Paperwork Reduction Act
Record Increase in Agencies' Burden Estimates Gao ID: GAO-03-619T April 11, 2003The Paperwork Reduction Act requires federal agencies to minimize the paperwork burden they impose on the public. The act also requires agencies to obtain approval from the Office of Management and Budget (OMB) before collecting covered information. GAO examined changes during the past fiscal year in federal agencies' paperwork burden estimates and their causes, focusing on the Internal Revenue Service (IRS). GAO also examined changes in the number of violations of the Paperwork Reduction Act.
As of September 30, 2002, federal agencies estimated that there was about 8.2 billion "burden hours" of paperwork governmentwide. IRS accounted for about 6.7 billion burden hours (81 percent) of this estimate. The federal paperwork estimate increased by about 570 million burden hours during fiscal year 2002--nearly double the previous record increase for a 1-year period. IRS and the Department of Transportation (DOT) accounted for almost 90 percent of the increase. IRS increased its paperwork estimate by about 330 million burden hours during fiscal year 2002, which the agency said was primarily caused by growth in the number of taxpayers using Form 1040. DOT's burden estimate rose by about 165 million burden hours, an increase that the department said was almost entirely attributable to the reintroduction and reestimation of one information collection. Federal agencies identified 244 violations of the PRA during fiscal year 2002--a significant reduction from the number of violations reported during the previous fiscal year. OMB deserves a great deal of credit for this decrease in violations. However, 244 violations of the law during a single fiscal year are still troubling and should not be tolerated. Also, although some longstanding violations have been resolved, others remained open at the end of the fiscal year and, in some cases, had been open for 2 years or more.
GAO-03-619T, Paperwork Reduction Act: Record Increase in Agencies' Burden Estimates
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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 10 a.m. EDT
Friday, April 11, 2003:
PAPERWORK REDUCTION ACT:
Record Increase in Agencies' Burden Estimates:
Statement of Victor S. Rezendes, Managing Director
Strategic Issues Team:
GAO-03-619T:
GAO Highlights:
Highlights of GAO-03-619T, testimony before the Subcommittee on Energy
Policy, Natural Resources and Regulatory Affairs, Committee on
Government Reform, House of Representatives
Why GAO Did This Study:
The Paperwork Reduction Act requires federal agencies to minimize the
paperwork burden they impose on the public. The act also requires
agencies to obtain approval from the Office of Management and Budget
(OMB) before collecting covered information. At the Subcommittee‘s
request, GAO examined changes during the past fiscal year in federal
agencies‘ paperwork burden estimates, focusing on the Internal Revenue
Service (IRS). GAO also examined changes in the number of violations of
the Paperwork Reduction Act.
What GAO Found:
As of September 30, 2002, federal agencies estimated that there was
about 8.2 billion ’burden hours“ of paperwork governmentwide. IRS
accounted for about 6.7 billion burden hours (81 percent) of this
estimate. The federal paperwork estimate increased by about 570 million
burden hours during fiscal year 2002”nearly double the previous record
increase for a 1-year period. IRS and the Department of Transportation
(DOT) accounted for almost 90 percent of the increase. IRS increased
its paperwork estimate by about 330 million burden hours during fiscal
year 2002, which the agency said was primarily caused by growth in the
number of taxpayers using Form 1040. DOT‘s burden estimate rose by
about 165 million burden hours, an increase that the department said
was almost entirely attributable to the reintroduction and reestimation
of one information collection.
Federal agencies identified 244 violations of the PRA during fiscal
year 2002”a significant reduction from the number of violations
reported during the previous fiscal year. OMB deserves a great deal of
credit for this decrease in violations. However, 244 violations of the
law during a single fiscal year are still troubling and should not be
tolerated. Also, although some longstanding violations have been
resolved, others remained open at the end of the fiscal year and, in
some cases, had been open for 2 years or more.
What GAO Recommends:
GAO is not making any recommendations. However, because IRS accounts
for most federal paperwork and for most of the increase in the
governmentwide estimate, OMB could focus more of its burden reduction
efforts on that agency. Also, its previous efforts notwithstanding, OMB
could take additional actions to reduce violations, such as encouraging
the budget side of OMB to use its influence and promote the use of
’best practices“ in agencies with good compliance records.
www.gao.gov/cgi-bin/getrpt?GAO-03-619T.
To view the full report, including the scope and methodology, click on
the link above. For more information, contact Victor Rezendes at (202)
512-6806 or rezendesv@gao.gov.
[End of section]
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 before
this Committee--violations of the PRA in which information collections
were either not authorized by the Office of Management and Budget (OMB)
or those authorizations had expired.
In brief, the agencies' estimate of federal paperwork at the end of
fiscal year 2002 stood at about 8.2 billion burden hours. The paperwork
estimate increased by about 570 million burden hours from last year--
nearly double the previous record increase for a 1-year period that I
reported last year. Two agencies--IRS and the Department of
Transportation (DOT)--accounted for almost 90 percent of the increase.
