This is the accessible text file for GAO report number GAO-05-778T
entitled 'Paperwork Reduction Act: Burden Reduction May Require a New
Approach' which was released on June 15, 2005.
This text file was formatted by the U.S. Government Accountability
Office (GAO) to be accessible to users with visual impairments, as part
of a longer term project to improve GAO products' accessibility. Every
attempt has been made to maintain the structural and data integrity of
the original printed product. Accessibility features, such as text
descriptions of tables, consecutively numbered footnotes placed at the
end of the file, and the text of agency comment letters, are provided
but may not exactly duplicate the presentation or format of the printed
version. The portable document format (PDF) file is an exact electronic
replica of the printed version. We welcome your feedback. Please E-mail
your comments regarding the contents or accessibility features of this
document to Webmaster@gao.gov.
This is a work of the U.S. government and is not subject to copyright
protection in the United States. It may be reproduced and distributed
in its entirety without further permission from GAO. Because this work
may contain copyrighted images or other material, permission from the
copyright holder may be necessary if you wish to reproduce this
material separately.
United States Government Accountability Office:
GAO:
Testimony:
Before the Subcommittee on Regulatory Affairs, Committee on Government
Reform, House of Representatives:
For Release on Delivery:
Expected at 2 p.m. EDT Tuesday, June 14, 2005:
Paperwork Reduction Act:
Burden Reduction May Require a New Approach:
Statement of Linda D. Koontz:
Director, Information Management:
GAO-05-778T:
GAO Highlights:
Highlights of GAO-05-778T, a testimony before the Subcommittee on
Regulatory Affairs, Committee on Government Reform, House of
Representatives:
Why GAO Did This Study:
Americans spend billions of hours each year providing information to
federal agencies by filling out information collections (forms,
surveys, or questionnaires). A major aim of the Paperwork Reduction Act
(PRA) is to minimize the burden that these collections impose on the
public, while maximizing their public benefit. Under the act, the
Office of Management and Budget (OMB) is to approve all such
collections and to report annually on the agencies’ estimates of the
associated burden. In addition, agency Chief Information Officers (CIO)
are to review information collections before they are submitted to OMB
for approval and certify that the collections meet certain standards
set forth in the act.
For its testimony, GAO was asked to comment on OMB’s burden report for
2004 and to discuss its recent study of PRA implementation (GAO-05-
424), concentrating on CIO review and certification processes and
describing alternative processes that two agencies have used to
minimize burden. For its study, GAO reviewed a governmentwide sample of
collections, reviewed processes and collections at four agencies that
account for a large proportion of burden, and performed case studies of
12 approved collections.
What GAO Found:
The total paperwork burden imposed by federal information collections
shrank slightly in fiscal year 2004, according to estimates provided in
OMB’s annual PRA report to Congress. The estimated total burden was
7.971 billion hours—a decrease of 1.6 percent (128 million burden
hours) from the previous year’s total of about 8.099 billion hours.
Different types of changes contributed to the overall change in these
estimates, according to OMB. For example, adjustments to the estimates
(from such factors as changes in estimation methods and estimated
number of respondents) accounted for a decrease of about 156 million
hours (1.9 percent), and agency burden reduction efforts led to a
decrease of about 97 million hours (1.2 percent). These decreases were
partially offset by increases in other categories, primarily an
increase of 119 million hours (1.5 percent) arising from new statutes.
However, because of limitations in the accuracy of burden estimates,
the significance of small changes in these estimates is unclear.
Nonetheless, as the best indicators of paperwork burden available,
these estimates can be useful as long as the limitations are clearly
understood.
Among the PRA provisions aimed at helping to achieve the goals of
minimizing burden while maximizing utility is the requirement for CIO
review and certification of information collections. GAO’s review of 12
case studies showed that CIOs provided these certifications despite
often missing or inadequate support from the program offices sponsoring
the collections. Further, although the law requires CIOs to provide
support for certifications, agency files contained little evidence that
CIO reviewers had made efforts to improve the support offered by
program offices. Numerous factors have contributed to these problems,
including a lack of management support and weaknesses in OMB guidance.
Because these reviews were not rigorous, OMB, the agency, and the
public had reduced assurance that the standards in the act—such as
minimizing burden—were consistently met.
In contrast, the Internal Revenue Service (IRS) and the Environmental
Protection Agency (EPA) have set up processes outside the CIO review
process that are specifically focused on reducing burden. These
agencies, whose missions involve numerous information collections, have
devoted significant resources to targeted burden reduction efforts that
involve extensive outreach to stakeholders. According to the two
agencies, these efforts led to significant reductions in burden on the
public. In contrast, for the 12 case studies, the CIO review process
did not reduce burden.
In its report, GAO recommended that OMB and the agencies take steps to
improve review processes and compliance with the act. GAO also
suggested that the Congress may wish to consider mandating pilot
projects to target some collections for rigorous analysis along the
lines of the IRS and EPA approaches. OMB and the agencies agreed with
most of the recommendations, but disagreed with aspects of GAO’s
characterization of agencies’ compliance with the act’s requirements.
www.gao.gov/cgi-bin/getrpt?GAO-05-778T.
To view the full product, including the scope and methodology, click on
the link above. For more information, contact Linda Koontz at (202) 512-
6240 or koontzl@gao.gov.
