CS99 Pre-Y2K Report

Governments

Stephen Kim and James Tatum

Computer Science 99

Dartmouth College Computer Science

March 15, 1999





Abstract

In this paper we analyze the Y2K problem from the perspective of the United States Government, with a brief look at state, local, and international governments. We focus on the functionality of the sectors of government that provide services to the populace. Among those researched are the IRS, Social Security, and Medicare. The paper looks at how prepared each department is and what the ramifications if it is not Y2K compliant on time. The paper discusses the differing obstacles to Y2K preparedness for each service provider and what the different strategies employed are. State and local governments are compared to the federal governmentís list of concerns and resources in pointing out that the problem is harder to solve at the local level in the current conditions. Effects on the international bodies are examined?which countries are prepared, and which countries are at risk. It should be noted that both the military and the judicial sectors of governments are intentionally not discussed in this work.

Contents

  1. Introduction
  2. Government Services
    1. Department of Labor
    2. IRS
    3. Social Security
    4. Pensions
    5. Welfare
    6. Postal Service
    7. Health Care Financing Administration
  3. Government Infrastructure
  4. States and Localities
    1. District of Columbia
    2. California
    3. Denver
  5. International
  6. Summary
  7. References
    1.  
1. Introduction

The year 2000 problem poses a much greater threat to the services the government provides than the immediate shutdown of the IRS, Social Security, etc. The vast amount code that must be analyzed and updated for each system coupled with the tight interdependence of the departments on each other to perform both internal and external functions almost guarantees failure, on some level, by our government to function in the expected manner as a result of improper handling of dates by computers.

Technically the problem begins with the bits assigned to store the year on computer systems. The use of two digits has led to the possibilities that computers may not handle the year 00 correctly, thinking it to be 1900 instead of 2000. This problem evidences itself not only in software but also in the hardware, as embedded chips have been inadvertently designed to handle dates incorrectly. The massive problem of updating every system has been made more difficult by the fact that each system must talk to another system within the federal government and with other outside entities.

While the computer systemsí failure is a serious concern, there lies a more crucial question. When these services fail, what will be the reaction of those dependent on government aid, such as welfare and Medicare? A widespread failure of services to tens of millions is possible for the first time in history. As each department and administration struggles through various approaches to ready themselves as best they can for the year 2000, they work not only to prevent a tangible disaster but also to protect Americaís faith in its government. Some departments have started early and tried many strategies while others are just beginning to grasp the gravity and complexity of their situation. Many are somewhere in between.

The following is an assessment of the current ability of our government to provide those social services we most depend on through the year 2000, and how each department has arrived at their current state. While describing the state of preparedness, government agencies have often been hesitant to release information and vague when they do. Only recently has each department been forced to report their progress towards year 2000 compliance. It is important to note that "compliance" usually means that the department or system has met some previously set standard that ensures functionality of the system. Unfortunately, this definition has not been defined as clearly for this new problem. Some agencies have all their computer systems compliant, yet depend on non-compliant outside agencies for basic functionality. Some have few systems compliant, and yet have a number of back-up contingency plans to handle all possible computer failure. We will take the approach that Y2K compliance ensures that each department will be able to perform in the year 2000 without interruption, whether by system rebuilds or contingency planning.

We will follow the look at federal agencies with a brief look at state governments to survey how they have been responding to the year 2000 problem. In addition, international year 2000 preparedness will be examined. Each country, state, and department has handled the Y2K bug in a unique manner. While it would be near impossible to catalog every governmentís Y2K status, we have selected key examples to illustrate the most common themes: planning, foresight, and execution.
 
 

2. Government Services

An important part of the government's functionality in this modern era is the social services it provides. For some citizens who have stagnantly resided in a state of poverty for decades, the support both economically and medically that the government provides is not merely aid as it was intended, but has become the lifeline of a newly created welfare state. To even more people institutions like social security provide necessary support for daily living. America depends on its social services today more than ever. While originally the Health and Human Services department was established to alleviate the possible consequences of a period of misfortune or national depression, the prevalence of the welfare state in modern politics sheds some light on how permanent these supposedly supplemental incomes and advantages are for millions of people. A lull in these services may just cause a temporary strain on volunteer organizations and non-governmental providers of social services, but a major black out of aid could be catastrophic to a segment of society that is often plagued with existing problems such as drugs, gangs, and violent crime.

These types of government services require a lot of computerization. From handling millions of forms to managing billions of dollars spread across the nation, computers create the infrastructure necessary to run a country. Unfortunately, this means that these services have been placed on the frontline of the Y2K bug battle. Some of the computers and software were built a long time ago, and government branches have been scrambling to rebuild massive systems so that critical functions will continue in the year 2000.
 
