PACC Committee Report

HOUSE OF COMMONS
CANADA

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Introduction
Observations and Recommendations
Conclusion

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Pursuant to Standing Order 108(3)(e), the Standing Committee on Public Accounts has the honour to present its

TWENTY-THIRD REPORT

The Standing Committee on Public Accounts has considered Chapter 20 of the December 1998 Report of the Auditor General of Canada (Preparedness for Year 2000 --- Government-Wide Mission-Critical Systems) and the Committee has agreed to report the following:

INTRODUCTION

Canadians are becoming increasingly aware of the risks and challenges associated with the Year 2000 problem. It is anticipated that this problem, also known as Y2K or the Millennium Bug, may seriously disrupt some computer- and microprocessor chip-based electronic systems on 1 January 2000.

As Canada’s largest corporate entity, the federal government possesses a large number of systems that may be potentially affected by the Y2K problem. The government relies on these systems to deliver a vast array of vital services to Canadians and to support its internal operations. As a consequence, the repair or replacement of non-compliant systems before 1 January 2000 has become an urgent matter. Collectively, the effort to identify affected systems, to repair or replace them, and to develop contingency plans for the delivery of services supported by non-compliant systems is complex, time-consuming, and very costly.

The Committee has taken an active interest in the state of the federal government’s Y2K preparedness since the Auditor General first raised the issue in Chapter 12 of his April 1997 Report (Information Technology --- Preparedness for Year 2000), tabled in October 1997. The Committee has held several meetings on this issue and issued a report with recommendations aimed at strengthening the federal government’s ability to address the problem.

In his Report of December 1998, the Auditor General included the results of an audit centred on the preparedness of Government-Wide Mission-Critical (GWMC) systems, or systems that, according to the government’s definition,

support any service or function performed by the federal government department or agency that directly affects the health, safety, security, or economic well-being of Canadian residents or their environment; the loss or interruption of which, even for a short period, is deemed to be an unacceptable risk.

Due to the important nature of the services dependent upon these systems and the Committee’s ongoing interest in the government’s Y2K preparedness as a whole, the Committee met on 9 February 1999 with Mr. Denis Desautels, FCA, the Auditor General of Canada, and members of his staff to discuss the results of his audit. Ms. Linda Lizotte-MacPherson, Chief Information Officer, Mr. Guy McKenzie, Assistant Secretary, Year 2000 Project Office, Mr. Jim Bimson, Director General, Departmental Readiness, Year 2000 Project Office, and Mr. Richard B. Fadden, Assistant Secretary, Government Operations Sector, appeared as witnesses on behalf of Treasury Board Secretariat.

OBSERVATIONS AND RECOMMENDATIONS

In his opening statement and throughout his testimony, the Auditor General stressed that the government had made significant progress since the time of his last audit. For example, he noted that the government has reacted favourably to the observations and recommendations contained in his 1997 Audit. (1535) Departments and agencies have now assigned top priority to the issue and overall, the pace of Year 2000 work has accelerated. He also indicated that progress had been made in the GWMC systems that were the subject of his recent audit. Toward the end of his statement, the Auditor General testified that he and his Office were "cautiously optimistic," but that they "remain guarded because slippage and unexpected problems can occur and the last 10% can be difficult to achieve on a timely basis." (1545)

The Chief Information Officer (CIO) updated the June 1998 data that had served as the basis for the Auditor General’s most recent examination. This information confirmed that progress is continuing and that the pace of work has picked up. For example, the CIO testified that as of January 1999, the overall readiness of GWMC functions stood at 84%, up by 34% since the Auditor General’s last (1998) audit. She stated that certain key functions such as Old Age Security, Employment Insurance, the Canada Pension Plan, and the Customs Border Systems are now Year 2000 ready. (1545) GWMC departments and agencies are also achieving progress in developing contingency plans for those functions that may not be ready in time. Ms. Lisotte-MacPherson also described the actions being taken by the federal government to communicate information on the state of the government’s internal Year 2000 readiness.

The Committee welcomes this progress but like the Auditor General, is cautious in its optimism. Although headway is being made, any conclusion that the problem has been resolved would be premature and lacking in supporting evidence. Continued scrutiny on the part of the Auditor General, the Treasury Board Secretariat’s Year 2000 Project Office, parliamentarians, and Canadians is clearly called for. In order to exercise this scrutiny --- and to avoid unfounded speculation --- all concerned must have information that is accurate and timely, and available at an appropriate level of detail.

In its first Report on this issue, this Committee called for improved communication of information to Parliament on the government’s Year 2000 preparedness. Since that time Treasury Board Secretariat has started to post this information on its web site and has recently begun to update this information as it relates to GWMC departments and agencies. It has also begun to produce, as of January 1999, a monthly report on the government’s state of readiness that encompasses all GWMC departments and agencies. These steps --- which involve the formatting of information and the frequency with which it is reported --- are all moves in the right direction.

Nevertheless, the Committee firmly believes that there are further improvements that must be made in terms of the content of the information that is being communicated. For example, information on the progress being made by GWMC departments and agencies is expressed in terms of three percentages. Two of these show the percentage of work completed by a given GWMC department in two areas: information technology and embedded systems. A third percentage is said to represent the department’s overall rate of progress. It should be noted that provision of data on embedded systems responds to a recommendation in the Auditor General’s December Report and represents an important improvement.

