Maurice Williamson - Report of the Y2K Task Force

Executive Summary
Introduction
The State of Readiness
The Case for Government Action
Recommendations for Government Action
Summary of Recommendations

Appendices

Recommendations for Government Action

Recommendation 1

Recommendation 12

5.0 Recommendations for Government Action

5.1 This chapter presents a range of recommendations for the Government's consideration. They are designed to support the strategic response described in the previous chapter by:

providing clear, well-targeted communications to promote greater understanding and ownership of the Year 2000 problem;
providing assistance to help organisations take action, including

user-friendly access to "help" information
encouragement for technology suppliers to co-operate with the provision of unambiguous information on product readiness and service commitment;

taking a leadership role in the public and private sectors and enhancing the effect of market mechanisms by encouraging and reinforcing the capabilities of sector organisations to pool resources and share information on technical solutions for remedial action, testing and monitoring;
building on the leverage of market mechanisms, such as bank credit reviews, audit certificates and the consulting services offered by accountancy firms to small and medium businesses; and
monitoring progress and encouraging planning for contingencies to ensure that critical areas of New Zealand's social and economic infrastructure, as well as the health and safety of the general public, are not compromised.

5.2 Our recommendations are those we believe the Government should undertake, or should consider, depending on the level of risk it wishes to accept on behalf of New Zealand.

5.3 While our analysis of readiness was conducted from an infrastructure perspective, our recommendations take an organisational or sectoral perspective. We have taken this approach simply because areas of infrastructure per se cannot be influenced to change or modify their behaviour, whereas the organisations within them can be.

5.4 The first 10 recommendations we make relate to initiatives which we believe the Government should take. The other 2 recommendations relate to initiatives we believe the Government should consider.

5.6 The recommendations for action consist of general initiatives (listed first), initiatives for the central government sector, and initiatives for other sectors (listed last).

Recommendation 1:
Government leadership 5.6 The Government should position itself, and the Prime Minister in particular, as the leader in encouraging all organisations to make an appropriate response to the Year 2000 problem through the following range of activities:

publishing this report;
endorsing and launching the Y2K Readiness Commission described in Recommendation 2;
raising the profile of the Year 2000 problem in her keynote speeches and media statements;
requiring her Ministers to make the problem a priority in their portfolios;
when considering restructuring Government agencies, taking into account the impact on their ability to manage Year 2000 problems;
encouraging her Business Enterprise Council to support Government initiatives to harness the expertise and energies of sector organisations;
writing to local authority leaders, the chairs of Crown agencies, business leaders and the owners of small and medium enterprises exhorting them to action and encouraging them to support each other; and
using any opportunity to address the above leaders and owners to lay stress on the importance to New Zealand that they manage the Year 2000 problem well.

Rationale

5.7 This is a national problem demanding an integrated and co-operative approach across private and public sectors. With a few exceptions, energy and expertise is currently dissipated as each organisation within a sector seeks and implements its own solutions. The Government can play a key role in achieving integration and co-operation, thus reducing risks and costs for New Zealand as a whole.

5.8 This is a way in which the Government can signal its commitment to New Zealand's response to the Year 2000 problem, lending credence to the seriousness of the issue and the necessity of dealing with it. The broad spectrum of Government actions proposed here will raise awareness, foster understanding and encourage businesses to address the problem and to assist each other in achieving readiness.

Indicative cost ²³

5.9 Minimal direct cost.

Recommendation 2:
Y2K Readiness Commission 5.10 As a matter of urgency, the Government should set up and resource a Y2K Readiness Commission to advance the other recommendations in this report. We propose that a Y2K Readiness Commission be established with a limited life, say to 31 March 2000. The Commission would comprise a small number of remunerated members (3 or 4), and seek advice from representatives of the public and private sectors and from consumers. It would report directly to a Minister. The Commission would be supported by a small secretariat.

5.11 The Commission's role will include:

advising the Government on the nation's readiness, drawing on the monitoring and research capabilities of organisations in the public and private sector that are already involved in Year 2000 readiness reporting;
liaising with civil defence agencies and monitoring their planning and activities in response to the Year 2000 problem, so that the Government can be sure that appropriate contingency planning is being undertaken;
promoting Year 2000 activities through umbrella organisations in all infrastructure sectors;
promoting Year 2000 activities in small and medium businesses through publicising existing market-based mechanisms, such as bank credit reviews, audit certification, directors' liability, and the advisory services offered by accountancy firms to small and medium businesses;
harnessing the energies of individuals, companies and sector umbrella organisations to complement and strengthen the Government's Year 2000 programmes;
managing a range of information campaigns designed to foster improved understanding, encourage action and provide signposts to technical and other assistance; and
using the public profile of the commissioners to raise awareness that the Year 2000 problem is a national issue, potentially affecting all New Zealanders.

