure we will have a lot of questions, because
we know your team has been working hard at this.
Our next witness is Mr. John Spotila, the Administrator of
the Office of Information and Regulatory Affairs, at the
President's Office of Management and Budget. Pleased to have
you here.
STATEMENT OF JOHN SPOTILA, ADMINISTRATOR, OFFICE OF INFORMATION
AND REGULATORY AFFAIRS, OFFICE OF MANAGEMENT AND BUDGET
Mr. Spotila. Good morning, Chairman Horn, Chairwoman
Morella, and members of the subcommittees. I am pleased to
appear before you to discuss the Federal Government's progress
on the year 2000 problem. I want to begin by thanking you and
all of the members of the subcommittees for your continuing
interest in the Y2K problem and its potential impact on our
country. It is doubtful that we would be as well prepared for
the year 2000 problem as we are if it were not for your
efforts.
Today I will address briefly our progress in the Federal
arena and our plans for the remaining 86 days as we transition
into the year 2000.
As you know, we have been working on this problem on a
Government-wide basis for almost 4 years. Based on the monthly
reports that OMB received from the agencies in September, 98
percent of the mission critical systems are now compliant. This
progress is a tribute to the skillful, dedicated, and hard work
of thousands of Federal employees and contractors. While much
remains to be done, we expect all of the Government's mission
critical systems will be Y2K compliant before January 1, 2000.
This is an important part of our work on the Y2K challenge.
But we also need to ensure that the programs supported by these
systems will be ready for the new year. Accordingly, OMB has
asked the agencies to take the lead in working with State,
tribal, and local governments, and with contractors, banks, and
others to confirm that Federal programs will work. They are
helping to develop business continuity and contingency plans,
and share key information on readiness with partner
organizations and with the public.
We have also identified 43 ``high impact'' federally
supported programs that are critical to the health, safety, and
well-being of individual Americans. We took a look at the
Federal Government from the individual's point of view to
determine what programs have the most direct and immediate
impact. Our goal is simple: to ensure the delivery of
uninterrupted services to the people who depend upon those
services and to reassure them that they can depend on those
services. Overall, progress has been good. Of the 43 programs,
12 have completed all end-to-end testing. We expect 19 others
to complete testing this month, 4 to complete it in November,
and the remaining 8 in December.
Like you, we are concerned about the programs that will not
be ready until December. This does not leave much of a margin
for error. The task is not easy. One of the eight programs, the
Indian Health Service, involves work with a large number of
sovereign tribes. The other seven programs are State-run. In
these cases, the Departments of Health and Human Services,
Agriculture, and Labor must work with all 50 States and,
depending on the program, with several territories. We care
about the people affected and will not consider the task
complete until all of the States, territories, and tribal areas
are ready.
We have been measuring progress in these programs as we
move toward their completion dates. In this regard, OMB asked
Federal agencies to tell us on a State-by-State basis when each
of these programs will be compliant. We then gave that
information to the National Association of State Information
Resource Executives for comment, and asked the three Federal
agencies to work with it to resolve any discrepancies.
We have reported the anticipated completion dates by State
and territory in our June and September reports to the
Congress. This information provides a better view of the status
of these programs and the progress being made. It also helps
identify States or territories that may be encountering
problems so that Federal agencies can focus resources where
they are most needed.
The Departments of Health and Human Services, Agriculture,
and Labor will be testifying later this morning and will
discuss their specific efforts with regard to these programs. I
would acknowledge again, though, that you and other Members of
Congress have played an important role in ensuring that both
the States and the Federal agencies devote appropriate
attention and work to these programs. We appreciate all that
you have done.
Before closing, I would add an update on our progress in
business continuity and contingency planning.
Although we expect all Federal mission critical systems to
be ready by January 1, 2000, it is still important that every
agency, no matter how well prepared, have a business continuity
and contingency plan [BCCP] in place. Sound BCCPs are an
important component of agency progress. To ensure quality and
consistency, OMB has directed the agencies to use the General
Accounting Office's guidance on this subject in preparing their
plans. Many agencies also are working closely with their
Inspectors General and expert contractors in the development
and testing of these plans. OMB has reviewed initial agency
BCCPs and has been providing feedback and guidance to these
agencies on an individual basis.
One characteristic of the year 2000 problem is that we have
a specific day when any problems are likely to occur. Even
after all of our other preparation, we can focus on being ready
to respond on day one. In this regard, we have been working
with the General Accounting Office and the agencies to develop
guidance that will help agencies take advantage of this
opportunity. We will ask agencies to provide us their updated
business continuity and contingency plans by October 15th,
including their day one plans, and we will be reviewing those
submissions.
Day one planning will allow agencies to take advantage of
the fact that the year will change 17 hours earlier in New
Zealand than in Washington. We can learn from problems
encountered elsewhere in the world and take mitigating actions.
Agencies can use the roll-over weekend to check their buildings
for security and heating and to have technicians verify that
all other systems are working. They can check with their
partners in program delivery, including the States, to assess
whether they are having problems and to begin providing
appropriate assistance. All of these steps will help minimize
any adverse impact from the Y2K problem.
In conclusion, we are very focused on the tasks remaining.
During the 86 days before the year 2000, we are concentrating
on three priorities: completing work on remaining mission
critical systems and on other Federal systems; completing end-
to-end testing with the States and other key partners, placing
special emphasis on ensuring the readiness of programs that
have a direct and immediate impact on public health, safety,
and well-being; and completing and testing business continuity
and contingency plans, particularly day one plans, to mitigate
the impact of any failures due to the year 2000 problem.
Thank you for the opportunity to share information with you
on our progress. We know that there is still a great deal to be
done and we are hard at work. I would be pleased to answer any
questions you may have after the conclusion of the testimony.
[The prepared statement of Mr. Spotila follows:]
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Mr. Horn. Thank you very much for your presentation.
The next witness is the Honorable John Callahan, Chief
Information Officer, Department of Health and Human Services.
Welcome again to this committee.
STATEMENT OF JOHN CALLAHAN, CHIEF INFORMATION OFFICER,
DEPARTMENT OF HEALTH AND HUMAN SERVICES
Mr. Callahan. Thank you very much, Chairman Horn, Co-
Chairman Morella, and other distinguished members of both
subcommittees. We want to thank you for holding this oversight
hearing on the Y2k status of ``high impact'' federally financed
State-administered programs. Your oversight has been very, very
beneficial, not only to the departments but I think to the
State governments as well.
HHS is responsible for several of the ``high impact''
programs under the direction of the Administration on Children
and Families and the Health Care Financing Administration.
First, I would note that all of HHS' mission critical systems,
including the ones that service these programs, are Y2K
compliant. There is one mission critical system, the Indian
Health Service Resource and Patient Management System, which is
Y2K compliant although we are in final negotiations with 16
tribes to ensure that they become Y2K compliant. But since they
are sovereign nations, those negotiations are complex, to say
the least.
We have listed and tested all of our data exchanges with
States on the ``high impact'' programs that you are concerned
about and they are Y2K compliant as well. Consequently, we are
confident that from our end we will be able to make grant
payments and child support enforcement matches for all of the
programs under consideration. Additionally, we have fielded and
are fielding contingency plans and day one operating plans for
these programs which will be coordinated with the ICC, which is
under the direction of John Koskinen, the President's Special
Counsel on Y2K matters.
Now let me give you a brief assessment of the Y2K readiness
of ``high impact'' Health and Human Services programs under the
Department's jurisdiction.
We are now just finishing the first round of technical
assistance on human service programs--TANF, child support
enforcement, child welfare, child care, and low-income home
energy assistance--that are the responsibility of the
Administration for Children and Families. Our technical
assistance reports in the HCFA case are being shared, first,
with State program officials who are on the line providing
these services, Governors, individual State chief information
officers, NGA, and NASIRE.
At this time, we have adjudged that some of the ACF
programs in the following States are at considerable risk of
Y2K failure because of both the remediation or testing of
systems is not complete, or behind schedule, or because the
contingency planning process is deficient. These are the States
of Alabama, Delaware, District of Columbia, Georgia,
Mississippi, New Hampshire, and South Carolina.
