Y2K Readiness of K-12 School Districts: Evidence from the State of Kansas

  • 05/01/99
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The State of Kansas expects to spend nearly 181,000 total hours to address the Year 2000 (Y2K) problem in its state agencies and six state universities. However, this statewide effort d'es not address a potentially large Y2K problem in the state's 304 public K-12 school districts. To date, these districts have received very little guidance from the state and have received no additional state funding for Y2K conversion. Basically, each K-12 school district must each address this issue without a coordinated statewide effort. This places Kansas school districts in a very difficult position since they are already operating within limited state budgets that have not kept pace with inflation for the past several years. In addition, they are competing with many of the country's largest corporations for information technology personnel to help address this problem at a time when the labor market for information technology specialists is very tight.

Table 1: Y2K Project Stages

Awareness

Encompasses establishing a budget and project plan (for example, a timeline or chart noting major tasks and due dates) for dealing with the year 2000 issues.

Assessment

When the organization begins the actual process of identifying all of its systems (preparing an inventory) and individual components of the systems. An organization may decide to review all system components for year 2000 compliance or, through a risk analysis, identify only mission-critical systems and equipment - systems and equipment critical to conducting operations - to check for compliance.

Remediation

When the organization actually makes changes to systems and equipment. This stage deals primarily with the technical issues of converting existing systems, or switching to compliant systems. During this stage, decisions are made on how to make the systems or processes year 2000-compliant, and the required system changes are made.

Testing

When the organization validates and tests the changes made during the conversion process. The development of test data and test scripts, the running of test scripts, and the review of test results are crucial for this stage of the conversion process to be successful. If the testing results show anomalies, the tested area needs to be corrected and retested.

The purpose of this paper is to report the results of a survey of the 304 public K-12 school districts in Kansas to assess their Y2K readiness. Since there has not been much attention focused on Y2K from the state to the school districts, it is likely that many public school districts in Kansas [or other states] have not devoted the necessary resources to resolve the Y2K problem. Some districts may not yet have begun their Y2K project or have only begun it recently. These districts will likely find it difficult to complete the Y2K project by year-end. The first official Y2K wake-up call that many districts and boards of education will receive will come from an unexpected source: the Governmental Accounting Standards Board.

The Governmental Accounting Standards Board (GASB) establishes generally accepted accounting principles that state and local governmental entities, including public K-12 school districts, must follow. In October 1998, the GASB issued Technical Bulletin No. 98-1 that requires the governmental entity to make certain disclosures about an entity's Y2K compliance efforts. These disclosures must include any significant amount of resources committed to the Y2K project and a general description of the Y2K issue as it relates to the entity. The description must also include a description of the stages of work in progress or completed, and the additional stages of work necessary to complete the Y2K project. The disclosure uses the following categories to describe and classify the various stages of work: awareness, assessment, remediation and testing. The GASB adopted these categories from the Securities and Exchange Commission's (SEC) January 1998 report entitled "Division of Market Regulation Year 2000 Work Program." Thus, Y2K-related regulations required for both school districts and publicly-held corporations are very similar. A brief description of these stages can be found in Table 1.

Currently, no guidance exists for governmental entities (including school districts) detailing when the four stages (project management and awareness, assessment, remediation and testing) should be completed. However, the SEC report recommended that public corporations complete the awareness stage in 1996 and the assessment stage in the first half of 1997. Remediation should soon follow in late 1997 or early 1998. In addition, the SEC required any public corporation that was still in the awareness, assessment or remediation stages as of January 1998 to notify the SEC management immediately. In light of these corporate recommendations offered by the SEC, similar expectations would likely be appropriate for school districts.

 

Method

A survey instrument was mailed during January 1999 to each of the 304 public K-12 school districts in Kansas. The survey asked 25 yes or no questions that addressed different aspects of the four stages of the Y2K project. In addition, for each of 12 mission-critical areas respondents were asked what stage the area was currently in and the respondents' level of confidence that the area would function properly after 1999. This survey is reported in the Appendix. A total of 147 responded for a 48 percent response rate. The average school size was 553 senior high school students compared to the statewide average of 467.

