Paperwork Reduction Act
Increase in Estimated Burden Hours Highlights Need for New Approach Gao ID: GAO-06-974T July 18, 2006Americans spend billions of hours each year providing information to federal agencies by filling out information collections (forms, surveys, or questionnaires). A major aim of the Paperwork Reduction Act (PRA) is to minimize the burden that responding to these collections imposes on the public, while maximizing their public benefit. Under the act, the Office of Management and Budget (OMB) is to approve all such collections and to report annually on the agencies' estimates of the associated burden. In addition, agency chief information officers (CIO) are to review information collections before submitting them to OMB for approval and certify that the collections meet certain standards set forth in the act. GAO was asked to testify on OMB's burden report for 2005 and on a previous study of PRA implementation (GAO-05-424), which focused on the CIO review and certification processes and described alternative processes that two agencies have used to minimize paperwork burden. To prepare this testimony, GAO reviewed the current burden report and its past work in this area. For its 2005 study, GAO reviewed a governmentwide sample of collections, reviewed processes and collections at four agencies that account for a large proportion of burden, and performed case studies of 12 approved collections at the four agencies.
After 2 years of slight declines, OMB reports that paperwork burden grew in fiscal year 2005 and is expected to increase further in fiscal year 2006. Estimates in OMB's annual report to Congress show that the total paperwork burden imposed by federal information collections increased last year to about 8.4 billion hours--an increase of 5.5 percent from the previous year's total of about 8.0 billion hours. Nearly all this increase resulted from the implementation of new laws (for example, about 224 million hours were due to the implementation of voluntary prescription drug coverage under Medicare). The rest of the increase came mostly from adjustments to the estimates due to such factors as changes in estimation methods and in the numbers of respondents. Looking ahead to fiscal year 2006, OMB expects an increase of about 250 million hours because of a new model for estimating burden being implemented by the Internal Revenue Service (IRS). According to OMB, this expected rise does not reflect any real change in the burden on taxpayers, but only in how IRS estimates it. The PRA requires that CIOs review information collections and certify that they meet standards to minimize burden and maximize utility; however, these reviews were not always rigorous, reducing assurance that these standards were met. In 12 case studies at four agencies, GAO determined that CIOs certified collections proposed by program offices despite missing or inadequate support. Providing support for certifications is a CIO responsibility under the PRA, but agency files contained little evidence that CIO reviewers had made efforts to improve the support offered by program offices. Numerous factors contributed to these problems, including a lack of management attention and weaknesses in OMB guidance. Based on its review, GAO recommended (among other things) that agencies strengthen the support provided for certifications and that OMB update its guidance to clarify and emphasize this requirement. Since GAO's study was issued, the four agencies have reported taking steps to strengthen their support for CIO certifications, such as providing additional resources and guidance for the process, and OMB has updated parts of its guidance. In contrast to the CIO review process, which did not lead to reduced paperwork burden in GAO's 12 case studies, IRS and the Environmental Protection Agency (EPA) have set up alternative processes specifically focused on reducing burden. These agencies, whose missions involve numerous information collections, have devoted significant resources to targeted burden reduction efforts that involve extensive outreach to stakeholders. According to the two agencies, these efforts have led to significant reductions in paperwork burden on the public. In light of these promising results, the weaknesses in the current CIO review process, and the persistent increases in burden, a new approach to burden reduction appears warranted. GAO suggested that Congress should consider mandating pilot projects to target some collections for rigorous analysis along the lines of the IRS and EPA approaches.
GAO-06-974T, Paperwork Reduction Act: Increase in Estimated Burden Hours Highlights Need for New Approach
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United States Government Accountability Office:
GAO:
Testimony:
Before the Subcommittee on Regulatory Affairs, Committee on Government
Reform, House of Representatives:
For Release on Delivery:
2:00 p.m. EDT Tuesday, July 18, 2006:
Paperwork Reduction Act:
Increase in Estimated Burden Hours Highlights Need for New Approach:
Statement of Linda D. Koontz, Director:
Information Management:
GAO-06-974T:
GAO Highlights:
Highlights of GAO-06-974T, a testimony before the Subcommittee on
Regulatory Affairs, Committee on Government Reform, House of
Representatives
Why GAO Did This Study:
Americans spend billions of hours each year providing information to
federal agencies by filling out information collections (forms,
surveys, or questionnaires). A major aim of the Paperwork Reduction Act
(PRA) is to minimize the burden that responding to these collections
imposes on the public, while maximizing their public benefit. Under the
act, the Office of Management and Budget (OMB) is to approve all such
collections and to report annually on the agencies‘ estimates of the
associated burden. In addition, agency chief information officers (CIO)
are to review information collections before submitting them to OMB for
approval and certify that the collections meet certain standards set
forth in the act.