IRS increased its paperwork estimate by about 330 million burden hours,
most of which involved adjustments to the agency's burden-hour estimate
for Form 1040. DOT's burden estimate rose by about 165 million burden
hours, an increase that was almost entirely attributable to the
reintroduction and reestimation of one information collection.
Also, federal agencies identified 244 violations of the PRA that
occurred during fiscal year 2002--a more than 40 percent reduction in
the number of violations that were reported during the previous fiscal
year and about one-fourth the number reported for fiscal year 1998.
Some agencies reported fewer violations in each of the last 3 fiscal
years, but other agencies reported increases in 1 or more of those
years. Although some longstanding violations were resolved, others
remained open at the end of the fiscal year and had been in violation
for 2 years or more at that point. OMB has taken several actions to
address PRA violations since last year's hearing--and deserves a lot of
credit for the reductions that have occurred in the past year. However,
244 violations of the law during a single year are still troubling and
should not be tolerated. We continue to believe that OMB and the
agencies can do more to ensure that the PRA is not violated and that
long-standing violations are resolved.
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 correct 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, 2001, 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. In February 2002, we reported that OMB had not fully
developed and implemented a strategic IRM plan that articulated a
comprehensive federal vision and plan for all aspects of government
information, including reducing information burdens, and we recommended
that the agency develop such a plan.[Footnote 2] During the past year
OMB has taken a number of actions that demonstrate progress in
fulfilling the PRA's requirement of providing a unifying IRM vision
with a focus on burden reduction. For example, OMB's E-Government
Strategy outlines the federal government's action plan for electronic
government. One focus of that strategy is implementing initiatives that
will reduce burden on businesses by reducing redundant data collection
and providing one-stop streamlined support. In addition, the Federal
Enterprise Architecture Business Reference Model provides an integrated
view of the federal government's activities, thereby allowing agencies
to look at federal business operations and understand the gaps,
overlaps, and opportunities for consolidation. Although OMB's
strategies and models are promising, their ability to reduce paperwork
burden and accomplish other objectives depends on how OMB implements
them.
OIRA also has overall responsibility for determining whether agencies'
proposals for collecting information comply with the PRA.[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 November 2002, 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 2003 ICB (reporting on
actions during fiscal year 2002).
OIRA published its ICB for fiscal year 2002 (showing changes in
agencies' burden-hour estimates during fiscal year 2001) in April 2002.
OIRA officials told us that they did not expect to publish the ICB for
fiscal year 2003 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 2002. We
then compared the 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 4] 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:
At the end of fiscal year 1995--just before the PRA of 1995 took
effect--federal agencies estimated that their information collections
imposed about 7 billion burden hours on the public. The amendment and
recodification of the PRA that year 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 decreased about 35 percent 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 stood at more than 8.2 billion
hours as of September 30, 2002--about a 1.2 billion hour (17 percent)
increase since the PRA of 1995 took effect. Nearly half of that
increase (about 570 million hours) occurred during fiscal year 2002
alone, and about 70 percent (about 860 million hours) occurred during
the last 2 fiscal years.
Figure 1: Governmentwide Paperwork Burden-Hour Estimate Continues to
Grow:
[See PDF for image]
Note: Data are as of the end of each fiscal year. The governmentwide
burden-hour estimate as of September 30, 2002, was about 8.2 billion
hours.
[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. As
figure 2 shows, data that we obtained from the Regulatory Information
Service Center (RISC) indicate that almost 95 percent of the 8.2
billion hours of estimated paperwork burden in place governmentwide as
of September 30, 2002, was being collected primarily for the purpose of
regulatory compliance.[Footnote 5] 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, 2002, Most Federal Paperwork Was
Primarily Collected for Regulatory Compliance:
[See PDF for image]
Note: The governmentwide burden-hour estimate as of September 30, 2002,
was about 8.2 billion hours. The "other" category includes program
evaluation, general purpose statistics, audit, and research. Addition
of individual elements does not total 100 percent due to rounding.
[End of figure]
Figure 3 shows that more than 60 percent of the governmentwide burden
estimate was primarily directed toward businesses or other for-profit
organizations. About one-third of the burden was primarily on
individuals or households, and less than 3 percent was on state, local,
or tribal governments.
Figure 3: As of September 30, 2002, Most Federal Paperwork Was
Primarily Directed at Businesses:
[See PDF for image]
Note: The governmentwide burden-hour estimate as of September 30, 2002,
was about 8.2 billion hours. The "other" category includes farms,
nonprofit organizations, and the federal government.
[End of figure]
As figure 4 shows, as of September 30, 2002, IRS accounted for about 81
percent of the governmentwide burden-hour estimate (up from about 75
percent in September 1995)--nearly 6.7 billion burden hours. Other
agencies with burden-hour estimates of 100 million hours or more as of
that date were the departments of Health and Human Services (HHS) and
Labor (DOL), DOT, the Environmental Protection Agency (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, 2002:
[See PDF for image]
Note: The governmentwide burden-hour estimate as of September 30, 2002,
was about 8.2 billion hours.
