Williams Accepts Blame for Y2K Problems
Washington Post Staff Writers
Saturday, September 25, 1999; Page B7
Mayor Anthony A. Williams accepted blame yesterday for the poor financial management of the District's Year 2000 computer repair program, promising Congress to quickly correct the problem while pushing forward with the city's catch-up effort to eliminate the threat caused by the millennium bug.
"There is no way you can look at this situation over the last several months and say it is working the way it should," Williams said of the accounting miscues that have plagued the District's repair program. "You accept everything on your watch."
The mayor's remarks came during a Capitol Hill hearing on the District's late-starting repair program, which already has cost $120 million and likely will reach more than $180 million before it is completed.
City officials and auditors from the General Accounting Office told a House panel that the District cannot accurately say how it has spent large chunks of the mostly federal funds invested in the project. One D.C. official said at least $25 million still cannot be accounted for, although there have been no allegations of misuse or fraud.
GAO auditors recently found that the city repeatedly has paid bills to its prime Y2K contractor--International Business Machines Corp.--without documentation to assure that the payments were justified, members of Congress were told. The city at one point even paid IBM for work that the company later realized it had not done.
One government source said there was so much confusion involving the project's finances earlier this year that checks intended for IBM accidentally were sent to the wrong D.C. agency, where they sat for some time.
The episode has exposed tension between some city administrators and Chief Financial Officer Valerie Holt. She was appointed by Williams but reports to the presidentially appointed D.C. financial control board, which has oversight of all D.C. government decisions.
Some top D.C. officials have criticized Terrie Weston Saunders, the deputy Holt assigned to the city's Information Technology Office in July, saying that Saunders is partly to blame for the poor financial management.
But other officials have directed their criticism at Y2K Project Director Mary Ellen Hanley, a consultant to D.C. government who is being paid at a rate of about $250,000 a year. Hanley approved payments to IBM without having them entered into the city's financial reporting system, or letting them be reviewed by the chief financial officer, government sources said.
"I don't think anyone should get into a blame game," said Holt, who took over her job in June. "At the end of the day, we have to be accountable for this money."
Hanley said yesterday in an interview that there are invoices that will clear up the accounting questions. "I'm telling you there is detail" in the records, she said.
Holt and Saunders have defended Saunders's performance, saying the trouble is not her fault.
Nevertheless, disputes between Holt's office and the Information Technology agency grew so intense in recent weeks that Holt decided to transfer Saunders and backed a plan by Mayor Williams to bring in an outside auditing firm--rather than another of Holt's deputies--to replace her.
"I did not want to get into a shouting match between everybody arguing over who an individual [replacing the departing deputy CFO] should be," Williams said after yesterday's hearing. "It is important to bring in . . . a neutral arbiter and give us an accounting of what has been spent."
Gloria L. Jarmon, a GAO administrator, told the House panel that until the city improves its financial oversight of the Y2K project, the federal government will have a hard time determining whether it should approve a pending request for an additional $68 million in assistance for the project.
Control board Vice Chairman Constance Berry Newman told panel members that the financial troubles are partly a result of the pressure on the city to complete the Y2K repair project quickly. The District did not begin the effort in earnest until June 1998, years after many other governments.
"I can't offer an excuse for this, but it is a reflection of a late start," Newman said. "The tight time frame necessitated an extremely aggressive schedule of work, in which securing resources to begin addressing Y2K took precedence over other considerations--including financial accounting and reporting."
GAO Administrator Jack L. Brock Jr. told the House panel that while the city appears to be largely sticking to its tight schedule to complete the work, it at times has fallen behind.
"There is no room for error," he said. "If there are any additional slippages, the District could be in trouble."
The Year 2000 problem stems from the fact that millions of computers were programmed to recognize only the last two digits of a year. On Jan. 1, unprepared machines will read the year "00" not as 2000 but as 1900, potentially causing them to malfunction and interrupt a range of services, from the issuance of unemployment checks to emergency dispatching.
D.C. Chief Technology Officer Suzanne J. Peck told the House panel that so far, 76 percent of the District's 370 computer systems had been fixed, but only 65 percent also had been tested and returned to service.
Peck and Williams assured the House panel that the city's computer systems will be ready for the new year. Peck acknowledged that there "surely are going to be a handful that get out from under the rug," referring to systems that will fail or will not be fixed in time. But extensive backup plans will be in place to prevent an interruption in services, she and the mayor said.
"It is like if you are in a building and the power goes out, the generator kicks in immediately," Williams said. "You may have a little blink of the lights, but the generator comes up."
© 1999 The Washington Post Company