GAO was asked to testify on OMB‘s burden report for 2005 and on a
previous study of PRA implementation (GAO-05-424), which focused on the
CIO review and certification processes and described alternative
processes that two agencies have used to minimize paperwork burden. To
prepare this testimony, GAO reviewed the current burden report and its
past work in this area. For its 2005 study, GAO reviewed a
governmentwide sample of collections, reviewed processes and
collections at four agencies that account for a large proportion of
burden, and performed case studies of 12 approved collections at the
four agencies.
What GAO Found:
After 2 years of slight declines, OMB reports that paperwork burden
grew in fiscal year 2005 and is expected to increase further in fiscal
year 2006. Estimates in OMB‘s annual report to Congress show that the
total paperwork burden imposed by federal information collections
increased last year to about 8.4 billion hours”an increase of 5.5
percent from the previous year‘s total of about 8.0 billion hours.
Nearly all this increase resulted from the implementation of new laws
(for example, about 224 million hours were due to the implementation of
voluntary prescription drug coverage under Medicare). The rest of the
increase came mostly from adjustments to the estimates due to such
factors as changes in estimation methods and in the numbers of
respondents. Looking ahead to fiscal year 2006, OMB expects an increase
of about 250 million hours because of a new model for estimating burden
being implemented by the Internal Revenue Service (IRS). According to
OMB, this expected rise does not reflect any real change in the burden
on taxpayers, but only in how IRS estimates it.
The PRA requires that CIOs review information collections and certify
that they meet standards to minimize burden and maximize utility;
however, these reviews were not always rigorous, reducing assurance
that these standards were met. In 12 case studies at four agencies, GAO
determined that CIOs certified collections proposed by program offices
despite missing or inadequate support. Providing support for
certifications is a CIO responsibility under the PRA, but agency files
contained little evidence that CIO reviewers had made efforts to
improve the support offered by program offices. Numerous factors
contributed to these problems, including a lack of management attention
and weaknesses in OMB guidance. Based on its review, GAO recommended
(among other things) that agencies strengthen the support provided for
certifications and that OMB update its guidance to clarify and
emphasize this requirement. Since GAO‘s study was issued, the four
agencies have reported taking steps to strengthen their support for CIO
certifications, such as providing additional resources and guidance for
the process, and OMB has updated parts of its guidance.
In contrast to the CIO review process, which did not lead to reduced
paperwork burden in GAO‘s 12 case studies, IRS and the Environmental
Protection Agency (EPA) have set up alternative processes specifically
focused on reducing burden. These agencies, whose missions involve
numerous information collections, have devoted significant resources to
targeted burden reduction efforts that involve extensive outreach to
stakeholders. According to the two agencies, these efforts have led to
significant reductions in paperwork burden on the public. In light of
these promising results, the weaknesses in the current CIO review
process, and the persistent increases in burden, a new approach to
burden reduction appears warranted. GAO suggested that Congress should
consider mandating pilot projects to target some collections for
rigorous analysis along the lines of the IRS and EPA approaches.
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-06-974T].
To view the full product, including the scope and methodology, click on
the link above. For more information, contact Linda Koontz at (202) 512-
6240 or koontzl@gao.gov.
[End of Section]
Madam Chairman and Members of the Subcommittee:
I am pleased to be here today to discuss the implementation of the
Paperwork Reduction Act (PRA).[Footnote 1] As you know, one of the
goals of the PRA is to help ensure that when the government asks the
public for information, the burden of providing this information is as
small as possible and the information itself is used effectively. In
other words, the goal is to minimize the paperwork burden while
maximizing the public benefit and utility of the information collected.
To achieve this goal, the PRA includes provisions that establish
standards and procedures for effective implementation and oversight of
information collections. Among these provisions is the requirement that
agencies not establish information collections without having them
approved by the Office of Management and Budget (OMB), and that before
submitting them for approval, agencies' Chief Information Officers
(CIO) certify that the collection meets 10 specified standards--
including that they avoid unnecessary duplication and reduce the
paperwork burden as much as possible.