[End of figure]
Changes in Individual Agencies' Estimates During Fiscal Year 2002:
As table 1 shows, only a few agencies' paperwork burden estimates
decreased during fiscal year 2002, most notably the Federal
Communications Commission (FCC)--from more than 40 million hours to
less than 27 million hours. Other agencies (most notably the Department
of the Treasury, DOT, HHS, and SEC) significantly increased their
burden hour estimates. Still other agencies with relatively small
burden-hour totals experienced large percentage increases in their
estimates--most notably the Department of Housing and Urban Development
(HUD) (an 81 percent increase) and the Department of State (a 76
percent increase).
Table 1: Changes in Federal Agencies' Burden-Hour Estimates During
Fiscal Year 2002:
Burden hours in millions.
Governmentwide; FY 2001 estimate: 7,651.4;
Program changes: New statutes: [Empty];
Program changes: Lapses in
OMB approval: [Empty]; Program changes:
Agency action: [Empty]; Program changes:
Total: [Empty]; Adjustments: [Empty];
Total change: 570.5; FY
2002 estimate: 8,221.7.
Non-Treasury; FY 2001 estimate: 1,235.6;
Program changes: New statutes: [Empty];
Program changes: Lapses in
OMB approval: [Empty]; Program changes:
Agency action: [Empty]; Program changes:
Total: [Empty]; Adjustments: [Empty];
Total change: 236.3; FY
2002 estimate: 1,471.8.
Departments:
Agriculture; FY 2001 estimate: 86.7;
Program changes: New statutes: 1.5;
Program changes: Lapses in
OMB approval: 0.5; Program changes: Agency
action: (0.3); Program changes: Total: 1.8;
Adjustments: 0.0;
Total change: 1.8; FY 2002 estimate: 88.5.
Commerce; FY 2001 estimate: 10.3;
Program changes: New statutes: 0.2;
Program changes: Lapses in
OMB approval: 0.0; Program changes: Agency
action: 1.2; Program changes: Total: 1.3;
Adjustments: (0.5);
Total change: 0.9; FY 2002 estimate: 11.2.
Defense; FY 2001 estimate: 92.1; hours
in Program changes: New statutes: -;
Program changes: Lapses in
OMB approval: 0.5; Program changes: Agency
action: 0.6; Program changes: Total: 1.0;
Adjustments: (0.7);
Total change: 0.3; FY 2002 estimate: 92.4.
Education; FY 2001 estimate: 40.5;
Program changes: New statutes: 0.2;
Program changes: Lapses in
OMB approval: (0.1); Program changes: Agency
action: (3.2); Program changes: Total: (3.1);
Adjustments: 1.0;
Total change: (2.1); FY 2002 estimate: 38.4.
Energy; FY 2001 estimate: 3.9; hours
in Program changes: New statutes: -;
Program changes: Lapses in
OMB approval: -; Program changes: Agency
action: 0.1; Program changes: Total: 0.1;
Adjustments: (0.2);
Total change: (0.1); FY 2002 estimate: 3.8.
Health and Human Services; FY 2001 estimate:
186.6; Program changes: New statutes: 35.9;
Program changes: Lapses in
OMB approval: 1.4; Program changes: Agency
action: (2.0); Program changes: Total: 35.3;
Adjustments: 1.9;
Total change: 37.2; FY 2002 estimate: 223.8.
Housing and Urban; Development; FY 2001
estimate: 12.1; Program changes: New
statutes: 0.0; Program changes: Lapses in
OMB approval: 9.9; Program changes: Agency
action: 0.0; Program changes: Total: 9.9;
Adjustments: (0.1);
Total change: 9.8; FY 2002 estimate: 21.9.
Interior; FY 2001 estimate: 7.6; hours
in Program changes: New statutes: 0.1;
Program changes: Lapses in
OMB approval: 0.1; Program changes: Agency
action: 0.3; Program changes: Total: 0.4;
Adjustments: (0.3);
Total change: 0.1; FY 2002 estimate: 7.7.
Justice; FY 2001 estimate: 40.5; hours
in Program changes: New statutes: 5.1;
Program changes: Lapses in
OMB approval: (0.0); Program changes: Agency
action: 0.8; Program changes: Total: 5.9;
Adjustments: 0.2;
Total change: 6.1; FY 2002 estimate: 46.6.
Labor; FY 2001 estimate: 186.1; hours
in Program changes: New statutes: 0.1;
Program changes: Lapses in
OMB approval: -; Program changes: Agency
action: 2.4; Program changes: Total: 2.5;
Adjustments: 0.7;
Total change: 3.1; FY 2002 estimate: 189.2.
State; FY 2001 estimate: 16.6; hours
in Program changes: New statutes: 12.1;
Program changes: Lapses in
OMB approval: 0.4; Program changes: Agency
action: -; Program changes: Total: 12.5;
Adjustments: 0.1;
Total change: 12.6; FY 2002 estimate: 29.2.
