PACC Committee Report
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HOUSE OF COMMONS
[ Introduction
] [ Observations and
Recommendations ] [ Estimated
Costs and the Availability of Resources
]
[ Accountability
and the Role of Treasury Board Secretariat
] [ Conclusions ]
Pursuant to Standing Order 108(3)(e), the Standing Committee on Public Accounts has the honour to present its
SECOND REPORT
The Standing Committee on Public Accounts has considered Chapter 12 of the April and October 1997 Report of the Auditor General of Canada (Information Technology: Preparedness for Year 2000) and the Committee has agreed to the following report:
As the year 2000 approaches, governments, the private sector, and individuals are faced with potential computer and information systems malfunctions that may have serious consequences. These malfunctions will result if systems are either not replaced or repaired before 2000. Solving the problem, which is a global one, will be labour- and time-intensive, and the estimated costs are enormous. The potential costs of failing to take timely, effective action may be even higher. This issue is commonly referred to as the Year 2000 challenge.
In his October 1997 Report, the Auditor General of Canada informed Parliament that the rate of progress achieved by the federal government in preparing its systems for 2000 has generally been slow. He cited a government estimate that the repair and replacement process will cost $1billion and indicated that unless urgent and aggressive action is taken, government systems will not be converted in time. The consequences, he warned, could be severe.
Based on the information contained in the Auditor General’s Report, the size of estimated cost of solving the problem, and the urgent action required to avoid costly systems failures, the Committee assigned priority to investigating this issue. Accordingly, the Committee met with the Auditor General of Canada, Mr. Denis Desautels, and Mr. René Guindon (Visiting Assistant Deputy Minister, Year 2000 Project Office) and Mr. Paul Rummell (Chief Information Officer) of the Treasury Board Secretariat on 28 October 1997.
Observations and Recommendations
During its meeting with witnesses, the Committee learned that although progress had been made since the audit was completed in March 1997, the overall prognosis is still not good. In his opening statement to the Committee, the Auditor General summarized his conclusion on completion of his audit: "the rate of progress has generally been slow and … the residual risks for systems errors and failure … remain high." Despite work by the Treasury Board Secretariat, and departments and agencies, the Auditor General told the Committee that he remained
Concerned that continuous delivery of major government programs and essential services into the 21st century remains at risk. The potential consequences for the government could be manifested as health and safety concerns, financial implications, disruption to essential services for the public or legal ramifications. (15:35)
Under questioning from the Committee, Mr. Desautels asserted that the assessment made by his Office in April 1997 continues to be "largely representative of the challenges ahead," and that "at this point remain very large, very serious."(16:00)
For their part, the witnesses from Treasury Board Secretariat pointed out that progress had been made since the audit’s completion. Although they carefully avoiding giving any guarantees that all systems would be repaired or replaced by 1 January 2000, they expressed confidence that the government could meet the Year 2000 challenge. They readily acknowledged the size of this challenge and that much still remains to be done.
The Committee recognizes the progress that has been made and wishes to acknowledge the work done by departments and the Treasury Board Secretariat. Nevertheless, the Committee is concerned that despite efforts to date, government systems --- particularly in key areas --- may not be fully replaced or repaired in time. This concern is heightened by the Auditor General’s observation, in his report, that in the past, "only 16% of [the federal government’s information] systems were delivered on time and within budget." (16:12)
The concerns of the Committee fall under six categories: accurate costing and the availability of resources to address the issue; contingency plans; service to the public; integrity of data banks; accountability and the role of Treasury Board Secretariat; and, information for Parliament. Accordingly, the Committee makes the following observations and recommendations.
