Federal Rulemaking:

Improvements Needed to Monitoring and Evaluation of Rules Development as Well as to the Transparency of OMB Regulatory Reviews

GAO-09-205: Published: Apr 20, 2009. Publicly Released: May 8, 2009.

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Regulation is one of the principal tools that the government uses to implement public policy. As part of the rulemaking process federal agencies must comply with an increasing number of procedural and analytical requirements. GAO was asked to examine how broadly applicable rulemaking requirements cumulatively have affected (1) agencies' rulemaking processes, in particular including effects of requirements added to the process since 2003, and (2) transparency of the Office of Information and Regulatory Affairs (OIRA) regulatory review process. To address these objectives, GAO reviewed selected rules issued between January 2006 and May 2008 and associated dockets and also interviewed knowledgeable agency and OIRA officials.

The agencies GAO reviewed had little data on the time and resources used to comply with regulatory requirements making it difficult to evaluate the effects of these requirements on rulemaking. All the agencies set milestones for regulatory development. During our review, only the Department of Transportation (DOT) provided data showing that it tracked and reported on milestones, but EPA and FDA provided similar information in their agency comments. The agencies GAO reviewed also could provide little systematic data on the resources they used--such as staff hours, contract costs, and other expenses--in developing rules. DOT and SEC have attempted to identify staff time expended on individual rules but are encountering difficulties generating usable and reliable data. Despite the challenges they have encountered in attempting to track time and resources in rulemaking, agency officials identified potential benefits to the management of their processes if they had such information to evaluate. Systematic tracking and reporting by agencies on their schedules and milestones would also be consistent with internal control standards. Our review of 139 major rules including 16 case-study rules revealed that most triggered analytical requirements under the Paperwork Reduction Act (PRA), Regulatory Flexibility Act (RFA), and Executive Order 12866, but few other requirements. Agency officials reported that requirements added to the rulemaking process by the Office of Management and Budget (OMB) since 2003 sometimes required a learning period when first implemented, but their agencies either already performed the added requirements or recognized the revisions as best practices. The officials instead identified long-standing requirements of the PRA and the RFA as generally requiring a more significant investment of resources. Based on the limited information available, the average time needed to complete a rulemaking across our 16 case-study rules was about 4 years, with a range from about 1 year to nearly 14 years, but there was considerable variation among agencies and rules. OIRA's reviews of agencies' draft rules often resulted in changes. Of 12 case-study rules subject to OIRA review, 10 resulted in changes, about half of which included changes to the regulatory text. Agencies used various methods to document OIRA's reviews, which generally met disclosure requirements, but the transparency of this documentation could be improved. In particular, some prior issues persist, such as uneven attribution of changes made during the OIRA review period and differing interpretations regarding which changes are "substantive" and thus require documentation. Out of eight prior GAO recommendations to improve the transparency OIRA has implemented only one--to clarify information posted about meetings with outside parties regarding draft rules under OIRA review.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: FDA stated that it maintains a database, the Federal Register Document Tracking System (FRDTS), to track the progress of all its Federal Register documents through the latter stages of the agency's development and clearance process. For potentially significant regulations, the agency not only uses the FRDTS but also develops work plans, and holds quarterly planning meetings with all parties involved in the regulations process, to keep abreast of progress, problems and possible delays. In addition, FDA noted that the agency reports internally when major milestones are reached. The agency instituted a Policy Council which is comprised of all senior agency officials involved in the regulations development process. The Policy Council meets once a month to discuss priorities, resources, and other issues that impact the agency's regulatory development process. The Policy Council meetings provide the opportunity to report to FDA senior management on the progress of meeting major milestones. FDA also communicates on a weekly phone call with senior officials at HHS to help keep priority documents on track for timely clearance within HHS and also at OMB. Over the past 3 years, FDA also has reported progress on a major enhancement of the FRDTS. Enhancement goals include the ability to track regulatory development more closely, more efficiently, and earlier in the process. In an August 9, 2013, update on the status of this recommendation, FDA reported that it is continuing to work on major enhancements to FRDTS, including a new ability to upload documents, single sign on, and tracking of clearances and milestones. All of these are not currently possible in FRDTS.

    Recommendation: To improve the monitoring and evaluation of rules development and the transparency of the review process, and to be consistent with internal controls for information in managing agency operations, for significant rules, the Commissioner of FDA and the Chairman of SEC should routinely track major milestones in regulatory development and report internally and externally when major milestones are reached against established targets.