 

2.1 Department of Labor

The Department of Labor has already experienced their first Y2K test. The Department of Labor dealt with unemployment insurance claims this year, as claims expire a year later, i.e. 2000. These claims "have been properly and timely processed by all 50 states... using their year 2000 remediated systems" [CAL 99]. However, all is not well at the Department of Labor. "Within the Department, the Bureau of Labor Statistics, with only 11 of the 23 mission critical systems in compliance, faces the serious risk of system failures jeopardizing its key statistical responsibilities" [2][GOO 98].

The failure to measure properly labor statistics, among the departmentís many duties, could mean serious problems for the United States. For example, the Federal Reserve uses these statistics to measure the strength of the economy. If there were a perceived reduction in the rate of unemployment (due to a computer improper invalidating unemployment claims), the Federal Reserve may attempt to restrict potential future inflation by raising interest rates. However, this would have the opposite effect that the economy needed, restricting the economy when it needed boosting. This misguided act would end up causing more unemployment as companies invest less due to high interest rates. This illustrates just one of the possible effects of systems errors in the Department of Labor. If they do not improve their systems, people could be left without unemployment benefits, lawmakers may make decisions on faulty statistics, and general chaos would ensue in the most important sector of the economy: employment.
 
 

2.2 IRS

The Internal Revenue Service has also fallen behind their plans for Y2K. This government agency illustrates clearly the kind of issues that the US government has dealt with in trying to make their systems Y2K compliant. Complex systems and poor management have created a problem that may be out of the agencyís capabilityís to handle in the year 2000.

Their problems in modifying their systems for compliancy has been exacerbated by changing tax rules to implement the Taxpayer Relief Act of 1997 which goes into effect fiscal year 1999. In addition to rewriting their systems to read the date properly, the programmers have to rewrite the system to handle the new tax rules, which is not a simple task. The dual burden of new tax laws and Y2K has already begun to effect the attempts at rebuilding the system. Linda D. Willis, director of tax policy and administration issues for the general government division of the General Accounting Office testified how "the IRS has fallen behind in its schedule for making sure crucial computer systems are able to properly read the date change and has taken a 'narrow approach to contingency planning'" [CLA 99]
However, if the system does fail in the year 2000, it will not have been the first time. Unfortunately, this past situation illustrates the agencyís lack of proper contingency planning. This inattention to unforeseen problems may haunt the IRS in the upcoming test. One of the tax return processing plants in 1985 had a computer malfunction preventing the employees from processing their forms correctly. As a result some "employees ended up shredding some tax returns and putting others in the trash so that they could appear to be meeting work quotas" [JOH 99]. While our country has survived the failure of a portion of the system, we have yet to see the repercussions of a total system failure. The Y2K bug is one of the few known to be capable of such failure. If the IRS goes into this problem with the same sort of contingency planning that they had in the past, disaster may be looming in this countryís future.

Nobody wants to file their taxes to find out they owe an incorrect sum to the government. However, that is exactly what may happen. The IRS maintains a massive, complex system that is everything you do not want heading into the Y2K. The IRS has more than 62 million lines of computer code, three big mainframes, and 60 other mainframes in 10 regional offices. According to the RFC, 'None of the mainframes are century date compliant, thereby necessitating immediate actions ranging from systems software upgrades to replacement.' Thousands of applications systems are 'undocumented'" [VAR 98]. These large legacy systems were installed over time, such that the data exchange is a confused mess of work-arounds. These systems have been " irreparably overlaid by and interfaced with a tangle of stovepiped distributed applications systems and networked infrastructures" [VAR 98].

The sheer complexity of this problem has made the year 2000 a dangerous time for the IRS. While efforts have been made towards Y2K compliance, the scenario is quite clear. Even if they do manage to fix all blatant errors in their system, the agencyís prior handling of unforeseen problems indicate that they may not be quick enough to solve hidden system errors when the year 2000 arrives.

2.3 Social Security

According to President Clinton, Social Security seems to be as prepared as any institution within the government can be. He promised on December 28th, 1998 that not one benefactor of social security would miss a check nor have one delayed[ASS 98]. Social security provides just what it says, security, in financial form for the elderly or those unable to work. In a sense it is the guaranteed income of social security that maintains the quality of living for those who have little means to support themselves. With over 50 millions beneficiaries, the largest of any federal social service provider, the importance of social security seems obvious.

