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United States General Accounting Office:
GAO:
Testimony:
Before the Subcommittee on Energy, Policy, Natural Resources, and
Regulatory Affairs, Committee on Government Reform, House of
Representatives:
For Release on Delivery:
Expected at 9:30 a.m. EDT:
Thursday, April 11, 2002:
Paperwork Reduction Act:
Burden Increases and Violations Persist:
Statement of Victor S. Rezendes, Managing Director:
Strategic Issues Team:
GAO-02-598T:
Mr. Chairman and Members of the Subcommittee:
I am pleased to be here today to discuss the implementation of the
Paperwork Reduction Act of 1995 (PRA). As you requested, I will
discuss changes in federal paperwork burden during the past year, with
a particular focus on the Internal Revenue Service (IRS). I will also
revisit an issue that we have discussed during previous hearings—
violations of the PRA in which information collection authorizations
from the Office of Management and Budget (OMB) either expired or were
otherwise inconsistent with the act's provisions.
In brief, the data indicate that federal paperwork increased by almost
290 million burden hours during fiscal year 2001—the largest 1-year
increase since the PRA was amended and recodified in 1995. As was the
case in previous years, this record increase is largely attributable
to IRS, which increased its paperwork estimate by about 250 million
burden hours during the year. Most of the increases that IRS described
involved changes that had been made at the initiation of the agency—
not because of new statutes.
Federal agencies providing information to OMB identified more than 400
violations of the PRA that occurred during fiscal year 2001. Those
same agencies identified only slightly fewer violations than last
year, indicating that the overall decline in the number of violations
during the past 2 years has stopped. Some of these PRA violations have
been going on for years, and they collectively represent substantial
opportunity costs. As we have said for the past several years, we
believe that OMB can do more to ensure that agencies do not use
information collections without proper clearance.
We also believe that OMB can do a better job in reporting information
to Congress and the public about major activities under the PRA.
Specifically, we believe that OMB should provide burden-hour estimates
and information on PRA violations for all of the agencies with
significant amounts of paperwork, not just selected agencies. In
addition, we believe that OMB can be more transparent in the
information that it provides, more clearly delineating the causes of
changes in agencies' burden-hour estimates.
Background:
Before discussing these issues in detail, it is important to recognize
that a large amount of federal paperwork is necessary and serves a
useful purpose. Information collection is one way that agencies carry
out their missions. For example, IRS needs to collect information from
taxpayers and their employers to know the amount of taxes owed. The
Bureau of the Census collects information that was used to reapportion
congressional representation and is being used for a myriad of other
purposes. The events of September 11 have demonstrated the importance
of accurate, timely information. On several occasions, we have
recommended that agencies collect certain data to improve operations
and evaluate their effectiveness.[Footnote 1]
However, under the PRA, federal agencies are required to minimize the
paperwork burden they impose. The original PRA of 1980 established the
Office of Information and Regulatory Affairs (OIRA) within OMB to
provide central agency leadership and oversight of governmentwide
efforts to reduce unnecessary paperwork and improve the management of
information resources. Currently, the act requires OIRA to develop and
maintain a governmentwide strategic information resources management
(IRM) plan, and in recent years OIRA has designated the Chief
Information Officers Council's strategic plan as the principal means
of meeting this requirement. In February of this year we issued a
report concluding that this document does not constitute an effective
and comprehensive strategic vision.[Footnote 2] Specifically, we said
that the goals in the plan were not linked to expected improvements in
agency and program performance, and did not address such issues as
records management or the collection and control of paperwork. Other
documents that OIRA provided also did not, either individually or
collectively, meet the PRA's requirement for a governmentwide
strategic IRM plan. However, the president's budget for 2003, released
in February of this year, contains many (but not all) of the required
elements, and therefore represents credible progress toward developing
a governmentwide IRM plan.
OIRA also has overall responsibility for determining whether agencies'
proposals for collecting information comply with the act.[Footnote 3]
Agencies must receive OIRA approval for each information collection
request before it is implemented. Section 3514(a) of the PRA requires
OIRA to keep Congress "fully and currently informed" of the major
activities under the act, and must submit a report to Congress at
least annually on those activities. The report must include, among
other things, a list of all PRA violations and a list of any increases
in burden. To satisfy this reporting requirement, OIRA develops an
Information Collection Budget (ICB) by gathering data from executive
branch agencies. In October 2001, the OMB director sent a bulletin to
the heads of executive departments and agencies requesting information
to be used in preparation for the fiscal year 2002 ICB (reporting on
actions during fiscal year 2001). However, that bulletin differed from
its predecessors in several respects. For example, the agencies that
the director asked to provide information did not include 12
noncabinet-level agencies and organizations that had previously
provided ICB information (e.g., the Federal Communications Commission,
the Federal Trade Commission, the Social Security Administration, and
the Securities and Exchange Commission). The only independent agency
asked to provide information to OMB was the Environmental Protection
Agency (EPA). Also, the covered agencies were asked to provide less
information than before. For example, the agencies were asked to
provide detailed information only for "significant" burden reductions
and increases, not on each change in burden estimates. The OMB
director said in the October 2001 bulletin that the amount of
information requested had been significantly reduced "in the interest
of reducing burden on the agencies."