Having said that, we believe that State Y2K preparedness
progress has been considerable. State officials in all States
are using these assessments provided by ACF and their
contractors to their best advantage. ACF is continuing to stand
ready to provide further detailed technical assistance to
States that need further help in correcting their Y2K problems
that they are encountering. We are confident that Governors,
State program officials, and State CIOs will continue to get on
top of the Y2K problem.
Turning to Medicaid and the State children's health
insurance program. HHS has provided extensive technical
assistance for nearly a year and a-half now. Two rounds of
State technical assistance visits have been completed, and a
third round of State visits is now being conducted. States that
are adjudged to be at considerable risk with regard to their
eligibility or financial systems on the Y2K preparedness front
at this point are Massachusetts, New Hampshire, Alabama, North
Carolina, New Mexico, and Alaska. States that should be make
substantial improvements in their contingency and business
continuity planning include New Hampshire, Rhode Island,
Vermont, New York, Delaware, West Virginia, Ohio, New Mexico,
Oklahoma, and Colorado. However, as in the case with ACF,
States are making almost daily improvements on these fronts as
well, progress that we will report to the subcommittee as soon
as we are able to.
Let me provide you with two examples of how our Federal
efforts have assisted States. In Maine, in late January, HCFA
made its first State site visit to Maine. Maine was hoping that
a new system would be implemented before the end of the year
and they were trying to decide whether to fix their old system
or put their resources into implementing the Y2K compliant
systems. Maine, like many States at the time, viewed the Y2K
problem too narrowly as a systems problem.
The HCFA review called the State's attention to a number of
issues where better direction was needed. Immediately, the
Maine commissioner of human resources took the HCFA findings
and developed a detailed strategy and put the department
commissioner for programs in charge of the Y2K effort.
Contractor support was obtained, and the State was able to
remediate and test the old system and develop a new business
continuity plan. When HCFA came back 4 months later, Maine had
gone from high risk to low risk.
Similarly, in North Dakota, HCFA made a first State visit
and the State was judged to be at risk because of inadequate
contingency planning. HCFA sent a team of experts to North
Dakota to work with State staff, and they are now adjudged to
be low risk on the contingency planning front.
I would like to conclude my testimony on a positive note.
As we all know, we only have a limited time left, but HHS has
provided, on a very cooperative basis, Y2K technical assistance
to make sure that State-administered federally financed
programs will be millennium compliant. The technical assistance
has been offered and received in a spirit of identifying and
seeking to fix Y2K problems in these areas. State governments
run these programs, they recognize that they have primary
responsibility for fixing the Y2K problem in these areas. The
Federal Government cannot assume any direct administrative
responsibility for these programs, but we can offer the best
and most cooperative technical assistance possible to the
States in this area. We have mounted a strong technical
assistance effort with regard to all these ``high impact''
programs, and we will continue to provide that right down to
last hour. So we believe that we are making progress, but, as
this committee knows, we need to make more progress, and we
will.
That concludes my testimony. I would be happy to answer any
questions.
[The prepared statement of Mr. Callahan follows:]
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Mr. Horn. Thank you very much. That is helpful and we will
get back to that.
The Honorable Shirley Watkins, who is the Under Secretary
for Food, Nutrition, and Consumer Services in the Department of
Agriculture. Welcome.
STATEMENT OF SHIRLEY R. WATKINS, UNDER SECRETARY FOR FOOD,
NUTRITION, AND CONSUMER SERVICES, U.S. DEPARTMENT OF
AGRICULTURE
Ms. Watkins. Thank you, Mr. Chairman, Chairwoman Morella,
and the distinguished members of the committees. I am delighted
to be able to join you this morning and share with you the
progress that we have made in the nutrition assistance programs
at USDA that are State-administered. Those programs are going
to be Y2K ready, and we will be working aggressively with the
States and will increase our efforts as we need to do so.
Food and Nutrition Service's primary goal has been to work
with our State partners to assure that there are no
interruptions in the Nation's nutrition assistance programs
that provide food to children and to working, needy families.
This is consistent with our goal to ensure that no people in
this country go hungry. These nutrition assistance programs
consist of the food stamp program, the supplementary nutrition
program for women, infants, and children, and the child
nutrition program, which includes school breakfast, school
lunch, and after school snacks.
FNS works with the partners in the States and the
territories in monitoring and providing oversight of these
critical programs. State agencies and territories are
responsible for providing the delivery of services for the
nutrition programs to the various customers across the Nation.
The Food and Nutrition Service started preparing for the
millennium by communicating to the 50 States, Guam, the Virgin
Islands, Puerto Rico, and the District of Columbia the
importance of Y2K preparedness for the food stamp, WIC, and for
the school nutrition programs. FNS, in January 1998 requested
Y2K progress in three critical areas: software, hardware, and
telecommunications compliance.
We also have sent several memoranda to the States, both
individually from FNS and jointly with the Department of Health
and Human Services regarding the significance of Y2K. Both FNS
and HHS also provided expedited approval of funding for Y2K
activities. We began obtaining status reports and updates from
each of the States, and we requested such information on a
quarterly basis at that point. That was to be submitted to the
seven regional offices around the country. Secretary Dan
Glickman, early in 1998, sent letters to every Governor
requesting their leadership to assure Y2K compliance by June
1999.
We have participated in several national meetings involving
all of the Federal and State partners and some of local
partners to discuss Y2K and its impact on State and local
systems. Each of our regional offices has performed site visits
to the various State offices in order to perform Y2K compliance
checks. In addition, FNS requested that the States report Y2K
compliance and submit to us a certifying letter that their
systems were Y2K complaint. The agency also requested that
those States that were not able to report that they would be
Y2K compliant by March 1999 submit a contingency plan which
would assure the continued delivery of nutrition assistance to
all of our recipients.
In April of this year, FNS acquired the services of Science
Applications International Corp. [SAIC] to assist in the
oversight and evaluation of State program compliance. We
reviewed and analyzed the information that was gathered from
the State agencies regarding the software, hardware, and
telecommunications compliance to determine which States SAIC
should review.
Thus far, SAIC has visited over 20 agencies in the States
to review their compliance activities, such as planning, test
procedures, test results, regression analysis, and
implementation and contingency plans. SAIC has worked very
closely with our headquarters office as well as the regional
staff in monitoring the State Y2K program activities.
Well, what is our current status at FNS? As of September
30, the vast majority of the State agencies have notified us
that they are Y2K compliant. FNS was designated by OMB as a
``high impact'' program because of the services that we provide
to the large numbers of customers around this country. I would
like to insert for the record a table outlining the progress by
program as of September 25th, showing the month in which the
State agencies report they will achieve Y2K compliance.
Mrs. Morella [presiding]. Without objection, so ordered. It
will be included in the record.
[The information referred to follows:]
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Ms. Watkins. Thank you. We are concerned with a couple of
States, and we have noted that.
But to ensure the continued successful operations of the
Nation's nutrition assistance programs into the year 2000, FNS
has requested a certification letter from each State agency
that operates the food stamp program and the WIC program. State
agencies that cannot certify Y2K readiness have been asked to
submit a business continuity/contingency plan. Through
September 1999, FNS has received certification letters or
contingency plans for these programs. For the food stamp
program we have received 23 letters of certification from
States, 19 States have submitted contingency plans, and 8
States have submitted both. For the WIC program, 37 States have
submitted certification letters, 21 States have submitted
contingency plans, and 9 States have submitted both.
With electronic benefit transfer, the District of Columbia
and 40 States now deliver food stamp benefits through EBT.
These systems are delivering benefits to nearly two-thirds of
all food stamp recipients, with 31 States and the District of
Columbia operating State-wide EBT systems. We are working
aggressively with the States. We have met with the EBT
processors, the retailers, the third party processors, and
financial networks to assure that the food stamp benefits
through EBT will be accessible to our clients on January 1,
2000. We have received assurances from the major food retailers
that food will be available. Our third party processors have
indicated to us in early July that all of those programs are
Y2K ready.
Mrs. Morella. I am going to ask you if you can wind up.