Rationale

5.12 The Commission will allow the Government to tap the expertise of the private sector and also provide the Government with a vehicle to encourage compliance in the private sector. It will form a second, more operational vehicle for championing awareness and improving levels of understanding. Finally, the Commission will be the Government's instrument to accomplish many of the other recommendations in this report.

5.13 Despite the potential impact of failure on New Zealand, no organisation currently is charged with advising the Government on the Year 2000 readiness of key infrastructure services in either the public or private sectors. The Commission would advise the Government should more direct action become necessary from a national perspective to protect infrastructure or preserve the health and safety of the New Zealand public. Its advice would be based on its analysis of readiness reporting received from private and public sector organisations.

5.14 We appreciate the fiscal imperatives that might encourage the Government to establish a Year 2000 unit within an existing organisation rather than as a separate commission reporting directly to a Minister as proposed.

5.15 We do not recommend that approach. There are a number of critical success factors for the Commission which include:

the ability to harness the skills and expertise of the private sector to co-operate in the interests of the country;
credibility with all sectors enhanced by an organisation with a private/public sector board (or commission) and "independence" by being able to report directly to a Minister;
the ability to "network" throughout all sector organisations and access the media as a means of generating awareness and understanding;
the ability to provide a focal point for Government action through the establishment of a single-issue, dedicated body with a finite life (18 months); and
the ability to attract people as Commissioners, giving the Commission profile to help it raise understanding and awareness and to enhance its credibility with all sectors.

Indicative cost

5.16 $1 Million (over an 18 month period)

Recommendation 3:
Reinforce accountability 15.17 The Government should do all it can to strengthen the accountability of chief executives and board members in the wider public sector for the successful management of the Year 2000 problem through:

continuing to require that core public sector accountability documents include the successful identification and resolution of Year 2000 problems;
requiring Ministers responsible for Crown entities, SOEs and other organisations where the Government has a significant ownership interest urgently to adopt a similar approach with their boards; and
encouraging a similar approach among local authorities.

Rationale

5.18 We acknowledge the recent initiatives taken by the Government to impose explicit Year 2000 accountability requirements on the chief executives of government departments. This needs to be extended to all public sector organisations because:

many of these organisations manage systems, processes and equipment crucial to the maintenance of New Zealand's social and economic infrastructure and to the health and safety of the general public; and
our assessment of readiness shows that many in this group are over-confident about their ability to deal with the Year 2000 problem.

Indicative cost

5.19 Minimal direct costs.

Recommendation 4:
Review team 5.20 The Government should establish a specialist review team within the State Services Commission (SSC) to assess progress by key organisations in the wider public sector towards Year 2000 readiness and to advise the Government accordingly.

Rationale

5.21 Some public sector organisations' own appraisals of readiness are unrealistic. Furthermore, some of those appraisals rely on securing skilled personnel - whose availability increasingly is open to question.

5.22 This team will review and report to the Government in some depth on the level of Year 2000 readiness in key organisations in the wider public sector. In particular, it will advise the Government where:

organisational restructuring or new IT developments might impede progress towards Year 2000 readiness for key organisations; or
reallocation of resources might be needed within or between public sector organisations to ensure that key organisations are ready in time.

5.23 The review team will provide the Government with technical quality assurance information on key government organisations.

5.24 This information will be of use to chief executives in managing their organisations, and to boards, Ministers and the SSC as these parties manage the performance review function that is an integral part of the existing accountability framework.

5.25 For the review team to be effective within the wider public sector, organisations outside the core public sector will have to be brought into the SSC's jurisdiction for Year 2000 purposes by Prime Ministerial direction as per section 11 of the State Sector Act 1988.

5.26 The SSC has no jurisdiction over local authorities. However, local authorities may appreciate an opportunity to use the services of the review team, provided they continue to exercise authority within their own jurisdictions.

