2010 Census:

Census Bureau Should Take Action to Improve the Credibility and Accuracy of Its Cost Estimate for the Decennial Census

GAO-08-554: Published: Jun 16, 2008. Publicly Released: Jul 16, 2008.

Additional Materials:

Contact:

Robert N. Goldenkoff
(202) 512-3000
GoldenkoffR@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

The 2010 Census will be the most expensive census in our nation's history, even after adjusting for inflation. The Census Bureau (Bureau) estimates that the life cycle cost of the 2010 Census will be from $13.7 billion to $14.5 billion. GAO was asked to (1) assess the extent to which the Bureau's 2010 Census life cycle cost estimate adheres to characteristics defined for high-quality cost estimation, (2) report on the relationship between the estimate and the Bureau's budget, and (3) assess whether the Bureau's existing policies and resources are sufficient to conduct cost estimation. To assess the reliability of the Bureau's cost estimate, GAO analyzed the Bureau's methods and approaches to determine if the estimate is well-documented, comprehensive, accurate, and credible.

The Bureau's 2010 Census life cycle cost estimate is not reliable because it lacks adequate documentation and is not comprehensive, accurate, or credible. The Bureau could not provide detailed documentation on data sources, significant assumptions, or changes in assumptions for the cost estimate. The cost estimate is not comprehensive because the Bureau did not include the potential cost to fingerprint temporary workers or clearly define some of the cost elements in the model. The cost estimate is not accurate because it does not reflect updated information on address canvassing productivity that was identified during the dress rehearsal and that should result in a significant cost increase. Further, the Bureau does not maintain historical data in a centralized way that is easily accessible for analysis. The cost estimate is not credible because the Bureau did not perform sensitivity or uncertainty analyses, which would have helped quantify the risk and uncertainty associated with the cost model and provided a level of confidence for the estimate. The Bureau also did not validate the estimate with an independent cost estimate. The Bureau uses the life cycle cost estimate as the starting point for annual budget formulation and revises the life cycle cost estimate based on appropriations received and updated budget information. However, the Bureau does not update the cost estimate to reflect actual costs. Further, because the life cycle cost estimate is not reliable, annual budget requests based on that estimate are not fully informed. The Bureau has insufficient policies and procedures and inadequately trained staff for conducting high-quality cost estimation for the decennial census. The Bureau does not have established cost estimation guidance and procedures in place or staff certified in cost estimation techniques. While the Bureau is developing a new budget management tool called the Decennial Budget Integration Tool, which will support the cost estimation process, the Bureau will need to establish rigorous cost estimation policies and procedures and use skilled estimators to ensure that future cost estimates are reliable and of high quality. On April 3, 2008, the Secretary of Commerce announced a redesign of the 2010 Census plan that included significant cost increases of $2.2 billion to $3 billion. The details of this cost increase were not available at the time of this review; however, until the Bureau makes fundamental changes to its cost estimation process, uncertainties about the ultimate cost of the 2010 Census will remain. Without improvements to the cost estimation process, the Bureau's ability to effectively manage operations will be hampered and Congress's ability to oversee the 2010 Census will be constrained.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: Non-response follow-up is the largest and most costly field operation. In December 2009 the Bureau wanted to determine whether the current budget of $2.74 billion was sufficient to carryout the operation. The Bureau implemented our recommendation when it performed workload and productivity sensitivity analysis and determined that $2.33 billion was a reasonable amount for NRFU, a reduction of almost $400 million. In addition, for the 2020 Census the Bureau told us it planned to purchase commercial software that will perform sensitivity and uncertainty analyses using data from the Decennial Budget Integration Tool (DBIT) system.

    Recommendation: To improve the Bureau's life cycle cost estimates for the decennial census, and to improve the quality of and provide a confidence level for the 2010 Census life cycle cost estimate, the Secretary of Commerce should direct the U.S. Census Bureau to perform sensitivity and uncertainty analyses on the estimate.

    Agency Affected: Department of Commerce

  2. Status: Closed - Implemented

    Comments: In 2008, we reported that the 2010 Census life cycle estimate was not current because it did not reflect actual costs. For the 2020 Census the Bureau has taken action to ensure the estimate is current. For example, for 2020 the Bureau intends to follow best practices, and will continually mature Census 2020 cost estimation methods in terms of detail and reliability throughout the decade based on the results of 2020 research, and as the scope and requirements for the 2020 Census unfold. As a first step, the Bureau produced a baseline 2020 rough order of magnitude cost estimate that in part was based on 2010 cost data. In addition, the new decennial budget integration tool has functionality that will also allow the Bureau to report cost variances and determine the factors that led to those differences.