    Agency Affected: Department of Health and Human Services: Public Health Service: Food and Drug Administration

  2. Status: Closed - Implemented

    Comments: In September 2010, SEC reported that the agency had taken corrective actions in response to this recommendation and now routinely tracks and provides internal reports on major milestones in regulatory development. In particular, SEC established a master rulemaking calendar in December 2009. Information on the master calendar is regularly shared internally to ensure milestones are met. The Chairman also assigned the Deputy Chief of Staff with the responsibility of tracking and calendaring rulemaking projects from the time that a concept for a rulemaking is developed through adoption. With respect to external reporting, SEC noted that the agency updates the public about rulemaking plans and decisions to revise them through the semi-annual Regulatory Flexibility Act agenda and that SEC modified the process for updating this agenda in September 2009.

    Recommendation: To improve the monitoring and evaluation of rules development and the transparency of the review process, and to be consistent with internal controls for information in managing agency operations, for significant rules, the Commissioner of FDA and the Chairman of SEC should routinely track major milestones in regulatory development and report internally and externally when major milestones are reached against established targets.

    Agency Affected: United States Securities and Exchange Commission

  3. Status: Closed - Implemented

    Comments: In September 2010, SEC reported that the agency had taken corrective actions in response to this recommendation. Specifically, SEC identified a process using the rulemaking tracking system that SEC established in December 2009 in response to our recommendations. SEC reported that this tracking system and process permits SEC to timely identify instances when the actual milestones are different from the targeted milestones, in order to permit analysis of the reasons and to facilitate discussions involving the responsible offices and senior agency management. In addition, regarding Dodd-Frank Act rulemakings, key agency leadership staff meet regularly to ensure that the development of that law's statutorily-mandated rulemakings are meeting all major milestones. With respect to external reporting, SEC updates the public about adjustments to the previously-established rulemaking calendar through the agency's semi-annual Regulatory Flexibility Act agenda. According to SEC, per a September 2009 update of that process, the agency closed out all obsolete projects that are no longer on the agenda so the published agenda accurately reflects the projects that are active and underway.

    Recommendation: To improve the monitoring and evaluation of rules development and the transparency of the review process, and to be consistent with internal controls for information in managing agency operations, the Administrator of EPA, the Commissioner of FDA, and the Chairman of SEC should each evaluate actual performance versus the targeted milestones and when they are different determine why.

    Agency Affected: United States Securities and Exchange Commission

  4. Status: Closed - Implemented

    Comments: On August 9, 2013, EPA provided an update on the status of this recommendation. As of August 2011 EPA made public in its current form the Regulatory Development and Retrospective Review Tracker (Reg DaRRT) website which includes a wide variety of information on planned, proposed, and ongoing regulatory activities. (According to the website, a priority rulemaking first appears on Reg DaRRT after EPA's Regulatory Policy Officer decides it is appropriate to start working on the regulation via a process known as "commencement approval," so a rulemaking may appear on this website months or even years before a docket is opened.) Reg DaRRT is updated regularly so that the public has the latest information on key milestones and dates. Further, Reg DaRRT includes retrospective reviews of rules that have already been finalized and are undergoing a review to determine if the rules should be modified, streamlined, expanded, or repealed, as called for by Executive Order 13563 (January 18, 2011). In its update, EPA also noted that the agency has replaced its former regulatory tracking database, RAPIDS, with a new and much improved tracking and management system, called ADP Tracker. Tracker was launched in February 2012 and includes many more internal controls (in the form of reminders, validation, and decision logic) designed to improve the quality and completeness of information available to management. EPA management continues to meet regularly to review regulatory milestones, to ensure that regulatory efforts are progressing, and that there is clear understanding when dates vary.

    Recommendation: To improve the monitoring and evaluation of rules development and the transparency of the review process, and to be consistent with internal controls for information in managing agency operations, the Administrator of EPA, the Commissioner of FDA, and the Chairman of SEC should each evaluate actual performance versus the targeted milestones and when they are different determine why.

