HUD may ask for Y2K help

Over the next few months, the Department of Housing and Urban Development may ask Congress for additional funds and legislation to ensure that HUD's local housing authorities and business partners are prepared for the Year 2000 date change.

Pending final testing of its computer systems and business processes, which the agency plans to complete in August, HUD reported that its systems are prepared for Year 2000.

The agency is now concerned about the lack of preparation and contingency planning by its partners, HUD deputy secretary Saul Ramirez and inspector general Susan Gaffney told the House Banking and Financial Services Committee last week.

"People are aware of this Y2K phenomenon, but they don't see how it relates to their activities," Ramirez said.

HUD often depends on outside banks, mortgage companies and public-housing authorities, as well as state and local governments, to perform many of the agency's functions.

HUD was concerned that only about 20 percent of the organizations it works with responded to a November 1998 letter informing them that their systems should be modified and tested by March 31, 1999, and their results given to HUD by April 15, Ramirez said.

Although HUD has been working with local authorities for some time to raise awareness, many did not start working on Year 2000 fixes until this year, Ramirez and Gaffney testified.

Local authorities do not have the time—and have not set aside the money—to do more than put quick contingency plans in place. The lack of response may require Congress to step in and help, Gaffney said.

Heads in the Sand

A recent survey of housing authorities conducted by the IG office found that "a majority had neither performed a risk and impact assessment for Y2K-compliance nor prepared a Y2K contingency plan," said Benjamin Hsiao, director of the HUD IG office's Information Systems Audit Division.

"More significantly, a majority of the housing authorities and project owners had not completed an inventory of equipment with date-sensitive controls that use embedded microprocessor chips," Hsiao said.For now, HUD's plan is to continue a year-old outreach program to spread information to local partners through letters, the HUD Year 2000 World Wide Web site (www.hud.gov/cio/year2000), satellite broadcasts, workbooks and video tapes, said HUD chief information officer Gloria Parker, who is in charge of the agency's Year 2000 effort.

"We need to just continue to do the outreach and try to encourage them," she said. While several people within HUD are working to form requests for legislation to get the agency's partners to better address Year 2000 issues in time, the agency is moving carefully. Penalties and other legislation to strong-arm noncompliant offices may do more harm than good, Ramirez said.

HUD plans to complete by August its Integrated Certification Test (ICeT), which will review code and business processes at the agency. HUD has already set up an internal weekly status report to monitor the progress of ICeT, and several representatives at the hearing also requested monthly updates on the test.The hearing also addressed several concerns about HUD's Year 2000 testing process raised by a HUD IG office audit released last month. The audit said the tests could be faulty because they did not use automated configuration management tools and lacked centralized management [FCW, April 22]. But Parker and Ramirez said that ICeT should check those problems, and the agency is looking into implementing automated CM tools soon.