    Recommendation: To improve the Bureau's life cycle cost estimates for the decennial census, and keep the life cycle cost estimate current and to document lessons learned for cost elements whose actual costs differ from the estimate, the Secretary of Commerce should direct the U.S. Census Bureau to update the estimate to reflect actual costs.

    Agency Affected: Department of Commerce

  3. Status: Closed - Implemented

    Comments: Best practices for an accurate cost estimate require that assumptions be updated when costs change as new information becomes available. In our June 2008 report on the Census Bureau's 2010 Census life cycle cost estimate, we found that estimated costs had been understated for the address canvassing operation. Subsequently, in October 2009 we testified that address canvassing in 2009 ran 25 percent or $88 million over its initial budget of $356 million. Given the Bureau's past difficulties with accurate cost estimates, we were concerned about the reliability of the $2.7 billion cost estimate for non-response follow-up, the Bureau's largest field operation, when census workers go door to door in an effort to collect data from households that did not return their census form. Following our October 2009 testimony the Bureau took action and re-examined assumptions and other data used to support the cost estimate for nonresponse follow-up. For example, the Bureau reviewed field work assumptions (such as miles driven per case, pay rates, hours worked per week, and attrition) which the Bureau updated based on actual Census 2000 data, national and field tests, and address canvassing results. In February 2010, the Bureau re-estimated that it would cost approximately $2.3 billion to conduct nonresponse follow-up.

    Recommendation: To improve the Bureau's life cycle cost estimates for the decennial census, and ensure that the life cycle cost estimate reflects current information, the Secretary of Commerce should direct the U.S. Census Bureau to update assumptions as appropriate, including updating productivity assumptions to reflect results from the address canvassing dress rehearsal. The Bureau should also document the basis for prior and future changes made to assumptions used in the life cycle cost estimate.

    Agency Affected: Department of Commerce

  4. Status: Open

    Comments: According to the Bureau, it will maintain "baselined" information from the 2010 Census, including assumptions, sources of data, methods of calculation and detailed estimates at the project level for all operations, systems, and contracts, in a standardized format, which it will use for all future year budget formulation efforts and which will be available for analysis in planning the 2020 Census. The Bureau stated that it plans to transition to the Decennial Budget Integration Tool (DBIT) system to store information on assumptions, data sources, and changes over time. As of 12/12/13 the Bureau has loaded financial and some other cost information into DBIT, but not all of the detailed information as recommended.

    Recommendation: To improve the Bureau's life cycle cost estimates for the decennial census, improve the quality and transparency of the Bureau's 2010 Census life cycle cost estimate, assist the Bureau in managing costs during design revisions resulting from problems with the handheld computers, and help establish a sound basis for the 2020 Census cost estimate, the Secretary of Commerce should direct the U.S. Census Bureau to thoroughly document the 2010 Census life cycle cost estimate. Specifically, documentation should be maintained in a centralized standard format and specify all data sources, assumptions, calculation methods, and cost elements used to prepare the 2010 cost estimate.

    Agency Affected: Department of Commerce

  5. Status: Closed - Implemented

    Comments: In 2008 we recommended that the U.S. Census Bureau (Bureau) ensure it have staff resources qualified in cost estimation and that it establish policies, procedures, and guidance for cost estimation. The Bureau agreed and completed a skill gap analysis using GAO's Cost Estimation Guide in January 2009, that was followed by the development of a comprehensive training plan in April 2009. Further the Bureau plans to establish internal guidance for cost estimating.

    Recommendation: To improve the Bureau's life cycle cost estimates for the decennial census, and to help ensure that the Bureau produces a reliable, high-quality life cycle cost estimate for the 2020 decennial census, the Secretary of COmmerce should direct the U.S. Census Bureau to establish guidance, policies, and procedures for conducting cost estimation that would meet best practices criteria and ensure that it has staff resources qualified in cost estimation.

    Agency Affected: Department of Commerce

 

Explore the full database of GAO's Open Recommendations »

Dec 22, 2014

Dec 18, 2014

Dec 17, 2014

  • government icon, source: Eyewire

    State and Local Governments' Fiscal Outlook:

    2014 Update
    GAO-15-224SP: Published: Dec 17, 2014. Publicly Released: Dec 17, 2014.

Dec 3, 2014

Nov 14, 2014

Nov 13, 2014

Nov 12, 2014

Oct 31, 2014

Oct 30, 2014

Oct 27, 2014

Looking for more? Browse all our products here