As you requested, I will begin by discussing the estimates of
government paperwork burden provided in the annual PRA report (known as
the Information Collection Budget) that OMB recently released, which
presents federal agencies' estimates of federal paperwork burden as of
the end of fiscal year 2005. I will also discuss results from a May
2005 report[Footnote 2] that we issued on PRA processes and compliance,
concentrating on our findings regarding agencies' processes to certify
that information collections meet PRA standards and on alternative
processes that two agencies have used to minimize the paperwork burden.
In preparing this testimony, we reviewed prior work and analyzed OMB
and other documents. For our discussion of the Information Collection
Budget, we examined the current OMB report as well as our reviews of
previous annual PRA reports.[Footnote 3] For our discussion of the
certification process, we drew on our May 2005 report, for which we
performed detailed reviews of paperwork clearance processes and
collections at four agencies: the Departments of Veterans Affairs (VA),
Housing and Urban Development (HUD), and Labor and the Internal Revenue
Service (IRS). Together, these four agencies represent a broad range of
paperwork burden, and in 2004, they accounted for about 82 percent of
the almost 8 billion hours of estimated paperwork burden for all
federal agencies. Of this total, IRS alone accounted for about 80
percent.[Footnote 4] We also selected 12 approved collections as case
studies (three at each of the four agencies) to determine how effective
agency processes were. In addition, we analyzed a random sample (343)
of all OMB-approved collections governmentwide as of May 2004 (8,211
collections at 68 agencies) to determine compliance with the act's
requirements regarding agency certification of the 10 standards and
consultation with the public. We designed the random sample so that we
could determine compliance levels at the four agencies and
governmentwide. Finally, although the Environmental Protection Agency
(EPA) was not one of the agencies whose processes we reviewed, we
analyzed documents and interviewed officials concerning the agency's
efforts to reduce the paperwork burden of its information collections.
Further details on our scope and methodology are provided in the
report. All work on which this testimony is based was performed in
accordance with generally accepted government auditing standards.
Results in Brief:
After 2 years of slight declines, the total paperwork burden imposed by
federal information collections increased in fiscal year 2005 and is
projected to increase again in fiscal year 2006, according to estimates
provided in OMB's July 2006 annual PRA report to Congress. The
estimated total burden for fiscal year 2005 was 8.4 billion hours,
which is an increase of 5.5 percent (441 million burden hours) from the
previous year's total of 8.0 billion hours. Nearly all this increase is
the result of the implementation of new statutes. For example, there
was an increase of about 224 million hours from the implementation of
voluntary prescription drug coverage under Medicare. In addition,
adjustments to the estimates (from such factors as changes in
estimation methods and the population of respondents) accounted for a
net increase in the burden of about 19 million hours, and agency
discretionary program changes led to a net increase of 180,000 hours.
With regard to PRA violations (information collections that did not
have OMB approval or for which that approval had expired), OMB reports
that fewer occurred in fiscal year 2005 than previously, for a total of
97 violations. OMB also stated in this year's report that IRS began
using a new statistical model in fiscal year 2006 that will improve the
accuracy and transparency of future taxpayer burden estimates. Using
this new model is expected to result in an increase of 250 million
hours in the burden estimate that IRS will report for next year.
However, according to OMB, this expected rise does not reflect any real
change in the burden on taxpayers, but only in how IRS estimates the
paperwork burden.
The PRA requires that CIOs review information collections and certify
that they meet standards to minimize burden and maximize utility;
however, these reviews were not always rigorous. As we reported in
2005, agency CIOs generally reviewed information collections before
they were submitted to OMB and certified that the required standards in
the act were met. However, our review of 12 case studies showed that
CIOs provided these certifications despite missing or inadequate
support from the program offices sponsoring the collections. Further,
although the law requires CIOs to provide support for certifications,
agency files contained little evidence that CIO reviewers had made
efforts to improve the support offered by program offices. Numerous
factors have contributed to these problems, including a lack of
management support and weaknesses in OMB guidance. Because these
reviews were not rigorous, OMB, the agency, and the public have reduced
assurance that the standards in the act--such as avoiding duplication
and minimizing burden--were consistently met.
