Y2K Readiness of K-12 School Districts: Evidence from the State of Kansas.
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 does 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.
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.
Table 1: Y2K Project Stages
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.
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.
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.
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.
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.
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.
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 89 52 5 program in our district. (61%) (36%) (3%) We have appointed a 71 67 8 Y2K project manager. (49%) (46%) (5%) We have completed a project 65 74 7 plan to deal with Y2K. (44%) (51%) (5%) If existing systems won't operate 64 66 16 beyond 1999, we have a contingency plan. (44%) (45%) (11%) Our Y2K conversion process is 47 90 9 regularly monitored by our school board. (32%) (62%) (6%) We have funds in the 1998-99 budget 38 99 9 specifically for Y2K conversion. (26%) (68%) (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 131 10 5 been asked if it is Y2K compliant. (90%) (7%) (3%) We have taken an inventory of all 94 50 4 system software & its Y2K compliance. (65%) (34%) (1%) We have sufficient, competent in-house 91 40 15 personnel for the Y2K conversion. (62%) (28%) (10%) We have taken an inventory of all 89 51 6 hardware & its Y2K compliance. (61%) (35%) (4%) We have taken an inventory of all 77 65 4 application software & its Y2K compliance (53%) (44%) (3%) We have enough information to 66 60 20 make a 1999-2000 budget request for Y2K. (45%) (41%) (14%) We will hire an outside consultant to 36 99 11 assist with the Y2K readiness project. (25%) (68%) (7%) Infrastructure (e.g., heating, elevators, 21 97 28 fire alarms) will need to be modified. (14%) (67%) (19%) External communications systems 20 102 24 (e.g., phones) will need to be modified. (14%) (70%) (16%) Internal communications systems 17 108 21 (e.g., intercoms) will need (12%) (74%) (14%) to be modified.
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 103 33 10 replacing non-compliant software. (70%) (23%) (7%) We've begun replacing hardware 98 34 14 made obsolete by Y2K. (67%) (23%) (10%) Vendor obligations regarding 62 75 9 Y2K been formalized in a (43%) (51%) (6%) written agreement. Software vendors have provided 43 80 23 dates for the release of (29%) (55%) (16%) compliant versions.
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 123 15 8 for Y2K compliance. (84%) (10%) (6%) Newly acquired software will be tested 113 24 9 for Y2K compliance. (78%) (16%) (6%) Existing software will be tested for 111 18 17 compliance after conversion. (76%) (12%) (12%) Existing hardware will be tested for 106 22 18 Y2K compliance after conversion. (73%) (15%) (12%) We have a district policy to only 67 73 6 purchase Y2K compliant software. (46%) (50%) (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? Not Awareness Assess. Started Payroll 5 15 16 4% 11% 12% Collection of Local Tax Revenue 17 18 15 19% 20% 17% Payment of Bills 7 14 15 5% 11% 12% Transportation/Bus Service 21 18 16 19% 16% 14% Food Service/Kitchen 17 18 24 15% 15% 21% External Communications (e.g., 17 23 26 phones) 14% 18% 21% Internal Communications (e.g., 16 18 30 intercom) 13% 14% 24% Infrastructure (e.g., heating, 17 22 37 elevators) 13% 17% 29% Special Education Coop. Services 24 17 19 24% 17% 19% Educational Service Center Services 25 16 17 25% 16% 17% Classroom Management (e.g., 13 19 24 grading) 10% 15% 19% Classroom Education (e.g., 19 20 25 tutorials) 16% 17% 21% Remediat. Testing Payroll 55 40 42% 31% Collection of Local Tax Revenue 25 14 28% 16% Payment of Bills 55 37 43% 29% Transportation/Bus Service 36 22 32% 19% Food Service/Kitchen 29 28 25% 24% External Communications (e.g., 33 27 phones) 26% 21% Internal Communications (e.g., 32 31 intercom) 25% 24% Infrastructure (e.g., heating, 29 22 elevators) 23% 17% Special Education Coop. Services 25 16 25% 16% Educational Service Center Services 27 16 27% 16% Classroom Management (e.g., 35 35 grading) 28% 28% Classroom Education (e.g., 28 26 tutorials) 23% 22% Will this area function properly after 1999? No Prob. No Maybe Prob. Def. Yes Yes Payroll 1 -- 3 28 103 1% 2% 21% 76% Collection of Local Tax 1 -- 14 36 39 Revenue 1% 16% 40% 43% Payment of Bills 1 -- 3 29 99 1% 2% 22% 75% Transportation/Bus Service 1 1 6 30 75 1% 1% 5% 27% 66% Food Service/Kitchen 1 1 6 39 69 1% 1% 5% 34% 59% External Communications 1 -- 15 4 62 (e.g., phones) 1% 12% 38% 50% Internal Communications 1 -- 16 39 70 (e.g., intercom) 1% 13% 31% 56% Infrastructure (e.g., 2 -- 14 50 58 heating, elevators) 2% 11% 40% 47% Special Education Coop. 1 -- 12 41 45 Services 1% 12% 41% 46% Educational Service Center 1 -- 11 39 48 Services 1% 11% 39% 49% Classroom Management (e.g., 1 -- 13 33 82 grading) 1% 10% 26% 64% Classroom Education (e.g., 1 -- 20 43 56 tutorials) 1% 17% 36% 47%
