U.S. Y2K Work 97 Percent Done - White House By Jim Wolf WASHINGTON (Reuters) - The U.S. government has completed 97 percent of Year 2000 fixes on its most important computer systems at a cost of $8.34 billion, the White House budget office reported Tuesday. In its latest quarterly report on federal preparations, the Office of Management and Budget (OMB) said the Pentagon, despite a mammoth effort, may suffer some problems caused by the Y2K coding glitch that could boggle computers. Nine of the 24 Cabinet departments and key agencies supplying federal services have not yet wrapped up Y2K work, OMB said. They were the departments of Agriculture, Commerce, Defense, Energy, Health and Human Services, Justice, Treasury and Transportation, as well as the Agency for International Development. These nine had a combined total of 217 ``mission critical'' systems that were not Y2K compliant as of Aug. 13, down from the 410 reported non-compliant in June, said OMB, which oversees management of the federal government. The Defense Department runs by far the largest number of federal systems requiring work to be ready for the date change, 169, as of June 30. Of these, 141 were being fixed, including 53 classified as secret; 18 were to be replaced; and 10 were to be retired by year end, OMB said. The Defense Department, which estimates it will spend $3.6 billion fixing Y2K problems, has been carrying out ``the largest, most complex testing in history'' to pinpoint Y2K problems, the budget office said. For instance, the Pentagon is making sure that all mission critical systems ``that are expected to be used if the armed forces are involved in a major theater of war are tested in at least two exercises,'' it said. Despite these tests, OMB said, ``the interconnection of so many complex systems increases the likelihood that DoD (Department of Defense) will experience some Y2K difficulties.'' As a result, the Pentagon was focusing on ``realistic continuity of operations and contingency planning,'' the report said. The so-called Y2K glitch could prevent some computers from distinguishing 2000 from 1900 because of old shortcuts that recorded the year with two digits only. Unless fixed, this could disrupt everything from radar to telecommunications to tank display panels. Overall, ``We feel confident as we go into the home stretch,'' said Linda Ricci, the OMB spokeswoman. ``The U.S. government is in good shape'' for the calendar rollover. The OMB report card, the 10th in a series, was due to be delivered to Congress by Wednesday, Ricci said. She said its timing was ``entirely independent and unrelated'' to consular reports on the Y2K readiness of as many as 196 countries being released later Tuesday by the State Department.