In contrast, our May 2005 report discussed how IRS and EPA have used
additional evaluative processes that focus specifically on reducing
burden. These processes are targeted, resource-intensive efforts that
involve extensive outreach to stakeholders. According to these
agencies, their processes led to significant reductions in burden on
the public while maximizing the utility of the information collections.
For example, in this year's PRA report, OMB cites a decrease of about
19 million hours from streamlining IRS's Form 1041 to make it easier
and faster to understand and file.
In our report, we recommended that OMB and agencies take steps to
improve review processes and compliance with the act. We also suggested
that Congress should consider mandating pilot projects to target some
collections for rigorous analysis along the lines of the approaches
used by IRS and EPA. OMB and the agencies agreed with most of the
recommendations. Since our study was issued, the four agencies have
reported taking steps to strengthen their support for CIO
certifications, such as providing additional resources and guidance for
the process, and OMB has updated parts of its guidance to agencies.
However, the updated guidance is not aimed at all information
collections, but rather at conducting surveys that are used for general-
purpose statistics or as part of program evaluations or research
studies.[Footnote 5] In addition, it does not provide clear guidance on
one of the topics mentioned in our recommendation: determining whether
small entities are affected by a collection and reducing reporting
burden on these entities.
Background:
Collecting information is one way that federal agencies carry out their
missions. For example, IRS needs to collect information from taxpayers
and their employers to know the correct amount of taxes owed. The U.S.
Census Bureau collects information used to apportion congressional
representation and for many other purposes. When new circumstances or
needs arise, agencies may need to collect new information. We
recognize, therefore, that a large portion of federal paperwork is
necessary and often serves a useful purpose.
Nonetheless, besides ensuring that information collections have public
benefit and utility, federal agencies are required by the PRA to
minimize the paperwork burden that the collection of information
imposes. Among the provisions of the act aimed at this purpose are
requirements for the review of information collections by OMB and by
agency CIOs.
Under PRA, federal agencies may not conduct or sponsor the collection
of information unless approved by OMB; information collections for
which OMB approval is expired or missing are considered violations of
the PRA. Before approving collections, OMB is required to determine
that the agency's collection of information is necessary for the proper
performance of the functions of the agency, including whether the
information will have practical utility.[Footnote 6] Consistent with
the act's requirements, OMB has established a process to review all
proposals by executive branch agencies (including independent
regulatory agencies) to collect information from 10 or more persons,
whether the collections are voluntary or mandatory.
In addition, the act as amended in 1995 requires every agency to
establish a process under the official responsible for the act's
implementation (now the agency's CIO[Footnote 7]) to review program
offices' proposed collections. This official is to be sufficiently
independent of program responsibility to evaluate fairly whether
information collections should be approved. Under the law, the CIO is
to review each collection of information before submission to OMB,
including reviewing the program office's evaluation of the need for the
collection and its plan for the efficient and effective management and
use of the information to be collected, including necessary
resources.[Footnote 8] As part of that review, the agency CIO must
ensure that each information collection instrument (form, survey, or
questionnaire) complies with the act, certify that the collection meets
10 standards (see table 1), and provide support for these
certifications.
Table 1: Standards for Information Collections Set by the Paperwork
Reduction Act:
Standards: The collection is necessary for the proper performance of
agency functions.
Standards: The collection avoids unnecessary duplication.
Standards: The collection reduces burden on the public, including small
entities, to the extent practicable and appropriate.
Standards: The collection uses plain, coherent, and unambiguous
language that is understandable to respondents.
Standards: The collection will be consistent and compatible with
respondents' current reporting and recordkeeping practices to the
maximum extent practicable.
Standards: The collection indicates the retention period for any
recordkeeping requirements for respondents.
Standards: The collection informs respondents of the information they
need to exercise scrutiny of agency collections information (the
reasons the information is collected; the way it is used; an estimate
of the burden; whether responses are voluntary, required to obtain a
benefit, or mandatory; and a statement that no person is required to
respond unless a valid OMB control number is displayed).
Standards: The collection was developed by an office that has planned
and allocated resources for the efficient and effective management and
use of the information to be collected.
Standards: The collection uses effective and efficient statistical
survey methodology (if applicable).
Standards: The collection uses information technology to the maximum
extent practicable to reduce burden and improve data quality, agency
efficiency, and responsiveness to the public.