The next two areas addressed in Table 6 are transportation and food service. Transportation and food service were at the remediation or testing phase in 51 and 49 percent, respectively, of the responding districts. However, 19 percent had not started on transportation and 15 percent had not started on food service. The percent of responses stating these areas would definitely function properly after 1999 was lower than for payroll and payment of bills. For transportation, 66 percent stated their systems would definitely work and for food service 60 percent responded definitely yes.
The next three areas focused on external communications, internal communications, and infrastructure. Forty-nine percent stated internal communication systems were in the remediation or testing phase, followed by 47 percent for external communication systems, and 40 percent for infrastructure. Approximately 13 percent had not started their Y2K conversion on these three areas. This was also reflected in the confidence responses in which approximately 87 percent stated the three areas would probably or definitely work after 1999, but 13 percent responded no or maybe.
The areas of classroom management and classroom education systems follow. Classroom management was in the remediation or testing phase in 56 percent of the responding districts, while classroom education was in one of those two phases in a somewhat lower 45 percent of the responding school districts. The confidence in classroom management systems was also higher with 90 percent stating they would probably or definitely work after 1999 compared to 83 percent for classroom education systems. One-fourth were in the not started or awareness phase for classroom management and one-third were in one of these two phases for classroom education systems. However, only 11 and 18 percent responded no, probably no or maybe to whether these systems would function properly after 1999.
The remaining three areas deal with functions upon which the school districts are dependent upon outside agencies or cooperatives: collection of local tax revenue, special education cooperative services, and educational service center services. The responses most likely reflect the extent to which the responding districts are monitoring the Y2K conversion efforts of these outside units. Collection of local tax revenues by school districts is dependent upon county governmental units in Kansas. The responses about that area likely reflect the school districts' knowledge of their local county government's Y2K conversion efforts. Only 44 percent indicated that collection of local tax revenue was in the remediation or testing phase, and 39 percent indicated this area had not started on Y2K conversion or was in the awareness stage. Nevertheless, 75 percent expressed confidence that this area would function properly after 1999. Education service centers and special education cooperatives were reported to be in the remediation or testing phases by 43 percent and 41 percent, respectively. However, almost one-fourth reported that these agencies had not started their Y2K conversion project and approximately another 16 percent were reported to be in the awareness stage. Nevertheless, approximately 87 percent stated these services would probably or definitely function properly after 1999.
The current stage in which a mission-critical area is in might be expected to correlate with the degree of confidence the districts have that the area will function properly after 1999. For example, if a district has not started the Y2K project for an area, but reports "definitely yes," the area will function properly after 1999, the district can only be basing that response on blind faith. Correlation analysis between the responses on the stage of completion and the responses on the confidence questions resulted in correlations that ranged from 0.43 to 0.71. This suggests that many school districts have high confidence that their mission-critical systems will function properly after 1999, but that this high confidence is not supported by the current stage of Y2K project completion.
The Y2K date problem creates a high level of risk to the financial reporting, billing, collection and expenditure systems, and mission critical operating systems and equipment of the nation's public school districts. The large number of embedded systems that control the processes through which districts deliver services requires immediate attention to prevent the disruption of a district's mission critical processes. With less than one year until January 1, 2000, school districts should be extremely concerned if their computer systems and mission-critical operating systems are not yet Y2K compliant.
