Clinton administration disputes Y2K spending report

The Clinton administration last week denied accusations that some federal agencies have either misspent or not properly tracked hundreds of millions of dollars allocated for Year 2000 fixes.

The General Accounting Office released a report last week on how agencies have spent some of the $3.35 billion that Congress set up in a special Year 2000 emergency fund. Rep. Dick Armey (R-Texas), Rep. Constance Morella (R-Md.) and Rep. Stephen Horn (R-Calif.) released the findings, which chastise agencies for keeping vague spending records.

Republicans and GAO charged some agencies with spending money on equipment and services that had no relation to fixing computers for the Year 2000 bug. Democrats did not respond to the report.

GAO concluded that at least 18 agencies had used the Year 2000 funding to replace PCs and network hardware. The Agriculture Department, for instance, requested $8.5 million for rural development to accelerate the replacement of PCs, according to GAO.

Anne Reed, chief information officer at USDA, said the agency bought the new PCs because the old ones did not have the power to accept a Year 2000-compliant mission-critical application. "The Y2K application wouldn't run on the lower-level-horsepower PCs in the field," she said. "To deliver the program, they not only had to upgrade the application, but the host [PCs] had to accept the application."

Spending Not Tracked

Armey's office also charged that nine federal agencies did not keep track of spending, and three departments - USDA, State and Treasury - refused to respond to GAO's requests for information.

Reed said she had been told that her agency had sent the information that GAO had requested and that the agency closely documents its Year 2000 supplemental-money spending. "I'll be more than happy to open the books up for GAO," she said.

In a statement submitted to FCW, State said it had submitted "volumes of information" to GAO. "GAO's characterization of State's cooperation as not providing relevant information on Y2K cost tracking is incorrect," the statement said.

Joel Willemssen, director of GAO's Civil Agencies Information Systems Accounting and Information Management Division, still insisted that GAO "did not get everything from all agencies."

The Office of Management and Budget insisted that its Year 2000 funding process is closely scrutinized. "We have absolute confidence that the process which exists monitors costs, expenditures and compliance appropriately," said Linda Ricci, an OMB spokeswoman.

GAO had asked for information on what agencies had actually spent on the Year 2000, "not what people think they're going to spend," which is what OMB's quarterly Year 2000 progress reports provide, Willemssen said.

Jim Kerrigan, president of Colmar Corp., a market research firm in Reston, Va., said agencies' Year 2000 spending practices may be caught in a political battle. "I don't think it's any big deal," Kerrigan said. "[Agencies] shouldn't be criticized for that. I don't think they are doing anything improper."

Olga Grkavac, executive vice president of the Information Technology Association of America, said she was taken aback by the report. "I'm very surprised by the comment that agencies spent funding on non-Y2K activities because chief information officers and deputy chief information officers say the system of approval was rigorous," Grkavac said. "The last thing we want is for Y2K to become a partisan issue."