Source: Paperwork Reduction Act, Pub. L. 104-13, 109 Stat. 173-4, sec.
3506(c)(3).
[End of table]
In addition, the original PRA of 1980 (section 3514(a)) requires OMB to
keep Congress "fully and currently informed" of the major activities
under the act and to submit a report to Congress at least annually on
those activities. Under the 1995 amendments, this report must include,
among other things, a list of any increases in burden. To satisfy this
requirement, OMB prepares the annual PRA report, which reports on
agency actions during the previous fiscal year, including changes in
agencies' burden-hour estimates as well as violations of the PRA.
The 1995 PRA amendments also required OMB to set specific goals for
reducing burden from the level it had reached in 1995: at least a 10
percent reduction in the governmentwide burden-hour estimate for each
of fiscal years 1996 and 1997, a 5 percent governmentwide burden
reduction goal in each of the next 4 fiscal years, and annual agency
goals that reduce burden to the "maximum practicable opportunity." At
the end of fiscal year 1995, federal agencies estimated that their
information collections imposed about 7 billion burden hours on the
public. Thus, for these reduction goals to be met, the burden-hour
estimate would have had to decrease by about 35 percent, to about 4.6
billion hours, by September 30, 2001. In fact, on that date, the
federal paperwork estimate had increased by about 9 percent, to 7.6
billion burden hours.
Over the years, we have reported on the implementation of PRA many
times.[Footnote 9] In a succession of reports and testimonies, we noted
that federal paperwork burden estimates generally continued to
increase, rather than decrease as envisioned by the burden reduction
goals in PRA. Further, we reported that some burden reduction claims
were overstated. For example, although some reported paperwork
reductions reflected substantive program changes, others were revisions
to agencies' previous burden estimates and, therefore, would have no
effect on the paperwork burden felt by the public. In our previous
work, we also repeatedly pointed out ways that OMB and agencies could
do more to ensure compliance with PRA. In particular, we have often
recommended that OMB and agencies take actions to improve the paperwork
clearance process.
Estimated Paperwork Burden Increased in 2005:
After 2 years of slight declines, OMB reports that burden hours
increased in fiscal year 2005 and are expected to increase again in
fiscal year 2006. According to OMB's most recent PRA report to
Congress, the estimated total burden hours imposed by government
information collections in fiscal year 2005 was 8.4 billion hours; this
is an increase of 441 million burden hours (5.5 percent) from the
previous year's total of 8.0 billion hours. It is also almost a billion
and a half hours larger than it was in 1995 and 3.8 billion larger than
the PRA target for the end of fiscal year 2001 (4.6 billion burden
hours). OMB's report also states that burden will increase in fiscal
year 2006 by an estimated 303 million hours to about 8.7 billion hours;
however, according to OMB, most of this projected increase (250 million
hours or 83 percent) is attributable to a new method of estimating
burden that is being implemented by IRS, rather than to any increase in
the actual burden. Finally, according to OMB, fewer violations of the
act were reported than in previous years.
Changes in Paperwork Burden Estimates Can Be Attributed to Various
Causes:
Changes in paperwork burden estimates result from several causes, which
OMB assigns to two main categories. OMB classifies all changes--either
increases or decreases--in agencies' burden-hour estimates as either
program changes or adjustments.
* Program changes are the result of deliberate federal government
action (e.g., the addition or deletion of questions on a form); these
can occur as a result of:
* new statutes,
* agency-initiated actions, or:
* the expiration or reinstatement of OMB-approved collections.[Footnote
10]
* Adjustments do not result from federal activities but from external
factors. For example:
* an agency may reestimate the burden associated with a collection of
information, or:
* the population responding to a requirement may change--such as if the
economy declines and more people complete applications for food stamps;
the resulting increase in the Department of Agriculture's paperwork
estimate is considered an adjustment because it is not the result of
deliberate federal action.
As shown above, within the category of program changes, OMB
distinguishes between changes due to new statutes and changes due to
agency action, which it also refers to as agency discretionary actions.
However, this term should not imply that agencies have no discretion in
how they implement new statutes. A major goal of the PRA is to ensure
that agencies consider how to make the burden of information
collections, whether old or newly established, as small as possible. In
the second part of my statement, I will address one of the ways set
forth in the PRA to help achieve this goal.
Table 2 shows the changes in reported burden totals from fiscal year
2004 to fiscal year 2005.