Luckily this was foreseen as long ago as 1989 and Social Securityís systems seem to be compliant. Many experts have praised the alertness of the Social Security administration and their willingness to put forth a massive effort to address the problem. Steve Horn, R-Calif., gave Social Security Administration one of the few ëAís on his latest "report card" on government Y2K preparedness. Over the past decade the SSA has employed over 2,800 workers, a fourth of which were programmers, to tackle the issue. The result is that all systems were ready last year at a cost of $43 million. This has allowed them to turn their focus to Treasury Department on whom SSA depends to send out 600 million checks annually to its beneficiaries  [LUE 98]. It is this type of interdependency between departments that has slowed the Y2K preparations throughout the government. It creates a scenario where a federal service is only as prepared as its weakest link.

That fact is underlined by the reality that SSA has no control over the financial institutions that own and run the networks that electronically transfer payments. About three fourths of all social security checks at one time or another are transferred through these networks. While the financial institutions have been working long and hard on the Y2K problems and appear to be ahead of most industries, the absence of any assurance that these electronic transfers will be working properly leaves the SSA with its hands tied as to whether it will be fully functional on January 1st, 2000. The treasury problem and the electronic transfer issue have also caused several Republicans in Congress to call for a reexamination of the Social Security system, this time evaluating whether checks will be received properly, not just processed correctly.

The foresight of the SSA may prove to be heroic for other parts of the government as the branch of the Treasury department also handles the distribution of checks for the IRS, Veterans Board, and various other federal pensions who will not have to worry about the updated anything more than their own systems now. But the rest of the Financial Management Service, who distributes 85% of the government's checks, appears to be behind. This will most likely jeopardizes the reliability of the checks going to other veteran organizations, many federal employees (the Defense department, Postal Service and the HCFA excluded), and tax refunds. That means the 40 million people still may not receive their government checks. So far the only back up plan suggested has been the comical offering of the implausible idea to hand write the checks to assure that the amounts are correct.

As of February 24th, 1999, the Financial Management System, who writes the checks for the Treasury, reported that it is 86% compliant. The problem lies in agreeing upon a new interface with other departments that is based on a Y2K compliant shared information system. The FMS held a meeting last December to try to start working towards this new platform. Getting the dependent branches of government to go to a new common shared information system seems to be easy compared with creating one that will be compliant and suit the FMSís needs. As of February 24th, they had no such system prepared [GRE 99].
 
 

2.4 Pensions

Pensions, as well as welfare, are handled by the Pension and Welfare Benefits Administration who are obligated to be in accordance with the Employee Retirement Income Security Act that makes providers financially and personally responsible for the failure to distribute the necessary payments to its beneficiaries.. This has naturally caused a great deal of concern over the obstacle Y2K poses to proper functioning of the pensions and welfare systems.

In the case of pensions, many of these payments, are handled by the private sector and consequently the PWBA can only give advice and try to make companies aware of their stringent responsibilities to be distribute benefits. The PWBA recommends that organizations seek outside help, from computer experts, in updating and testing their systems so as to have a documented approach to why a failure may occur and what can be done to safety net any possible failures. Such contingencies plans, the PWBA testified before Congress, may include shutting down computer systems and manually caring out one's duties.

PWBA also warns that fiduciaries must be extremely cognoscente of the Y2K issue in making invests and planning employee's financial futures [LEB 98]. PWBA has tried to set itself up as a "help desk" of sorts for proceeding with business in a manner that will best prepare service provides for the year 2000. This includes sending out warning memos, providing a web site for web site for questions and answers, and a toll free number. The hope is that this will aid providers in avoiding the massive amount of litigation possible due to the Employee Retirement Income Security Act which could cost beneficiaries, providers and the courts millions of dollars in the coming years.
 
 

2.5 Welfare

Welfare provides many services to the most needy segment of society. It oversees the distribution of food stamps, welfare checks and enforces child support. It does this by commissioning and aiding welfare programs on the state level. As a result each state has been responsible for their own Y2K preparedness with varied results.

As of November, 1998 the General Accounting Office reported to Congress that welfare was not Y2K compliant and could not say definitively whether it would be [FOR 98]. The study done showed that only about one third of the state systems that manage the federal welfare dispersal were compliant. About half the systems, including systems used in child support enforcement and food stamp dispersal, had not even been tested. The possibility of a cessation of services in many states seems very real. Eighteen states claimed to be less than a quarter completed with testing and updating systems and only Arkansas, Idaho and Utah were more than 75% done.

As a result some states have taken drastic measures to try to help the problem. In Virginia the state has sponsored community colleges to attempt to train welfare recipients in Fortran and Cobol so that they can help in the analysis and update of the very systems that provide their welfare checks[VIS 99]. Welfare seems to a be an overlooked facet of government in the press, perhaps because politicians are more concerned with other services that pertain more directly to voters.
 
