A r c h i v e d  I n f o r m a t i o n

Speeches and Testimony

DEPARTMENT OF EDUCATION

Statement by

Marshall S. Smith
Acting Deputy Secretary

Before the

U.S. House of Representatives
Subcommittee on Oversight and Investigations

of the

Committee on Education and the Workforce

On the

Department's Year 2000 Compliance Efforts

May 12, 1999

Mr. Chairman and Members of the Subcommittee:

Thank you for this opportunity to update the Subcommittee on the Department of Education's progress toward full Year 2000 compliance. In addition to my testimony, Mr. Chairman, I would like to submit for the record a pre-release version of our quarterly Year 2000 report to the Office of Management and Budget.

Last fall I testified before this Subcommittee about the Department's detailed schedule for ensuring Year 2000 compliance for its computer-based systems, 14 of which were designated as mission-critical. I also testified that this schedule slipped a little in October, but I expressed confidence that the Department would achieve full compliance and implementation of all of our systems by the March 31 deadline set by OMB.

I am pleased to report to you today that the Department in fact did complete its systems conversion effort on March 8, 1999, three weeks ahead of the OMB deadline. Of the 175 systems identified as at risk of Year 2000 failure, 147 are now Year 2000 compliant and fully implemented and 28 have been replaced or retired. The Department has renovated, validated, implemented, and phased into production all 14 of its mission-critical systems, most of which support the postsecondary student aid programs. All of the mission-critical systems were subjected to independent verification and validation (IV&V), and we are following the recommendations of our IV&V contractors for continued documentation and monitoring procedures and for testing with external customers and partners.

The Department's Year 2000 progress has been recognized by Congressman Steven Horn's Subcommittee on Government Management, Information, and Technology, which on February 22 gave the Department a grade of "A minus," and by the Office of Management and Budget, which has placed the Department in its highest Y2K readiness tier.

The General Accounting Office (GAO) and the Office of the Inspector General (OIG) are also reviewing our systems to confirm Y2K compliance. In particular, the Inspector General is required by the Higher Education Amendments of 1998 to complete a risk assessment of the mission-critical systems used to support the student aid programs. The initial assessment, which involved 13 of our 14 mission critical systems, was issued on January 15, 1999 and found ED "on track to achieve Y2K readiness" for these systems. OIG's final risk assessment report is due on June 30, 1999.

We are proud of this achievement, but we are taking nothing for granted when it comes to Year 2000 readiness. With the renovation of our systems now complete, we are focusing on continued testing, outreach to the education community, and contingency planning.

TESTING CONTINUES

We believe that our data exchanges are in good shape because from the beginning we considered these exchanges to be part of the Department's standard systems conversion process. We checked their compliance and renovated them as needed, and the ability of each system to send and receive Y2K compliant data was tested during the validation phase. We also provided the GAO a comprehensive list of our external data exchanges and corresponding test plans and results in a report issued March 31, 1999. We plan to update this report in July and October.

Early this year we began live testing of data exchanges with our trading partners, and this testing will continue as additional partners complete renovation of their own systems and are ready to participate in such testing. We have finalized instructions and procedures for our trading partners to participate in this testing, and we have posted an initial list of test windows on our web site. For example, the first testing window for the National Student Loan Data System (NSLDS) is open from April 12 through May 21. We will provide additional testing opportunities for schools and institutions that complete Y2K renovations later in the year.

Few institutions have yet taken advantage of this initial test window, but this is consistent with surveys suggesting that many of our partners will complete Y2K renovations and be ready for testing this summer. In addition, most postsecondary institutions are currently busy with end-of-term activities, and many may be implementing software and other system upgrades related to the new student aid award year that begins on July 1. Nevertheless, we will closely monitor institutional participation in the testing process, and I have asked Greg Woods, the Chief Operating Officer for the Office of Student Financial Assistance Programs, to develop a strategy for encouraging the full cooperation of our student aid partners in our Year 2000 testing efforts.

OUTREACH EFFORTS

We also are continuing to make extensive outreach efforts on Year 2000 compliance activities to our many partners in the education community at the State, local, and institutional levels. For example, we just completed a second printing of the Year 2000 Compliance Guide for Elementary/Secondary Schools and School Districts and the Year 2000 Readiness Kit for postsecondary institutions. These documents provide an explanation of Y2K risks, sample plans from other schools, information on managing the Y2K compliance of suppliers, sample Y2K procurement and contract language, information on contingency planning, a list of web site resources, and additional tools and resources. We have already distributed 18,000 copies of the Readiness Kit to postsecondary institutions and 16,000 copies of the Compliance Guide to school districts. Both documents are available on the Department's Year 2000 web site, which also contains a wide variety of technical assistance documents on the Year 2000 problem.

In addition, the Department continues to sponsor separate regional workshops on the Year 2000 issue, including nine workshops for the elementary and secondary community and 12 workshops for the postsecondary education community. We also are surveying the education community to assess its Year 2000 readiness. A survey of school districts is currently underway and results will be available in mid-June. We will launch a survey of some 6,500 postsecondary institutions this month, with results available in late July.

OMB has identified the Department's postsecondary student financial aid programs as a high-impact area requiring a special outreach approach. In response, we are developing a "Local Assurances" program in tandem with our trading partners that will assure our customers and the general public that student financial aid will continue without interruption throughout 2000 and beyond. The Department submitted an initial "Local Assurances" plan to OMB last month.

CONTINGENCY PLANNING

In spite of all of our progress in achieving Year 2000 compliance for the Department's systems, our comprehensive testing plans, and our ongoing outreach efforts, we recognize that some failures may occur. For this reason, last summer we began an aggressive contingency planning effort by applying the GAO's business continuity and contingency planning (BCCP) guidelines to our core business processes. The Department also engaged the services of KPMG and Booz-Allen and Hamilton to help coordinate and provide advice on our BCCP efforts. Our contingency planning process also includes substantial consultation with postsecondary and financial institutions participating in the student financial aid programs.

The Department completed initial contingency plans for all core business processes and their related systems, as well as plans for all non-mission critical systems, at the end of March. Initial testing of these plans also was completed in March, and we are continuing to test and refine the plans for our mission critical systems. We plan to post the revised contingency plans on our web site later this month.

CONCLUSION

I believe the Department has responded well to the challenge represented by the Year 2000 problem. We achieved compliance for our own systems ahead of the OMB schedule, leaving time for continued testing. We have developed a comprehensive and responsible plan for both internal and external testing of our systems. We have developed contingency plans for all of our systems. And we are continuing to conduct extensive outreach aimed at ensuring that our data exchange partners are as ready as we are when the year 2000 arrives.

I will be happy to take any questions you may have.


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Last Updated -- May 12, 1999(mjj)