Transportation; FY 2001 estimate: 80.3;
Program changes: New statutes: 0.8;
Program changes: Lapses in
OMB approval: -; Program changes: Agency
action: 163.2; Program changes: Total: 164.0;
Adjustments: 1.2;
Total change: 165.2; FY 2002 estimate: 245.5.
Treasury; FY 2001 estimate: 6,415.9;
Program changes: New statutes: 64.1;
Program changes: Lapses in
OMB approval: (0.1); Program changes: Agency
action: (9.5); Program changes: Total: 54.6;
Adjustments: 279.6;
Total change: 334.2; FY 2002 estimate:
6,750.0.
Veterans Affairs; FY 2001 estimate: 5.3;
Program changes: New statutes: -;
Program changes: Lapses in
OMB approval: 0.3; Program changes: Agency
action: -; Program changes: Total: 0.3;
Adjustments: 1.8;
Total change: 2.1; FY 2002 estimate: 7.4.
Agencies:
Environmental Protection
Agency; FY 2001 estimate: 130.8;
Program changes: New statutes: 0.1;
Program changes: Lapses in
OMB approval: -; Program changes: Agency
action: 0.6; Program changes: Total: 0.7;
Adjustments: 9.0;
Total change: 9.7; FY 2002 estimate: 140.5.
Federal Acquisition; Regulatory Council; FY
2001 estimate: 23.8; Program changes: New
statutes: -; Program changes: Lapses in
OMB approval: -; Program changes: Agency
action: 0.7; Program changes: Total: 0.7;
Adjustments: -;
Total change: 0.7; FY 2002 estimate: 24.5.
Federal Communications; Commission; FY 2001
estimate: 40.1; Program changes: New
statutes: (0.5); Program changes: Lapses in
OMB approval: -; Program changes: Agency
action: (1.7); Program changes: Total: (2.3);
Adjustments: (11.1);
Total change: (13.3); FY 2002
estimate: 26.8.
Federal Deposit; Insurance Corporation; FY
2001 estimate: 10.5; Program changes: New
statutes: -; Program changes: Lapses in
OMB approval: -; Program changes: Agency
action: 0.1; Program changes: Total: 0.1;
Adjustments: (0.7);
Total change: (0.5); FY 2002 estimate: 10.0.
Federal Emergency; Management Agency; FY 2001
estimate: 5.5; Program changes: New statutes:
0.0; Program changes: Lapses in
OMB approval: 0.0; Program changes: Agency
action: 0.3; Program changes: Total: 0.3;
Adjustments: 2.0;
Total change: 2.3; FY 2002 estimate: 7.8.
Federal Energy Regulatory
Commission; FY 2001 estimate: 4.4;
Program changes: New statutes: -;
Program changes: Lapses in
OMB approval: 0.0; Program changes: Agency
action: 0.0; Program changes: Total: 0.0;
Adjustments: -;
Total change: 0.0; FY 2002 estimate: 4.4.
Federal Trade; Commission; FY 2001 estimate:
72.6; Program changes: New statutes: -;
Program changes: Lapses in
OMB approval: -; Program changes: Agency
action: -; Program changes: Total: -;
Adjustments: (2.9); Total
change: (2.9); FY 2002 estimate: 69.7.
National Aeronautic and
Space Administration; FY 2001 estimate: 6.9;
Program changes: New statutes: -;
Program changes: Lapses in
OMB approval: (0.9); Program changes: Agency
action: 0.0; Program changes: Total: (0.9);
Adjustments: 0.0;
Total change: (0.9); FY 2002 estimate: 6.0.
National Science; Foundation; FY 2001
estimate: 4.8; Program changes: New statutes:
-; Program changes: Lapses in
OMB approval: -; Program changes: Agency
action: 0.0; Program changes: Total: 0.0;
Adjustments: (0.3);
Total change: (0.3); FY 2002 estimate: 4.5.
Nuclear Regulatory; Commission; FY 2001
estimate: 8.2; Program changes: New statutes:
-; Program changes: Lapses in
OMB approval: -; Program changes: Agency
action: -; Program changes: Total: -;
Adjustments: 0.2; Total
change: 0.2; FY 2002 estimate: 8.4.
Securities and Exchange; Commission; FY 2001
estimate: 114.3; Program changes: New
statutes: 0.2; Program changes: Lapses in
OMB approval: -; Program changes: Agency
action: 4.3; Program changes: Total: 4.5;
Adjustments: 17.8;
Total change: 22.3; FY 2002 estimate: 136.6.
Small Business; Administration; FY 2001
estimate: 1.9; Program changes: New statutes:
-; Program changes: Lapses in
OMB approval: 0.3; Program changes: Agency
action: 0.0; Program changes: Total: 0.4;
Adjustments: 0.5;
Total change: 0.9; FY 2002 estimate: 2.8.