 

2.6 Postal Service

The Postal Service has been clear in stating that they see the importance of a functional Postal Service to reacting to Y2K associated problems but extremely vague in whether or not it will be prepared. In a statement made on February 23rd, 1999 by Norman E. Lorentz, Senior Vice President and Chief Technology Officer of the Postal Service, the problem consists of analyzing 100 million lines of code. A problem of this size seems extremely daunting especially when Lorents states that the Postal Service "does not have all the answers" and "canít promise that there will be no problems"[LOR 99]. The only assurance given is that the Postal Service is doing "all they can."

In another statement made by Inspector General to the Postal Service, Karla Corcoran, the Postal serviceís failure sees more eminent. The Postal Service did not begin to fully address the issue with any real man power until 12 people were appointed to the task in 1997. Considering 198 billions of pieces of mail are delivered annually with the aid of automated systems, this effort seems grossly insufficient. Only in the last year has the Postal Service begun to truly address the issue and has spent about a third of the $607 million dollars it intends to spend  [COR 99].

The Postal Serviceís main goal has been to update the 43 systems responsible for the handling of mail and to assure compliance on the part of its 8,000 suppliers and transporters. 39 of the 43 systems are compliant and the remaining four represent a small portion of the total system. But 7,200 suppliers have not even responded as to whether they will be able to provide their usual aid in transporting mail by land, seas and air. The Postal Service identified 661 suppliers as critical to the functionality of the postal Service. With some still not responding 254 are known to be in "great risk" according to Corcoran of Y2K related failure [COR 99].

Another important feature of the Postal Service is the thousands of daily data exchanges conducted internally, with financial institutions, meter manufacturers, and with the US Treasury, that are import to the running of the various institutions. The Postal Service identified 5,700 different data exchanges of which only 4,300 had been assessed. To make matters worse, of the 2,000 data exchanges deemed critical only 123 are currently compliant. The need for extensive contingency plans is crucial but as of yet the Postal Service has only recognized that need and no formal plans have been made.
 
 

2.7 Health Care Financing Administration

This branch of the government oversees many of the health care issues that will be most affected by the Y2K bug. Among their responsibilities is Medicare and Medicaid which require the government to distribute medicines and coverage for millions of Americans who depend on the support. Clearly, the ramifications of Y2K failure are severe. The elderly might not get service if the system were to think that their coverage was invalid. Doctors may not got paid for performing their operations if the computer invalidates the payment transfer. The latter may result in even validated Medicare-covered elderly from not getting coverage as hospitals turn away all Medicare patients in fear of not getting their payment. The potential scenarios are frightening, and the HFCA (Health Care Financing Administration) placed this scenario as a highly possible one.

The Medicare program is large, and handles over 800 million claims, 85 percent of which are filed and paid electronically [GK 98]. This system requires several systems, over 70 contractors, and a network of approximately 900,00 providers on the local level. Medicareís 30 million dependents make it second only to Social Security in the possible number of people affected by its crash [DOR 99].

Fixing the computer system of such magnitude is not a simple task. HCFA (Health Care Financing Administration) attempted to rebuild the claims processing system to make it more flexible and Y2K compliant. However, this new system, MTS, failed to succeed in replacing such a complex system. The complexity of filling such massive needs while becoming Y2K compliant proved to be beyond their expectations. "Given the magnitude of these problems, along with continually increasing costs, HCFA terminated the MTS contract on August 15, 1997. The failure of MTS cost HCFA about $50 million for the software development contract alone"  [GK 98]. Rep. Stephen Horn, R-Calif., testified on Medicare's problems in adequately solving the issue: "The picture is a gloomy one... If HCFA does not accelerate its efforts dramatically, failure of Medicare's systems is inevitable" [AP 98]. While this message had political overtones, the problem is a large one. However, according to DeParle, things may be improving in Medicare: "The 25 most critical computer systems operated by HCFA have been renovated, tested and validated by outside experts... Medicare contractors have finished work on 95 percent of their software code, and DeParle said she expected most contractors to report soon that they have finished a third round of testing to ensure that systems will operate smoothly in 2000" [BAR 99].

Important to keep in mind is the fact Medicaid and Medicare fund many organizations such as funeral homes and nursing homes which depend on them for funding. As an incentive to get these companies to be Y2K compliant they have threatened to cut off funding if the home is not prepared to take care of each of its patients or clients in the event of a Y2K disaster. Some organizations are at risk of losing 90% of their funding after investing all that they had. The result will be an increase in the number adversely affected by Y2K.