 

Results

This section first discusses school districts' Y2K readiness for each of the following areas: project management and awareness, assessment, remediation and testing. Next, the stage of Y2K progress in 12 mission-critical areas is presented along with the confidence the respondents had that each area would function properly after 1999.

Table 2 reports the survey results for six questions focused on the areas of project management and awareness. All six questions were written such that yes responses are positive and indicate appropriate awareness and project management plans are in place. The yes responses ranged from 61 percent to 38 percent. The most positive news was that 61 percent had Y2K awareness programs in their districts. However, only 49 percent have appointed a Y2K project manager; only 44 percent have a Y2K project plan or contingency plan; and only 32 percent reported that the Y2K conversion process was regularly monitored by their board of education. Sixty-eight percent did not specifically budget for Y2K conversion in the 1998-1999 budget year. Additional analysis revealed that the largest quartile of schools was significantly more likely to have appointed a Y2K project manager, to have a Y2K awareness program in their district, and to have funds in the 1998-99 budget specifically for Y2K conversion. In comparison to the SEC's requirements for corporations, the results of the awareness questions depict a very poor state of readiness for the responding school districts.

Table 2: Project Management and Awareness

Yes

No

NA

We have a Y2K awareness program in our district.

89(61%)

52(36%)

5(3%)

We have appointed a Y2K project manager.

71(49%)

67(46%)

8(5%)

We have completed a project plan to deal with Y2K.

65(44%)

74(51%)

7(5%)

If existing systems won't operate beyond 1999, we have a contingency plan.

64(44%)

66(45%)

16(11%)

Our Y2K conversion process is regularly monitored by our school board.

47(32%)

90(62%)

9(6%)

We have funds in the 1998-99 budget specifically for Y2K conversion.

38(26%)

99(68%)

9(6%)

Table 3 reports the responses on 10 questions dealing with the assessment stage of the Y2K project. Assessment activities include inventorying systems that support mission-critical activities and identifying the necessary resources to correct potential problems. A yes response on the first six questions in Table 3 is positive and ranged from 90 percent to 45 percent. Ninety percent have asked vendors whether existing software is Y2K compliant, but only 65 percent, 61 percent, and 53 percent have inventoried their system software, hardware, and application software, respectively. Sixty-two percent believed they had sufficient in-house personnel to successfully make the Y2K conversion, and only 25 percent indicated they would hire an outside consultant to assist with the project. The largest quartile of schools was significantly more likely to report that they had sufficient in-house personnel to deal with this issue. Less than one-half (45 percent) felt they had sufficient information to make a 1999-2000 budget request for Y2K. When asked whether infrastructure, external communication systems, and internal communications systems would need to be modified, 67 percent, 70 percent, and 74 percent, respectively, responded no. Once again, responses to the assessment questions reveal that responding school districts appear to be far behind the SEC's guidelines.

Table 3: Assessment

Yes

No

NA

For existing software, vendors have been asked if it is Y2K compliant.

131(90%)

10(7%)

5(3%)

We have taken an inventory of all system software & its Y2K compliance.

94(65%)

50(34%)

4(1%)

We have sufficient, competent in-house personnel for the Y2K conversion.

91(62%)

40(28%)

15(10%)

We have taken an inventory of all hardware & its Y2K compliance.

89(61%)

51(35%)

6(4%)

We have taken an inventory of all application software & its Y2K compliance

77(53%)

65(44%)

4(3%)

We have enough information to make a 1999-2000 budget request for Y2K.

66(45%)

60(41%)

20(14%)

We will hire an outside consultant to assist with the Y2K readiness project.

36(25%)

99(68%)

11(7%)

Infrastructure (e.g., heating, elevators, fire alarms) will need to be modified.

21(14%)

97(67%)

28(19%)

External communications systems (e.g., phones) will need to be modified.

20(14%)

102(70%)

24(16%)

Internal communications systems (e.g., intercoms) will need to be modified.