OIRA published its ICB for fiscal year 2001 (showing changes in
agencies' burden-hour estimates during fiscal year 2000) in August
2001. OIRA officials told us that they did not expect to publish the
ICB for fiscal year 2002 until today's hearing. Therefore, we obtained
unpublished data from OIRA to identify changes in governmentwide and
agency-specific "burden-hour" estimates during fiscal year 2001.
However, because the OIRA data does not include burden-hour estimates
from any independent agencies other than EPA, we also obtained data
from the Regulatory Information Service Center (RISC) for the
independent agencies that OIRA did not cover.[Footnote 4] We then
compared both the OIRA and the RISC data to agencies' burden-hour
estimates in previous ICBs to determine changes in those estimates
over time.
"Burden hours" has been the principal unit of measure 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 important to recognize that these estimates have limitations.
Estimating the amount of time it will take for an individual to
collect and provide information or how many individuals an information
collection will affect is not a simple matter.[Footnote 5] Therefore,
the degree to which agency burden-hour estimates reflect real burden
is unclear. Nevertheless, these are the best indicators of paperwork
burden available, and we believe they can be useful as long as their
limitations are kept in mind.
Governmentwide Paperwork Burden Estimate Has Increased:
Federal agencies estimated that their information collections imposed
about 7 billion burden hours on the public at the end of fiscal year
1995—just before the PRA of 1995 took effect. The PRA made several
changes in federal paperwork reduction requirements. One such change
required OIRA to set a goal of 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." Therefore, if federal agencies had
been able to meet each of these goals, the 7-billion burden-hour
estimate in 1995 would have fallen to about 4.6 billion hours by
September 30, 2001.
However, as figure 1 shows, this anticipated reduction in paperwork
burden did not occur. In fact, the data we obtained from OIRA show
that the governmentwide burden-hour estimate increased by about 9
percent during this period and stood at more than 7.6 billion hours as
of September 30, 2001. During fiscal year 2001 alone, the
governmentwide estimate increased by nearly 290 million hours—the
largest 1-year increase since the PRA was amended and recodified in
1995.
Figure 1: Governmentwide Burden-Reduction Goals Are Not Being Met 8
Burden-hour estimate (in billions):
[Refer to PDF for image: multiple line graph]
Burden-hour estimate (in billions) is depicted on the graph for fiscal
years 1995 through 2001 for the following:
Agencies' burden-hour estimates;
Burden-reduction goals envisioned in PRA.
Note: Data are as of the end of each fiscal year. The governmentwide
burden-hour estimate as of September 30, 2001, was about 7,651.4
million hours.
Sources: OMB and agencies' ICB submissions.
[End of figure]
It is also important to understand how the most recent estimate of
federal paperwork is allocated by the purpose of the collections, by
type of respondent, and by agency. As figure 2 shows, RISC data
indicates that almost 95 percent of the more than 7.6 billion hours of
estimated paperwork burden in place governmentwide as of September 30,
2001, was being collected primarily for the purpose of regulatory
compliance. Less than 5 percent was being collected as part of
applications for benefits, and about 1 percent was collected for other
purposes.
Figure 2: As of September 30, 2001, Most Federal Paperwork Was
Primarily Collected for Regulatory Compliance:
[Refer to PDF for image: pie-chart]
Regulatory/compliance: 94.1%;
Application for benefits: 4.8%;
Program planning/management: 0.5%;
Other: 0.6%.
Note: The governmentwide burden-hour estimate as of September 30,
2001, was about 7,651.4 million hours. The "other" category includes
program evaluation, general purpose statistics, audit, and research.
Sources: OMB and RISC.
[End of figure]
Figure 3 shows that almost two-thirds of the governmentwide burden
estimate was primarily directed toward businesses. Slightly less than
one-third of the burden was primarily on individuals, and less than 3
percent was on state, local, or tribal governments.
Figure 3: As of September 30, 2001, Most Federal Paperwork Was
Primarily Directed at Businesses:
[Refer to PDF for image: pie-chart]
Businesses: 63.4%;
Individuals: 32.2%;
State, local, or tribal governments: 2.5%;
Other: 2.0%.
Note: The governmentwide burden-hour estimate as of September 30,
2001, was about 7,651.4 million hours. The "other" category includes
farms, nonprofits, and the federal government.
Sources: OMB and RISC.
[End of figure]
As figure 4 shows, as of September 30, 2001, IRS accounted for about
83 percent of the governmentwide burden-hour estimate (up from about
75 percent in September 1995). Other agencies with burden-hour
estimates of 100 million hours or more as of that date were the
departments of Labor (DOL) and Health and Human Services (HHS), EPA,
and the Securities and Exchange Commission (SEC). Because IRS
constitutes such a significant portion of the governmentwide burden-
hour estimate, changes in IRS' estimate can have a significant—and
even determinative—effect on the governmentwide estimate.