Estimated Costs and the Availability of Resources
In his Report, the Auditor General indicated that according to its own estimate, the cost to the federal government of meeting this challenge could be approximately $1 billion. Treasury Board Secretariat witnesses confirmed this estimate, which they asserted, is still accurate, more than five months after it was first made. They acknowledged, however, that costing in many departments is still incomplete. According to the Auditor General, the $1 billion figure
Is a global estimate arrived at by making some rough calculations … it’s not a department by department estimate of where they are at and how much each [department] is going to need to carry this out,…(16:45)
As Mr. Desautels stated (with the agreement of TBS witnesses) the estimate --- although the best one available --- is a "soft" one. It is thus clear to the Committee that, at this stage, no one has a definitive estimate of the total costs involved in solving the Year 2000 challenge.
Treasury Board officials did not know how much of this estimated total had been spent to date. In further testimony, they indicated that departmental spending on the problem came mostly out of existing budgets. Treasury Board Secretariat, they added, is now in the process of determining whether or not costs in addition to existing budgets will be involved.
In his report, the Auditor General indicates that Treasury Board Secretariat plans called for updates of departmental progress in September 1997 and January 1998. Yet when pressed for details on progress to date, Secretariat witnesses repeatedly told the Committee that they would not have answers until December 1997. Nevertheless, they told the Committee on several occasions that much progress had been made since the Auditor General had completed his audit.
Perhaps the lack of solid information also prevented Secretariat witnesses from being more precise about staffing plans. According to their testimony, there are approximately 8,000 government employees who now work in the information technology area. Government has announced plans to hire an additional 2000 and to increase levels of pay. When asked, however, whether those now working in this area would be taken away from current assignments in order to solve the problem, the witnesses did not comment.
The absence of a more accurate estimate on total costs combined with uncertainty over the allocation of human resources poses two problems: whether sufficient resources will be devoted to correct the problem; and, if not, whether technology installation and upgrade projects now underway will have to be cancelled or postponed. As witnesses pointed out, costs are now being covered out of existing budgets. This sets up a tension between the need to solve the Year 2000 problem and the need to complete other technology installation and upgrade projects.
The Committee fully expects that a firmer estimate, based on a department by department analysis, will help clarify some of these issues. In the meantime, it recommends:
That the government, as it responds to the year 2000 challenge, identify critical technology installation and upgrade projects now under development and take steps to ensure that these projects are maintained.
The Committee is anxious that the Chief Information Officer Branch within Treasury Board Secretariat and its Year 2000 Project Office has the necessary assistance. As the Auditor General stated, the CIO’s office "will need a lot of support" in order to meet this enormous challenge successfully. The Committee is concerned with achieving solutions and therefore recommends:
That Treasury Board and Treasury Board Secretariat give the Chief Information Officer Branch the full support and assistance necessary to resolve the Year 2000 challenge successfully.
As 2000 draws closer, competition for the services of individuals with the skills needed to fix the problem will intensify. The Committee heard evidence that competition for skilled individuals is already occurring. The Committee is aware that the CIO Branch has developed an action plan for managing human resources in the information technology community that addresses Year 2000 issues. There is a need, however, for a contingency plan in case this action plan is insufficient. The Committee therefore recommends:
That Treasury Board Secretariat recognize the growing competition for the services of individuals with the skills needed to resolve the Year 2000 challenge and draw up an internal contingency staffing plan.
Another area of concern involves the need for contingency plans. In his report, the Auditor General advised Parliament that at the time of his audit "none of the nine [audited] departments …[had] started preparing substantive contingency plans for their systems." (12.83) He also reported that only three of 50 departments and agencies that responded to a survey replied that they had developed contingency plans; none of them supplied a copy.
In answer to questions put to them, Secretariat witnesses told the Committee that the development of contingency plans "is not priority one." (16:35) Instead, the focus is on fixing the problem. In his Report, however, the Auditor General advises that many departments and agencies will be unable to test their systems that have been repaired or replaced before 01 January 2000. To the Committee, this means that these systems will be exposed to the risk of failure while they are operational. This in turn means that alternative methods of supporting the delivery of essential programs should be available in case they are needed.