Indicative cost

5.27 Up to $1.5 million based on a team of 6 for 18 months. It is assumed that local authorities wishing to use this service will meet the full cost

FOOTNOTES

Where possible, the Task Force has provided an indicative cost for each recommendation to assist the Government when considering these recommendations. Accurate costings will need to be developed as part of an implementation programme.omputer systems used for information processing as opposed to those embedded in other equipment return

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5.0 Recommendations for Government Action
	5.1	This chapter presents a range of recommendations for the Government's consideration. They are designed to support the strategic response described in the previous chapter by: providing clear, well-targeted communications to promote greater understanding and ownership of the Year 2000 problem; providing assistance to help organisations take action, including user-friendly access to "help" information encouragement for technology suppliers to co-operate with the provision of unambiguous information on product readiness and service commitment; taking a leadership role in the public and private sectors and enhancing the effect of market mechanisms by encouraging and reinforcing the capabilities of sector organisations to pool resources and share information on technical solutions for remedial action, testing and monitoring; building on the leverage of market mechanisms, such as bank credit reviews, audit certificates and the consulting services offered by accountancy firms to small and medium businesses; and monitoring progress and encouraging planning for contingencies to ensure that critical areas of New Zealand's social and economic infrastructure, as well as the health and safety of the general public, are not compromised.
	5.2	Our recommendations are those we believe the Government should undertake, or should consider, depending on the level of risk it wishes to accept on behalf of New Zealand.
	5.3	While our analysis of readiness was conducted from an infrastructure perspective, our recommendations take an organisational or sectoral perspective. We have taken this approach simply because areas of infrastructure per se cannot be influenced to change or modify their behaviour, whereas the organisations within them can be.
	5.4	The first 10 recommendations we make relate to initiatives which we believe the Government should take. The other 2 recommendations relate to initiatives we believe the Government should consider.
	5.6	The recommendations for action consist of general initiatives (listed first), initiatives for the central government sector, and initiatives for other sectors (listed last).
Recommendation 1: Government leadership	5.6	The Government should position itself, and the Prime Minister in particular, as the leader in encouraging all organisations to make an appropriate response to the Year 2000 problem through the following range of activities: publishing this report; endorsing and launching the Y2K Readiness Commission described in Recommendation 2; raising the profile of the Year 2000 problem in her keynote speeches and media statements; requiring her Ministers to make the problem a priority in their portfolios; when considering restructuring Government agencies, taking into account the impact on their ability to manage Year 2000 problems; encouraging her Business Enterprise Council to support Government initiatives to harness the expertise and energies of sector organisations; writing to local authority leaders, the chairs of Crown agencies, business leaders and the owners of small and medium enterprises exhorting them to action and encouraging them to support each other; and using any opportunity to address the above leaders and owners to lay stress on the importance to New Zealand that they manage the Year 2000 problem well.
	Rationale
	5.7	This is a national problem demanding an integrated and co-operative approach across private and public sectors. With a few exceptions, energy and expertise is currently dissipated as each organisation within a sector seeks and implements its own solutions. The Government can play a key role in achieving integration and co-operation, thus reducing risks and costs for New Zealand as a whole.
	5.8	This is a way in which the Government can signal its commitment to New Zealand's response to the Year 2000 problem, lending credence to the seriousness of the issue and the necessity of dealing with it. The broad spectrum of Government actions proposed here will raise awareness, foster understanding and encourage businesses to address the problem and to assist each other in achieving readiness.
	Indicative cost ²³
	5.9	Minimal direct cost.
Recommendation 2: Y2K Readiness Commission	5.10	As a matter of urgency, the Government should set up and resource a Y2K Readiness Commission to advance the other recommendations in this report. We propose that a Y2K Readiness Commission be established with a limited life, say to 31 March 2000. The Commission would comprise a small number of remunerated members (3 or 4), and seek advice from representatives of the public and private sectors and from consumers. It would report directly to a Minister. The Commission would be supported by a small secretariat.
	5.11	The Commission's role will include: advising the Government on the nation's readiness, drawing on the monitoring and research capabilities of organisations in the public and private sector that are already involved in Year 2000 readiness reporting; liaising with civil defence agencies and monitoring their planning and activities in response to the Year 2000 problem, so that the Government can be sure that appropriate contingency planning is being undertaken; promoting Year 2000 activities through umbrella organisations in all infrastructure sectors; promoting Year 2000 activities in small and medium businesses through publicising existing market-based mechanisms, such as bank credit reviews, audit certification, directors' liability, and the advisory services offered by accountancy firms to small and medium businesses; harnessing the energies of individuals, companies and sector umbrella organisations to complement and strengthen the Government's Year 2000 programmes; managing a range of information campaigns designed to foster improved understanding, encourage action and provide signposts to technical and other assistance; and using the public profile of the commissioners to raise awareness that the Year 2000 problem is a national issue, potentially affecting all New Zealanders.
	Rationale
	5.12	The Commission will allow the Government to tap the expertise of the private sector and also provide the Government with a vehicle to encourage compliance in the private sector. It will form a second, more operational vehicle for championing awareness and improving levels of understanding. Finally, the Commission will be the Government's instrument to accomplish many of the other recommendations in this report.
	5.13	Despite the potential impact of failure on New Zealand, no organisation currently is charged with advising the Government on the Year 2000 readiness of key infrastructure services in either the public or private sectors. The Commission would advise the Government should more direct action become necessary from a national perspective to protect infrastructure or preserve the health and safety of the New Zealand public. Its advice would be based on its analysis of readiness reporting received from private and public sector organisations.
	5.14	We appreciate the fiscal imperatives that might encourage the Government to establish a Year 2000 unit within an existing organisation rather than as a separate commission reporting directly to a Minister as proposed.
	5.15	We do not recommend that approach. There are a number of critical success factors for the Commission which include: the ability to harness the skills and expertise of the private sector to co-operate in the interests of the country; credibility with all sectors enhanced by an organisation with a private/public sector board (or commission) and "independence" by being able to report directly to a Minister; the ability to "network" throughout all sector organisations and access the media as a means of generating awareness and understanding; the ability to provide a focal point for Government action through the establishment of a single-issue, dedicated body with a finite life (18 months); and the ability to attract people as Commissioners, giving the Commission profile to help it raise understanding and awareness and to enhance its credibility with all sectors.
	Indicative cost
	5.16	$1 Million (over an 18 month period)