Figure 4: IRS Accounted for Most of the Federal Paperwork Burden-Hour
Estimate as of September 30, 2001:
[Refer to PDF for image: pie-chart and sub-chart]
Internal Revenue Service: 82.9%;
Other: 19.7%:
- Securities and Exchange Commission (SEC): 1.5%;
- Environmental Protection Agency (EPA): 1.7%;
- Department of Labor (DOL): 2.4%;
- Department of Health and Human Services (HHS); 2.4%;
- Other: 9.1%.
Note: The governmentwide burden-hour estimate as of September 30,
2001, was about 7,651.4 million hours.
Sources: OMB and the Department of the Treasury.
[End of figure]
Changes in Individual Agencies' Estimates During Fiscal Year 2001:
As table 1 shows, some agencies' paperwork burden estimates decreased
sharply during fiscal year 2001, most notably those of the departments
of Commerce and Transportation (DOT). However, other agencies (e.g.,
the department of the Treasury and the SEC) indicated that their
paperwork burdens had increased. The reasons behind some of these
changes are clear. For example, the sharp decrease in the Department
of Commerce's estimate (from more than 38 million hours to about 10
million hours) appears to be almost entirely attributable to the
completion of the decennial census. The reasons for other changes are
less immediately apparent. As I will discuss later, the sharp decrease
in the DOT estimate was caused by the expiration (and subsequent PRA
violation) of a single information collection.
Table 1: Changes in Federal Agencies' Burden-Hour Estimates From
Fiscal Years 2000 to 2001:
Burden hours (in millions):
Governmentwide:
FY 2000 estimate: 7,361.7;
Total change: 289.7;
FY 2001 estimate: 7,651.4.
Departments:
Agriculture:
FY 2000 estimate: 75.2;
Program changes: 5.8;
Adjustments: 5.9;
Total change: 11.5;
FY 2001 estimate: 86.7.
Commerce:
FY 2000 estimate: 38.6;
Program changes: (28.6);
Adjustments: 0.5;
Total change: (28.3);
FY 2001 estimate: 10.3.
Defense:
FY 2000 estimate: 93.6;
Program changes: (0.7);
Adjustments: (0.2);
Total change: (1.6);
FY 2001 estimate: 92.1.
Education:
FY 2000 estimate: 42.0;
Program changes: (1.5);
Adjustments: (0.0);
Total change: (1.5);
FY 2001 estimate: 40.5.
Energy:
FY 2000 estimate: 2.9;
Program changes: 1.0;
Adjustments: (0.0);
Total change: 0.9;
FY 2001 estimate: 3.9.
Health and Human Services:
FY 2000 estimate: 173.7;
Program changes: 2.2;
Adjustments: 10.9;
Total change: 12.9;
FY 2001 estimate: 186.6.
Housing and Urban Development:
FY 2000 estimate: 12.5;
Program changes: (0.5);
Adjustments: 0.0;
Total change: (0.4);
FY 2001 estimate: 12.1.
Interior:
FY 2000 estimate: 5.6;
Program changes: 1.9;
Adjustments: (0.2);
Total change: 1.9;
FY 2001 estimate: 7.6.
Justice:
FY 2000 estimate: 36.8;
Program changes: 0.3;
Adjustments: 3.5;
Total change: 3.7;
FY 2001 estimate: 40.5.
Labor:
FY 2000 estimate: 181.6;
Program changes: (0.0);
Adjustments: 4.7;
Total change: 4.5;
FY 2001 estimate: 186.1.
State:
FY 2000 estimate: 29.2;
Program changes: (0.1);
Adjustments: (13.8);
Total change: (12.6);
FY 2001 estimate: 16.6.
Transportation:
FY 2000 estimate: 117.7;
Program changes: (42.4);
Adjustments: 5.1;
Total change: (37.3);
FY 2001 estimate: 80.3.
Treasury:
FY 2000 estimate: 6,156.8;
Program changes: 214.2;
Adjustments: 44.8;
Total change: 259.1;
FY 2001 estimate: 6,415.9.
Veterans Affairs:
FY 2000 estimate: 6.0;
Program changes: (0.0);
Adjustments: (0.7);
Total change: (0.7);
FY 2001 estimate: 5.3.
Agencies:
Environmental Protection Agency:
FY 2000 estimate: 128.8;
Program changes: 0.9;
Adjustments: 1.2;
Total change: 2.0;
FY 2001 estimate: 130.8.
Federal Acquisition Regulations:
FY 2000 estimate: 23.3;
Program changes: 0.5;
Adjustments: [Empty];
Total change: 0.5;
FY 2001 estimate: 23.8.
Federal Communication Commission:
FY 2000 estimate: 29.0;
Program changes: 11.7;
Adjustments: (0.6);
Total change: 11.1;
FY 2001 estimate: 40.1.
Federal Deposit Insurance Corporation:
FY 2000 estimate: 8.3;
Program changes: 2.1;
Adjustments: 0.1;
Total change: 2.3;
FY 2001 estimate: 10.5.