This paper presents the results of a survey instrument administered to the entire population of public school districts in the State of Kansas. The responses indicate that an overwhelming number of districts are not fully Y2K compliant and are at risk of service disruption in the new millennium. Results reveal that a majority of the school districts are still considered to be in either the awareness or assessment stages of the Y2K readiness process. This result is quite alarming given the SEC's requirement of public corporations to be through the awareness and assessment stages by the end of 1997. It appears that school districts within the State of Kansas are lagging behind their corporate counterparts by a significant amount. These results regarding the lack of readiness by the state's school districts are consistent with the findings of the State of Ohio's "Survey of Year 2000 Remediation Efforts in Governmental Units," in which public school districts were found to rank near the bottom of a readiness survey when compared to counties, cities and other state agencies. Although the State of Kansas expects to spend nearly 181,000 total hours to address the Y2K problem in its state agencies and six state universities, the statewide effort does not address the content of this study: a potentially large Y2K problem in the state's 304 public K-12 school districts. Coupled with the recommendations set forth by the SEC as well as the findings of the State of Ohio's survey, it appears that a large number of the nation's public school districts are desperately in need of funding to address the Y2K issue. Without this increase in funding, it is unlikely that public schools will be able to successfully enter the new millennium.
YEAR 2000 SURVEY
Please answer each of the following questions below regarding your district's Year 2000 (Y2K) readiness. If you don't know, or it is not applicable for your district, please mark NA.
Question Yes No NA Example: I am tired of hearing about Y2K, but I will complete your survey. 1. We have appointed a Y2K project manager. 2. We have completed a project plan to deal with Y2K. 3. We have a Y2K awareness program in our district. 4. Our Y2K conversion process is regularly monitored by our school board. 5. We have sufficient, competent in-house personnel for the Y2K conversion. 6. We will hire an outside consultant to assist with the Y2K readiness project. 7. We have funds in the 1998-99 budget specifically for Y2K conversion. 8. We have enough information to make a 1999-2000 budget request for Y2K. 9. We have a district policy to only purchase Y2K compliant software. 10. We have taken an inventory of all hardware & its Y2K compliance. 11. We've begun replacing hardware made obsolete by Y2K. 12. Existing hardware will be tested for Y2K compliance after conversion. 13. Newly acquired hardware will be tested for Y2K compliance. 14. We have taken an inventory of all application software & its Y2K compliance. 15. We have taken an inventory of all system software & its Y2K compliance. 16. We've begun upgrading or replacing non-compliant software. 17. Existing software will be tested for compliance after conversion. 18. For existing software, vendors have been asked if it is Y2K compliant. 19. Vendor obligations regarding Y2K have been formalized in a written agreement. 20. Software vendors have provided dates for the release of compliant versions. 21. Newly acquired software will be tested for Y2K compliance. 22. If existing systems won't operate beyond 1999, we have a contingency plan. 23. External communications systems (e.g., phones) will need to be modified. 24. Internal communications systems (e.g., intercoms) will need to be modified. 25. Infrastructure (e.g., heating, elevators, fire alarms) will need to be modified. Approximately how many total man-hours will be needed to complete the Y2K project? Approximately how many man-hours have already been spent on the Y2K project? Approximately how much money will be needed to complete the Y2K project? $ Approximately how much money has already been expended on the Y2K project? $
David O'Bryan is an associate professor of accounting at Pittsburg State University. He received a doctorate of philosophy in accounting from the University of Missouri in 1992. He holds the Certified Public Accountant, Certified Management Accountant, and Certified Financial Manager certifications. David has published extensively in bath academic and practitioner-oriented journals.
Jeffrey J. Quirin is an assistant professor of accounting at Kansas State University. He received a doctorate of philosophy in accounting from the University of Nebraska in 1998. Jeffrey has published in numerous academic journals.
David P. Donnelly is the Baird, Kurtz, & Dobson professor of accounting at Kansas State University. David received a doctorate of philosophy in accounting from the University of Illinois in 1983. He is a Certified Public Accountant and has published a number of academic and practitioner. oriented papers.
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|Title Annotation:||Industry Trend or Event|
|Author:||O'BRYAN, DAVID; QUIRIN, JEFFREY J.; DONNELLY, DAVID P.|
|Publication:||T H E Journal (Technological Horizons In Education)|
|Date:||May 1, 1999|
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