The House Committee on Ways and Means (Archer) on the status and preparedness of Federal agencies to correct the Year 2000 computer problem.
Kenneth Apfel, Commissioner, testified, February 24, 1999.

Mr. Chairman and Members of the Committee:

Thank you for inviting me to be here today to discuss the Social Security Administration's (SSA) Year 2000 conversion efforts and the implications for beneficiaries and taxpayers. SSA recognized very early the potential effect on beneficiaries and workers created by the Year 2000 problem. I am pleased to be here today to report on our progress and plans for the future.

Impact on SSA Operations

SSA relies on a vast computer network to keep track of earnings for 145 million workers, take six million applications for benefits a year, and pay monthly benefits to over

50 million beneficiaries. Because so many people depend on SSA's systems, we began to work on the Year 2000 problem as soon as it was identified in 1989. The magnitude of this project cannot be overstated: we had to review systems supported by more than

35 million lines of in-house computer code, as well as vendor products, while coordinating efforts with State and Federal agencies and third parties.

SSA's ability to provide world class service to beneficiaries, workers and their families depend on a complex infrastructure that is crucial to our ongoing operations. Power, data, and voice telecommunications, along with the Agency's computer operations hardware and software, are essential to ensuring that SSA's business processes are able to continue uninterrupted. Our automated systems are the means by which SSA is able to provide service on demand to the public.

SSA has five core business processes through which we maintain the accuracy of beneficiary records and process and adjudicate claims:

  1. Enumeration, the process through which SSA assigns Social Security numbers;
  2. Earnings, the process which establishes and maintains a record of an individual's earnings;
  3. Claims, the process comprising actions taken by SSA to determine an individual's eligibility for benefits;
  4. Postentitlement, the process involving actions that SSA takes after an individual becomes entitled to benefits; and
  5. Informing the Public, the process by which we disseminate information about the programs we administer.

I am confident that our systems will function on and after the Year 2000 to ensure that our core business processes proceed smoothly and without disruption as we move into the 21st century. When we open our offices for business on January 3, 2000, we expect to be prepared to provide our full complement of services to the American public with the accuracy and reliability that they have come to expect from SSA.

January 2000 Benefit Payments

We are happy to report that our benefit payment system is 100 percent Year 2000 compliant. SSA has worked very closely with the Treasury Department, Federal Reserve and the Post Office to ensure that Social Security and Supplemental Security Income checks and direct deposit payments for January 2000 will be paid on time. Since October 1998, payments for both Social Security and Supplemental Security Income programs have been made with Year 2000 compliant systems at both SSA and Treasury.

SSA is working closely with the Treasury Department and the Federal Reserve to identify any Year 2000 problem that might affect direct deposit payments. If a problem should occur in January 2000, the Treasury Department will quickly issue a replacement check after recertification by SSA, and SSA offices will provide emergency payment services to beneficiaries with critical needs

I do not consider Social Security's job to be done until timely and correct benefits are in the hands of all of our beneficiaries.

Status of SSA's Year 2000 Implementation Efforts

I would like to discuss the status of SSA's progress in our Year 2000 implementation efforts.

All of our mission critical systems have been made Year 2000 compliant. These are the systems that support the core business processes I described earlier.

Because they are so vital to our disability claims process, SSA is overseeing and managing the effort of assuring Year 2000 compliance of State Disability Determination Service (DDS) systems. Fifty State DDSs have automated systems to support the disability determination process. As of January 31, 1999, all 50 DDS automated systems are Year 2000 compliant and are being used to process disability claims.

We recognize that it is not enough for our agency to be Year 2000 compliant if all our trading partners are not ready. Therefore SSA has worked with all of our trading partners, and I am pleased to say that 99 percent of our data exchanges are Year 2000 complaint. We are working with our partners to test the remaining 1 percent and get them implemented as quickly as possible.

SSA has inventoried all of our telecommunications systems and we have a plan and schedule for all fixes and upgrades. Numerous acquisitions have been made that will result in the installation of telecommunications software and hardware upgrades. SSA is also working with the General Services Administration (GSA) in this effort, particularly with regard to testing vendor fixes. SSA's goal is to have all telecommunications compliant by the end of March 1999.

SSA continues to work with GSA in addressing the Year 2000 problem in the areas of our facilities infrastructure. We have inventoried our building systems and testing contracts have been awarded. Testing has commenced in some buildings, with all sites progressing as scheduled.

Our independent verification and validation contractor, Lockheed Martin, completed a comprehensive review of SSA's Year 2000 program and submitted their finding in October 1998. Their report covered all aspects of Year 2000 preparedness activities and found our Year 2000 methodology to be sound and feasible.

Focus of Activities in 1999

Now that all of our mission critical systems are Year 2000 compliant, we have taken steps to make sure we do nothing to introduce possible date defects into these systems. Since we must continue to modify these systems to accommodate regulations, recent legislation, and other required changes, we have instituted a re-certification process that uses a commercial computer software tool. In addition we have instituted a moratorium beginning in July 1999 on the installation of commercial off-the-shelf software and mainframe products. A similar moratorium is in place for discretionary changes to our software beginning in September 1999. The moratoriums will remain in effect through March 2000.

Business Continuity and Contingency Plan

Obviously, we all hope that there will be no need for backup or contingency plans. However, SSA recognizes that our systems are dependent on infrastructure services, such as the power grid of the telecommunications industry and third parties, which are beyond our control. Therefore, SSA has developed a Business Continuity and Contingency Plan. The plan was first issued March 31, 1998 and it is updated quarterly. The plan is consistent with Government Accounting Office guidelines and is being used as a model by other agencies and private sector organizations.

The plan identifies potential risks to business processes, ways to mitigate each risk and strategies for ensuring continuity of operations if systems fail to operate as intended. The SSA Business Continuity and Contingency Plan addresses all core processes, including disability claims processing functions supported by the DDSs.

As part of our Business Continuity and Contingency Plan, we have in place local plans for each of our field offices, teleservice centers, and processing centers, hearing offices and state DDSs. We have also developed contingency plans for benefit payment and delivery, building operations, human resources, and communications. Our benefit payment and delivery plan was developed in conjunction with the Treasury Department and the Federal Reserve.


I would like to conclude by repeating that SSA was at the forefront of Government and private organizations in addressing Year 2000 issues. We are proud of our long-standing reputation as a leader when it comes to providing customer service, and we are confident that we will be prepared to continue that tradition when the new millennium arrives.

I will be happy to answer any questions you may have.