Ms. Watkins. Sure. What are our next steps? We are making
preparations to ensure that all of these programs will be
compliant. We do have some State agencies that have indicated
that they will not be ready until December. Those include
Georgia and Maryland for either WIC and child nutrition. We
will be working with those agencies aggressively to assure that
they are ready. Today, Secretary of Agriculture Dan Glickman is
sending a letter to every Governor reemphasizing the importance
of Y2K compliance to ensure that no families go hungry, and
that letter will also let them know where they are currently in
the process.
In conclusion, Congresswoman Morella, USDA's vision for its
Food and Nutrition Service is to lead America in ending hunger
and improving nutrition and health. To not provide food to
needy families and children as a result of Y2K would undercut
that vision. We want to make certain that all of our families
are going to be served and all children will be served.
That concludes my prepared remarks. At the conclusion of
the panel, I will be glad to answer any questions that you may
have about these programs.
[The prepared statement of Ms. Watkins follows:]
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Mrs. Morella. Thank you very much, Secretary Watkins. I am
particularly interested, as Mr. Bartlett is, in getting more
compliance from Maryland.
We are going to recess this panel because we do have a
vote. Mr. Horn will be back probably very quickly and then we
will reconvene in about 10 minutes. Thank you.
[Recess.]
Mr. Horn. The subcommittee will come to order.
Our next presenter is Edward Hugler, the Deputy Assistant
Secretary for Information Technology, and Acting Deputy
Assistant Secretary for Administration and Management, U.S.
Department of Labor. Welcome.
STATEMENT OF EDWARD HUGLER, DEPUTY ASSISTANT SECRETARY FOR
INFORMATION TECHNOLOGY AND ACTING DEPUTY ASSISTANT SECRETARY
FOR ADMINISTRATION AND MANAGEMENT, U.S. DEPARTMENT OF LABOR
Mr. Hugler. Thank you, Chairman Horn, and members of the
subcommittee. I appreciate the opportunity, like the rest of
the panel, to discuss the readiness of the Department of
Labor's programs, specifically, the Federal and State-run
unemployment insurance program.
As you know, the unemployment insurance program operates
through 53 State employment security agencies [SESAs]. The
Department of Labor oversees this nationwide program which is
administered by the 50 States, Puerto Rico, the Virgin Islands,
and the District of Columbia. It is a $20 billion program,
serving some 8 million workers annually. As such, the UI
program is, indeed, and ``high impact'' program with very
direct and immediate impact on the lives of individuals in
need.
To carry out the Secretary of Labor's commitment to ensure
the uninterrupted delivery of these and other core Department
of Labor services, we have taken a very strong leadership role
in assisting our 53 SESA partners. Since 1996, the Department
has provided ongoing guidance and hands-on technical
assistance. Specifically, our Employment and Training
Administration unemployment insurance staff have worked
extensively with the SESAs to carry out the very same year 2000
readiness regiment used across the Department of Labor for our
own systems as well as other Federal agencies. That began with
the system of remediation or replacement, followed by
independent verification and validation, which is, in effect, a
double-check audit of that work, followed then by end-to-end
testing to see that we accomplished what we set out to do, and
then, finally, business continuity and contingency planning so
that if any automated system is in fact disrupted by something
unforeseen, program services can still be delivered.
In support of these rigorous preparations, the SESAs have
received more than $250 million to date, and we appreciate the
support of Congress in making those funds available to our SESA
partners.
I believe we have solid results to show for these efforts.
At the beginning of this year, the unemployment insurance
program was one of the very first to have to adapt to the
century date change. This is because the eligibility
computations for workers filing claims at the start of 1999
began to include, for the first time, projections into the year
2000. The unemployment insurance program's 53 SESAs were
prepared and they cleared this hurdle without incident.
Since then a tremendous amount of work has been done to
ensure that all aspects of the unemployment insurance program
are equally ready at the end of this year, and that we can
repeat our earlier success. I should explain that the
unemployment insurance programs are composed of three principal
systems: the benefit payment system, which is really where the
rubber meets the road; the tax system, which provides the
revenue for the benefit payments; and the wage record systems.
Right now, the benefit payment systems in 50 of the 53 SESAs
are year 2000 compliant and have been successfully implemented;
46 SESAs also have all three of their primary systems compliant
and on line.
In the time remaining, we are stepping up our monitoring
and assistance to the SESAs focusing on those with work still
to do. Yesterday, the Secretary of Labor sent letters to the
Governors of three States, Iowa, Maine, and New Jersey,
alerting them to the issues that require their attention.
In the District of Columbia, which is behind all other
SESAs at this time, the Department is providing extensive and
direct assistance, utilizing nearly $2 million in recently
released emergency funds. As part of this effort, the
Department is working with the District to install a first of
its kind, stand alone, personal computer-based system that can
actually substitute for any State's benefit payment system. It
is called, appropriately, the Automated Contingency System. It
was developed by the Department in cooperation with the State
of Maryland specifically for the unemployment insurance program
to protect against any unforeseen year 2000 disruptions. The
system can be customized to the unique laws of any SESA, and
thereafter it will process claims, calculate benefits, and
issue payments to eligible claimants, while the main system is
brought on line.
Right now we are installing this ingenious solution in the
District of Columbia to back up our efforts to complete the
installation and testing of compliant systems before the end of
the year. We expect to have the Automated Contingency System
operational in the District of Columbia next month. We have
also demonstrated the ACS, Automated Contingency System, to
other SESAs interested in utilizing it as part of their
contingency planning.
These are some of the highlights of what we have been able
to accomplish in our UI program and that staff working with our
53 SESA partners. I would be very pleased to expand on any of
these topics and answer any questions you may have. One other
thing I would like to do is revisit what I think is a
misunderstanding of some of our management information that was
referred to in Mr. Willemssen's testimony which I think could
inadvertently cast some doubt on the readiness of our SESA
systems. We are confident that the unemployment insurance
program will be there for workers who may need it on and after
the century date change. Thank you, Mr. Chairman.
[The prepared statement of Mr. Hugler follows:]
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Mr. Horn. Thank you very much. That was a very thorough
statement.
Mike Benzen is president of the National Association of
State Information Resource Executives. Tell me a little bit
about the group and who all is in there.
STATEMENT OF MIKE BENZEN, PRESIDENT, NATIONAL ASSOCIATION OF
STATE INFORMATION RESOURCE EXECUTIVES
Mr. Benzen. Mr. Chairman, members of the committee, I would
be happy to. NASIRE represents the State government CIOs. In
that capacity, we do need to understand, first, NASIRE does not
control what individual States do, it is a coalition of States,
if you will, and of State CIOs.
We began working on Y2K in terms of workshops, awareness
programs 4 years ago. We think we have been very successful
with it. But it is very difficult to characterize progress of
50 individual States. I would note that while certainly there
are problems, and they have been well-documented at this
table--I have five colleagues sitting here commenting about the
States; I think I am the one now defending the States and it is
hard to circle the wagons when you have only one wagon--but,
nonetheless, we think that the progress of the States has been
exceptional. If you look at the overall progress in terms of 40
States or 47 States, we are now dealing with a few. We
certainly recognize that this is a serious issue. Those States
need to do whatever has to be done to be ready on time. But we
think, overall, the progress has been exceptional.
I think I would also mention this, and it is hard for the
States to acknowledge this I think, we have partnered with the
Federal Government, they have acted in partnership, the people
at this table, and in a cooperative effort we have gotten out
of an adversarial relationship and have gotten into cooperative
agreements. I would hope that this would be something that we
would see go on after the turn of the century and after Y2K,
because I think this has been very beneficial and I believe
both NGA and NASIRE feel the same way about that.
And with that, I will close and take questions.
[The prepared statement of Mr. Benzen follows:]
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Mr. Horn. Thank you very much. I think we are inclined to
take your advice on that series of hearings in the future. So,
thank you for raising it.
Let me start with Mr. Callahan, because HHS is a tremendous
impact on the States and the people, Health and Human Services.
