The Federal Reserve may not have enough staff to complete the next round of year-2000 exams on time, according to a General Accounting Office report.
By March 31 the Fed must examine 990 state member banks, 349 bank holding companies, 221 foreign bank offices, and nine Edge Act corporations, with combined assets of over $7.7 trillion , the GAO said.
"It is critical that (the Fed) determine whether it has the number of technical examiners needed," the GAO found. "If resources are strained or insufficient, (the Fed) could be forced to delay completing year-2000 examinations, reduce their scope, or not perform some of them at all."
The report, issued Friday , said the Fed was taking the computer problem "very seriously." In addition to establishing a year-2000 Web site, distributing a year-2000 video for bank executives, and conducting 230 seminars around the country, the agency is training extra examiners to complete a second round of on-site examinations. The first round, completed in June, found that 96% of the examined institutions had made "satisfactory" progress.
The GAO's report was the fourth in a series on the year-2000 efforts of the five banking agencies. It was preceded by reports on the National Credit Union Administration, the Federal Deposit Insurance Corp., and the Office of Thrift Supervision. A report on the Office of the Comptroller of the Currency is pending.
Like other agencies, the Fed began its year-2000 program at least six months late and did not realize it had an insufficient number of year-2000 examiners until well into the first round of on-site exams, the GAO said.
But the GAO said the Fed has taken steps to increase the number of year- 2000 examiners. In addition to 73 full-time and part-time information system examiners, the Fed has trained 106 safety-and-soundness and other examiners to assist if needed, and it plans to delay about 300 bank information technology exams to free up resources.
Separately on Friday , the Senate Judiciary Committee approved a bill that would give legal protection to firms that make erroneous disclosures about their year-2000 readiness. President Clinton urged passage of the bill before Congress adjourns next month.