While things are looking better, one cannot judge exactly how much of DeParleís statements are factual and how much are spin. After all, it seems unlikely that a division ranking an "F" in Hornís Y2K report card has suddenly completed 95 percent of their repairs overnight. Unfortunately, its only a matter of time before the truth will be revealed.

3. Government Infrastructure

Internally, the government has been facing Y2K problems of their own. From e-mail to paying out employees, the infrastructure of the federal government relies on computers to provide the backbone for the day to day functions of the government. Much of the government's infrastructure is now automated, relegating back office operations to computers and a small number of technical people. Thus when the problem of Y2K arose, the government was left to deal with an unknown problem. The Y2K bug "requires Cabinet secretaries and agency heads to worry about technical details that they usually avoid. . . in fact, the whole problem is the sort of back-room operation that has no hint of policy innovation or new benefit" [WAL 98].

Lawmakers have been sluggish to actively respond to the problem, as dealing with the Y2K bug is not glamorous nor attracts voters. Add to that a shortage of technically competent employees to fix the computers, the technical infrastructure of the government is at risk. The GAO reported that "[of] the 24 large agencies reporting to OMB [Office of Management and Budget], 13 are expressing concerns about the availability of information technology personnel. Also, 10 of the 41 small agencies and independent entities expressed these concerns" [GAO 98]. In response, the government has gone recruiting for computer professionals. In fact the OPM (U.S. Office of Personnel Management) has even offered <a href: http://www.opm.gov/y2k/html/y2kbroc2.htm> Dos and Don'ts </a> in managing the influx of new people. The lack of people has made proper prioritization of "mission-critical" systems key. However, sometimes there are not even enough people for those systems. For example, the "Department of Commerce... reported that its Patent and Trademark Office experienced a 3-month delay on one of its mission-critical system development efforts, the Classified Search and Image Retrieval system, when the contractor was unable to place qualified staff on the task [due to the scarcity of IT professionals]" [GAO 98].

Gaining actual hard statistics in the number of internal systems that need repair proves to be a difficult affair. Few agencies have willingly come forth with potentially embarrassing information about their Y2K problems when not required to. Unfortunately, this may mean that while these agencies may appear Y2K compliant on the exterior, they may have serious problems that they have been pushing aside for financial, technical, and political reasons.

Finances have been one of the most restraining factors in getting the government ready for the Y2K. Under-estimations of the complexity of the issue has led to tight budget constraints. For example, the Department of the Interior We estimates that the "cost of achieving [y2k] will approach $100 million... some of which has not been formally identified in the Departmentís fiscal year (FY) 1998 - 1999 budgets" [DOI 98]. The Y2K problem has taxed the government's resources to the limit, and in many cases beyond.

Like any large employer, the federal government has been experiencing similar types of Y2K issues. Personal PCs and their software have to be checked for Y2K compliance. Elevators, printing operations, and similar systems also need repair to function in the year 2000. For example, point-of-sale and accounting applications operated by the Senate Restaurants are not year 2000 compliant, and they require an upgrade"[HAN] so that these costs will be properly accounted for. This also illustrates some of the unique features of the government Y2K problem. While normal businesses have generally a single product to manage back-office tasks, the government is a highly organic and complex network of disparate systems.

These types of problems have been somewhat understated. Much of the government's limited resources have been aimed at "mission-critical" systems, like nuclear missiles and utility maintenance. However, systems that do not appear to be "mission-critical" have serious implications as well. For example, the Defense Logistics Agency's contract and finance system was not Y2K compliant. When they issued a "three-year contract beginning on January 1, 1997... [the] agency's computer system, mistakenly identifying the ending date as January 1, 1900, generated a 97-year delinquency notice"[CSM]. So while the Defense Logistics Agency might label internal finance software as of inferior importance to managing troop locations, the functionality of the agency was hampered by the software's Y2K problems.

Some vulnerable systems have already been found. In the House of Representatives, one report labeled "[three] computer projects-- including a large database that tracks property items purchased by House officers-- as 'high risk'... the payroll for members and the systems that provide members with information on federal grants and contracts as facing substantial Y2K risks" [BAR 99]. Certainly chaos would ensue if the House could not keep track of its finances, pay its employees, or record their legislation. All of these are within the realm of possibility.

The inherent danger in solving such a massive problem in a limited amount of time has been made clear. Some systems will probably not be repaired in time for the year 2000. What remains to be seen is what will and what won't be fixed. While most of the nationís eyes are upon Government services like Medicare, they may find the system failing in the year 2000 because of some hidden internal system.
 