I appreciate you publicizing in your written statement and your
oral comments that several programs have a high risk of Y2K
failures. Those States included, as I remember and wrote some
of them down, Alabama, Colorado, Delaware, the District of
Columbia, Georgia, Mississippi, New Hampshire, Rhode Island,
South Carolina, Vermont, West Virginia. I might have missed a
few. But which of those State-run programs are of the greatest
concern to HHS?
Mr. Callahan. Well, I think, Mr. Chairman, the fact that we
have enumerated those States as having problems in two areas.
One is the continued remediation schedules for Y2K, and then
the development of sound business continuity plans. I do not
know whether we would discriminate among those States as to
saying one has a more serious problem than another. But I think
the point here is that we will provide, and are providing,
direct technical assistance from both HCFA and ACF to help them
remediate these problems as quickly as possible.
I would echo Mr. Benzen's comments here. We entered into
this technical assistance problem not ``to fix the blame,'' but
to fix the problem. We do feel that in many, many cases, you
may get a listing today and it may change 3 days from now, a
week from now, whatever. And that is our effort here, is to do
the two things that you are concerned about, which is the
remediation and the certification of Y2K compliance, and
second, have a sound business continuity plan so that even if
there is some system failure, services can be provided.
Mr. Horn. Have any of those States that we named, and I
might have missed a few, have any of them undertaken--well, the
remediation, has that been done at all with all of them or just
a few?
Mr. Callahan. Oftentimes they are in the process of doing
the remediation, we just do not feel that their remediation
based on the contractor assistance has progressed far enough at
the time we take the snapshot. Again, all these reports, as you
know, are snapshots and the snapshot can change today,
tomorrow, et cetera. So the effort is to identify the problem
and fix it as soon as possible. We will continue to provide the
subcommittee as much as we can with direct reports on that. But
I might add that when we do these reports, when the contractor
goes in and does these reports, whether it is for ACF or HCFA,
they provide immediate interaction with the program officials
so that everyone comes to as much of an agreement as possible
about the things that are problems and that need to be
corrected. We are hopeful that they will continue down the path
of making these corrections.
I will say, if I could, that a number of the States that
have good business continuity plans, I think we are sharing
those with other States so that they can benefit from the work
of their neighbors or other States that they are compatible
with. It is pretty clear that in many States they are moving to
things like presumptive eligibility after year 2000 should a
system fail. They are also in many cases moving to preprint
checks for January and February so that they are looking at
their eligibility rolls and would have checks available. So I
do think a number of States are making positive efforts in this
regard. Our job is to work with the States that are not quite
as far along and help them down the road.
Mr. Horn. Did any of them try testing for the January 1,
2000 date to see the extent of the problem they might have?
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Mr. Callahan. Some of them have and have been successful. A
number of them have not really gone as far as we would like in
that regard. But we will provide as much as we can of that
detailed information to the subcommittee.
Mr. Horn. OK. In your written statement, there were 19
States and territories that have been high or medium risks
associated with Medicaid mission critical systems. I guess the
question would be, what can be done to mitigate potential
Medicaid Y2K failures in those States? Do you just feel they
are the same as any other program, or some programs are much
more difficult and with a much greater impact on people than
some of the others?
Mr. Callahan. The one thing that occurs in Medicaid that is
somewhat similar to the problem that we have alluded to in the
area of Medicare that we are directly responsible for, and this
is the issue of making sure that the providers that provide
these services, whether it is Medicaid or Medicare, are Y2K
compliant. I think it is fair to say that in testimony before
this subcommittee and elsewhere there has been a little bit of
disappointment that a lot of the medical providers may not have
taken this problem seriously enough. So the States will face
very much similar problems that we face in the Federal
Government about urging the providers to get on with it and be
able to transmit their claims, for example, on a Y2K basis.
HCFA, as you know, recently HCFA has provided a Y2K ``jump
start kit'' which is available to any provider that would seek
it. But, again, some providers, either because of the press of
business, or hoping against hope I guess, are not coming to the
fore. That will be a bit of a problem.
Mr. Horn. How about the Department of Agriculture,
Secretary Watkins, where are we there with the particular
States? I have got this chart that you have shown on nutrition
programs. As I read it, the big problems would be the October
compliance, the November compliance, and the December
compliance. It looks like the December compliance is Georgia
and Maryland primarily with the red markings. Can you give us
any enlightenment on where your worries are, with what States?
Ms. Watkins. The worries primarily, Mr. Chairman, are with
those two States that you identified that have stated they will
be compliant in December. The concern in Georgia is with the
WIC program. We do have the contractor in there this week
working with Georgia so that they can work on a backup system
so they will be ready to deliver services for our WIC clients.
And the Maryland program is with our school nutrition programs.
They had a system that they were working on and had a failure
in that system. So they do have a manual system in place. That
will not disrupt any of the school nutrition meal services, and
it will not disrupt the payment, because payments would be made
mid-February for January. So that is not as critical for us,
but we will continue to work with them to get their systems
complaint.
Mr. Horn. How about the Department of Labor, Mr. Hugler,
where are they with some of the States, and which are the ones
that you think you might the most trouble with?
Mr. Hugler. Mr. Chairman, right now, if we add up all the
systems that we want to see be fully ready for the year 2000,
there would be 159 component parts of all the respective SESAs.
There are 11 systems that have not yet been made year 2000
compliant. Breaking that down a little bit further. Three of
those are benefit payment systems, and they really, again, are
where the rubber meets the road, where the benefit payments
will be made, and they are at the top of our list.
Mr. Horn. What are the States that are in that category?
Mr. Hugler. Yes, sir. The States of concern right now would
have to begin with the District of Columbia. They are, as I
mentioned earlier, further behind than any other SESA. I think
the good news there is that we are going to install, as I
mentioned earlier, the automated system that will actually take
over and independently run their benefit systems. We are going
to do that and have that done by November.
Mr. Horn. Are you designing the software for that?
Mr. Hugler. The Department of Labor, in conjunction with
the State of Maryland, came up with a software system that can
be adapted to any SESA. So the work being done in the District
right now is to configure that program to the unique laws of
the District of Columbia so that it can do that work in
accordance with the local laws. That is the work being done
right now in the District of Columbia.
Mr. Horn. Has the Department of Labor done software for any
of the States on any of its programs?
Mr. Hugler. We have not done this type of thing before, if
that is your question. We have offered the Automated
Contingency System and demonstrated it for all of the SESAs and
will make it available to anyone who would want to make it part
of their contingency plan.
Mr. Horn. The reason I am asking the question is I think it
is an outstanding idea. I remember proposing it about twenty
years ago on a couple of departments, saying, look, why are we
reinventing the wheel everywhere. If you have got a compatible
software for the States to administer it in relation to yours,
that ought to be the way it was done. So I congratulate you. I
am glad somebody in this town is doing that.
Mr. Hugler. And the commendation goes to the unemployment
insurance staff and working with the State of Maryland and the
SESAs.
Very quickly, other States. California has a benefit
program that has one piece, an imaging program, that needs to
be fixed. That will get done we believe, and they have a very
good contingency plan for it if it does not. That is due in at
the end of this month. Puerto Rico will implement all three of
their primary systems over this upcoming weekend. So that
should take care of the remainder. So I think we are in good
shape on that score.
Mr. Horn. I see my time is about up. So let me ask the
whole panel here, in your opinion, which States run the risk of
experiencing the most year 2000 related failures, and in what
program areas?
Mr. Willemssen, do you want to answer that one?
Mr. Willemssen. I will answer it in two ways, Mr. Chairman.
First of all, it is very difficult to generalize on States for
all these 10 programs. When we look at any specific State,
there are within those States differences among the programs. I
think some of the States and some of the programs have been
highlighted where the most significant risks are. For example,
in Medicaid, we would think that the two States right now with
the highest risk would be New Mexico and New Hampshire since
each of those has been assessed as high risk for one of its
systems and also high risk for its business continuity and
contingency plan. This is a double whammy that has to be
avoided.
I would generally concur with the comments that have been
made about the specific programs and the evidence we have seen
in terms of where the risks are for those specific States.
Mr. Horn. If we can get the question in, we have got time
to answer it. I made the mark.