Social Security; Administration; FY 2001
estimate: 24.2; Program changes: New
statutes: 0.4; Program changes: Lapses in
OMB approval: -; Program changes: Agency
action: 0.3; Program changes: Total: 0.7;
Adjustments: 0.0;
Total change: 0.6; FY 2002 estimate: 24.8.
Source: OMB and agencies' ICB submissions.
Note: Data on the Federal Acquisition Regulatory Council 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 "--"entries were zero
values. Addition of individual elements may not equal totals due to
rounding.
[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
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.
The agencies' ICB submissions identified what drove the changes in
agencies' bottom-line burden-hour estimates during fiscal year 2002.
For example, more than 80 percent of the 13 million hour decline in the
FCC estimate was due to the adjustment of one information collection.
However, OMB does not require agencies to explain the causes of
significant adjustments in agencies' burden-hour estimates. Therefore,
it is not clear whether the FCC adjustment reflected a real reduction
in the burden felt by the public (e.g., a change in the population
responding to the collection), or was simply a reestimation of the
burden that already existed. In any event, it appears that most of the
FCC decrease was not the result of agency burden-reduction initiatives.
In contrast, HHS indicated that the 37 million burden-hour increase in
its paperwork estimate during fiscal year 2002 was almost entirely
driven by a statutory program change in a single collection related to
the enactment of the Health Insurance Portability and Accountability
Act of 1996.[Footnote 6] In its ICB submission, HHS said the purpose of
this statutory change was "to establish standards for electronic
transactions and for code sets to be used in those transactions." HUD
indicated that the 87 percent increase in its burden estimate was
entirely driven by program changes--specifically the reinstitution of
two information collections that had been in violation of the PRA.
Therefore, although the department's burden estimate increased, the
actual burden imposed on the public by the collection did not change.
In some cases, we found the agencies' explanations in their ICB
submissions for the changes in their burden estimates somewhat
misleading and/or inconsistent. For example, DOT indicated in its
summary table that virtually all of the department's 165 million
burden-hour increase in its estimate was driven by program changes--
specifically, an "agency action." However, the narrative that the
department submitted to OMB indicated that almost all of this change
was driven by the reinstatement of a collection that had been in
violation ("Driver's Records of Duty Status") and an adjustment to the
collection's burden estimate.[Footnote 7] DOT's estimate of the burden
associated with this collection declined about 42 million burden hours
when the violation occurred during fiscal year 2001, so the adjustment
was about 120 million hours. Documentation that we obtained from DOT's
Office of the Chief Information Officer indicated that the adjustment
was caused by significant increases in the department's estimates of
the time needed for drivers and motor carriers to perform certain
tasks. Therefore, the actual burden associated with this information
collection did not change. The same information was being collected
when the authorization had lapsed during fiscal year 2001 and when it
was reinstated during fiscal year 2002. The rest of the increase was
caused by the department's reestimation of the burden, not a change in
the burden itself.
Reasons for Changes in IRS Burden Estimate:
The increase in the IRS burden-hour estimate during fiscal year 2002
(about 330 million burden hours) was more than the increase in 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.
The Department of the Treasury's ICB submission indicated that more
than 80 percent of the increase in the department's estimate during
fiscal year 2002 (about 280 million burden hours) was caused by
adjustments. An IRS official told us that this adjustment was largely
driven by an increase in the number of taxpayers using Form 1040.
IRS identified a number of burden-hour increases that it said were
caused by the underlying statutes. For example, IRS said that it added
more than 18 million burden hours to its estimate because of changes to
Form 1040 and its associated schedules and instructions that were
precipitated by the Economic Growth and Tax Relief Reconciliation Act
of 2001.[Footnote 8] Also, IRS said it added nearly 17 million hours to
the burden associated with Form 4562 ("Depreciation and Amortization")
because of changes made by the Job Creation and Worker Assistance Act
of 2002.[Footnote 9]
However, IRS said that other increases in its burden-hour estimate were
made at the agency's initiative--not because of new statutes. For
example, the agency said that an increase of more than 22 million hours
in its estimate for Form 941 and related forms were due to changes
"requested by IRS."[Footnote 10]
The Department of the Treasury also indicated in its ICB submission
that it had taken a number of initiatives to reduce paperwork burden.
For example, beginning with the 2002 tax year, Treasury said that IRS
had eliminated the requirement on small corporate filers (i.e., those
with total receipts and assets of less than $250,000) to file certain
schedules with their returns, resulting in a reduction of about 26
million burden hours. Treasury also said it had decided to increase the
threshold for taxpayers having to file Schedule B (Form 1040) from $400
to $1,500. As a result, the department said that more than 10 million
fewer taxpayers would have to file the schedule--about one-third of
those who previously had to file. However, Treasury did not estimate
how many burden hours would be reduced as a result of that action.