The Committee believes all departments that deliver critical programs that are exposed to risk must have contingency plans in place in case the support technologies for them fail. The Committee therefore strongly recommends:
That Treasury Board Secretariat ensure that all departments and agencies that deliver programs that are exposed to risk and that directly affect the health, security, and economic well-being of Canadians, have contingency plans proportional to the level of risks involved in place to sustain those programs in the event of systems failure on 1 January 2000.
The Committee is also concerned that in the effort to identify priorities and develop contingencies, a focus on the delivery of service to citizens will not receive sufficient attention. When asked about this issue, the Chief Information Officer of Treasury Board Secretariat told the Committee:
I cannot [un]equivocally say that customer service, meeting the needs of the individual Canadian citizen, the businesses, the small businesses, the large businesses of Canada, is the central focus of our mission…(16:35)
The Committee believes that this factor needs to be given greater prominence in the Year 2000 project, and therefore recommends:
That the Chief Information Officer Branch and the Year 2000 Project Office attach a priority to quality of service delivery to citizens and that it communicate this priority to all government departments and agencies.
Accountability and the Role of Treasury Board Secretariat
Accountability is an issue that is of greatest importance to this Committee. In terms of taking effective action and achieving satisfactory results, there is great merit in having one department, and one individual within that department capable of taking the lead responsibility for solving problems. Knowing who holds the responsibility means knowing who is in a position to make decisions and to act on them. It means knowing who is in charge.
When the Committee asked questions in this area, it was told that departments are responsible for ensuring that their systems are adequately prepared for 2000. Treasury Board Secretariat, for its part, is responsible for providing guidance and leadership on this challenge throughout government, particularly in the search for solutions to common problems.
Under normal circumstances, this may be an appropriate division of responsibility. In this instance, however, in the opinion of the Committee, more assertive action by Treasury Board Secretariat will be necessary. In his Report, the Auditor General calls on the Secretariat to attach priority to identifying and monitoring the government’s most critical systems. He also calls for strategic intervention in the event that repair efforts in critical areas are falling behind. This will require the Secretariat to go beyond its usual role as a leader and facilitator and intervene strategically where necessary.
In light of these considerations, and in light of the urgency attached to the Year 2000 challenge, the Committee therefore recommends:
That Treasury Board Secretariat assume full responsibility and authority for resolving the Year 2000 problem and ensure that the lines of its authority in this regard are clearly understood by all departments and agencies.
It is also important that one person within the Secretariat assume the responsibility for meeting this challenge. Yet there was some ambiguity in the testimony given by Secretariat officials. In the written version of his opening statement, Mr. René Guindon, the Visiting Assistant Deputy Minister, Treasury Board Secretariat Year 2000 Project Office, indicated that he has the "responsibility for the Year 2000 issue within CIO Branch of Treasury Board Secretariat." During testimony, however, Mr. Paul Rummell, the Chief Information Officer, told the Committee that he carries "the primary sponsorship for this project." (16:50) To clear up any confusion, the Committee recommends:
That Treasury Board Secretariat clearly identifies whom, within the Secretariat, holds the principal responsibility for the Year 2000 project, as quickly as possible.
In his Report, the Auditor General asserts that Parliament should be kept informed of the Year 2000 challenge and the government’s progress in preparing for it. The Committee agrees with this assertion. As the central agency that monitors departmental progress in countering the Year 2000 challenge, the Treasury Board Secretariat is best positioned to provide Parliament with this information. The Committee notes that Secretariat officials responded positively to its requests for more detailed information and wishes to encourage the Secretariat to act expeditiously on its intentions. The Committee therefore recommends:
That Treasury Board Secretariat submit its work plan for government-wide Year 2000 initiatives to the Public Accounts Committee no later than January 31, 1998; and
That Treasury Board Secretariat submit a report to the Public Accounts Committee on the progress that has been achieved across all government departments and agencies by January 31 1998, and at six-month intervals thereafter, up to and including January 31, 2001.