Mr. Spotila. Mr. Chairman, I would agree with the comments
that Joel has just made and the other panel members. We,
obviously, reported based on information supplied by the
agencies having the more current, up-to-date specific
knowledge. But I think what we have heard today is pretty
accurate.
Mr. Horn. Does anybody want to add to that?
Mr. Callahan.
Mr. Callahan. Again, I would concur, especially to the
extent where a State is behind on its basic remediation and its
business continuity planning, that is a State where additional
technical assistance from our side and State effort from their
side has to occur.
Mr. Horn. Ms. Watkins.
Ms. Watkins. I would agree with Mr. Callahan. We will have
to work with those States that look like they may fall behind.
And we will continue to work with Maryland with Georgia and
those two program areas, as we work with Oklahoma, Arkansas,
Illinois, and Alabama where we have some program areas of
concern. We will work with everyone right up to the last minute
where there may be some problems. We would be particularly
concerned about those people who have November and December
dates.
Mr. Horn. Do you want to add anything for the Department of
Labor?
Mr. Hugler. Mr. Chairman, the only jurisdiction with which
we have concern about being at high risk is the District of
Columbia. We are taking extraordinary efforts to work with them
right now to solve that problem.
Mr. Horn. Anything you can----
Mr. Benzen. Well, only this. Obviously, anyone that is
planning on finishing in November, December, there is great
cause for concern. I think I would have to agree with that.
Mr. Horn. Yes. Thank you.
I am going to yield to the gentleman from Washington on
behalf of the minority. Mr. Baird, you have got 7 minutes.
Mr. Baird. Thank you, Mr. Chairman. I very much appreciate
the work you folks are doing on this. I get asked about it
almost every town meeting, and, like the speaker earlier said,
this is a difficult problem.
I was intrigued by Mr. Hugler's comments. Is that
pronunciation correct?
Mr. Hugler. Yes, sir.
Mr. Baird. About the contingency plan with a PC-based
backup system. I am interested, are other agencies using a
similar model as a contingency plan either at the State or at
the Federal level? I will sort of open that up to whoever. If
anybody is, it makes sense to me.
Mr. Callahan. I do not believe we are. But certainly based
on the comments today, we would immediately converse with the
Department of Labor to see what benefits it would have. We are,
as I mentioned earlier, providing assistance to providers both
in Medicare and Medicaid, if they request it.
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Mr. Hugler. We would be happy to share anything we have
learned.
Mr. Baird. It makes a lot of sense to me. I would hope that
somewhere someone has a hard copy so that if Mrs. Jones comes
in and her checks are late and she needs to feed the kids,
somebody can look on a hard copy and see if somebody owes her a
check or not. I hope we have got some kind of backup.
Let us suppose a system crashes in a State agency that
administers one of these programs. Do we have a sense from
previous test experience what sort of timeframe does the State
have in how long it will take to bring the system back up and
get it up and running again?
Mr. Benzen. That depends entirely on what crashed. I can
speak to my own State easier than I can the other 49.
Medicaid--finished, done, back in production, year 2000
compliant. Stuck it into the test partition past year 2000 and
it did crash. It took almost twenty minutes to get it back up
and running again. The piece of this that you do need to
understand, if these systems have been remediated, and some of
these systems are 200,000 hours worth of labor to fix, once
they are done, if you do find something that is going to crash
on January 1st, it is very unlikely you are going to have to
come back and spend another 200,000 hours to fix it again. It
is typically going to be something much more minor. So, in
terms of a surprise crash, what you are going to see--now, if
people do not meet these December dates, it is not going to
crash, they are not going to be able to turn it on because they
know it is not going to work--but if you see a crash, chances
are real good that you are going to get it up and running real
fast.
Mr. Baird. If there were multiple crashes at the same time,
it would follow that the skilled folks who can correct such a
crash would be in high demand. It would seem almost analogous
to a power outage where we have got people putting up lines in
different places. Do we have a national readiness force, or do
the States have in place readiness forces of people on call who
can work on these issues?
Mr. Benzen. I am not seeing that kind of preparation.
Again, we know what needs to be done. What is being talked
about at this table I believe is we have an estimate that it is
going to take X thousands of hours and they have not completed
that number of hours. But in terms of, gee, we thought we had
it fixed and then all of a sudden it just crashed, I am not
looking to see that kind of problem. I would be amazed if that
happens.
Mr. Spotila. One thing I would add to that, though, is that
when I testified about the importance of business continuity
and contingency plans and day one plans, that is precisely the
potential problem that those plans are directed at and that is
why we are giving such emphasis to it.
Mr. Baird. Excellent. That is good to hear.
One final question. I have been reading about the concern
people have about trap doors being written into the software
from private business, particularly banking and other financial
concerns. Do we have concerns about that at the Federal level,
someone writes a trap door and suddenly gets 40,000 social
security checks?
Mr. Spotila. I think the truth is we do have a concern
about this. It is difficult to assess the extent of the risk.
We work closely with the National Security Council, with
Richard Clarke, the President's advisor in this area, and we
have had discussions with them. It is something that we are
watching closely. We do not have specific threats identified
that we can go after and start working on now, but we are
certainly watching it.
Mr. Baird. Is there a discussion underway of how to monitor
that, how we would look for it?
Mr. Spotila. We are certainly trying to monitor it
internally in terms of the Federal Government and there is a
lot of discussion about how to do that. With respect to the
private sector, we have ongoing discussions, particularly with
key industry groups, about how to do that monitoring and how to
get information from them so that we can respond. We can try to
supply you with more information on that, if you like. But, in
general, it is something we are sensitive to. We are going to
need an awful lot of cooperation from the private sector if we
are going to be able to work together on this.
Mr. Callahan. I might add, if I could. I am sure that both
for our agency and for other agencies, we are also standing up
all our computer security people in this year 2000 process so
that they can do what they normally do, which is look for
intrusion, detection, et cetera, and we are working with the
Department of Commerce, the Carnegie Mellon operation and other
relevant agencies. We will fully stand up our security people
along with Y2K people.
Mr. Baird. Thank you very much. Thank you, Mr. Chairman.
Mr. Horn. Thank you. Appreciate that line of questioning.
I now yield to the gentleman from Maryland, Dr. Roscoe
Bartlett.
Mr. Bartlett. Thank you very much.
Mr. Callahan, can you please update us on the Y2K readiness
of HHS' big, $165 billion payment management system and where
that is?
Mr. Callahan. Yes. The payment management system is Y2K
compliant. It has been certified as Y2K compliant by IV&V, and
we have done some end-to-end testing as well in that regard.
So, in essence, the payment management system that makes these
grants, particularly in the ACF areas, will be available and
ready to pay States their allotments.
I might add, what happens is the States generally draw down
their money on a day-to-day basis. They might get a quarterly
apportionment for any number of grant payments, but they draw
it down from us on a day-to-day basis to make sure there is no
interest payments that they would owe us. But we are ready to
go on that.
Mr. Bartlett. Assessment presumes I gather the readiness of
the infrastructure? There are lots of electronic fund
transfers, not much operates without electricity today. What
sort of assessments do you make of the availability of the
infrastructure, and what contingency plans do you have if it is
not there?
Mr. Callahan. This is power primarily?
Mr. Bartlett. Power and electronic, phone lines and so
forth.
Mr. Callahan. We have had continuing discussions with the
power suppliers and the telephone suppliers in the area and we
feel that those discussions have been very positive. I will
supply for the record our detailed information on that, but I
believe we have also identified hot sites to move from our
current area in Rockville if, in fact, it is not serviceable.
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Mr. Bartlett. Several months ago I attended a hearing of
our Technology Subcommittee with the power representatives. In
effect, what they told us was that they would not be ready
because they have hundreds of thousands of embedded chips in
components and it was just impossible for them to figure out
were all those going to work. But their hope was that they
could wire around it. Obviously, we had electricity a long time
before we had computers. But I do not know how much ability we
have now to wire around computer problems. Are you sanguine
with the position that if they cannot fix these embedded chip
problems, they will just wire around it?
Mr. Callahan. Well, not having been privy to your
conversation with the power executives, it is a little hard for
me to get a context here. But we will supply for the
subcommittee and for you the nature of our discussions with our
power and telephone suppliers as it relates to our payment
management system.