[End of section]
June 14, 2005:
Madam Chairman and Members of the Subcommittee:
I am pleased to be here today to discuss the implementation of the
Paperwork Reduction Act (PRA).[Footnote 1] As you know, the primary
goals of the act are to minimize the government paperwork burden on the
public while maximizing the public benefit and utility of the
information collections that the government undertakes. To achieve
these goals, the PRA includes a range of provisions that establish
standards and procedures for effective implementation and oversight.
Among these provisions is the requirement for the Office of Management
and Budget (OMB) to report annually to the Congress on the estimated
burden imposed on the public by government information collections
(forms, surveys, and questionnaires). Another requirement is that
agencies not establish information collections without having them
approved by OMB, and that before submitting them for approval,
agencies' Chief Information Officers (CIO) certify that the collection
meets 10 specified standards (for example, that it avoids unnecessary
duplication and minimizes burden).
As you requested, I will begin by commenting briefly today on the
estimates of government paperwork burden provided in the annual PRA
report (known as the Information Collection Budget) that OMB recently
released, which presents federal agencies' estimates of federal
paperwork burden as of the end of fiscal year 2004. I will then discuss
results from a report that we prepared on PRA processes and compliance,
which is being released today.[Footnote 2] I will concentrate on our
findings regarding agencies' processes to certify that information
collections meet PRA standards and on alternative processes that two
agencies have used to minimize burden.
In preparing this testimony, we reviewed our testimonies on previous
annual PRA reports as well as examining the most recent one. For our
discussion of the certification process, we drew on our report, for
which we performed detailed reviews of paperwork clearance processes
and collections at four agencies: the Department of Veterans Affairs
(VA), the Department of Housing and Urban Development (HUD), the
Department of Labor, and the Internal Revenue Service (IRS). Together,
these four agencies represent a broad range of paperwork burdens, and
in 2003, they accounted for about 83 percent of the 8.1 billion hours
of estimated paperwork burden for all federal agencies. Of this total,
IRS alone accounted for about 80 percent.[Footnote 3] We also selected
12 approved collections as case studies (three at each of the four
agencies) to determine how effective agency processes were. In
addition, we analyzed a random sample (343) of all OMB-approved
collections governmentwide as of May 2004 (8,211 collections at 68
agencies) to determine compliance with the act's requirements regarding
agency certification of the 10 standards and consultation with the
public. We designed the random sample so that we could determine
compliance levels at the four agencies and governmentwide. Finally,
although the Environmental Protection Agency (EPA) was not one of the
agencies whose processes we reviewed, we analyzed documents and
interviewed officials concerning the agency's efforts to reduce the
burden of its information collections. Further details on our scope and
methodology are provided in our report.
The work on which this testimony is based was conducted from May 2004
to May 2005, in accordance with generally accepted government auditing
standards.
Results in Brief:
The total paperwork burden imposed by federal information collections
shrank slightly in fiscal year 2004, according to estimates provided in
OMB's May 2005 annual PRA report to Congress. The estimated total
burden was 7.971 billion hours, which is a decrease of 1.6 percent (128
million burden hours) from the previous year's total of about 8.099
billion hours. Different types of changes contributed to the overall
change in the total burden estimates, according to OMB. For example,
adjustments to the estimates (from such factors as changes in
estimation methods and the population of respondents[Footnote 4])
accounted for a decrease of about 156 million hours (1.9 percent), and
agency burden reduction efforts led to a decrease of about 97 million
hours (1.2 percent). These decreases were partially offset by increases
in other categories, primarily an increase of 119 million hours (1.5
percent) arising from new statutes. However, because of limitations in
the ability to develop accurate burden estimates, the degree to which
agency burden-hour estimates reflect real burden is unclear, and so the
significance of small changes in these estimates is also uncertain.
Nonetheless, these estimates are the best indicators of paperwork
burden available, and they can be useful as long as the limitations are
clearly understood.
Among the PRA provisions intended to help achieve the goals of
minimizing burden while maximizing utility is the requirement for CIO
review and certification of information collections. Governmentwide,
agency CIOs generally reviewed information collections before they were
submitted to OMB and certified that the required standards in the act
were met. However, our review of 12 case studies showed that CIOs
provided these certifications despite often missing or inadequate
support from the program offices sponsoring the collections. Further,
although the law requires CIOs to provide support for certifications,
agency files contained little evidence that CIO reviewers had made
efforts to improve the support offered by program offices. Numerous
factors have contributed to these problems, including a lack of
management support and weaknesses in OMB guidance. Because these
reviews were not rigorous, OMB, the agency, and the public have reduced
assurance that the standards in the act--such as avoiding duplication
and minimizing burden--were consistently met.
In contrast, IRS and EPA have used additional evaluative processes that
focus specifically on reducing burden. These processes are targeted,
resource-intensive efforts that involved extensive outreach to
stakeholders. According to these agencies, their processes led to
significant reductions in burden on the public while maximizing the
utility of the information collections.
In our report, we recommended that OMB and the agencies take steps to
improve review processes and compliance with the act. We also suggested
that the Congress may wish to consider mandating pilot projects to
target some collections for rigorous analysis along the lines of the
IRS and EPA approaches. OMB and the agencies agreed with most of the
recommendations, but disagreed with aspects of GAO's characterization
of agencies' compliance with the act's requirements.[Footnote 5]
Background:
Collecting information is one way that federal agencies carry out their
missions. For example, IRS needs to collect information from taxpayers
and their employers to know the correct amount of taxes owed. The U.S.