    Agency Affected: Environmental Protection Agency

  5. Status: Closed - Implemented

    Comments: FDA identified several quality improvement efforts that the agency engages in for its rulemaking process related to the GAO recommendation. In addition to quarterly regulations meetings with each agency component and the FDA Policy Council meetings, FDA periodically reviews its regulations development and clearance process to see if changes are needed to improve efficiency and timeliness. According to the agency, recent improvements include piloting the use of digital signatures for clearing regulations to reduce the time it takes to clear and publish regulations in the Federal Register and piloting the use of a standardized questionnaire on a wiki platform to reduce the time it takes to develop an economic analysis for a rule. On August 9, 2013, FDA provided an update on the status of this recommendation, in which it reported that the agency has completed its transition to digital signatures for FDA Federal Register documents. In its latest update, the agency also reported that the FDA Office of Policy has been engaged in a Rulemaking Improvement Project, with the assistance of consultants, to identify means of improving the quality of regulations, including standardized basic training for new employees, more specialized training for regulations writers and policy makers, additional internal standard operating procedures and guidance for regulations processes, and additional templates and standard paragraphs.

    Recommendation: To improve the monitoring and evaluation of rules development and the transparency of the review process, and to be consistent with internal controls for information in managing agency operations, the Administrator of EPA, the Commissioner of FDA, and the Chairman of SEC should each evaluate actual performance versus the targeted milestones and when they are different determine why.

    Agency Affected: Department of Health and Human Services: Public Health Service: Food and Drug Administration

  6. Status: Closed - Not Implemented

    Comments: In comments on the draft report, OMB stated that these recommendations have merit and warrant further consideration. However, since issuance of the final report, OMB has taken no action to implement the recommendation. On July 8, 2014, OMB officials said that OMB has no additional information to provide on the status of this recommendation.

    Recommendation: If the current administration retains Executive Order 12866, or establishes similar transparency requirements, to improve the monitoring and evaluation of rules development and the transparency of the review process, the Director of OMB, through the Administrator of OIRA, should define in guidance what types of changes made as a result of the OIRA review process are substantive and need to be publicly identified to more consistently implement the order's requirement to provide information to the public "in a complete, clear, and simple manner".

    Agency Affected: Executive Office of the President: Office of Management and Budget

  7. Status: Closed - Not Implemented

    Comments: In comments on the draft report, OMB stated that these recommendations have merit and warrant further consideration. However, since issuance of the final report, OMB has taken no action to implement the recommendation. On July 8, 2014, OMB officials said that OMB has no additional information to provide on the status of this recommendation.

    Recommendation: If the current administration retains Executive Order 12866, or establishes similar transparency requirements, To improve the monitoring and evaluation of rules development and the transparency of the review process, the Director of OMB, through the Administrator of OIRA, should direct agencies to clearly state in final rules whether they made substantive changes as a result of the OIRA reviews to more consistently implement the order's requirement to provide information to the public "in a complete, clear, and simple manner".

    Agency Affected: Executive Office of the President: Office of Management and Budget

  8. Status: Closed - Not Implemented

    Comments: In comments on the draft report, OMB stated that these recommendations have merit and warrant further consideration. However, since issuance of the final report, OMB has taken no action to implement the recommendation. On July 8, 2014, OMB officials said that OMB has no additional information to provide on the status of this recommendation.

    Recommendation: If the current administration retains Executive Order 12866, or establishes similar transparency requirements, to improve the monitoring and evaluation of rules development and the transparency of the review process, the Director of OMB, through the Administrator of OIRA, should standardize how agencies label documentation of these changes in public rulemaking dockets to more consistently implement the order's requirement to provide information to the public "in a complete, clear, and simple manner".

    Agency Affected: Executive Office of the President: Office of Management and Budget

  9. Status: Closed - Not Implemented

    Comments: In comments on the draft report, OMB stated that these recommendations have merit and warrant further consideration. However, since issuance of the final report, OMB has taken no action to implement the recommendation. On July 8, 2014, OMB officials said that OMB has no additional information to provide on the status of this recommendation.

    Recommendation: If the current administration retains Executive Order 12866, or establishes similar transparency requirements, to improve the monitoring and evaluation of rules development and the transparency of the review process, the Director of OMB, through the Administrator of OIRA, should instruct agencies to clearly attribute those changes "made at the suggestion or recommendation of OIRA to more consistently implement the order's requirement to provide information to the public "in a complete, clear, and simple manner".

    Agency Affected: Executive Office of the President: Office of Management and Budget

 

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