Federal Emergency Management Agency:
FY 2000 estimate: 5.2;
Program changes: 0.4;
Adjustments: 0.0;
Total change: 0.4;
FY 2001 estimate: 5.5.
Federal Energy Regulatory Commission:
FY 2000 estimate: 4.1;
Program changes: 0.3;
Adjustments: [Empty];
Total change: 0.3;
FY 2001 estimate: 4.4.
Federal Trade Commission:
FY 2000 estimate: 73.8;
Program changes: 0.1;
Adjustments: (1.3);
Total change: (1.2);
FY 2001 estimate: 72.6.
National Aeronautics and Space Administration:
FY 2000 estimate: 7.2;
Program changes: (0.1);
Adjustments: (0.2);
Total change: (0.3);
FY 2001 estimate: 6.9.
National Science Foundation:
FY 2000 estimate: 4.8;
Program changes: 0.0;
Adjustments: (0.0);
Total change: 0.0;
FY 2001 estimate: 4.8.
Nuclear Regulatory Commission:
FY 2000 estimate: 9.5;
Program changes: (0.8);
Adjustments: (0.6);
Total change: (1.4);
FY 2001 estimate: 8.2.
Securities and Exchange Commission:
FY 2000 estimate: 71.8;
Program changes: FY 2000 estimate: (1.8);
Adjustments: 44.3;
Total change: 42.5;
FY 2001 estimate: 114.3.
Small Business Administration:
FY 2000 estimate: 2.2;
Program changes: FY 2000 estimate: (0.2);
Adjustments: (0.0);
Total change: (0.2);
FY 2001 estimate: 1.9.
Social Security Administration:
FY 2000 estimate: 22.2;
Program changes: 1.3;
Adjustments: 0.7;
Total change: 2.0;
FY 2001 estimate: 24.2.
Note: OIRA did not provide us with reliable data on the program
changes and adjustments governmentwide. Data on the Federal
Acquisition Regulations were submitted by the General Services
Administration. Data from the 27 departments and agencies may not
equal the governmentwide figure because smaller agencies' requirements
are also included. Cells with "0.0" values were non-zero values
rounded to zero. Cells with [Empty] entries were zero values. Addition
of individual elements may not equal totals due to rounding.
Sources: OMB (cabinet departments and EPA) and RISC (other agencies).
[End of table]
However, changes in agencies' bottom-line burden-hour estimates do not
tell the whole story, and can be misleading. It is also important to
understand how the agencies accomplished these results. OIRA
classifies modifications 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 through the expiration or
reinstatement of OIRA-approved collections. Adjustments are not the
result of deliberate federal government action, 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 resultant
increase in the Department of Agriculture's (USDA) paperwork estimate
is considered an adjustment because it is not the result of deliberate
federal action.
In recent ICBs, OIRA has indicated whether fluctuations in agencies'
burden-hour estimates were caused by program changes or adjustments.
The fiscal year 2001 burden estimates that we obtained from OIRA and
RISC in preparation for this hearing also contained those two
categories and are presented in table 1. Analysis of those data helps
explain what drove the changes in agencies' bottom-line burden-hour
estimates. For example, almost all of the marked decline in the
Department of State's estimate was due to adjustments. Also, the more
than 40 million burden-hour increase in the SEC estimate was primarily
driven by adjustments. Therefore, the Department of State cannot claim
credit for having proactively reduced the paperwork burden that it
imposes on the public, and the SEC may not be responsible for the
increase that it reported. In contrast, table 1 shows that the more
than 37 million burden-hour decrease in DOT's bottom-line paperwork
estimate was entirely driven by a more than 40 million-hour program
change reduction. However, the table does not indicate what specific
type of action precipitated this or any other program change—new
statutes, agency actions, or reinstated/expired collections. Although
DOT's ICB submission did not provide further clarification, OIRA staff
told us that the reduction was caused by the expiration (and
subsequent PRA violation) of the agency's "hours of service"
information collection.
Last year, the data that OIRA obtained from the agencies allowed us to
separate the program changes in our table into the new statutes,
agency actions, and reinstate/expired subcategories. However, as I
noted previously, OIRA did not request such detailed data from the
agencies for the fiscal year 2002 ICB except for certain "significant"
collections.
Therefore, our table this year does not break down the program changes
into these subcategories.
For the past 2 years, OIRA indicated in separate columns of the ICB
summary table whether the program changes made during each fiscal year
were due to agency action or new statutes. OIRA officials told us that
the ICB that the agency was releasing today would present both
statutory and agency action-based program changes during fiscal year
2001 in one column. As a result, they said, Congress and the public
could calculate the amount of program change that was attributable to
violations or reinstatements by subtracting the amount of the new
statutes/agency actions from the total program changes.
We believe that this approach has at least two problems. First,
combining the statutory and agency-initiated program changes into one
column prevents Congress and the public from knowing why the agencies'
paperwork estimates changed. Presentation of this information in
separate columns—as has been done in previous years—allows the public
to know whether Congress or the agencies are responsible for increases
or decreases in an agency's paperwork estimate. Second, not providing
this information and requiring Congress and the public to calculate
the amount of change in burden caused by violations or the
reinstatement of violations seems to run counter to the
administrator's stated goal of increasing the transparency of OIRA's
operations. OIRA has such data, for it listed expirations and
reinstatements were separately listed in the raw data provided to us
in preparation for this hearing, and OIRA used the data to calculate
the amount of the program changes that were due to agency actions or
new statutes.