Census Bureau collects information used to apportion congressional
representation and for many other purposes. When new circumstances or
needs arise, agencies may need to collect new information. We
recognize, therefore, that a large portion of federal paperwork is
necessary and often serves a useful purpose.
Nonetheless, besides ensuring that information collections have public
benefit and utility, federal agencies are required by the PRA to
minimize the paperwork burden that they impose. Among the act's
provisions aimed at this purpose are detailed requirements, included in
the 1995 amendments to the PRA, spelling out how agencies are to review
information collections before submitting them to OMB for approval.
According to these amendments, an agency official independent of those
responsible for the information collections (that is, the program
offices) is to evaluate whether information collections should be
approved. This official is the agency's CIO,[Footnote 6] who is to
review each collection of information to certify that the collection
meets 10 standards (see table 1) and to provide support for these
certifications.
Table 1: Standards for Information Collections Set by the Paperwork
Reduction Act:
Standards:
The collection is necessary for the proper performance of agency
functions.
The collection avoids unnecessary duplication.
The collection reduces burden on the public, including small entities,
to the extent practicable and appropriate.
The collection uses plain, coherent, and unambiguous language that is
understandable to respondents.
The collection will be consistent and compatible with respondents'
current reporting and recordkeeping practices to the maximum extent
practicable.
The collection indicates the retention period for any recordkeeping
requirements for respondents.
The collection informs respondents of the information they need to
exercise scrutiny of agency collections information (the reasons the
information is collected; the way it is used; an estimate of the
burden; whether responses are voluntary, required to obtain a benefit,
or mandatory; and a statement that no person is required to respond
unless a valid OMB control number is displayed).
The collection was developed by an office that has planned and
allocated resources for the efficient and effective management and use
of the information to be collected.
The collection uses effective and efficient statistical survey
methodology (if applicable).
The collection uses information technology to the maximum extent
practicable to reduce burden and improve data quality, agency
efficiency and responsiveness to the public.
Source: Paperwork Reduction Act, Pub. L. 104-13, 109 Stat. 173-4, sec.
3506(c)(3).
[End of table]
In addition, the original PRA of 1980 (section 3514(a)) requires OMB to
keep Congress "fully and currently informed" of the major activities
under the act and to submit a report to Congress at least annually on
those activities. Under the 1995 amendments, this report must include,
among other things, a list of any increases in burden. To satisfy this
requirement, OMB prepares the annual PRA report, which reports on
agency actions during the previous fiscal year, including changes in
agencies' burden-hour estimates.
In addition, the 1995 PRA amendments required OMB to set specific goals
for reducing burden from the level it had reached in 1995: at least a
10 percent reduction in the governmentwide burden-hour estimate for
each of fiscal years 1996 and 1997, a 5 percent governmentwide burden
reduction goal in each of the next 4 fiscal years, and annual agency
goals that reduce burden to the "maximum practicable opportunity." At
the end of fiscal year 1995, federal agencies estimated that their
information collections imposed about 7 billion burden hours on the
public. Thus, for these reduction goals to be met, the burden-hour
estimate would have had to decrease by about 35 percent, to about 4.6
billion hours, by September 30, 2001. In fact, on that date, the
federal paperwork estimate had increased by about 9 percent, to 7.6
billion burden hours.
For the most recent PRA report, the OMB Director sent a bulletin in
September 2004 to the heads of executive departments and agencies
requesting information to be used in preparing its report on actions
during fiscal year 2004. In May 2005, OMB published this report, which
shows changes in agencies' burden-hour estimates during fiscal year
2004.
Reported Paperwork Burden Decreased Slightly in 2004:
According to OMB's most recent PRA report to Congress, the estimated
total burden hours imposed by government information collections in
fiscal year 2004 was 7.971 billion hours; this is a decrease of 128
million burden hours (1.6 percent) from the previous year's total of
about 8.099 billion hours. It is also about a billion hours larger than
in 1995 and 3.4 billion larger than the PRA target for the end of
fiscal year 2001 (4.6 billion burden hours).
The reduction for fiscal year 2004 was a result of several types of
changes, which OMB assigns to various categories. OMB classifies all
changes--either increases or decreases--in agencies' burden-hour
estimates as either "program changes" or "adjustments."
* Program changes are the result of deliberate federal government
action (e.g., the addition or deletion of questions on a form) and can
occur as a result of new statutory requirements, agency-initiated
actions, or the expiration or reinstatement of OMB-approved
collections.[Footnote 7]
* Adjustments do not result from federal burden-reduction activities
but rather are caused by factors such as changes in the population
responding to a requirement or agency reestimates of the burden
associated with a collection of information. For example, if the
economy declines and more people complete applications for food stamps,
the resulting increase in the Department of Agriculture's paperwork
estimate is considered an adjustment because it is not the result of
deliberate federal action.
Table 2 shows the changes in reported burden totals since the fiscal
year 2003 PRA report.
Table 2: Changes in Governmentwide Reported Burden Totals by Category:
In millions.