 
 
 

4. States and Localities

States and localities share many of the same problems as the federal government only they have a lesser margin of error. The challenge is that in some ways state and local governments act as miniature federal governments in that they have less people to provide for and a smaller budget to provide it from. But if a state government encounters a bug in their tax program to calculate its tax returns it poses the same size obstacle, technologically speaking, that the federal government might encounter. The stateís systems still may have millions of line of code to change but less resources to do so.

The federal government has tried to help by giving millions in aid to state and local governments, but it appears to be an impossible task. With so much to do many localities will have little bargaining force in the fight over funds that are needed desperately. Since some government computer systems are not directly related to the number of citizens in a given locality, the possibility that there exists more lines per code to change per person affected for some services, some areas may receive no aid. This may leave state and local service providers with too little too late in the race to recognize and alleviate Y2K bugs. The level of preparedness varies greatly from state to state and locality to locality so we will just look at a few to get an idea for the different factors that occur on a reduced level.
 
 

4.1 District of Columbia

One of the worst prepared is the District of Columbia. The federal government does not think that District will be prepared on time and sees possible disaster if it doesn't step in and help. It has appropriated $60 million in emergency funds to bail out the district which got a late start on tackling the problem. In addition the federal government is providing hundreds of IBM computer experts to analyze Washington's systems and try to update them in time. The unpreparedness of the District for such a costly problem can be seen in the constricting rules required to purchase a computer system of over $1million dollars in worth. As the rules stand now every such purchase requires the approval of the D.C Council. Since many of the systems that are being replaced cost over than a million dollars this has caused a bureaucratic bottleneck. While the District is trying to get this changed it shows how many localities are not organizationally set up treat such an enormous problem in the expeditious fashion the Y2K bug demands.

The District ear marked $31 million dollars of its own money to Y2K but requested and additional $111 million. The federal government in handing out the funds mentioned that it feared that the district may have failures in public safety, schools, transportation and other service essential to daily life in the district. In addition the district has been instructed to make sure that it has back up plans for the contingency that there is no water or power and to ensure aid for those most dependent on government services such as the elderly, poor, sick and homeless.
 
 

4.2 California

As of February 23rd, California had come to a unique crossroads in its efforts to prepare. Previously the state had claimed that 75% of its critical systems were compliant. The state had created the Department of Information Technology in 1997 to handle the issue, made a prioritized list of what needed the most attention, spent $342 million, and brought in a vender to oversee the project at the start of 1999 [TAY 99]. Unfortunately the state Auditor General, Kurt Sjoberg, recently announced that two thirds of the stateís systems are not Y2K prepared.

Eleven of the fourteen agencies audited tested either have failed or havenít been tested. Together the fourteen agencies contain the twenty systems deemed critical to state functionality [LUC 99]. Some untested systems control traffic lights, climate control in state buildings, electric fences at prison and the California Aqueduct. The Employment Development Department will not be able to begin testing until September leaving its 2.9 billion dollars worth of unemployment benefits in jeopardy of being distributed improperly or not at all. The audit also found that State Universities were not required to report on progress, 76% of all state administered critical systems werenít ready, and that 43 of them wouldnít be before October 20th.

As a result the Department of Information Technology has taken a lot of criticism. Assemblywoman Elaine Alquist, D - Satan Clara called the ramifications of this report "horrendous" [TAY 99]. Another point of criticism of the DOIT is that they are already two months past Former Governor Pete Wilsonís deadline of December 31, 1999. The DOITís response has been to reprioritize what systems are left and higher a new vendor to aid in a last second try at getting the state ready in time. While a few departments like the DMV have been working for a decade on the problem and will be prepared, overall, with no new strategies to tackle the same problem in less time than the effort to date, the likelihood of Californiaís state government failing to function seems probable.
 
 

4.3 Denver

In contrast, the city of Denver has spent almost $67 million dollars on getting Y2K prepared and $9 million alone has gone to its making sure that Denver International Airport will be ready[FLY 99]. Denver is the example of a city that has started early, prioritized its attack and has been thorough. The city feels confident that it will be ready, but also has made extensive contingency plans such as manually running traffic control and runway lights. Denver has been working for over 3 years on updating its systems, spending tens of millions each year to reach this readied state. To help alarmed residents the city has also set up an 800 number to field questions about the problem and tell citizens what to expect. Denver is a good example of a well organized premeditated plan of attack. Most city systems have already been analyzed, modified or replaced and tested. In the ubiquitous scenarios where dependency on other factors such as power may be an uncontrollable variable in keeping services functional, back ups like generators have been provided for important services like fire and police.

The key factor in Denver's attack is that it has tried to set itself up to be self sufficient. It fixed all the problems that it could fix on its own and has planned for those services it most depends on to be backed up.
 