Table 2: Changes in Governmentwide Reported Burden Totals by Category:
In millions:
Category of change: Baseline: fiscal year 2004 total;
Change from fiscal year 2004 PRA report: [Empty];
Change from fiscal year 2004 PRA report: Hours: 7971.18;
Change from fiscal year 2004 PRA report: Percent: [Empty].
Category of change: Fiscal year 2005 program changes;
Change from fiscal year 2004 PRA report: [Empty];
Change from fiscal year 2004 PRA report: Hours: 0;
Change from fiscal year 2004 PRA report: Percent: [Empty].
Category of change: Fiscal year 2005 program changes: Changes due to
agency action;
Change from fiscal year 2004 PRA report: 0.18;
Change from fiscal year 2004 PRA report: Hours: 0;
Change from fiscal year 2004 PRA report: Percent: 0.00.
Category of change: Fiscal year 2005 program changes: Changes due to
new statutes;
Change from fiscal year 2004 PRA report: 418.89;
Change from fiscal year 2004 PRA report: Hours: 0;
Change from fiscal year 2004 PRA report: Percent: +5.26.
Category of change: Fiscal year 2005 program changes: Changes due to
lapses in OMB approval;
Change from fiscal year 2004 PRA report: 2.80;
Change from fiscal year 2004 PRA report: Hours: 0;
Change from fiscal year 2004 PRA report: Percent: +0.04.
Category of change: Fiscal year 2005 program changes: Total program
changes;
Change from fiscal year 2004 PRA report: [Empty];
Change from fiscal year 2004 PRA report: Hours: 422.00;
Change from fiscal year 2004 PRA report: Percent: +5.29.
Category of change: Fiscal year 2005 adjustments;
Change from fiscal year 2004 PRA report: [Empty];
Change from fiscal year 2004 PRA report: Hours: 19.14;
Change from fiscal year 2004 PRA report: Percent: +0.24.
Category of change: Fiscal year 2005 total;
Change from fiscal year 2004 PRA report: [Empty];
Change from fiscal year 2004 PRA report: Hours: 8412.27;
Change from fiscal year 2004 PRA report: Percent: +5.53.
Source: OMB annual PRA report.
Note: Numbers do not add exactly because of rounding.
[End of table]
As the table shows, the change due to new statutes was by far the
largest factor in the increase for fiscal year 2005. OMB reports that
the statute having the largest impact on burden was the statute
establishing voluntary prescription drug coverage under
Medicare;[Footnote 11] implementing the program mandated by this
statute required the collection of significant amounts of information,
leading to an increase in burden of 224 million hours.[Footnote 12] An
additional significant increase--about 116 million hours--resulted from
the implementation by the Federal Communications Commission (FCC) of
the CAN-SPAM Act, which requires disclosure of certain information
contained in unsolicited commercial e-mails.
In contrast to changes due to new statutes, changes due to agency
action did not contribute significantly to the overall change in burden
this year, adding 180,000 hours out of the total rise of 441 million.
Although the overall result was a slight increase, agencies did take
many actions that decreased burden; without these actions, the
governmentwide increase would have been greater. The annual report does
not list all these actions, but it does highlight actions that led to
significant paperwork reductions and increases. (These include
increases and decreases in burden from statutory requirements and
miscellaneous agency actions, as well as burden reductions from
changing regulations, cutting redundancy, changing forms, and using
information technology.) From both an individual agency perspective and
a governmentwide perspective, the relatively small increase due to
agency action is the result of large increases and decreases that
mostly offset each other:
* From an individual agency perspective, the net change in an agency's
burden estimate is generally the result of disparate actions, some of
which reduce burden and some of which increase it. An example is the
IRS, which as an agency was responsible for a net decrease of about 3
million hours. Among the burden reductions that the annual report
highlights are two IRS actions to change forms, both of which reduced
burden by simplification and streamlining, for a reduction of about 19
million hours.[Footnote 13] The ICB also reports that in January 2006
IRS completed an initiative to simplify the process of applying for an
extension to file an income tax return, which is associated with a
burden reduction of 8 million hours. Elsewhere, on the other hand, five
IRS actions are highlighted that together resulted in an increase of
about 24 million hours.[Footnote 14] Examples of reasons IRS took these
actions included increasing accuracy and improving the agency's ability
to monitor compliance with the law.
