GCN: First,
let’s talk about your agency’s year 2000 preparations.

CRAIG: I actually think we are in pretty good shape. I know there has been some
negative press about us, although more recently some good things are starting to be said.

We issue about 850 million payments a year. Of those, 600 million are Social Security
and supplemental security income payments.

Those systems we finished testing and we will be implementing this month. The Oct. 1
supplemental security income and the Oct. 3 Social Security payments will be issued
through the year 2000-ready Social Security Administration payment systems.

We have been working very closely with Social Security and also the Federal Reserve
Board. Most people don’t realize that the Federal Reserve is a big player. So
for direct deposit, we actually send the payment information to the Federal Reserve and
the Federal Reserve deposits the money with the banking community.

If it is a check, we print the check and deliver it to the post office.

We have also implemented the payment system for IRS tax refunds. We did that last
month. That is another 90 million payments. Combined with the SSA payments that is about
80 percent of our payment volume. So it is a big deal.

We also have a lot of collection systems. FMS does what the Treasury Department was
originally set up to do when this country was founded: collect and disburse the money and
keep the books.

On the collection side, for example, we work with the IRS to collect taxes. For those
systems, we’re in good shape as well.

The biggest system, the Electronic Federal Tax Payment System, collects over $1
trillion a year. It is in Y2K testing and will be implemented before the end of the year.

A third major area is governmentwide accounting. We are making progress in that area.
We’ve picked up some speed. We are on track to complete renovation and begin
implementation of all of our systems by March. In fact, most of our systems will be
complete by the end of the year. Only three or four will end up taking until March.

GCN: How are the date code
changes being made?

CRAIG: We are employing a number of strategies. For a lot of our systems, analysis
indicated we did not have to convert to a four-digit date to ensure compliance.

We found it would be cheaper and easier to not make all those changes. We interface
with so many different agencies that if we make a change in our system it has a ripple
effect. We are trying to take the simplest, cheapest and least labor-intensive approach.

For some, we’re sticking with the two-digit date fields. Take Social
Security—they were ahead of the curve and wanted to go to a four-digit code. We
modified our payment system to handle four digits. The Veterans Affairs Department
didn’t want to go to four digits so we stuck with two. So we’ve tried to
accommodate a good customer when we could.

GCN: How are
you testing your year 2000 work?

CRAIG: We’re doing both current-date and forward-date testing. We have set up
isolated partitions on our system where we can actually turn the clock forward.

We have one that simulates and another where you can actually turn the clock forward.
We have installed all our system software on that platform, and it has been certified by
the vendors.

Our people also tested every piece of software. We turned the clock forward, and we
tested it to make sure it would work in the year 2000.

We’re doing the same thing for our midtier platforms.

We set up a separate box that is isolated from everything else, and we can run the
system that way.

Then we are doing some extra testing before we certify the systems.

We are asking an outside contractor to look at what we are doing and make sure we
haven’t missed anything.

So, for the in-house systems like Social Security payments and the IRS, we want to have
that contractor look at what we have done before we certify them.

I think some agencies are doing certification before they go to implementation. We
didn’t want everything to hit at the same time so that we are implementing everything
the same month. I also didn’t want to slow up the process.

So, once we have gone through our normal software development cycle and we feel
comfortable that the software is ready, we put it into production and then we do
certification as that extra step.

GCN: What are your
contingency plans?

CRAIG: For each operating system, we are looking at what happens if that system has a
problem. We are also looking at what-if scenarios from a business perspective. Or what if
it’s from an infrastructure problem?

I think the focus is going to shift. Six months ago everyone was asking, “Are you
going to have your systems ready?” I don’t think that is going to be the
problem. People will have their systems ready.

What we are hearing about now is what if there is a power problem or an outside vendor
that provides telecommunications services that aren’t ready?

The shift is that contingency planning will be a bigger picture than an individual
system issue.

We are trying to tackle both.

On the big picture, we have set it up so that we can run payments in at least two
centers in different parts of the country.

We have a center here, one in Philadelphia and one in Austin, Texas. So we can run
Social Security payments at our Philadelphia office or here.

If Philadelphia is having a problem, I can shift the work here or to Austin. IRS tax
refund payments will run out of Austin or here.

We have also put in an emergency generator for this site that will run two weeks on one
tank of fuel. Computers don’t like it when you have power glitches, even if it is not
a full blackout but it is bouncing up and down.

This will allow us to be stable, and we can move on.

GCN: What are the details
about FMS’ Government On-Line Accounting Link Systems, known as GOALS?

CRAIG: GOALS is an accounting system, not a payment system. It is used to collect and
disseminate financial data that comes from the different program agencies to us. We use
that data to publish a number of reports, including the Monthly Treasury Statement and the
U.S. Government’s Consolidated Financial Statement.

We originally had planned to replace the system but then decided we were cutting it too
close to 2000.

So we are renovating the system, and we have a contractor doing that work. We have made
significant progress on this system. Our contractor has been able to accelerate its
schedule for completion no later than March for all critical subsystems.

GCN: Besides
2000, what are your priorities?

CRAIG: First I want to say that Y2K is the focus. After that, we will be looking at the
next generation of security technology. We are planning to replace our current electronic
certification system with new-generation security technology after 2000.

We also want to take greater advantage of the Internet while ensuring privacy and
security.

On debt management, the Debt Collection Improvement Act of 1996 gave us some new
responsibilities. Let’s say you have a student loan that you didn’t pay back and
now you are getting an IRS tax refund. I have a database that maintains that debt and when
I see that you are supposed to get an IRS payment, I offset the payment. Depending on the
payment type, there are different rules.

For example, let’s take a Social Security payment. Because a lot of people
don’t make much money, there are requirements that we don’t offset too much
because we wouldn’t want to put someone on the street—even if they did owe
money.

That’s a program we are working on now, but we aren’t able to roll it out as
quickly as we would like because of Y2K.

Also, we are planning to modernize our central accounting system to better serve other
federal agencies and to improve the quality and integrity of governmentwide financial
data.

As part of this process, we will be re-evaluating our current automated system as well
as looking at federal accounting standards to determine the most efficient and effective
means of collecting accounting data.