While these data are useful, they represent an aggregate or "roll-up" of other percentages showing work completed on the systems that support the 48 functions delivered by GWMC departments and agencies. In those instances in which a department delivers only one GWMC function, actual progress can be determined easily and quickly. Some departments, however, deliver as many as five functions. In these cases, it is not possible to determine the degree of progress being made toward compliance for each function.

In her testimony, Ms. Nancy Cheng of the Office of the Auditor General observed that the current progress report "does not get down to the mission-critical function level, which is where perhaps that would be more meaningful for [the Committee] to understand which functions are ahead and which functions are perhaps behind."(1625) The Committee notes that Treasury Board Secretariat has this information. Ms. Lizotte-MacPherson testified that the departments do report on a system-by-system basis and then Treasury Board Secretariat aggregates this information at the department level. (1630) Mr. Jim Bimson acknowledged that the Secretariat does have the information by function. (1630)

There is one other way in which the percentages now used to report work completed do not allow for a detailed understanding of the actual progress being made. In order to measure progress, Treasury Board Secretariat uses methodology developed by the GartnerGroup. This methodology breaks the work down into seven phases (Awareness; Inventory; Project Scoping; Analysis and Design; Repair; Testing; and Implementation). These phases require different degrees of effort before they can be completed. It is universally recognized, for example, that Testing, the penultimate phase requires 45% of the total effort. Furthermore, as the CIO testified, the last 10% of the work "will probably be the most difficult." (1630) Thus aggregating these figures does not foster a full understanding of the work remaining to be done --- or an appreciation of the work actually completed.

In its first report to this Committee, which showed government Year 2000 readiness as of fall 1997, Treasury Board Secretariat provided progress information on each one of the seven phases for all GWMC departments. It did so again (although somewhat belatedly) when it reported readiness as of September 1998. In its report covering December 1998, however, the Secretariat dropped this practice and moved to aggregate percentages instead. This change, it should be noted, was made without consulting this Committee and without explanation.

In his closing comments, the Auditor General observed that "it is always possible to provide more information and provide it differently." He also said that "there would be some advantage to providing more information, … , on the actual functions as opposed to an average by department." (1720) The Committee believes that there is a need for more detailed information at the level of mission-critical functions and therefore recommends:

Recommendation 1

That, as of March 1999, when Treasury Board Secretariat reports on the Year 2000 readiness of Government-Wide Mission-Critical departments and agencies, it report progress within each of the seven GartnerGroup phases for each of the 48 Government-Wide Mission-Critical functions.

There is one other way in which the information in these monthly progress reports should be improved. In his testimony, the Auditor General noted that central monitoring does not cover the preparedness of Department-Wide Mission-Critical (DWMC) systems, systems that are essential to departments and agencies so that they can continue to carry out their mandates. (1540) He highlighted the importance of monitoring these essential mini-systems by pointing to the telephone system within his own Office. This system, initially thought to be Year-2000 ready, was later found to be non-compliant and has now been repaired. (1620)

In his testimony, Mr. Guy McKenzie stated that departments are now fixing their departmental mission-critical systems and that the Project Office was about to begin quarterly reporting on progress in that area. (1655) Mr. Jim Bimson added that the Project Office would soon have some data on Department-Wide Mission-Critical systems and would begin to look at these systems on a monthly basis. He indicated that the focus on these systems would increase as GWMC systems move to full compliance. (1655) The Committee welcomes these steps and recommends:

Recommendation 2

That Treasury Board Secretariat work with departments and agencies to identify Department-Wide Mission-Critical systems, begin monitoring the preparedness of these systems monthly, and report progress at the departmental level against each of the GartnerGroup phases starting with its monthly progress report in April 1999.

In their attempts to inform Canadians, the Treasury Board Secretariat appears to have overlooked the important role that Members of Parliament play in imparting information on government to their constituents. The Committee notes that in December 1998 the President of Treasury Board provided all parliamentarians with a Year 2000 information kit. It also notes that the CIO has made a commitment to supply the Committee with monthly progress reports. These measures represent an appropriate response to the information needs of parliamentarians, but more must be done. Accordingly, the Committee recommends:

Recommendation 3

That Treasury Board Secretariat immediately develop and implement a communications strategy designed specifically to inform all Members of Parliament, on at least a monthly basis, of the state of federal government preparedness for the Year 2000.

The Committee further recommends:

Recommendation 4

That Treasury Board Secretariat immediately designate an individual within its Year 2000 Project Office who will be available to Members of Parliament to provide information and answer questions regarding the state of federal government preparedness.

CONCLUSION

This year, 1999, marks a crucial period as 1 January 2000 approaches. There is much that remains to be done in the short time remaining before this unavoidable deadline if the systems that support the delivery of government services are to continue functioning into the new century.

Rather than seeking reassurance in the progress that has been made, those who bear responsibility must redouble their efforts and avoid the dangers of complacency. They must also attend to the delicate but necessary task of ensuring that Canadians are provided with accurate, timely, and complete information on the federal government’s own state of preparedness for the Year 2000. A successful conclusion to this challenge rests, among other things, upon meaningful accountability supported by an appropriate degree of transparency. For its part, the Committee will continue to monitor progress and press for improvements as necessary.

The Committee believes that adoption of its recommendations will assist Canadians and their Members of Parliament understand the challenges involved and be fully prepared as they enter the new century.

Pursuant to Standing Order 109, the Committee requests that the Government table a comprehensive response to this Report.

A copy of the relevant Minutes of Proceedings (Meeting Nos. 52 and 54) is tabled.

Respectfully submitted,

JOHN WILLIAMS

Chair