As I mentioned previously, the PRA requires OIRA to keep Congress and
congressional committees "fully and currently informed" of the major
activities under the act. It specifically says that OIRA's annual
report must identify "any increase in the collection of information
burden." We do not believe that the information OIRA is releasing
today fully satisfies this PRA requirement in that it includes only
some of the agencies with estimated burden-hour increases and
substantial information collection
requirements. In fact, some of the independent agencies that OIRA
indicated that it planned to exclude from this year's ICB (e.g., the
SEC, the Federal Trade Commission, and the Federal Communication
Commission) had higher estimated burden than some of the cabinet
departments for which information was provided (e.g., the departments
of Energy, Interior, and Veterans Affairs) Also, to facilitate
transparency and increase Congress' and the public's understanding of
paperwork burden, we believe that OIRA should separately identify each
of the specific types of program changes in the ICB—changes due to
agency action, changes due to new statutes, changes due to violations,
and changes due to reinstatements.
Reasons for Changes in IRS Burden Estimates:
Although changes in non-IRS departments and agencies' burden-hour
estimates are notable and important, they pale in comparison to the
size of the changes at IRS. The increase in the IRS burden-hour
estimate during fiscal year 2001 (about 250 million burden hours) was
more than six times as much as the rest of the government combined.
Therefore, although all agencies must ensure that their information
collections impose the least amount of burden possible, it is clear
that the key to controlling federal paperwork governmentwide lies in
understanding and controlling the increases at IRS.
As table 1 shows, more than 80 percent of the 259 million burden-hour
increase in the Department of the Treasury paperwork estimate during
fiscal year 2001was attributed to program changes. IRS accounted for
about 250 million (about 97 percent) of the departmental increase. In
the Department of the Treasury's ICB submission to OMB describing
changes during fiscal year 2001, IRS identified a number of
significant program change increases that it said were a function of
the underlying statutes. For example, IRS said that it added nearly 28
million burden hours to its estimate because the FSC Repeal and
Extraterritorial Income Exclusion Act of 2000 added a section to the
Internal Revenue Code, resulting in a new Form 8873.[Footnote 6]
However, about two-thirds of the program change increases that IRS
identified in the ICB submission for fiscal year 2001 involved changes
made at the initiation of the agency—not because of new statutes. For
example:
* IRS said that 14 lines and 23 Code sections were added to Form 1065
("U.S. Return of Partnership Income"), and accompanying schedules and
instructions at the request of the agency, resulting in an estimated
increase of more than 75 million burden hours.
* IRS said that changes made at the agency's request to Form 1120S
("U.S. Income Tax Return for an S Corporation") and accompanying
schedules and instructions resulted in an estimated increase of more
than 22 million burden hours.
* IRS said that changes at the request of the agency to Form 1120
("U.S. Corporation Income Tax Return") and related schedules and
instructions resulted in a more than 7 million-hour increase in the
form's estimated burden.
Because IRS attributed most of the increase in its burden-hour
estimate during fiscal year 2001 to program changes, and because most
of the program changes during that period were made at the agency's
initiative, IRS cannot claim (as it has in the past) that statutory
changes primarily caused the increase in its burden-hour estimates.
IRS also indicated in the ICB submission that it had taken a number of
actions intended to reduce paperwork burden. For example, IRS said it
(1) had conducted a series of focus groups consisting of taxpayers who
file Schedule D to explore their preferences for presenting and
reporting information to compute gains and losses and any tax due, (2)
was working with a contractor to redesign Form 941, "Employer's
Quarterly Federal Tax Return," and the accompanying instructions, and
(3) was continuing its initiative to encourage taxpayers to file the
simplest tax return for their tax situation. With regard to small
corporations, IRS said it had proposed that corporate filers with
assets of less than $250,000 be exempted from certain reporting
requirements, which would—if implemented—save 39 million burden hours.
Two Strategies for Controlling Paperwork:
In summary, the agencies' information collection estimates for the ICB
being released today indicate that federal paperwork continues to
increase, and that changes initiated by IRS accounted for most of the
record 1-year increase during fiscal year 2001. As we indicated in our
February report on information resources management, OIRA and the
agencies lack a unifying vision for how those resources will
facilitate the government's agenda. Also, the risk is increased that
duplicative initiatives will be undertaken, and that opportunities for
data sharing will be missed. The PRA requires that OIRA develop such a
plan, one element of which must be a proposal for reducing information
burdens. Also, because IRS constitutes such a significant portion of
the governmentwide burden-hour estimate, another strategy to address
increases in federal paperwork could be to focus OIRA's burden-
reduction efforts on that agency. Just as increases in IRS's burden
estimates have had a determinative effect on the governmentwide
estimates, reduction in the IRS estimates can have an equally
determinative effect.