* Similarly, from a governmentwide perspective, the overall change is
the result of some agencies whose actions produced a net decrease and
others whose produced a net decrease. In fiscal year 2005, agencies
with net decreases produced a reduction of about 14.02 million hours.
This reduction was offset, however, by agencies with net increases,
which totaled about 14.20 million hours.
Compared to program changes as a whole, adjustments to the estimates
were a relatively small factor (as table 2 also shows), accounting for
a net increase in the burden of about 19 million hours. In previous
years, adjustments have had a much greater impact and have tended to
decrease overall burden estimates, thus masking the effect of increases
from program changes. In fiscal years 2003 and 2004, the impact of
adjustments was large enough to lead to overall burden estimates that
were lower than for the year before. In fiscal year 2004, OMB reported
a decrease of about 156 million hours in adjustments versus an increase
of about 29 million hours in program changes; the result was a lower
overall burden estimate than for the previous year. Similarly, overall
burden in fiscal year 2003 was slightly less than in fiscal year 2002,
also as a result of a decrease in adjustments (about 182 million hours)
that more than offset an increase in program changes (about 72 million
hours).
Besides these large decreases due to adjustments, another reason for
the slight decrease in total burden in fiscal years 2004 and 2003 was
that increases due to program changes were relatively small, as shown
in table 3. This year, both program changes and adjustments went up, so
adjustments did not have the effect of masking increases in program
changes. As the table also shows, fiscal year 2005 saw the largest net
increase from program changes since 1998.
Table 3: Increases in Burden Hours Due to Program Changes between
Fiscal Years 1998 and 2005:
In millions:
Fiscal year: 2005;
Total governmentwide burden-hour estimate: 8,412.3;
Net increase in burden hours due to program changes: 422.0.
Fiscal year: 2004;
Total governmentwide burden-hour estimate: 7,971.2;
Net increase in burden hours due to program changes: 28.5.
Fiscal year: 2003;
Total governmentwide burden-hour estimate: 8,105.4;
Net increase in burden hours due to program changes: 72.1.
Fiscal year: 2002;
Total governmentwide burden-hour estimate: 8,223.2;
Net increase in burden hours due to program changes: 294.1.
Fiscal year: 2001;
Total governmentwide burden-hour estimate: 7,651.4;
Net increase in burden hours due to program changes: 158.7.
Fiscal year: 2000;
Total governmentwide burden-hour estimate: 7,361.0;
Net increase in burden hours due to program changes: 188.0.
Fiscal year: 1999;
Total governmentwide burden-hour estimate: 7,183.9;
Net increase in burden hours due to program changes: 189.0.
Fiscal year: 1998;
Total governmentwide burden-hour estimate: 6,951.1;
Net increase in burden hours due to program changes: 41.1.
Source: OMB.
[End of table]
IRS Continues to Account for Largest Portion of Estimated
Governmentwide Burden:
In fiscal year 2005, IRS accounted for about 76 percent of the
governmentwide paperwork burden: about 6.4 billion hours. As shown in
figure 1, no other agency's estimate approaches this level. Six
agencies had burden-hour estimates of 100 million hours or more (the
Departments of Health and Human Services, Labor, and Transportation;
EPA; FCC; and the Securities and Exchange Commission). Thus, as we have
previously reported, changes in paperwork burden experienced by the
federal government have been largely attributable to changes associated
with IRS.[Footnote 15]
Figure 1: Distribution of Paperwork Burden among Agencies, Fiscal Year
2005:
[See PDF for image]
Source: Annual PRA report, OMB.
[End of figure]
OMB reports that starting in fiscal year 2006, IRS began using a new
methodology based on a statistical model- the Individual Taxpayer
Burden Model- estimate the reporting burden imposed on individual
taxpayers. Among other things, this new model, which was developed to
improve the accuracy and transparency of taxpayer burden estimates,
reflects the major changes over the past two decades in the way that
taxpayers prepare and file their returns, including the use of
electronic preparation methods. According to OMB, rather than
estimating burden on a form-by-form basis, the new methodology takes
into account broader and more comprehensive taxpayer characteristics
and activities, considering how the taxpayer prepares the return (e.g.,
with or without software or a paid preparer) as well as the taxpayer's
activities, such as gathering tax materials, completing forms,
recordkeeping, and tax planning. In contrast, the previous methodology
primarily focused on the length and complexity of each tax form. OMB
states that this new model will make it possible to estimate the burden
implications of new legislative and administrative tax proposals.