Baseline: Fiscal year 2003 total hours: 8,098.79.
Fiscal year 2004 program changes: Changes due to agency action;
Change from fiscal year 2003 PRA report total (hours and percentage): -
96.84; (-1.2%).
Fiscal year 2004 program changes: Changes due to new statutes;
Change from fiscal year 2003 PRA report total (hours and percentage):
119.00; (1.5%).
Fiscal year 2004 program changes: Changes due to lapses in OMB
approval;
Change from fiscal year 2003 PRA report total (hours and percentage):
6.39; (0.1%).
Total program changes;
Change from fiscal year 2003 PRA report total (hours and percentage):
28.54; (0.4%).
Fiscal year 2004 adjustments;
Change from fiscal year 2003 PRA report total (hours and percentage): -
156.15; (-1.9%).
Fiscal year 2004 total;
Change from fiscal year 2003 PRA report total (hours and percentage):
7971.18; (-1.6%).
Source: OMB annual PRA reports.
[End of table]
As table 2 shows, the change in the "adjustments" category was the
largest factor in the decrease for fiscal year 2004. These results are
similar to those for fiscal year 2003, in which adjustments of 181.7
million hours led to an overall decrease of 116.3 million hours (1.4
percent) in total burden estimated. The slight decreases that occurred
in fiscal years 2004 and 2003 followed several years of increases, as
shown in table 3. As table 3 also shows, if adjustments are
disregarded, the federal government paperwork burden would have
increased by about 28.5 million burden hours in fiscal year 2004
("total program changes" in table 2).
Table 3: Increases in Burden Hours Due to Program Changes Between
Fiscal Years 1998 and 2004:
In millions.
Fiscal year: 2004;
Total governmentwide burden-hour estimate: 7,971.2;
Net increase in burden hours due to program changes: 28.5.
Fiscal year: 2003;
Total governmentwide burden-hour estimate: 8,105.4;
Net increase in burden hours due to program changes: 72.1.
Fiscal year: 2002;
Total governmentwide burden-hour estimate: 8,223.2;
Net increase in burden hours due to program changes: 294.1.
Fiscal year: 2001;
Total governmentwide burden-hour estimate: 7,651.4;
Net increase in burden hours due to program changes: 158.7.
Fiscal year: 2000;
Total governmentwide burden-hour estimate: 7,361.0;
Net increase in burden hours due to program changes: 188.0.
Fiscal year: 1999;
Total governmentwide burden-hour estimate: 7,183.9;
Net increase in burden hours due to program changes: 189.0.
Fiscal year: 1998;
Total governmentwide burden-hour estimate: 6,951.1;
Net increase in burden hours due to program changes: 41.1.
Source: OMB.
[End of table]
The largest percentage of governmentwide burden can be attributed to
the IRS. In fiscal year 2004, IRS accounted for about 78 percent of
governmentwide burden: about 6210 million hours. No other agency's
estimate approaches this level: As of September 30, 2004, only five
agencies had burden-hour estimates of 100 million hours or more (the
Departments of Health and Human Services, Labor, and Transportation;
EPA; and the Securities and Exchange Commission). Thus, as we have
previously reported, changes in paperwork burden experienced by the
federal government have been largely attributable to changes associated
with IRS[Footnote 8].
However, in interpreting these figures, it is important to keep in mind
their limitations. First, as estimates, they are not precise; changes
from year to year, particularly small ones, may not be meaningful.
Second, burden-hour estimates are not a simple matter. The "burden
hour" has been the principal unit of paperwork burden for more than 50
years and has been accepted by agencies and the public because it is a
clear, easy-to-understand concept. However, it is challenging to
estimate the amount of time it will take for a respondent to collect
and provide the information or how many individuals an information
collection will affect.[Footnote 9] Therefore, the degree to which
agency burden-hour estimates reflect real burden is unclear. (IRS is
sufficiently concerned about the methodology it uses to develop burden
estimates that it is in the process of developing and testing
alternative means of measuring paperwork burden.) Because of these
limitations, the degree to which agency burden-hour estimates reflect
real burden is unclear, and so the significance of small changes in
these estimates is also uncertain. Nonetheless, these estimates are the
best indicators of paperwork burden available, and they can be useful
as long as the limitations are clearly understood.
Agency Review Processes Were Not Rigorous:
Among the PRA provisions intended to help achieve the goals of
minimizing burden while maximizing utility are the requirements for CIO
review and certification of information collections. The 1995
amendments required agencies to establish centralized processes for
reviewing proposed information collections within the CIO's office.
Among other things, the CIO's office is to certify, for each
collection, that the 10 standards in the act have been met, and the CIO
is to provide a record supporting these certifications.
The four agencies in our review all had written directives that
implemented the review requirements in the act, including the
requirement for CIOs to certify that the 10 standards in the act were
met. The estimated certification rate ranged from 100 percent at IRS
and HUD to 92 percent at VA. Governmentwide, agencies certified that
the act's 10 standards had been met on an estimated 98 percent of the
8,211 collections.
However, in the 12 case studies that we reviewed, this CIO
certification occurred despite a lack of rigorous support that all
standards were met. Specifically, the support for certification was
missing or partial on 65 percent (66 of 101) of the
certifications.[Footnote 10] Table 4 shows the result of our analysis
of the case studies.
