A state Department of Financial Services audit released this week slammed the state comptroller’s office’s “dangerous” use of “antiquated technology” to run the pension system for New York State employees. The banking regulators singled out of the comptroller for relying on a computer language called COBOL, which they labeled “very outdated.”
That would be news to the global financial institutions and New York State and federal agencies that also use COBOL, short for Common Business-Oriented Language, to drive billions of computerized transactions.
COBOL is, indeed, so old that it has its own exhibit in the Smithsonian Institution, and it is rarely taught in computer programming courses in the United States these days. But that doesn’t mean it’s obsolete, or unsafe, said Earl Evans, a computer science historian who hosts the Retrobits podcast. The average American, wittingly or not, has interactions with systems running on COBOL about 13 times a day, Evans said.
“About 75 percent of business and transaction systems around the world still run on COBOL — credit cards, ATMs, ticket purchasing,” Evans tallied. “Companies in some big sectors like finance, healthcare, government, shipping, transportation have huge investments in the language and in the machines that it runs on.” The Department of Financial Services audit questioned the security of the Retirement Fund’s software. This assessment puzzled Evans, who said COBOL “tends to be very stable and reliable.”
COBOL may have been developed in 1959, but the most recent version of its standards was updated in 2002, said Alex Bochannek, curator and senior manager at the Computer History Museum in Mountain View, Calif. COBOL’s age, he added, isn’t necessarily an indicator of how well it works.
“That assumption that just because something is old you should discard it is a somewhat naive way of looking at the reality of technologies,” Bochannek said.
The Department of Financial Services audit of programs run by State Comptroller Thomas DiNapoli comes after DiNapoli issued a series of audits critical of the operations of Cuomo administration agencies. DiNapoli’s office rebuffed the conclusions of the Department of Financial Services.
“New York State retirees and taxpayers are not at risk,” wrote spokesperson Eric Sumberg in a statement.
“We have long been aware of the need to modernize our legacy IT system. In 2012, following a lengthy procurement process, a contractor was selected and work has begun to overhaul this system, a fact that examiners chose not to highlight in their report. Many of the conclusions of this report are either incorrect, exaggerated or misleading.” Sumberg promised that his office will release a more detailed response to the audit soon.
The audit did correctly identify one major problem: Even with so many world financial systems still running on COBOL, the language is rarely taught in American schools, and programmers proficient in the language are nearing retirement age. A search of undergraduate and graduate computer programming courses at nearby the nearby University at Albany of the state university system turned up no classes in COBOL.
The Department of Financial Services audit warned that a shortage of programmers versed in COBOL and a related Customer Information Control System is a threat to management of the Common Retirement Fund.
“The [retirement fund] faces a serious problem as the availability of programmers proficient in both COBOL and CICS is small and will continue to deteriorate over time,” the audit said.
That hasn’t stopped the New York State government from using COBOL coding to run some of its vital systems, including the billing apparatus for its $54-billion-a-year Medicaid program, which makes up about a third of the state’s annual budget.
The state’s Office of Temporary and Disability Assistance awarded a $4.2 million contract in January 2013 to Computer Aid, Inc., for COBOL programmers. And in 2012, the state Department of Health signed on for $177 million to extend a massive contract with Computer Sciences Corporation to build and manage the technology driving Medicaid in New York. The state originally hired the company in 2000 to overhaul Medicaid data collection and billing, and programmers wrote the code for the new system, called eMedNY, using COBOL. The state’s contract with CSC to build and operate eMedNY is now worth more than $1.1 billion.
“The perception that COBOL is a “dead’ language is inaccurate and has been repeated off and on for more than two decades, most often by those who are unaware of the certain types of systems that require reliability of transactions, high throughput and fast response times,” said Computer Sciences Corporation spokeswoman Michelle Herd, in an email.
CSC doesn’t use code that was written in 1959, because COBOL has been updated since then, Herd wrote.
“The COBOL that is in current use is ‘not your grandfather’s COBOL,'” she said, adding that COBOL “remains a highly viable language…particularly well suited to applications…such as Medicaid claims, eligibility verification and other transactions that the NY Medicaid system processes each year in the hundreds of millions.”
A Department of Financial Services spokesperson referred requests for comment to the state’s Office of Information Technology Services. An ITS spokesperson declined to comment.
DiNapoli and his predecessor as Comptroller, Alan Hevesi, have criticized eMedNY in audits conducted since the program became operational in 2006. The system frequently failed to prevent billing errors, which led to more than $450 million in over-payments. Even after errors were found, the agency took months to rewrite code correcting them. The Medicaid overhaul was completed 33 months after its expected date, with more than $160 million in cost overruns. CSC has said it “demonstrated accurate and cost-effective administration.”