Mr. Bartlett. So your assessment of readiness is then
intra-agency assessment? You are presuming the availability of
services?
Mr. Callahan. At this point, as I said in conversations
with our power and telephone suppliers vis a vis this
particular system, we are confident that that will be
available. But we will provide the subcommittee with that
information.
Mr. Bartlett. I appreciate that. Thank you very much.
Thank you, Mr. Chairman.
Mr. Horn. Thank you.
I now yield to the gentleman from Minnesota, Mr. Gutknecht,
who is a member of the Science Subcommittee on Technology.
Mr. Gutknecht. Thank you, Mr. Chairman, and thank you to
the people that are here today testifying.
When we first starting having these hearings 4 years ago,
they were very sparsely attended and most of us had no idea
what Y2K stood for. I think we have made real progress. But
there was something that you said, Mr. Callahan, that sort of
just caught my ear. You said something about the problems that
are still out there we expect to solve down the road. Part of
the reason we have been having these hearings is to get
periodic updates to make certain that we are making progress. I
guess the real point here is that the road is getting shorter,
and I know you are aware of that. We are down to T-minus 80
days, something like that.
Mr. Callahan. Yes. Let me, if I can, correct the record. As
you know, and every member of the subcommittee knows, when we
started off with this Y2K problem, one of the biggest problems
was the Federal Government itself. Congressman Horn, with his
report cards, sort of put the sticks to us to provide a lot of
progress in a lot of our systems, including Medicare, for
example, which is a very, very complex system. So I think by
necessity the initial efforts here were on our own, on the
Federal Government computer systems, because if they did not
work, it did not make any difference whether the State systems
worked or not. I think, as Mr. Spotila has mentioned on behalf
of OMB, tremendous progress has been made with regard to that.
So first things have to come first, which was to fix our own
computer systems.
Now, obviously, we have to work with the States and make
sure that we have complimentary contingency plans, et cetera,
to make sure that the federally financed but State-administered
programs will run. And so that came, to some degree, after the
first effort here. I do think a lot of progress has been made,
and will continue to be made, even though we have to focus for
the subcommittee on some of the States where there are
particular problems.
Mr. Bartlett. I certainly agree. I want to congratulate all
of you. Compared to where we were even a year ago, I think at
least the Federal Government is in a lot better shape than we
would have been. And, again, I congratulate Chairman Horn and
Chairwoman Morella because I think it has been their reports
cards and the updates and forcing people to come to grips with
this situation that have really helped. And, of course, the
real purpose is so that we do not have hearings in January
asking why did people not get their checks, why did this
happen. Unfortunately, this town is very good at finger-
pointing and, frankly, I think most of us on this subcommittee
and the science subcommittee as well do not want to be into
that.
I do want to make one other point. Ms. Watkins, you sort of
made a reference to how the food and nutrition programs would
work. And by what you said, it sounded to me as if there would
be no problem getting the money out to the schools so they
could continue to buy food for the kids. Your concern was
information coming to the Federal Government.
I am not trying to pin you down on this, but I do hope, and
this is just one Member's opinion, that if there is a problem,
we will err on the side of the people who need the benefit. OK?
That if the bureaucracy, in other words, is not getting the
information or the red tape from whomever, I hope that
temporary aid for needy families, for example, will not be
withheld because for some reason there is a glitch in our
getting the right information. In other words, if there is a
problem, I hope we will err on the side of making certain that
people get the health care, get the temporary assistance, or
get whatever that they would otherwise be entitled to. I just
hope that is the policy, and I hope that someone here will kind
of reassure me that that is the policy.
Ms. Watkins. That certainly is the policy. Maybe I need to
correct the record, because I did not want to give the
impression that when talking about Maryland and the reports
that would be flowing in from school districts to the State,
that anything would delay the feeding of children or any person
who is eligible for nutrition assistance in this country. We
are going to work to make certain that all of the benefits that
are deserved so all of customers will be delivered. We will be
monitoring those contingency plans that are coming in from the
States.
I personally am working with our staff here in headquarters
to go through those State plans to ensure that no person goes
hungry in this country. That is what the Secretary of
Agriculture wants us to do, that is what this committee wants
us to do, and we are going to monitor it. Nobody wants to see
any interruption in our programs. So it will not be a
bureaucratic process and looking at some report. We certainly
are not going to get caught up in that. That is not what you
want us to do.
Mr. Bartlett. I assumed that was the answer and I just
wanted to make sure that was clear and on the record. I thank
you all.
I yield back, Mr. Chairman.
Mr. Horn. Thank you.
Let me just clean up a few things and then I will yield to
the vice chairwoman, Mrs. Biggert.
Mr. Spotila, I am curious about the States that OMB is
worried about and the respective programs. What had made us
both curious, both Mrs. Morella and I, was the waiting till
December for a lot of this review, last minute remediation
testing, and so forth. There seems to be a little disagreement
here with the General Accounting Office in terms of the number
of States, what their names are, what are the programs that OMB
is worried about. I just want to straighten that out.
Mr. Spotila. I think that, as we said earlier, Mr.
Chairman, we have actually heard a pretty detailed discussion
here by the agencies involved who are more directly connected.
Mr. Horn. But we have a lot of other agencies that also
have programs. We just brought them up because they are so
gargantuan in terms of their impacts.
Mr. Spotila. Right. As to the particular impact, Mr.
Chairman, it would be best if we supplied you with that list. I
do not have the individual States by program right in front of
me. The information we have most recently is the report that we
submitted to you. We do have some updated information that is
coming in, but I do not have that compiled to give you this
morning. I would be happy to try to supply you with more
information.
Mr. Horn. Well, what are the States you are worried about?
Does your subordinate know that?
Mr. Spotila. As I mentioned in my testimony, we share your
concern for any State that is waiting until December to finish
because the margin for error is so slim. We have heard
references here to some States and individual programs, and we
concur in that, Mr. Chairman.
Mr. Horn. Does OMB want that testing done in early, middle,
or late December? Or do you want to move it up to November?
Mr. Spotila. I think the problem here is that the testing
has to follow the work. The reason that the testing is late is
that the work is not necessarily completed. Again, we are
relying on information being supplied to us by individual
agencies working with individual States in many of these cases.
We are presuming that this testing is going to be done as soon
as possible, as soon as there is something to test. So the
problem here is that although people are hard at work on it, in
many cases they started too late and they are behind.
We have a concern and we are doing all that we can do to
work with the agencies to make certain that the resources are
there and to make certain that information is supplied. But we
do not control the effort ultimately when we are dealing with
States or territories or tribal areas. We cannot do it for
them. All we can do is try to be supportive, and they have that
primary responsibility to do their part.
Mr. Horn. Mr. Willemssen, what are your thoughts on this?
Mr. Willemssen. My thoughts are to, first, recognize that
the OMB reports that have been put together over the last
couple of quarters that have laid out the detail by State, all
of that information is unverified. What you have heard today
from some of the agencies who have overall responsibility for
those 10 State-administered programs is that they have
additional information, additional data, beyond that self-
reported information. So I think OMB, in the very near future,
needs to take that kind of information into account when it
highlights those States that are most at risk for those
particular programs rather than simply going with the
unverified information that it receives. I think the agencies
here are now in a position to provide more of a qualitative
assessment given their risk evaluations that have been done, so
that the agencies and OMB can go beyond that self-reported
information and make real assessments on where the risks are.
Mr. Horn. What I would like, you said you would like to
file it for the record, can you file that by Friday?
Mr. Spotila. We will respond by Friday.
Mr. Horn. OK. Because Columbus Day is Monday and I do not
think much is going to happen then and that would kick it over
to Tuesday. Let's see if we can get it up here by Friday,
hopefully not 5. Do it at least by 4; there will be a lot of
people running for planes.
Do you have any comments, Mr. Benzen, on this from the
States' standpoint?
Mr. Benzen. No, sir, I do not.
Mr. Horn. OK. I think that is about it on my side. I am
yielding now to the vice chairwoman of the Subcommittee on
Government Management, Information, and Technology, Mrs.