Focusing on IRS to Control Paperwork:
In summary, the agencies' information collection estimates for the ICB
being released today indicate that federal paperwork continues to
increase at a record pace, and that IRS continues to account for most
of the increases in estimated burden. Because IRS constitutes such a
significant portion of the annual increases and the governmentwide
burden-hour estimate, one strategy to address increases in federal
paperwork could be to focus more of OIRA's burden-reduction efforts on
that agency. Just as increases in IRS's estimates have had a
determinative effect on the governmentwide estimates, reduction in the
IRS estimates can have an equally determinative effect. For example,
just one IRS information collection (related to Form 1040) is estimated
to impose more paperwork burden than all of the non-Treasury
collections combined. Just five IRS information collections represent
about half of the 8.2 billion hour paperwork estimate governmentwide. A
small reduction in the burden associated with those five collections
could have a major effect on the governmentwide effort to reduce
paperwork burden.
However, significant reduction of the burden hours associated with
these and other IRS information collections may ultimately depend upon
congressional action. IRS officials maintain that the agency's
paperwork burden totals reflect the information that is needed to
administer the tax laws. Therefore, they suggest that significant
reductions in IRS's paperwork burden would require changes to the tax
laws. Within the current tax laws, however, IRS has some discretion
that can affect paperwork burden. For example, in January 2001 IRS
altered the threshold over which businesses must pay employment taxes
on a quarterly rather than a more frequent basis. In general, when
considering reductions in the amount or frequency of data collection,
IRS must also balance the potential for decreasing its ability to
ensure that taxpayers fulfill their tax obligations with the amount of
burden imposed.
Agencies Identified Fewer PRA Violations:
I would now like to turn to the other main topic that 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. Under the PRA, 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 currently about 8,000 approved collections.
As table 2 shows, the agencies indicated in their ICB submissions that
a total of 244 PRA violations occurred during fiscal year 2002 (i.e.,
were either carried over from the previous year or were new
violations). As in previous years, most (217) of these violations were
collections whose OIRA approvals had expired and had not been
reauthorized. Four cabinet departments were responsible for nearly 60
percent of the violations--USDA, the Department of Commerce (DOC), HUD,
and the Department of Veterans Affairs (DVA).
Table 2: Reported Violations of the PRA During Fiscal Year 2002:
Departments.
Agriculture; Expired information collections: Departments: 65; Other
violations: Departments: 1; Total violations: Departments: 66.
Commerce; Expired information collections: Departments: 28; Other
violations: Departments: 2; Total violations: Departments: 30.
Defense; Expired information collections: Departments: 7; Other
violations: Departments: 0; Total violations: Departments: 7.
Education; Expired information collections: Departments: 3; Other
violations: Departments: 1; Total violations: Departments: 4.
Energy; Expired information collections: Departments: 0; Other
violations: Departments: 0; Total violations: Departments: 0.
Health and Human Services; Expired information collections:
Departments: 11; Other violations: Departments: 7; Total violations:
Departments: 18.
Housing and Urban Development; Expired information collections:
Departments: 24; Other violations: Departments: 0; Total violations:
Departments: 24.
Interior; Expired information collections: Departments: 6; Other
violations: Departments: 0; Total violations: Departments: 6.
Justice; Expired information collections: Departments: 16; Other
violations: Departments: 1; Total violations: Departments: 17.
Labor; Expired information collections: Departments: 0; Other
violations: Departments: 0; Total violations: Departments: 0.
State; Expired information collections: Departments: 4; Other
violations: Departments: 0; Total violations: Departments: 4.
Transportation; Expired information collections: Departments: 0; Other
violations: Departments: 0; Total violations: Departments: 0.
Treasury; Expired information collections: Departments: 0; Other
violations: Departments: 0; Total violations: Departments: 0.
Veterans Affairs; Expired information collections: Departments: 23;
Other violations: Departments: 0; Total violations: Departments: 23.
Agencies.
Environmental Protection Administration; Expired information
collections: Departments: 0; Other violations: Departments: 1; Total
violations: Departments: 1.
Federal Acquisition Regulation; Expired information collections:
Departments: 0; Other violations: Departments: 0; Total violations:
Departments: 0.
Federal Communications Commission; Expired information collections:
Departments: 2; Other violations: Departments: 0; Total violations:
Departments: 2.
Federal Deposit Insurance Corporation; Expired information
collections: Departments: 0; Other violations: Departments: 0; Total
violations: Departments: 0.
Federal Emergency Management Agency; Expired information collections:
Departments: 6; Other violations: Departments: 8; Total violations:
Departments: 14.
Federal Energy Regulatory Commission; Expired information collections:
Departments: 1; Other violations: Departments: 0; Total violations:
Departments: 1.
Federal Trade Commission; Expired information collections:
Departments: 0; Other violations: Departments: 0; Total violations:
Departments: 0.
National Aeronautics and Space Administration; Expired information
collections: Departments: 12; Other violations: Departments: 0; Total
violations: Departments: 12.
National Science Foundation; Expired information collections:
Departments: 0; Other violations: Departments: 0; Total violations:
Departments: 0.
Nuclear Regulatory Commission; Expired information collections:
Departments: 0; Other violations: Departments: 0; Total violations:
Departments: 0.