Agencies Again Identified Hundreds of Violations:
I would now like to turn to the other main topic you asked us to
address—PRA violations. The PRA prohibits an agency from conducting or
sponsoring a collection of information unless (1) the agency has
submitted the proposed collection and other documents to OIRA, (2)
OIRA has approved the proposed collection, and (3) the agency displays
an OMB control number on the collection. The act also requires
agencies to establish a process to ensure that each information
collection is in compliance with these clearance requirements. OIRA is
required to submit an annual report to Congress that includes a list
of all violations. The PRA says no one can be penalized for failing to
comply with a collection of information subject to the act if the
collection does not display a valid OMB control number. OIRA may not
approve a collection of information for more than 3 years, and there
are about 7,000 approved collections at any one time.
In the ICB for fiscal year 1999, OIRA identified a total of 872
violations of the PRA during fiscal year 1998. In our testimony before
this Committee 3 years ago, we noted that some agencies—USDA, BIB, and
the Department of Veterans Affairs (VA)—had each identified more than
100 violations.[Footnote 7] We also said that OIRA had taken little
action to address those violations and suggested a number of ways that
OIRA could improve its performance. For example, we said that OIRA
could use its database to identify information collections for which
authorizations had expired, contact the collecting agency, and
determine whether the agency was continuing to collect the
information. We also said that OIRA could publicly announce that the
agency is out of compliance with the PRA in meetings of the Chief
Information Officers Council and the President's Management Council.
During the past 2 years, the number of violations that OMB reported
has declined steadily.
* Two years ago we testified that the number of violations had
declined from 872 during fiscal year 1998 to 710 during fiscal year
1999.[Footnote 8]
* Last year, we testified that the number of violations had declined
even further—from 710 to 487 during fiscal year 2000.[Footnote 9]
Each year, a few agencies—most consistently USDA and HUD, but
occasionally the Department of Justice and VA—have accounted for a
disproportionate share of the violations. Each year we concluded that,
although OIRA had taken several actions to address PRA violations, the
OMB and the agencies responsible for the collections could do more to
ensure compliance.
Table 2 shows the number of violations that the covered agencies
reported (and that OIRA agreed were violations) during fiscal year
2001. As noted previously, noncabinet-level agencies other than EPA
were not required to report this information to OIRA in preparation
for this year's ICB, so we could not provide information for those
agencies in our table. Therefore, comparison of the total number of
violations during fiscal year 2001 to previous years can be done only
for those agencies reporting in all relevant time frames.
The cabinet departments and EPA reported 648 PRA violations during
fiscal year 1999 and 423 violations during fiscal year 2000. Those
agencies identified a total of 402 violations during fiscal year 2001—
only slightly fewer than the year before. Therefore, the substantial
decline in the number of PRA violations that has occurred in these
agencies appears to have stopped. As was the case in previous years,
HUD, USDA, and VA reported the most violations during fiscal year 2001-
112, 67, and 64, respectively. The number of violations at USDA
decreased between fiscal years 2000 and 2001 (from 96 to 67), but the
numbers at HUD and VA went up (from 99 to 112, and from 40 to 64,
respectively). Overall, the number of violations decreased in 8 of the
15 agencies reporting data in both years, increased in 6 agencies, and
stayed the same in 1 agency.
Table 2: Reported Violations of the PRA During Fiscal Year 2001:
Department of Agriculture:
FY 2001 expired information collections: 61;
FY 2001 other violations: 6;
Total FY 2001 violations: 67.
Department of Commerce:
FY 2001 expired information collections: 22;
FY 2001 other violations: 0;
Total FY 2001 violations: 22.
Department of Defense:
FY 2001 expired information collections: 7;
FY 2001 other violations: 0;
Total FY 2001 violations: 7.
Department of Education:
FY 2001 expired information collections: 4;
FY 2001 other violations: 0;
Total FY 2001 violations: 4.
Department of Energy:
FY 2001 expired information collections: 6;
FY 2001 other violations: 0;
Total FY 2001 violations: 6.
Department of Health and Human Services:
FY 2001 expired information collections: 29;
FY 2001 other violations: 7;
Total FY 2001 violations: 36.
Department of Housing and Urban Development:
FY 2001 expired information collections: 112;
FY 2001 other violations: 0;
Total FY 2001 violations: 112.
Department of the Interior:
FY 2001 expired information collections: 11;
FY 2001 other violations: 5;
Total FY 2001 violations: 16.
Department of Justice:
FY 2001 expired information collections: 16;
FY 2001 other violations: 5;
Total FY 2001 violations: 21.
Department of Labor:
FY 2001 expired information collections: 4;
FY 2001 other violations: 4;
Total FY 2001 violations: 8.
Department of State:
FY 2001 expired information collections: 11;
FY 2001 other violations: 0;
Total FY 2001 violations: 11.
Department of Transportation:
FY 2001 expired information collections: 12;
FY 2001 other violations: 0;
Total FY 2001 violations: 12.