Table 4: Support Provided by Agencies for Paperwork Reduction Act
Standards in 12 Case Studies:
Standard: The collection is necessary for the proper performance of
agency functions;
Total[A]: 12;
Support provided: Yes: 6;
Support provided: Partial: 6;
Support provided: No: 0.
Standard: The collection avoids unnecessary duplication;
Total[A]: 11;
Support provided: Yes: 2;
Support provided: Partial: 2;
Support provided: No: 7.
Standard: The collection reduces burden on the public, including small
entities, to the extent practicable and appropriate;
Total[A]: 12;
Support provided: Yes: 5;
Support provided: Partial: 7;
Support provided: No: 0.
Standard: The collection uses plain, coherent, and unambiguous language
that is understandable to respondents;
Total[A]: 12;
Support provided: Yes: 1;
Support provided: Partial: 0;
Support provided: No: 11.
Standard: The collection will be consistent and compatible with
respondents' current reporting and recordkeeping practices to the
maximum extent practicable;
Total[A]: 12;
Support provided: Yes: 3;
Support provided: Partial: 0;
Support provided: No: 9.
Standard: The collection indicates the retention period for any
recordkeeping requirements for respondents.[B];
Total[A]: 6;
Support provided: Yes: 3;
Support provided: Partial: 3;
Support provided: No: 0.
Standard: The collection informs respondents of the information they
need to exercise scrutiny of agency collections (i.e., the reasons the
information is collected; the way it is used; an estimate of the
burden; whether responses are voluntary, required to obtain a benefit,
or mandatory; and a statement that no person is required to respond
unless a valid OMB control number is displayed)[B];
Total[A]: 12;
Support provided: Yes: 4;
Support provided: Partial: 8;
Support provided: No: 0.
Standard: The collection was developed by an office that has planned
and allocated resources for the efficient and effective management and
use of the information to be collected;
Total[A]: 11;
Support provided: Yes: 2;
Support provided: Partial: 0;
Support provided: No: 9.
Standard: The collection uses effective and efficient statistical
survey methodology (if applicable);
Total[A]: 1;
Support provided: Yes: 1;
Support provided: Partial: 0;
Support provided: No: 0.
Standard: The collection uses information technology to the maximum
extent practicable to reduce burden and improve data quality, agency
efficiency, and responsiveness to the public;
Total[A]: 12;
Support provided: Yes: 8;
Support provided: Partial: 4;
Support provided: No: 0.
Totals;
Total[A]: 101;
Support provided: Yes: 35;
Support provided: Partial: 30;
Support provided: No: 36.
Sources: Paperwork Reduction Act, GAO.
[A] The total number of certifications is not always 12 because not all
certifications applied to all collections.
[B] For these two standards, the presence on the forms of the
information indicated was categorized as support, the absence of some
elements was categorized as partial support, and the absence of all
elements was categorized as no support.
[End of table]
For example, under the act, CIOs are required to certify that each
information collection is not unnecessarily duplicative. According to
OMB instructions, agencies are to (1) describe efforts to identify
duplication and (2) show specifically why any similar information
already available cannot be used or modified for the purpose described.
In 2 of 11 cases, agencies provided the description requested; for
example:
Program reviews were conducted to identify potential areas of
duplication; however, none were found to exist. There is no known
Department or Agency which maintains the necessary information, nor is
it available from other sources within our Department.
In an additional 2 cases, partial support was provided. An example is
the following, provided by Labor:
[The Employer Assistance Referral Network (EARN)] is a new, nationwide
service that does not duplicate any single existing service that
attempts to match employers with providers who refer job candidates
with disabilities. While similar job-referral services exist at the
state level, and some nation-wide disability organizations offer
similar services to people with certain disabilities, we are not aware
of any existing survey that would duplicate the scope or content of the
proposed data collection. Furthermore, because this information
collection involves only providers and employers interested in
participating in the EARN service, and because this is a new service, a
duplicate data set does not exist.
While this example shows that the agency attempted to identify
duplicative sources, it does not discuss why information from state and
other disability organizations could not be aggregated and used, at
least in part, to satisfy the needs of this collection.
In 7 cases, moreover, support for these certifications was missing. An
example is the following statement, used on all three IRS collections:
We have attempted to eliminate duplication within the agency wherever
possible.
This assertion provides no information on what efforts were made to
identify duplication or perspective on why similar information, if any,
could not be used. Further, the files contained no evidence that the
CIO reviewers challenged the adequacy of this support or provided
support of their own to justify their certification.
A second example is provided by the standard requiring each information
collection to reduce burden on the public, including small
entities,[Footnote 11] to the extent practicable and appropriate. OMB
guidance emphasizes that agencies are to demonstrate that they have
taken every reasonable step to ensure that the collection of
information is the least burdensome necessary for the proper
performance of agency functions. In addition, OMB instructions and
guidance direct agencies to provide specific information and
justifications: (1) estimates of the hour and cost burden of the
collections and (2) justifications for any collection that requires
respondents to report more often than quarterly, respond in fewer than
30 days, or provide more than an original and two copies of
documentation.