Securities and Exchange Commission; Expired information collections:
Departments: 0; Other violations: Departments: 0; Total violations:
Departments: 0.
Small Business Administration; Expired information collections:
Departments: 9; Other violations: Departments: 0; Total violations:
Departments: 9.
Social Security Administration; Expired information collections:
Departments: 0; Other violations: Departments: 6; Total violations:
Departments: 6.
Total; Expired information collections: Departments: 217; Other
violations: Departments: 27; Total violations: Departments: 244.
Sources: OMB and agencies' ICB submissions.
[End of table]
Number of Violations Has Declined in Recent Years:
As figure 5 shows, the number of PRA violations that the agencies
identified has fallen markedly during the past 5 fiscal years--from 872
violations during fiscal year 1998 to 244 during fiscal year 2002. The
decline in the number of violations between fiscal year 2001 and fiscal
year 2002 is particularly notable. Last year, OIRA only asked the
cabinet departments and EPA to report data on violations. The number of
violations during fiscal year 2002 in just those agencies was less than
half the number reported by the same agencies during fiscal year 2001
(200 versus 402).
Figure 5: The Number of PRA Violations Has Declined During the Past 5
Fiscal Years:
[See PDF for image]
Note: In fiscal year 2001, OMB reported the violations only for the
cabinet-level departments and the EPA. Therefore, the data for that
year does not include information for 12 independent agencies included
in the other years.
[End of figure]
As figure 6 shows, federal agencies vary in the extent and the
consistency with which they have been able to reduce their number of
violations. In some agencies, the number of violations has gone down in
each of the last 3 fiscal years (e.g., USDA and the Department of
Justice). In other agencies, the number of violations has gone up
during this period (e.g., DOC) or exhibited an inconsistent pattern
(e.g., HUD and DVA).
Figure 6: Agencies Exhibit Varying Patterns of Compliance with the PRA:
[See PDF for image]
[End of figure]
Some cabinet departments have made particularly notable progress during
the past fiscal year--the Department of the Treasury (from 14
violations during fiscal year 2001 to zero during fiscal year 2002);
DOT (from 12 violations to zero); DOL (from 8 violations to zero); and
the Department of Energy (from 6 violations to zero).
OIRA Efforts to Reduce Violations:
OIRA deserves a great deal of the credit for the reduction in the
number of PRA violations during the past year. In June 2002--2 months
after last year's hearing before this Committee--the OIRA Administrator
sent a memorandum to agency chief information officers (CIOs), general
counsels, and solicitors emphasizing the importance of compliance with
the PRA. The Administrator said that, despite recent progress, the
number of overall and unresolved violations was still "unacceptably
high," and asked each agency to identify progress on violations
reported in the ICB for fiscal year 2001 and to identify any new
violations that had occurred since September 30, 2001. He also asked
the agencies to describe the procedures that they had in place to
prevent future violations, and said OIRA was planning to meet with the
CIOs and general counsels of the five agencies with the highest number
of overall, long-standing, or high-burden violations--USDA, HHS, HUD,
the Department of State, and DVA.
In November 2002, the OIRA Administrator sent another memorandum to the
CIOs, noting that although most agencies had done a good job of
resolving existing violations, some were still having problems in this
area. He also reported that six agencies had reported 10 or more new
violations from October 2001 through June 2002--USDA, DOC, the
Department of State; the Federal Emergency Management Administration,
the National Aeronautics and Space Administration, and the Small
Business Administration. The Administrator said OIRA's goal was "to
achieve zero violations by no later than April 1, 2003," and urged each
agency to reexamine the efficacy of its PRA clearance system. To assist
in that effort, he attached a list of collections that had expired in
the previous 30 days and those that were due to expire in the next 150
days, and asked the agencies to take action to resolve existing
violations and to prevent future ones.
Long-standing Violations Still a Problem:
In our previous testimonies on the implementation of the PRA, we noted
that many of the agencies' PRA violations had been occurring for years.
The agencies appear to have made some progress in this area, resolving
certain long-standing violations by either obtaining OMB clearance or
discontinuing the collections. For example, during fiscal year 2002,
the Department of the Interior resolved three violations that had been
occurring since 1993 or 1994. DVA resolved five violations that had
been occurring since 1996 or 1997.
However, the agencies also indicated that many other long-standing
violations had not been addressed. Of the 244 violations that occurred
during fiscal year 2002, 120 were still occurring at the end of the
fiscal year (September 30, 2002). Forty-five of these 120 violations
had been occurring for at least 1 year at that point, and 27 had been
occurring for at least 2 years.
Some agencies had a particularly large number of long-standing
unresolved violations.
* USDA indicated that 27 of its 66 violations were unresolved as of
September 30, 2002. Of these, 14 had been occurring for more than 1
year, and 6 had been in violation for more than 2 years. Three of the
USDA collections had been in violation for at least 5 years--since
1997.