 

5. International

We now turn our attention to the Y2K governmental problem in the world scale. Some countries are woefully behind the USís already questionable progress. The recent worldwide economic shock due to the Asian Crisis indicates how critical it will be for the whole world to handle the Y2K bug. The effects could range from isolated disasters to nuclear war. International relations will be placed under extreme stress as the nations attempt to work together so that the transition to the year 2000 goes smoothly.

The nuclear bomb threat has already been identified by the American and Russian governments as a possible outcome of the year 2000. To remedy this, the U.S. has been "engaging, in the process of engaging the Russians in a program called Shared Early Warning, and that process continues. The overall goal is one that would result in both sides having a greater degree of confidence in their early warning systems"[MCC 99] so that a computer glitch will not cause World War III. Some missiles are inherently Y2K proof, due to date-ignorance or human failsafes. For example, "The Defence Research and Development Organisation (DRDO) has clarified that all the missiles developed in India 'are explicitly Y2K-proof' and cannot be accidentally triggered or guided to the wrong target, because of a possible effect of the Year 2000 computer glitch" [HIN 99]. However, not all war systems are built such and they need watching.

The biggest problem facing world stability, however, is the fact that some nations have only just recently attempted to fix their Y2K systems. Not only that, even when they have begun work on repairs, they either have underestimated the problem, do not have the resources to remedy the situation, or both. National Intelligence Officer for Science and Technology Lawrence Gershwin testified to the House with regards to the international efforts to solve the Y2K problem. He reported that foreign countries "trail the United States in addressing Y2K problems by at least several months, and in many cases much longer. Y2K remediation is under-funded in most countries..." [GER 99]. This does not forebode well for a smooth world-wide year 2000. He goes on to point out how the "Asian economic crisis has hampered the Y2K remediation efforts of all of the Asia-Pacific countries except Australia... [China's] late start in addressing Y2K issues suggests Beijing will fail to solve many of its Y2K problems in the limited time remaining" [GER 99]. There are additional regions undergoing financial stress (such as Latin America) which are in similar straits.

Many lesser-developed nations have been too distracted by economic and other factors to focus on the Y2K problem. By examining how poorly large countries are faring, we cannot hope for much better in third world nations. Juan Enriquez, a researcher at Harvard University's David Rockefeller Center, opined in the Boston Globe:

      "Countries like Brazil, Indonesia, Russia, and Mexico will continue to focus on other crises: When your economy faces an immediate meltdown, remedying an obscure computer glitch is not a priority. Fear of Y2K could be more devastating than its direct effects. Estimates of what it will take to fix the problem globally range anywhere from $100 billion up to $1 trillion. Electoral conflict and lack of leadership will increase uncertainty." [ENR 99].
The financial costs of fixing Y2K problems are often outside the reach of these countries, whose resources are limited by size or lack of development. Even a large country like Russia is having troubles financing their Y2K survival. "The cost of tackling the problem is staggering, especially for Russia, overwhelmed by debts. The latest estimate is $ 3 billion... in a country so broke that this year's budget foresees just $ 21 billion in revenues -- none of which is tagged for the Y2K problem" [CHA 99]. Unfortunately, this may mean they have money for agencies crippled by the Y2K bug. Senator Robert F. Burnett warns "Some [developing] countries with inadequate resources are likely to drop off the radar screen, perhaps not to be heard from again."[GOS 98].

The lack of understanding the problemís nature and solutions has slowed the modernization of many foreign countries' computer systems. While the penetration of computers in every day lives of Americans is quite high, the same cannot be said of foreign society. Computers are rarer there and the base technical knowledge to handle the problem is lacking. Russia's "computer systems likely will not be modified in time to keep them from crashing with the changeover to 2000... What's happening over there is there's still a lot of apathy, there's almost a sense of hopelessness in many cases, and the systems are a lot more bug-ridden than we thought they were"[PIE 99].

Some of the developed nations are faring better however. Canada has reported that its "federal government is spending $ 1.4 billion to cleanse its essential computer systems, 74 per cent of which are now ready for the next millennium"[KOH 99] which appears to be on track for the year 2000. England is a tad behind Canada, having some departments falling behind schedule, much as in the U.S.. As of November, 1998, "three-quarters of departments and agencies have now completed 50% or more of the necessary correction work on business critical IT systems, up from a figure of a half of departments and agencies in the last quarter. Two-fifths have completed 90% or more of the work, double the number from the last quarter" [UKG 98]. While certainly not guaranteed of success, these countries have an opportunity to complete their work, demonstrating that the problem boils down to understanding, awareness, and the resources to implement action.