Department of the Treasury:
FY 2001 expired information collections: 14;
FY 2001 other violations: 0;
Total FY 2001 violations: 14.
Department of Veterans Affairs:
FY 2001 expired information collections: 64;
FY 2001 other violations: 0;
Total FY 2001 violations: 64.
Environmental Protection Agency:
FY 2001 expired information collections: 1;
FY 2001 other violations: 1;
Total FY 2001 violations: 2.
Rest of government:
FY 2001 expired information collections: Unknown;
FY 2001 other violations: Unknown;
Total FY 2001 violations: Unknown.
Total:
FY 2001 expired information collections: 374;
FY 2001 other violations: 28;
Total FY 2001 violations: 402.
Note: In contrast to previous years, OIRA did not collect information
on PRA violations from any noncabinet-level agency other than EPA.
Therefore, the total in each column would be greater if the
data on violations for those agencies were available.
Source: OMB (expired collections) and agencies' ICB submissions (other
violations).
[End of table]
Many of the 402 violations that occurred during fiscal year 2001 were
new and had been resolved by the end of the fiscal year. However,
about 40 percent of the violations were listed in last year's ICB, and
many had been occurring for years. For example, as of the end of
fiscal year 2001,
* USDA indicated that 13 of its collections had been in violation for
more than 2 years, and 10 had been in violation for at least 3 years,
* HUD indicated that 10 of its collections had been in violation for
at least 2 years, and 6 had been in violation for at least 4 years,
* the Department of the Interior indicated that 9 collections had been
in violation for at least 2 years, and 4 had been in violation for at
least 7 years, and,
* VA indicated that 25 of its collections had been in violation for at
least 2 years, and 15 had been in violation for at least 4 years.
Violations and Opportunity Costs:
In our testimony in previous years, we provided an estimate of the
monetary cost associated with certain PRA violations. To estimate that
cost, we multiplied the number of burden hours associated with the
violations by an OMB estimate of the "opportunity costs" associated
with each hour of IRS paperwork. Although the ICBs list the
information collections that were in violation during the previous
year, and the dates of expiration and any reinstatement, they do not
provide information on the number of burden hours associated with each
of the violations. Therefore, we obtained data from OIRA on the
estimated number of burden hours for 340 of the 402 information
collections that were in violation of the PRA during fiscal year 2001.
[Footnote 10]
As in previous years, the data suggest that these PRA violations may
constitute significant opportunity costs for those required to provide
the related information. We estimate that the 340 violations involved
about 58 million burden hours of paperwork, or about $1.6 billion in
opportunity costs. A small percentage of the collections accounted for
the bulk of those costs. For example, 60 of the collections involved
estimated opportunity costs of at least $1 million each, for a total
of more than $1.5 billion. Just three of the collections (two from
USDA and one from VA) accounted for more than $1 billion in estimated
opportunity costs.
Many of the information collections that were in violation of the PRA
were being administered for regulatory purposes, so if the respondents
knew the collections were not valid they might not have completed the
required forms. However, other violations involved collections in
which individuals or businesses were applying for benefits such as
loans or subsidies. Therefore, it is not clear whether these
individuals and businesses would have refused to complete the required
forms if they knew that the collections were being conducted in
violation of the PRA.
OIRA Can Do More to Address Violations:
As I indicated earlier, OIRA has taken some steps to encourage
agencies to comply with the PRA, and those steps previously appeared
to have been paying off in terms of fewer reported violations overall
and within particular agencies. However, particularly because the
number of violations did not decline during fiscal year 2001, we
believe that OIRA can do more. For example, 2 years ago OIRA added
information to its Internet home page about information collections
that expired in the previous month. As a result, potential respondents
are able to review the list of recent expirations and inform the
collecting agency, OIRA, and Congress of the need for the agency to
either obtain reinstatement of OIRA approval or discontinue the
collection.
Although notifying the public about unauthorized information
collections is a step in the right direction, OIRA's approach places
the burden of responsibility to detect unauthorized collections on the
public. It is OIRA, not the public, which has the statutory
responsibility to review and approve agencies' collections of
information and identify all PRA violations. Therefore, we believe
that OIRA should not simply rely on the public to identify these
violations. For example, OIRA desk officers could use the agency's
database to identify information collections for which authorizations
had expired, contact the collecting agency, and determine whether the
agency is continuing to collect the information. The desk officers
could also use the database to identify information collection
authorizations that are about to expire, and therefore perhaps prevent
violations of the act. At a minimum, OIRA could post on its Internet
home page the complete list of collections that it believes are in
violation of the PRA—not just those collections that expired during
the previous month and that may or may not constitute violations.
OIRA officials and staff previously told us that they have no
authority to do much more than publish the list of violations in the
ICB and inform the agencies directly that they are out of compliance
with the act. We do not agree that OIRA is as powerless as this
explanation would suggest. First of all, OIRA could publish the number
of violations for all of the agencies covered by the PRA in the ICB.