Biggert of Illinois.
Mrs. Biggert. Thank you, Mr. Chairman. If I might submit my
opening statement for the record.
Mr. Horn. Without objection, it will be put in the
beginning where the opening statements appear as if read.
[The prepared statement of Hon. Judy Biggert follows:]
[GRAPHIC] [TIFF OMITTED] T1232.162
[GRAPHIC] [TIFF OMITTED] T1232.163
Mrs. Biggert. I would just like to ask a couple of
questions. First, what is going to happen on December 31, 1999,
as it rolls over, in conjunction with these agencies and the
States? Will the offices be open in case there are glitches? Is
this part of the contingency planning? You obviously are not
going to be sending out checks on January 1st. I would hope
that people would have time to celebrate as well as to worry
about the Y2K problems. But will there be somebody who is
looking to see what the glitches are, if any?
Mr. Spotila. In general, I think it is fair to say yes,
there will be someone, not just one person, but there will
actually be teams of people at each of these agencies. We are
looking to the individual business contingency plans in order
to determine specifically how agencies are approaching it. As
we get that information, we will certainly make that available.
Mrs. Biggert. Mr. Willemssen, in your statement you
mentioned the lateness in the year 2000 compliance for States
and programs, that there are nine States' child support
enforcement programs, and then seven States' food stamp
programs, and then four States' unemployment insurance
programs. Can you name the States for each of these potentially
late programs?
Mr. Willemssen. Yes. Child support enforcement is New
Hampshire, New Mexico, North Carolina, Utah, California,
Oklahoma, Alabama, and Illinois, and the Virgin Islands.
For food stamps, Illinois, New Hampshire, Ohio, Alabama,
Oklahoma, Georgia, and the Virgin Islands.
Unemployment insurance, the District of Columbia,
California, Nebraska, and Vermont.
Mrs. Biggert. Being from Illinois, I think I am sorry I
asked.
In your opinion, are these programs severely at risk for
not being ready for January 1, 2000?
Mr. Willemssen. I am most concerned about the risk status
for those States that have late completion dates and are at
high risk with their business continuity and contingency plans.
As we get closer to the rollover period, the business
continuity and contingency planning element is going to play an
even more crucial role. To the extent that the States have
these backup plans in place and can implement them in the event
of disruptions, then I think we have reason to be more
optimistic. If these kind of plans and day one strategies are
not in place, even for those States who like are in good shape,
then I am much more concerned.
Mrs. Biggert. In your written statement, you also said that
at particular risk are several States with systems that are not
yet Y2K compliant. Can you name those States?
Mr. Willemssen. Those States would be primarily by program.
So if you go down the 10 programs, there is variance. I think I
mentioned earlier, for example, Medicaid, the two States we
would be most concerned for about would be New Mexico and New
Hampshire. I would concur with Mr. Hugler's comments about the
four entities that he mentioned, starting with the District of
Columbia in the red alert status, and I believe there are three
other entities in the yellow alert status.
So I think we would generally concur with the comments that
have been made today that are program specific and State
specific. But, again with the caveat, it is still very
difficult to generalize on a particular State because within
that State you have different agencies running the program.
Mrs. Biggert. Thank you. Thank you, Mr. Chairman.
Mr. Horn. Thank you very much.
I now yield to the gentleman from Oregon, Mr. Wu from the
Science and Technology Subcommittee.
Mr. Wu. Thank you, Mr. Chairman. I have only a couple of
questions.
With the passage of September 9, 1999, are we any more
confident in the Y2K transition after we have gone by the 9/9/
99 date?
Mr. Spotila. We are very conscious of the fact that January
1 will be a key date in and of itself. And although in one
sense it is a comfort that September 9th was not a problem, we
are pleased with the progress, but very conscious that there is
a lot of important work still to be done. So we have a general
sense, particularly from the standpoint of the Federal
agencies, that we have reached 98 percent compliance on mission
critical systems and we have a plan for completing it. We are
pleased with that kind of progress and the hard work that has
gone into it, but we are not over-confident. We are still
focused on what remains to be done.
Mr. Wu. I am reading between the lines that you are not
taking much comfort in passing what might have been a
potentially minor disruption date.
Mr. Spotila. Well, it is a good sign that we did not have a
disruption on September 9, 1999. But it is not the end of the
problem.
Mr. Wu. One of my consistent concerns has been that despite
however well or poorly we might do in the United States in the
private sector or at the Federal level in preparing for the Y2K
transition, foreign countries and the private sectors in
foreign countries might not be nearly as well-prepared as the
United States hopefully will be. The question is whether, in
the arena that you all are addressing today with respect to
State programs, whether there is a substantial risk basically
of a cascade effect of problems in foreign countries cascading
into the State preparedness arena?
Mr. Spotila. We are obviously all concerned that not every
country in the world has matched the progress that we have been
able to accomplish here in the United States. We are looking at
what interrelationships there might be and interdependencies
there might be. On a general level, we are reasonably confident
that there will not be the kind of cascading negative effect
you are describing affecting U.S. citizens. So I think we have
a good confidence level there.
We are, speaking now in terms of the administration, we are
sensitive to situations that vary from country to country. I
would point out that the President's Council on Year 2000
Conversion, headed by John Koskinen, has been very much
involved in working on an international level to try to promote
year 2000 compliance and assess the risks. And I might add, and
this ties into a question that came earlier about individual
citizens, the Council makes good, updated information available
both on a website, http://y2k.gov, and through a toll-free
number, which is 1-888-USA-4-Y2K. That information is something
people can monitor as it is updated. The Council is giving out
advisories; the State Department is giving out advisories on
travel. So there are a variety of things happening to try to
get information to American citizens. In general, we feel this
is not a crisis affecting us from international Y2K compliance,
but, again, it is a risk that is a little difficult to assess
in some countries.
Mr. Wu. Are there any particular systems that you might
consider more vulnerable to problems developing in foreign
countries? Telecommunication and aviation come to mind
immediately. But I would like to hear from the panel about any
particular systems that you all deem to be particularly
sensitive.
Mr. Spotila. My understanding is that the major industries
have all been focusing on this, including the aviation industry
which has worked hard to ensure that we do not have major
problems relating to Y2K. That does not mean that a particular
airport in a particular country might not have a problem. And
for this, I would defer to the Council and to other updates
that will be coming out from now until the end of the year to
give a better assessment. So I do not think we can look so much
by broad industry area. I think most of the major industries
are addressing the problem, but there are going to be
individual areas where there may be more risk.
Mr. Wu. Thank you very much, Madam Chairwoman.
Mrs. Morella [presiding]. Thank you, Mr. Wu.
I apologize for having been at another hearing that I had
to attend. I know this has been covered before, but before I
ask you all a final question, Secretary Watkins, I was not here
to hear what you said about what we can do to get Maryland
moving faster in terms of compliance. And what is wrong? We
have been in the forefront. My county of Montgomery has been
Y2K OK for a long time and had a lot of drills. It is sad to
think that one of the basic connects is not working at this
point.
Ms. Watkins. Maryland is waiting till December to be
compliant. Congresswoman Morella, you were not here and I will
just restate Maryland's situation. It relates to the child
nutrition program only. Our food stamp program in Maryland is
compliant and we have a certification letter for the food stamp
program. And the same is true with the WIC. WIC is compliant.
We do not have a certification letter yet, but we will get the
certification letter from them for WIC.
Maryland's only problem area is with the school meals
programs and with child nutrition. That is not as critical for
us, but we will continue to work with them. They do have a
manual system in place. Their system crashed, but they were
working aggressively and will continue to do so. We will
provide them any kind of technical assistance and support that
is needed for child nutrition. And when I say it is not as
critical because they do not have a system in place, it only
affects the reimbursement rate that the school districts would
submit to the State. It is not going to impact their feeding of
children throughout the State of Maryland. So we will work with
them and Maryland will be OK.
Mrs. Morella. I am glad to hear that.
Mr. Hugler, did you have a chance to tell them about the
booklet that you have put together?