Recommendation 3: Reinforce accountability	15.17	The Government should do all it can to strengthen the accountability of chief executives and board members in the wider public sector for the successful management of the Year 2000 problem through: continuing to require that core public sector accountability documents include the successful identification and resolution of Year 2000 problems; requiring Ministers responsible for Crown entities, SOEs and other organisations where the Government has a significant ownership interest urgently to adopt a similar approach with their boards; and encouraging a similar approach among local authorities.
	Rationale
	5.18	We acknowledge the recent initiatives taken by the Government to impose explicit Year 2000 accountability requirements on the chief executives of government departments. This needs to be extended to all public sector organisations because: many of these organisations manage systems, processes and equipment crucial to the maintenance of New Zealand's social and economic infrastructure and to the health and safety of the general public; and our assessment of readiness shows that many in this group are over-confident about their ability to deal with the Year 2000 problem.
	Indicative cost
	5.19	Minimal direct costs.
Recommendation 4: Review team	5.20	The Government should establish a specialist review team within the State Services Commission (SSC) to assess progress by key organisations in the wider public sector towards Year 2000 readiness and to advise the Government accordingly.
	Rationale
	5.21	Some public sector organisations' own appraisals of readiness are unrealistic. Furthermore, some of those appraisals rely on securing skilled personnel - whose availability increasingly is open to question.
	5.22	This team will review and report to the Government in some depth on the level of Year 2000 readiness in key organisations in the wider public sector. In particular, it will advise the Government where: organisational restructuring or new IT developments might impede progress towards Year 2000 readiness for key organisations; or reallocation of resources might be needed within or between public sector organisations to ensure that key organisations are ready in time.
	5.23	The review team will provide the Government with technical quality assurance information on key government organisations.
	5.24	This information will be of use to chief executives in managing their organisations, and to boards, Ministers and the SSC as these parties manage the performance review function that is an integral part of the existing accountability framework.
	5.25	For the review team to be effective within the wider public sector, organisations outside the core public sector will have to be brought into the SSC's jurisdiction for Year 2000 purposes by Prime Ministerial direction as per section 11 of the State Sector Act 1988.
	5.26	The SSC has no jurisdiction over local authorities. However, local authorities may appreciate an opportunity to use the services of the review team, provided they continue to exercise authority within their own jurisdictions.
	Indicative cost
	5.27	Up to $1.5 million based on a team of 6 for 18 months. It is assumed that local authorities wishing to use this service will meet the full cost