The Committee is anxious that the reports tabled by Treasury Board Secretariat on preparedness for the Year 2000 contain information that is timely and relevant. To that end the Committee recommends:
That progress reports on Year 2000 preparedness include the following information:
- Progress in each phase of the conversion project (inventory, assessment and planning; conversion; and testing and implementation), including timelines and deadlines, for each department and agency;
- An evaluation of the repaired and replaced systems that have been tested and the results;
- Mission-critical systems, an impact analysis showing the risk associated with each of them, and an indication of which of these systems have contingency plans in place;and
- A continuing evaluation of the costs, broken down by department and agency, of fixing the problem, an aggregate of these costs, and a statement of the method by which they were calculated.
The Committee is aware that in some instances it may be more appropriate to replace a system rather than upgrade it. Upgrading a system that will have to be replaced in the near future would represent an unwarranted expenditure of scarce resources. Accordingly, the Committee recommends:
That Treasury Board Secretariat, in co-operation with various affected departments, conduct a full and detailed assessment of existing systems with the view of replacing outdated technology where appropriate instead of upgrading it to the year 2000.
The Committee is also deeply aware that departments and agencies will face increasing difficulties in obtaining the software and hardware needed to address the Year 2000 challenge. Accordingly, they will have to assess their needs and, where appropriate, make the necessary purchases as quickly as possible. Treasury Board Secretariat has a role to play in making the departments and agencies aware of this necessity. In light of these considerations, the Committee also recommends:
That Treasury Board Secretariat include, in its progress reports on the response to the Year 2000 challenge, status reports on efforts to obtain the hardware and software from vendors that is needed to solve the problem.
Under normal circumstances, the Office of the Auditor General would conduct a follow up audit two years after the completion of an initial audit. In these circumstances, however, this subsequent action would occur far too late to have any positive influence over the outcome. Constructive participation in the exercise will therefore have to occur much sooner. All of the status reports on the Year 2000 challenge prepared by the Treasury Board Secretariat will be forwarded to the Office of the Auditor General. Consequently, the Committee recommends:
That the Auditor General conduct a thorough review of the reports tabled by the Treasury Board Secretariat on the Year 2000 challenge, and report his conclusions to Parliament.
In closing, the Committee believes that the way in which individual departments and agencies are dealing with this challenge ought to be reported to the Standing Committees of the House of Commons that oversee them. In its Performance Report for the period ending 31 March 1997, Treasury Board Secretariat does provide information on its efforts to resolve the Year 2000 problem. Others should follow this example. Accordingly, the Committee recommends:
That Part III of the Estimates (Reports on Plans and Priorities) for 1998-99, and subsequent fiscal years, and Performance Reports beginning in autumn 1998, for all departments and agencies, contain specific reference to efforts (planned and actual) and expenditures (planned and actual) devoted to meeting the Year 2000 challenge.
Based on the testimony of its witnesses, the Committee believes that progress is being made in the effort to ensure that the major systems of government will continue to function on 1 January 2000. Confirmation of this progress, however, and an indication of its actual extent, will have to await Treasury Board Secretariat’s report.
In the meantime, it is important not to be complacent. Indeed, witnesses were unanimous in the view that the challenge is a serious one and will require constant effort.
From the Committee’s perspective, the response to the Year 2000 challenge illustrates several of the Committee’s principal interests. They are accountability, the need for timely, reliable, and comprehensive solutions to problems, and the assurance that Canadians will be well served by their government.
The Committee is convinced that a satisfactory response to its concerns and recommendations with respect to the Year 2000 challenge will contribute significantly to its solution.
Pursuant to Standing Order 109, the Committee requests the Government table a comprehensive response to this Report.
A copy of the relevant Minutes of Proceedings (Meetings Nos. 5 and 10) are tabled.
Respectfully submitted,
JOHN WILLAMS
Chair