Mr. Hugler. I did not make any remarks about the Secretary
of Labor's recent release of the future work report, but I
appreciate your mentioning it. It is quite a bit of insight
into the workplace of the future, which, really, it is upon us
now because there is a very heavy emphasis on computer
engineering and other related skills. But I thank you for
mentioning it.
Mrs. Morella. Yes. There is definitely a connection between
Y2K remediation and work force readiness too, which has been
one of the problems why it has been so costly, why so many
companies and States and localities and even the Federal
Government has had some particular problems. I often think
Admiral Grace Hopper, who was involved with the COBOL
beginning, I used to say she was the one who kind of designed
it, and then someone said, ``Oh, no, I was on that committee
and it was a committee that did it.'' I just think that it has
posed a challenge that we have been trying to take care.
I know that the agencies have all stated that they are
confident that their own systems and kind of cautiously
optimistic that the State systems will be compliant and
interoperable. Is there a role that you see that Congress can
and should play in these remaining 86 days? I just wondered if
I might just go through the panel and see if you have any
comments about that.
Mr. Willemssen.
Mr. Willemssen. Two comments on two different levels. One,
I think each Member of Congress would be well served by
inquiring about their own State, if they have not already. That
inquiry should start at the level of the Governor in terms of
getting information on readiness and making sure that
information, if it has not already, has been given to the
public so that the citizens know where the individual State is
with respect to readiness.
The second thing I would offer, more in the traditional
congressional role, is I think the Congress needs to be
postured in the early January timeframe should there be any Y2K
events and risks that realize themselves. I think the executive
branch has set itself up with its information coordination
center and working through FEMA and the FEMA regions to be in a
position to know what problems may occur. That could lend
itself eventually to some sort of a request to the Congress to
be ready should funding, for example, be needed for
implementation of contingency plans. Something that we have
testified on before that we thought was important is that OMB
have in hand how much it would cost if contingency plans need
to be implemented on any kind of widespread basis. I think the
Congress needs to be at the ready in the unlikely event that
something like that occurs.
Mrs. Morella. I think it is a very good idea that we get
the word out to our members to communicate with their States to
inquire about and indicate their interest in making sure that
the State is compliant. I am not quite sure what you mean by
Congress being properly postured with the exception of the
financial thing you mentioned.
Mr. Willemssen. That is essentially what I am getting at.
Mrs. Morella. OK. Great. Thank you. I appreciate the
comment.
Mr. Spotila. What I would add, Congresswoman, as John
Koskinen indicated in his August report, one of the areas that
concerns us is that individuals and small businesses around the
country may, even at this late stage, not be sufficiently aware
of the need for Y2K compliance. NFIB, for example, did a survey
of small businesses earlier in the year and, based on what they
were hearing from members, they predicted that there might be
850,000 small businesses not ready for Y2K. I think that
Members of Congress are in a unique position to communicate
with their constituents, to continue to try to articulate this
message and create awareness. I think that is an important
function.
Mrs. Morella. I think that is a very good point. I also
wanted to thank you. In your oral statement, you also had some
very laudatory comments about Congress and its interest and
involvement in moving the Federal Government and State and
local governments ahead, and I certainly appreciate that.
Mr. Callahan.
Mr. Callahan. Yes. I think the key emphasis, and it has
been mentioned here by a number of people, has been the need to
have very strong and operable business continuity plans in the
case of some system failures. I think it is fair to say there
may be some isolated or sporadic system failures in any number
of areas, and, if that occurs, we have to fall back very, very
quickly and readily to these continuity plans so the citizens
will receive the services they need and require.
Mrs. Morella. I hear more and more of that, people who are
not sure of how they should react and some small businesses are
saying we know this will pass, it will be all right. Again,
there is a little bit of frustration about what you do about
it. We have had a lot of different kinds of town meetings and
given them legislative assistance in terms of encouraging
openness and all. But I do agree that we need to inform the
public about what needs to be done.
Secretary Watkins.
Ms. Watkins. Congresswoman Morella, I could not agree more
with the panelist who have spoken before me about your
advocating and being there to let the general public know,
particularly those people who are on nutrition assistance
programs and who use those benefits, and joining with Governors
and our other State partners and with retailers around the
country to assure people in the various communities that the
systems are Y2K compliant and that they will receive their
benefits. I could imagine that if you were in Montgomery
County, with the large number of people that we have eligible
for these programs, and you had a public event with retailers
and the Governor and someone from Health and Human Services and
Education, to let them know that the systems are OK and that
they should not worry about Y2K and they are going to have
food. If this was done around the country with the various
Members of Congress and Governors and our State partners, who
have done an outstanding job, I think it certainly would send
the right signal.
Mrs. Morella. It might be that a mailing would be more
effective. Sometimes with these meetings you just do not get as
many people as you would like to have show up to them. And so
maybe something that would comfort them. I have been thinking I
am going to give Christmas and Hanukkah gifts of baskets with a
Y2K survival kit to hold you over for a weekend, with foods,
and batteries, and whatever, and just let them know in advance
not to be alarmed.
Mr. Hugler.
Mr. Hugler. Madam Chairwoman, I would concur with
everything that has been said by the panel thus far in response
to your question. I would particularly highlight the value of
Members of Congress interacting with their respective Governors
over the issues concerning Y2K. The public events suggestion I
think was a very good one. The important point here is I think
it would be beneficial if the States would hear the same
message that they hear from the Department of Labor and other
departments represented here about what is important. I would
second what Mr. Callahan said, for example, about business
continuity and contingency plans. That is something where we
need to finish that work. As good a job as we have done and we
know our partners have done, we still need to be prepared for
the unforeseen and be able to continue business in the
temporary absence of automated systems.
Mrs. Morella. Mr. Benzen, I am sorry I did not hear your
oral presentation, but I do have your written testimony. I
would love to hear from you now.
Mr. Benzen. Just very quickly. To answer your question, I
think I would have to agree with everyone at this table. I
think they are on target with what efforts need to be
continued. I would point out the efforts of this committee have
helped the States certainly in that it is an evangelizing role,
if you will. It has called attention to the problem and it has
gotten action. The idea of making sure the Governors know it is
important, I think the Governors really already know what is
important. I do not think the problems we are seeing are
because of inactivity or because of ignorance. I think it is a
matter of just a tremendous amount of work to do that needs to
be done.
Mrs. Morella. And it all starts from the top, and those who
recognized it and started early, and it kind of pyramided out
to touch many more people.
We have 86 days to solve our remaining Y2K problems. The
Y2K technology challenge has shown how closely our society is
dependent on computers. It illustrates our interdependence also
on each other. The Federal Government has many critical
business partners that help carry out essential programs such
as you have discussed, Medicaid, temporary assistance for needy
families, food stamps, and unemployment insurance. Millions of
lives will be severely disrupted if even one State-run program
fails.
States and counties need to be ready. Many have significant
work left to do. Today, we have named several States that face
a significant challenge in the coming months. If computer
systems are not ready, I strongly urge State and local
governments to develop and test practical contingency plans.
Some have done it, some have not.
Our society lives with minor disruptions and inconveniences
each day, whether it is the traffic congestion or the weather.
However, our Nation cannot afford to experience significant
service delivery problems to our essential programs. We still
have time to get the programs ready, but I think you all agree
we must redouble our efforts.
I just think this has been a great panel. I want to thank
you all for being with us. There may be some other questions
with regard to what is happening in some States on some of the
programs that we have not had a chance to discuss that, with
your agreement, we may forward to you for responses.
I want to thank the following people. On the majority
staff, J. Russell George, staff director and chief counsel;
Matt Ryan, senior policy director; Bonnie Heald, communications
director and professional staff member; Chip Ahlswede, clerk;
P.J. Caceres, Deborah Oppenheim. On the Technology
Subcommittee, Jeff Grove, staff director; Ben Wu, Joe Sullivan.
On the minority staff, Trey Henderson and Jean Gosa. And the
Subcommittee on Technology, Michael Quear, Marty Ralston. Also,
the court reporter, Ruth Griffin.
The meeting is now adjourned. Thank you all very much.
[Whereupon, at 11:59 a.m., the subcommittees were
adjourned, to reconvene at the call of their respective
Chairs.]
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