Year 2000 bug nets $2.25B funding boost

The Senate Appropriations Committee on May 14 created a $2.25 billion emergency reserve fund that agencies will be able to tap during fiscal 1999 to fix Year 2000 conversion problems in critical federal information systems.

The Office of Management and Budget will determine the agencies that will be able to withdraw money from the fund. The fund, unlike most Year 2000 funding to date, will be new money, not reprogrammed agency funding, according to an Appropriations Committee spokesman.

The committee decided to create the fund after learning from agencies such as the Treasury Department and the Federal Aviation Administration that budget constraints this year were hampering Year 2000 efforts, the spokesman said. "Some agencies are ill-equipped to deal with this and are going to need a reserve to tap into," he said.

The fund will become available just six months before a March 1999 deadline for agencies to have rewritten, tested and installed Year 2000-compliant systems. As of February, OMB estimated that the government would spend a total of $4.7 billion through fiscal 2000 on the Year 2000 problem. But OMB has indicated that the total bill most likely will increase.

OMB officials could not be reached for comment.

On May 1, President Clinton signed a supplemental appropriations bill that will earmark close to $86 million for some agencies to pay for Year 2000 problems this fiscal year. Treasury, the FAA, the Internal Revenue Service and the Health Care Financing Administration received reprogrammed funding from this bill for fiscal 1998.

Neil Stillman, deputy chief information officer at the Department of Health and Human Services, said HHS is "struggling internally" to find more money in fiscal 1998 and 1999 budgets for Year 2000 repairs.

"We're trying to find additional money to solve the problems of the Medicare contractors," Stillman said, noting he did not know details about the fund. "By the time we get into 1999, it may be too late."

HCFA manages about 70 contractors, which use computer systems to process medical bills under the Medicare program.

Olga Grkavac, senior vice president of the Information Technology Association of America's Systems Integration Division, said the Defense Department, the FAA, HCFA, the IRS and other parts of Treasury are most likely to get additional funds for Year 2000 fixes.