-Caveat Lector-
Interesting essay regarding SSA and Y2K.
flw
Social Security at Risk from the Y2K Domino Effect
By Jim Lord June1, 1998
Every enterprise is dependent on the Y2K compliance of
its suppliers and service providers and the Social Security
Administration (SSA) is no exception. Among all federal agencies, SSA
is universally recognized as the Y2K leader within the US government.
They started their Year 2000 repair efforts in 1989 after a major system
failed. As a result of this early start, they will almost certainly have
their computers completely ready for the date change deadline. This is,
of course, great news for tens of millions of people who are dependent
on Social Security for their basic income. Or is it?
The fact is, because of the way they do business, the Y2K readiness of
the Social Security Administration might not matter. You see, SSA
doesn't make payments directly to Grandma or any of the other 50 million
Social Security beneficiaries. Instead, they send a list over to another
agency called the Financial Management Service (FMS), a little known
part of the Treasury Department. FMS sends the actual checks or, if
payment is made by direct deposit, they electronically send the money to
Grandma's bank account. According to an article in the April 1, 1998
issue of the Year 2000 Law Report here's what Treasury Secretary Robert
Rubin said about the FMS in testimony before a House Subcommittee:
"(T)he only bureau left with truly serious (Y2K) issues is (FMS). That
bureau, which handles a wide range of financial transactions for almost
every government agency - including the administration of the Electronic
Federal Tax Payment System - continues to be 'the area we're most
concerned about.'" Well, those aren't very comforting words. Even
worse, that's just half of the equation - the output side. Take a look
at the input to the SSA "engine." You know all that money you've been
paying into Social Security all these years? Well, it doesn't go to the
Social Security Administration at all, it just goes into the General
Fund, which includes income tax money and other revenues. And every
dollar of it has to go through those REALLY old computers over at the
Internal Revenue Service (IRS). The ones that GAO says are among the
most serious Y2K risks in the entire federal government.
Even if SocialSecurity gets their computers fixed the system might fail
because there isn't any money coming in or there's no way to get the
payments out.
It doesn't matter what any government agency (or business for that matter)
says about their own internal Y2K readiness. If they haven't tested
their systems with all of their interconnections and dependencies on
customers, suppliers, vendors, and service providers, they are not yet
prepared for the date >The fact is, because of the way they do business,
the Y2K readiness of the Social Security Administration might not
matter.
You see, SSA doesn't make payments directly to Grandma or any of
the other 50 million Social Security beneficiaries. Instead, they send a
list over to another agency called the Financial Management Service
(FMS), a little known part of the Treasury Department. FMS sends the
actual checks or, if payment is made by direct deposit, they
electronically send the money to Grandma's bank account. According to an
article in the April 1, 1998 issue of the Year 2000 Law Report here's
what Treasury Secretary Robert Rubin said about the FMS in testimony
before a House Subcommittee: "(T)he only bureau left with truly serious
(Y2K) issues is (FMS). That bureau, which handles a wide range of
financial transactions for almost every government agency - including
the administration of the Electronic Federal Tax Payment System -
continues to be 'the area we're most concerned about.'" Well, those
aren't very comforting words. Even worse, that's just half of the
equation - the output side. Take a look at the input to the SSA
"engine." You know all that money you've been paying into Social
Security all these years? Well, it doesn't go to the Social Security
Administration at all, it just goes into the General Fund, which
includes income tax money and other revenues. And every dollar of it has
to go through those REALLY old computers over at the Internal Revenue
Service (IRS). The ones that GAO says are among the most serious Y2K
risks in the entire federal government.
Even if Social Security gets their computers fixed the system might fail
because there isn't any money coming in or there's no way to get the
payments out. It doesn't matter what any government agency (or business for
that matter) says
about their own internal Y2K readiness. If they haven't tested their
systems with all of their interconnections and dependencies on
customers, suppliers, vendors, and service providers, they are not yet
prepared for the date change
ARGUS
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