With regard to small entities, OMB guidance states that the standard
emphasizes such entities because these often have limited resources to
comply with information collections.[Footnote 12] The act cites various
techniques for reducing burden on these small entities,[Footnote 13]
and the guidance includes techniques that might be used to simplify
requirements for small entities, such as asking fewer questions, taking
smaller samples than for larger entities, and requiring small entities
to provide information less frequently.
Our review of the case examples found that for the first part of the
certification, which focuses on reducing burden on the public, the
files generally contained the specific information and justifications
called for in the guidance. However, none of the case examples
contained support that addressed how the agency ensured that the
collection was the least burdensome necessary. According to agency CIO
officials, the primary cause for this absence of support is that OMB
instructions and guidance do not direct agencies to provide this
information explicitly as part of the approval package.
For the part of the certification that focuses on small businesses, our
governmentwide sample included examples of various agency activities
that are consistent with this standard. For instance, Labor officials
exempted 6 million small businesses from filing an annual report;
telephoned small businesses and other small entities to assist them in
completing a questionnaire; reduced the number of small businesses
surveyed; and scheduled fewer compliance evaluations on small
contractors.
For four of our case studies, however, complete information that would
support certification of this part of the standard was not available.
Seven of the 12 case studies involved collections that were reported to
impact businesses or other for-profit entities, but for 4 of the 7, the
files did not explain either:
* why small businesses were not affected or:
* even though such businesses were affected, that burden could or could
not be reduced.
Referring to methods used to minimize burden on small business, the
files included statements such as "not applicable." These statements do
not inform the reviewer whether there was an effort made to reduce
burden on small entities or not. When we asked agencies about these
four cases, they indicated that the collections did, in fact, affect
small business.
OMB's instructions to agencies on this part of the certification
require agencies to describe any methods used to reduce burden only if
the collection of information has a "significant economic impact on a
substantial number of small entities." This does not appropriately
reflect the act's requirements concerning small business: the act
requires that the CIO certify that the information collection reduces
burden on small entities in general, to the extent practical and
appropriate, and provides no thresholds for the level of economic
impact or the number of small entities affected. OMB officials
acknowledged that their instruction is an "artifact" from a previous
form and more properly focuses on rulemaking rather than the
information collection process.
The lack of support for these certifications appears to be influenced
by a variety of factors. In some cases, as described above, OMB
guidance and instructions are not comprehensive or entirely accurate.
In the case of the duplication standard specifically, IRS officials
said that the agency does not need to further justify that its
collections are not duplicative because (1) tax data are not collected
by other agencies so there is no need for the agency to contact them
about proposed collections and (2) IRS has an effective internal
process for coordinating proposed forms among the agency's various
organizations that may have similar information. Nonetheless, the law
and instructions require support for these assertions, which was not
provided.
In addition, agency reviewers told us that management assigns a
relatively low priority and few resources to reviewing information
collections. Further, program offices have little knowledge of and
appreciation for the requirements of the PRA. As a result of these
conditions and a lack of detailed program knowledge, reviewers often
have insufficient leverage with program offices to encourage them to
improve their justifications.
When support for the PRA certifications is missing or inadequate, OMB,
the agency, and the public have reduced assurance that the standards in
the act, such as those on avoiding duplication and minimizing burden,
have been consistently met.
Two Agencies Have Developed Processes to Reduce Burden Associated with
Information Collections:
IRS and EPA have supplemented the standard PRA review process with
additional processes aimed at reducing burden while maximizing utility.
These agencies' missions require them both to deal extensively with
information collections, and their management has made reduction of
burden a priority.[Footnote 14]
In January 2002, the IRS Commissioner established an Office of Taxpayer
Burden Reduction, which includes both permanently assigned staff and
staff temporarily detailed from program offices that are responsible
for particular information collections. This office chooses a few forms
each year that are judged to have the greatest potential for burden
reduction (these forms have already been reviewed and approved through
the CIO process). The office evaluates and prioritizes burden reduction
initiatives by:
* determining the number of taxpayers impacted;
* quantifying the total time and out-of-pocket savings for taxpayers;
* evaluating any adverse impact on IRS's voluntary compliance efforts;
* assessing the feasibility of the initiative, given IRS resource
limitations; and:
* tying the initiative into IRS objectives.
Once the forms are chosen, the office performs highly detailed, in-
depth analyses, including extensive outreach to the public affected,
the users of the information within and outside the agency, and other
stakeholders. This analysis includes an examination of the need for
each data element requested. In addition, the office thoroughly reviews
form design.[Footnote 15]
The office's Director[Footnote 16] heads a Taxpayer Burden Reduction
Council, which serves as a forum for achieving taxpayer burden
reduction throughout IRS. IRS reports that as many as 100 staff across
IRS and other agencies can be involved in burden reduction initiatives,
including other federal agencies, state agencies, tax practitioner
groups, taxpayer advocacy panels, and groups representing the small
business community.
The council directs its efforts in five major areas:
* simplifying forms and publications;
* streamlining internal policies, processes, and procedures;
* promoting consideration of burden reductions in rulings, regulations,
and laws;
* assisting in the development of burden reduction measurement
methodology; and:
* partnering with internal and external stakeholders to identify areas
of potential burden reduction.
