Year 2000 readiness of state and local governments: findings from the GFOA/MBIA Survey.

• Author: Cook, Nicole
• Position: Government Finance Officers Assn

This study examines methods and evaluates progress made by state and local governments in addressing Year 2000 problems.

Public and private organizations alike are busy managing the threat of operational disruptions resulting from the Year 2000 (Y2K) problem. Media coverage of the problem has generally stressed how far the public sector lags behind the private sector in Y2K compliance, especially in major federal agencies. Far less is known about Y2K compliance by state and local governments. Indeed, while many municipal governments have taken proactive and remedial steps in this area, citizens, taxpayers, suppliers, banks, creditors, and other public-finance institutions (e.g., rating agencies and bond insurers) remain uneasy about the current state of affairs.

The Government Finance Officers Association (GFOA) and MBIA Inc., jointly conducted a survey in July 1998 which sought to address the following questions:

* How confident are public officials about the progress they have made?

* To what extent have governments conducted an enterprisewide inventory of information systems?

* Have governments purchased Y2K liability insurance?

* Have funds been systematically appropriated to address Y2K issues and problems?

Methodology

During the early part of June 1998, GFOA and MBIA drafted an initial survey containing approximately 30 questions related to Y2K issues. The survey was pretested using 50 finance officers at the GFOA annual conference in June 1998. After the pretest, a GFOA membership list was used to construct the sample of 1,098 governments. Two mailings were conducted in July and August 1998. Overall, a 45 percent response was attained. Of the 494 responses, 466 were considered to be complete (i.e., minimal missing data for survey items). Although surveys were sent [TABULAR DATA FOR EXHIBIT 1 OMITTED] to finance officers, in some cases, GFOA received responses from MIS managers.

Survey Results

Confidence in Addressing Y2K. The survey asked "how confident are you on your organization's overall progress in addressing Year 2000 issues?" Some 56 percent of the respondents stated they were "highly confident" to "very confident" in their organization's overall progress (Exhibit 1). Another 33 percent of the respondents [TABULAR DATA FOR EXHIBIT 2 OMITTED] stated that they were "confident." Only 11 percent of the respondents stated they were either "somewhat confident" or "not confident" about progress.

Exhibit 3 BUSINESS PRACTICE PROVISIONS Does the completed Y2K inventory report provide recommendations on 1) how to conduct a risk analysis of existing business processes, 2) how to address and correct cash management and revenue...