The repercussions of theY2K problem go far beyond a single country's border. One countryís Y2K failure can often mean another countryís disaster. "Many developing countries cannot muster the resources to tackle a problem that most see as a vague and distant threat. For example, many developing countries have regional power-sharing arrangements that force them to rely on a neighbor's [non-compliant] electrical supply" [BON 99]. Beijing has fallen severely behind the pace and threatens to bring Asia through another financial crisis. The "World Bank forecast there could be wide-scale chaos if measures were not taken... Fears have been expressed that, given the size of the mainland economy and its importance in the region, widespread millennium-related problems could spark a new wave of economic contagion in the region."[KOH 99]. The ripple effect of multiple countriesí failing is unprecedented and could mean an economic and humanitarian disaster beyond any seen to date.

To fix this, countries have come together to create under United Nations and World Bank care the International Y2K Co-operation Center. This Center "will seek to promote greater information sharing between countries and industries, establish best practices for testing vulnerable systems, and help prepare contingency plans for possible failures... It is also a response to growing concerns that many governments, particularly in the developing world, have not yet taken adequate steps to deal with the problem"[SUZ 99]. This initiative, the countries hope, will aid in the dissemination of critical information and ease the painful transition that must be made. At the very least, the center will demonstrate the danger the Y2K bug poses and allow nations to build contingency plans.

The United Nations as well have begun their Year 2000 preparations. Fortunately, the United Nations does not have as many time critical issues to deal with like Social Security and welfare as our government has to. However, this does not mean that the United Nations is clear of the year 2000 bug. However, much of their efforts have gone towards the repair of its member nations, especially the lesser developed ones. To accomplish this, they called an unprecedented world-wide conference in December of 1998. While the discussions were behind closed doors, the magnitude of the worldwide problem has been made clear. To aid this cause the "World Bank, which with the United States and United Kingdom are providing $ 17 million to assist developing countries in need of Y2K aid, also [participated] in the conference"[SUZ 98].

Clearly the world is gearing up for the year 2000. The question becomes whether it is too late or not. Governments around the world will spend a lot of money attempting to fix millions of lines of code, replace millions of embedded chips. Only time will tell if these efforts will pay off with a painless January 2000.
 
 

6. Summary

The Y2K bug can cripple every kind of government. Efforts have been made on behalf of the smallest town governments to the largest country governments to rush repairs so that disaster can be averted in the year 2000. Estimates for worldwide expenditure on the Y2K bug range as high as $600 billion according to the Garner Group. Systems are being prioritized, coders are rewriting code, and hardware being replaced at an unprecedented level.

We have seen how governments have been handling the problem. Some, like Canada, had identified the problem long ago and are now in the final stages of testing out systems. There are countries like Russia who had until this point ignored the problem and have placed themselves, their neighbors, and possibly the world at risk for the Y2K bug. Even a single countryís handling of Y2K issues cannot be generalized as on top of the problem, or behind the ball. In the United States Federal government alone, agencies and departments are at opposite ends of the spectrum in making their computer systems Y2K compliant.

Foresight delineates those that have the problem under control and those who do not. If the IRS had thought ahead and foreseen the issues in rebuilding such a large, complex system, perhaps they might have built a simpler system that would make only nominal repairs necessary. A clear understanding of the problem has given many agencies and governments the ability to identify truly mission critical systems, fix what they could fix, and make contingency plans for what they could not.

These various governments also demonstrate the unique nature of their Y2K problems. Often times, their ability to handle the problem is beyond their reach. Running on small budgets, some agencies have little chance at Y2K compliance and can only hope that the bug will not cause total system failure. Other times, their problem is the fact that it is not even their problem. Government departments depend on each other, independent contractors, and other countries. With any one link in the chain broken, the system may fail. We have seen how Social Securityís dependence on independent financial networks may prevent people receiving their checks should the network fail.

Political factors have also made the Y2K a difficult challenge for governments to overcome. Technically unaware politicians have had difficult times understanding what exactly the Y2K bugs entail, how their systems need repair, and the costs of becoming Y2K compliant. The unpopular nature of dealing with what is essentially an obscure computer bug has made the issue an ignored one for the most part. Potential nuclear war, presidential scandal, and other more popular issues have taken the larger part of our lawmakersí time relegating the large task to overburdened IT staff.

These are just some of the many issues that every government faces with the year 2000 looming overhead. Only time will tell to see how these governments fare. Hopefully, when the year 2000 arrives, we will not even notice the transition. Unfortunately, this scenario is highly unlikely, and we must keep making preparations up to, and in many cases, beyond the New Year so that at the very least contingency plans are made. The deadline is approaching and we must prepare.
 

       
       
       

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