IRS reports that this targeted, resource-intensive process has achieved
significant reductions in burden: over 200 million burden hours since
2002. For example, it reports that about 95 million hours of taxpayer
burden were reduced through increases in the income-reporting threshold
on various IRS schedules.[Footnote 17] Another burden reduction
initiative includes a review of the forms that 15 million taxpayers use
to request an extension to the date for filing their tax
returns.[Footnote 18]
Similarly, EPA officials stated that they have established processes
for reviewing information collections that supplement the standard PRA
review process. These processes are highly detailed and evaluative,
with a focus on burden reduction, avoiding duplication, and ensuring
compliance with PRA. According to EPA officials, the impetus for
establishing these processes was the high visibility of the agency's
information collections and the recognition, among other things, that
the success of EPA's enforcement mission depended on information
collections being properly justified and approved: in the words of one
official, information collections are the "life blood" of the agency.
According to these officials, the CIO staff are not generally closely
involved in burden reduction initiatives, because they do not have
sufficient technical program expertise and cannot devote the extensive
time required.[Footnote 19] Instead, these officials said that the CIO
staff's focus is on fostering high awareness within the agency of the
requirements associated with information collections, educating and
training the program office staff on the need to minimize burden and
the impact on respondents, providing an agencywide perspective on
information collections to help avoid duplication, managing the
clearance process for agency information collections, and acting as
liaison between program offices and OMB during the clearance process.
To help program offices consider PRA requirements such as burden
reduction and avoiding duplication as they are developing new
information collections or working on reauthorizing existing
collections, the CIO staff also developed a handbook[Footnote 20] to
help program staff understand what they need to do to comply with PRA
and gain OMB approval.
In addition, program offices at EPA have taken on burden reduction
initiatives that are highly detailed and lengthy (sometimes lasting
years) and that involve extensive consultation with stakeholders
(including entities that supply the information, citizens groups,
information users and technical experts in the agency and elsewhere,
and state and local governments). For example, EPA reports that it
amended its regulations to reduce the paperwork burden imposed under
the Resource Conservation and Recovery Act. One burden reduction method
EPA used was to establish higher thresholds for small businesses to
report information required under the act. EPA estimates that the
initiative will reduce burden by 350,000 hours and save $22 million
annually. Another EPA program office reports that it is proposing a
significant reduction in burden for its Toxic Release Inventory
program.[Footnote 21]
Overall, EPA and IRS reported that they produced significant reductions
in burden by making a commitment to this goal and dedicating resources
to it. In contrast, for the 12 information collections we examined, the
CIO review process resulted in no reduction in burden. Further, the
Department of Labor reported that its PRA reviews of 175 proposed
collections over nearly 2 years did not reduce burden.[Footnote 22]
Similarly, both IRS and EPA addressed information collections that had
undergone CIO review and received OMB approval and nonetheless found
significant opportunities to reduce burden.
In summary, government agencies often need to collect information to
perform their missions. The PRA puts in place mechanisms to focus
agency attention on the need to minimize the burden that these
information collections impose--while maximizing the public benefit and
utility of government information collections--but these mechanisms
have not succeeded in achieving the ambitious reduction goals set forth
in the 1995 amendments. Achieving real reductions in the paperwork
burden is an elusive goal, as years of PRA reports attest.
Among the mechanisms to fulfill the PRA's goals is the CIO review
required by the act. However, as this process is currently implemented,
it has limited effect on the quality of support provided for
information collections. CIO reviews appear to be lacking the rigor
that the Congress envisioned. Many factors have contributed to these
conditions, including lack of management support, weaknesses in OMB
guidance, and the CIO staff's lack of specific program expertise. As a
result, OMB, federal agencies, and the public have reduced assurance
that government information collections are necessary and that they
appropriately balance the resulting burden with the benefits of using
the information collected.
The targeted approaches to burden reduction used by IRS and EPA suggest
promising alternatives to the current process outlined in the PRA.
However, the agencies' experience also suggests that to make such an
approach successful requires top-level executive commitment, extensive
involvement of program office staff with appropriate expertise, and
aggressive outreach to stakeholders. Indications are that such an
approach would also be more resource-intensive than the current
process. Moreover, such an approach may not be warranted at all
agencies that do not have the level of paperwork issues that face IRS
and similar agencies. Consequently, it is critical that any efforts to
expand the use of the IRS and EPA models consider these factors.
In our report, we suggested options that the Congress may want to
consider in its deliberations on reauthorizing the act, including
mandating pilot projects to test and review alternative approaches to
achieving PRA goals. We also made recommendations to the Director of
OMB, including that the office alter its current guidance to clarify
and emphasize issues raised in our review, and to the heads of the four
agencies to improve agency compliance with the act's provisions.
Madam Chairman, this completes my prepared statement. I would be
pleased to answer any questions.
Contacts and Acknowledgments:
For future information regarding this testimony, please contact Linda
Koontz, Director, Information Management, at (202) 512-6420, or
koontzl@gao.gov. Other individuals who made key contributions to this
testimony were Barbara Collier, Alan Stapleton, Warren Smith, and
Elizabeth Zhao.
FOOTNOTES
[1] The Paperwork Reduction Act was originally enacted into law in 1980
(Pub. L. 96-511, Dec. 11, 1980). It was reauthorized with minor
amendments in 1986 (Pub. L. 99-591, Oct. 30, 1986) and was reauthorized
a second time with more significant amendments in 1995 (Pub. L. 104-13,
May 22, 1995).