Section 3514(a) of the act specifically requires OIRA to include in
its annual report a "list of all violations," not just the cabinet
departments plus EPA. Therefore, we do not believe that the
information that OIRA is releasing today fully satisfies this
requirement. Also, if an agency does not respond to an OIRA notice
that one of its information collections is out of compliance with the
PRA, the administrator could take any number of actions to encourage
compliance, including any or all of the following:
* Publicly announce that the agency is out of compliance with the PRA
in meetings of the Chief Information Officers Council.
* Notify the "budget" side of OMB that the agency is collecting
information in violation of the PRA and encourage the appropriate
resource management office to use its influence to bring the agency
into compliance.
* Place a notice in the Federal Register notifying the affected public
that they need not provide the agency with the information requested
in any expired collection.
OIRA could also notify agencies that the PRA requires them to
establish a process to ensure that each information collection
complies with the act's clearance requirements. Agencies that continue
to collect information without OIRA approval or after the approval has
expired are clearly not complying with this requirement. Some agencies
do not appear to have established sound clearance processes. Just
three agencies—USDA, HUD, and VA—accounted for about 60 percent of all
reported violations.
We recognize that some, and perhaps many, of the information
collections that violate the PRA's requirements represent important
agency data gathering efforts. As I indicated previously, information
collection is one way that agencies accomplish their missions and
protect public health and safety. Nevertheless, we do not believe that
the goals of information collection and compliance with the PRA's
requirements are inconsistent. In fact, the more clearly agencies can
demonstrate the value of those collections, the easier it should be
for them to obtain OIRA approval. Also, the vast majority of PRA
violations are ultimately reauthorized by OIRA, therefore indicating
that this is more of a management problem than a substantive issue of
rogue information collections.
We also recognize the limitations that OIRA faces, with an ever-
increasing workload and limited resources. However, we do not believe
that the kinds of actions we are suggesting would require significant
additional resources. Primarily, the actions require a commitment to
improve the operation of the current paperwork clearance process.
Also, OIRA cannot eliminate PRA violations by itself. Federal agencies
committing these violations need to evidence a similar level of
resolve.
Mr. Chairman, this completes my prepared statement. I would be pleased
to answer any questions.
[End of section]
Footnotes:
[1] See, for example, U.S. General Accounting Office, Veterans' Health
Care: VA Needs Better Data on Extent and Causes of Waiting Times,
[hyperlink, http://www.gao.gov/products/GAO/HEHS-00-90] (Washington,
D.C.: May 31, 2000) and U.S. General Accounting Office, Public
Housing: HUD Needs Better Information on Housing Agencies' Management
Performance, [hyperlink, http://www.gao.gov/products/GAO-01-94]
(Washington, D.C.: Nov. 9, 2000).
[2] U.S. General Accounting Office, Information Resources Management:
Comprehensive Strategic Plan Needed to Address Mounting Challenges,
[hyperlink, http://www.gao.gov/products/GAO-02-292] (Washington, D.C.:
Feb. 22, 2002). Our conclusions in this report were similar to those
in a report issued several years earlier. See U. S. General Accounting
Office, Regulatory Management: Implementation of Selected OMB
Responsibilities Under the Paperwork Reduction Act, [hyperlink,
http://www.gao.gov/products/GAO/GGD-98-120] (Washington, D.C.: July 9,
1998).
[3] The act requires the director of OMB to delegate the authority to
administer all functions under the act to the administrator of OIRA
but does not relieve the OMB director of responsibility for the
administration of those functions. Approvals are made on behalf of the
OMB director. In this testimony, we generally refer to OIRA or the
OIRA administrator wherever the act assigns responsibilities to OMB or
the director.
[4] RISC is part of the General Services Administration but works
closely with OMB to provide information to the president, Congress,
and the public about federal regulations. RISC maintains a database
that includes information on all regulatory actions and all
information collection review actions by OIRA.
[5] See U.S. General Accounting Office, EPA Paperwork: Burden Estimate
Increasing Despite Reduction Claims, [hyperlink,
http://www.gao.gov/products/GAO/GGD-00-59] (Washington, D.C.: Mar. 16,
2000) for how one agency estimates paperwork burden.
[6] IRS said the section "provides for an exclusion from gross income
for certainty transaction (sic) occurring after September 30, 2000,
with respect to foreign trading gross receipts."
[7] U.S. General Accounting Office, Paperwork Reduction Act: Burden
Increases and Unauthorized Information Collections, [hyperlink,
http://www.gao.gov/products/GAO/T-GGD-99-78] (Washington, D.C.: Apr.
15, 1999).
[8] U.S. General Accounting Office, Paperwork Reduction Act: Burden
Increases at IRS and Other Agencies, [hyperlink,
http://www.gao.gov/products/GAO/T-GGD-00-114] (Washington, D.C.: Apr.
12, 2000).
[9] U.S. General Accounting Office, Paperwork Reduction Act: Burden
Estimates Continue to Increase, [hyperlink,
http://www.gao.gov/products/GAO-01-648T] (Washington, D.C.: Apr. 24,
2001).
[10] OIRA said it did not have burden hour estimates for some of the
violations because they had never been approved under the PRA.
[End of section]