17(12%)

108(74%)

21(14%)

Table 4 addresses remediation efforts in progress at the respondents' districts. Remediation involves conversion, replacement or retirement of non-compliant systems or components. Seventy percent have begun upgrading or replacing non-compliant software, and 67 percent have begun replacing hardware made obsolete by Y2K. Less than one-half of the districts (43 percent) have formalized vendor obligations regarding Y2K, and less than one-third (29 percent) have received dates from software vendors for the release of Y2K compliant versions. Overall, results of the remediation portion of the survey continue to be quite alarming.

Table 4: Remediation

Yes

No

NA

We've begun upgrading or replacing non-compliant software.

103(70%)

33(23%)

10(7%)

We've begun replacing hardware made obsolete by Y2K.

98(67%)

34(23%)

14(10%)

Vendor obligations regarding Y2K been formalized in a written agreement.

62(43%)

75(51%)

9(6%)

Software vendors have provided dates for the release of compliant versions.

43(29%)

80(55%)

23(16%)

Table 5 focuses on the last stage in the Y2K conversion project, testing. Testing involves the testing and validation of converted or replaced systems. Eighty-four percent and 78 percent indicated they would test newly acquired hardware and software, respectively. Existing software will be tested for compliance after conversion by 76 percent, and existing hardware will be tested by 73 percent. A relatively low number, 46 percent, have a district policy to only purchase Y2K compliant software. The largest quartile of schools were significantly more likely to report that they did have a district policy to only purchase Y2K compliant software and that they would test existing hardware for Y2K compliance after conversion.

Table 5: Testing

Yes

No

NA

Newly acquired hardware will be tested forY2K compliance.

123(84%)

15(10%)

8(6%)

Newly acquired software will be tested for Y2K compliance.

113(78%)

24(16%)

9(6%)

Existing software will be tested for compliance after conversion.

111(76%)

18(12%)

17(12%)

Existing hardware will be tested for Y2K compliance after conversion.

106(73%)

22(15%)

18(12%)

We have a district policy to only purchase Y2K compliant software.

67(46%)

73(50%)

6(4%)

 

Table 6 reports the current stage (not started, awareness, assessment, remediation and testing) of completion for 12 mission-critical areas. In addition, respondents were asked to indicate how confident they were that these areas would function properly after 1999. The first two areas in Table 6 deal with financial matters: payroll and payment of bills. Of the 12 areas listed in Table 6, payroll had the highest percentage of respondents at the remediation and testing phases (73 percent) followed by payment of bills (72 percent), and the percent stating these areas would definitely function properly after 1999 was correspondingly high and approximately the same (76 percent and 75 percent, respectively).

Table 6: Y2K Readiness of, and Confidence in, Mission-critical Areas

What is the current stage for this area?

Will this area function properly after 1999?

Not

Awareness

Assess.

Remediat.

Testing

No

Prob. No

Maybe

Prob. Yes

Def. Yes

Started Payroll

5
(4%)

15
(11%)

16
(12%)

55
(42%)

40
(31%)

1
(1%)

-

3
(2%)

28
(21%)

103
(76%)

Collection of Local Tax Revenue

17
(19%)

18
(20%)

15
(17%)

25
(28%)

14
(16%)

1
(1%)

-

14
(16%)

36
(40%)

39
(43%)

Payment of Bills

7
(5%)

14
(11%)

15
(12%)

55
(43%)

37
(29%)

1
(1%)

-

3
(2%)

29
(22%)

99
(75%)

Transportation/Bus Service

21
(19%)

18
(16%)

16
(14%)

36
(32%)

22
(19%)

1
(1%)

1
(1%)

6
(5%)

30
(27%)

75
(66%)

Food Service/Kitchen

17
(15%)

18
(15%)

24
(21%)

29
(25%)

28
(24%)

1
(1%)

1
(1%)

6
(5%)

39
(34%)

69
(59%)

External Communications (e.g., phones)

17
(14%)

23
(18%)

26
(21%)

33
(26%)

27
(21%)

1
(1%)

-

15
(12%)

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