* HUD indicated that 23 of its 24 violations during fiscal year 2002
were unresolved as of September 30, 2002. Of these, 17 had been
occurring for at least 1 year, and 13 had been in violation for at
least 2 years.
* SBA indicated that 8 of its 9 violations during fiscal year 2002 were
unresolved as of September 30, 2002. Of these, 6 had been occurring for
at least 1 year, and 4 had been occurring for at least 2 years.
Federal agencies brought a number of their unresolved violations into
compliance after the fiscal year ended. For example, by the end of
January 2003, HUD had resolved 15 of its 23 violations that were open
at the end of fiscal year 2002. USDA resolved 12 of its 27 open
violations by January 2003. Overall, 46 of the 120 violations that were
still occurring as of September 30, 2002, were resolved between that
date and the end of January 2003. However, that still leaves 74
violations occurring during fiscal year 2002 that had not been resolved
by the end of January 2003.
Violations and 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 "average value of time" associated
with each hour of paperwork.[Footnote 11] Although the ICBs list the
information collections that were in violation during the previous
year, they do not show 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 the 45 information collections
that had been in violation for at least 1 year as of September 30,
2002.
The data suggest that PRA violations may constitute significant costs
for those required to provide the related information. The 45
violations that we examined involved an estimated 48 million burden
hours of paperwork, or (at $30 per hour) about $1.4 billion in costs.
Just 2 of the 45 collections accounted for more than $1 billion in
estimated opportunity costs.
Many of the information collections that were in violation were being
administered for regulatory purposes, so if the respondents knew that
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 or
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:
Although OIRA and the agencies have clearly made progress in reducing
the overall number of PRA violations in recent years, more progress is
needed. As I am sure that the Administrator would agree, 244 violations
of the law in 1 year is not acceptable. Agencies can and should achieve
OIRA's goal of zero violations.
As I noted earlier, OIRA has taken a number of steps during the past
year to try to address this problem. As we recommended last year, OIRA
has used its database to identify information collections that (1) have
recently expired and attempted to determine whether the agencies are
continuing to collect the information and (2) are about to expire,
thereby attempting to prevent future violations. OIRA has also asked
the agencies to describe the procedures that they have in place to
prevent future violations and has met with agencies that have the
highest number of overall, long-standing, or high-burden violations. We
believe that these actions precipitated the improvements that occurred
during fiscal year 2002, and will have positive benefits for years to
come.
However, OIRA still has not taken some of the actions that we
previously recommended to improve compliance with the PRA. For example,
OIRA could notify the budget side of OMB that an 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. OIRA could also encourage the use of "best practices"
in agencies with a good record of PRA compliance. Agencies that have
recently eliminated their violations altogether (e.g., the Department
of the Treasury, DOT, and DOL) may have much to teach agencies that
continue to violate the act.
Although OIRA's current workload is clearly substantial, we do not
believe the kinds of actions that we suggested would require
significant additional resources. Primarily, the actions require a
continued commitment by OIRA leadership to improve the operation of the
current paperwork clearance process. However, we also recognize that
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.
(450192):
FOOTNOTES
[1] See, for example, U.S. General Accounting Office, Veterans' Health
Care: VA Needs Better Data on Extent and Causes of Waiting Times, GAO/
HEHS-00-90 (Washington, D.C.: May 31, 2000); Public Housing: HUD Needs
Better Information on Housing Agencies' Management Performance, GAO-01-
94 (Washington, D.C.: Nov. 9, 2000); and Environmental Information: EPA
Needs Better Information to Manage Risks and Measure Results, GAO-01-
97T (Washington, D.C: Oct. 3, 2000).
[2] U.S. General Accounting Office, Information Resources Management:
Comprehensive Strategic Plan Needed to Address Mounting Challenges,
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, 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] See U.S. General Accounting Office, 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.
[5] RISC is part of the General Services Administration but works
closely with OIRA to provide information to the President, Congress,
and the public about federal regulations. It maintains a database that
includes information on all information collection review actions by
OIRA.
[6] Pub. Law 104-191.
[7] This collection is used by DOT to determine the compliance of motor
carriers and commercial motor vehicle drivers with the maximum driving
and duty time limitations prescribed in the Federal Motor Carrier
Safety Regulations. For a discussion of how DOT's burden-hour estimate
for this collection changed, see 67 Fed. Reg. 1396 (Jan. 10, 2002).
[8] Pub. Law 107-16.
[9] Pub. Law 107-147. IRS said that the provisions that affected Form
4562 include an additional 30 percent depreciation deduction for
qualified property placed in service after September 10, 2001, and an
increase in the section 179 expense deduction for property placed in
service in the New York Liberty Zone.
[10] Form 941 is used by employers to report payments made to employees
subject to income and social security/Medicare taxes and the amounts of
those taxes.
[11] Office of Management and Budget, Draft Report to Congress on the
Costs and Benefits of Federal Regulations, 67 Fed. Reg. 15014 (Mar. 28,
2002). In this report, OMB used an average value of time of $30 per
hour to estimate the cost associated with paperwork burden.