[2] GAO, Paperwork Reduction Act: New Approach May Be Need to Reduce
Government Burden on Public, GAO-05-424 (Washington, D.C.: May 20,
2005).
[3] Although IRS accounted for about 80 percent of burden, it did not
account for 80 percent of collections: it accounted for 808 out of the
total 8,211 collections governmentwide as of May 2004.
[4] That is, an agency may change its method for estimating the burden
associated with a collection of information, or new information or
circumstances may lead to a changed estimate of the number of
respondents (the people or entities that can or must respond to an
information collection).
[5] For example, OMB, the Treasury, Labor, and HUD disagreed with our
position that the PRA requires agencies both to publish a Federal
Register notice and to otherwise consult with public. Our position,
however, is that the PRA's language is unambiguous: agencies shall
"provide 60-day notice in the Federal Register, and otherwise consult
with members of the public and affected agencies concerning each
proposed collection…" Pub. L. 104-13, 109 Stat. 173, 44 U.S.C.
3506(c)(2).
[6] The 1995 amendments used the 1980 act's reference to the agency
"senior official" responsible for implementation of the act. A year
later, Congress gave that official the title of agency Chief
Information Officer (the Information Technology Management Reform Act,
Pub. L. 104-106, Feb. 10, 1996, which was subsequently renamed the
Clinger-Cohen Act, Pub. L. 104-208, Sept. 30, 1996).
[7] When an agency allows OMB approval of a collection to lapse but
continues to collect the information, this is a violation of the PRA.
However, the expired collection is accounted for as a decrease in
burden. When the approval is reinstated, the reinstatement is accounted
for as an increase in burden in OMB's accounting system. The lapse and
reinstatement thus generally cancel each other out, unless the
reinstatement involves changed burden estimates based on new analysis.
[8] GAO, Paperwork Reduction Act: Agencies' Paperwork Burden Estimates
Due to Federal Actions Continue to Increase, GAO-04-676T (Washington,
D.C.: Apr. 20, 2004).
[9] See GAO, EPA Paperwork: Burden Estimate Increasing Despite
Reduction Claims, GAO/GGD-00-59 (Washington, D.C.: Mar. 16, 2000), for
how one agency estimates paperwork burden.
[10] The total number of certifications does not total 120 (12 cases
times 10 standards) because some standards did not apply to some cases.
[11] OMB's instructions to agencies state that a small entity may be
(1) a small business, which is deemed to be one that is independently
owned and operated and that is not dominant in its field of operation;
(2) a small organization, which is any not-for-profit enterprise that
is independently owned and operated and is not dominant in its field;
or (3) a small government jurisdiction, which is a government of a
city, county, town, township, school district, or special district with
a population of less than 50,000.
[12] Particularly for small businesses, paperwork burdens can force the
redirection of resources away from business activities that might
otherwise lead to new and better products and services, and to more and
better jobs. Accordingly, the Federal Government owes the public an
ongoing commitment to scrutinize its information requirements to ensure
the imposition of only those necessary for the proper performance of an
agency's functions. H. Report 104-37 (Feb. 15, 1995) p. 23.
[13] These include (a) establishing different compliance or reporting
requirements or timetables for respondents with fewer available
resources; (b) clarifying, consolidating, or simplifying compliance and
reporting requirements; and (c) exempting certain respondents from
coverage of all or part of the collection.
[14] "IRS is committed to reducing taxpayer burden and established the
Office of Taxpayer Burden Reduction (OTBR) in January 2002 to lead its
efforts." Congressional testimony by the IRS Commissioner, April 20,
2004, before the Subcommittee on Energy Policy, Natural Resources, and
Regulatory Affairs, House Committee on Government Reform.
[15] In congressional testimony, the IRS Commissioner stated that OMB
had referred another agency to IRS's Office of Taxpayer Burden
Reduction as an example of a "best practice" in burden reduction in
government.
[16] The Director reports to the IRS Commissioner for the Small
Business and Self-Employed Division.
[17] In addition, the office reports that IRS staff positions could be
freed up through its efforts to raise the reporting threshold on
various tax forms and schedules. Fewer IRS positions are needed when
there are fewer tax forms and schedules to be reviewed.
[18] We did not verify the accuracy of IRS's reported burden-hour
savings. We have previously reported that the estimation model that IRS
uses for compliance burden ignores important components of burden and
has limited capabilities for analyzing the determinants of burden. See
GAO, Tax Administration: IRS Is Working to Improve Its Estimates of
Compliance Burden, GAO/GGD-00-11 (Washington, D.C.: May 22, 2000).
Moreover, IRS has an effort under way to revise the methodology used to
compute burden. That new methodology, when completed, may result in
different estimates of reduced burden hours.
[19] These officials added that in exceptional circumstances the CIO
office has had staff available to perform such projects, but generally
in collaboration with program offices.
[20] EPA Office of Environmental Information, Collection Strategies
Division, ICR Handbook: EPA's Guide to Writing Information Collection
Requests Under the Paperwork Reduction Act of 1995, draft (revised
March 2005).
[21] We did not verify the accuracy of EPA's burden reduction
estimates.
[22] These reviews did result in a 1.3 percent reduction in calculated
burden by correcting mathematical errors in program offices'
submissions.