OMB projects that these changes will create a one-time increase of
about 250 million hours in the estimate of IRS burden levels in fiscal
year 2006. This increase represents most (83 percent) of the total
projected governmentwide increase for fiscal year 2006 of 303 million
hours. However, according to OMB, this increase does not reflect any
change in the actual burden experienced by taxpayers, but rather a
change in the way the burden is measured.
In the past, we reported that IRS's previous estimation model ignored
important components of burden and had limited capabilities for
analyzing the determinants of burden.[Footnote 16] The new model is the
result of work that IRS has performed over the past several years to
improve its model and address these and other limitations. At this
time, we have not analyzed IRS's new model to determine the extent to
which it improves the accuracy of burden estimates, and we have not
assessed the accuracy of the new model's estimates. However, IRS's
efforts to increase the accuracy of its model appear to be an important
step towards addressing the previous model's shortcomings.
These changes in IRS's estimation methodology highlight the importance,
when trying to interpret the annual burden estimates, of bearing in
mind their limitations. For more than 50 years, the "burden hour" has
been the principal unit of paperwork burden and has been accepted by
agencies and the public because it is a clear, easy-to-understand
concept. But as IRS's efforts show, burden-hour estimates are not a
simple matter. The degree to which agency burden-hour estimates reflect
real burden is unclear. It is challenging to estimate the amount of
time it will take for a respondent to collect and provide information
or to estimate how many individuals an information collection will
affect.[Footnote 17] In addition, like all estimates, paperwork burden
estimates are not precise; changes from year to year, particularly
small ones, may not be meaningful. However, as long as the limitations
are clearly understood, these estimates can be useful as the best
indicators of paperwork burden available.
Fewer Violations Reported in Fiscal Year 2005:
OMB reports reductions in PRA violations for fiscal year 2005 compared
to previous years. The PRA prohibits an agency from conducting or
sponsoring the collection of information unless (1) the agency has
submitted the proposed collection to OMB, (2) OMB has approved the
proposed collection, and (3) the agency displays an OMB control number
on the collection. According to OMB's annual report, agencies have made
great progress in recent years in reducing the number of violations of
these conditions and in resolving them more promptly. OMB attributed
this reduction to several initiatives it had taken, including meeting
with agency officials to discuss ways to reduce violations and adding
reporting requirements.
According to OMB, during fiscal year 2005, agencies reported a total of
97 violations: 60 information collections that expired during the year,
and another 37 that had expired before October 1, 2004, and were not
reinstated until fiscal year 2005. Of the 27 agencies included in the
annual report, the three agencies with the greatest number of
violations were the Departments of the Treasury and Homeland Security
and the Small Business Administration. In addition, OMB reported no
unresolved violations at the end of fiscal year 2005 and only 6
violations during the first 8 months of fiscal year 2006. The 97
violations reported in fiscal year 2005 is much less than the 164
violations in fiscal year 2004 and the 223 violations in fiscal year
2003.
Although the reduction in violations is a positive trend, we should
note that the violations reported may not be comprehensive; they
include only those that agencies identified and reported to OMB. As a
result, the statistics would omit violations of which agencies were
unaware. In our May 2005 review, we examined forms posted on Web sites
for four agencies (VA, HUD, Labor, and IRS). We found examples of
violations among these forms of which the agencies were generally
unaware.[Footnote 18] Based on our examination, we projected that the
four agencies overall had an estimated 69 violations: 61 collections in
use without OMB approval and 8 expired collections. For example, we
estimated 16 violations at VA; at that time, OMB's report reflected
VA's belief that it had no violations. Based on these results, we
recommended that the four agencies periodically review their Web sites
to ensure that all forms comply with PRA requirements; we also
recommended that OMB alter its guidance so that all federal agencies
would be required to periodically review Web sites in this way. Since
then, VA has reported to us that it removed forms from its Web site
that were in violation of PRA. However, OMB has not yet issued
governmentwide guidance directing these types of reviews, so it is
possible that some PRA violations remain undetected.
Agency Processes for Reviewing Information Collections Were Not
Effective:
Among the PRA provisions intended to help achieve the goals of
minimizing burden while maximizing utility are the requirements for CIO
review and certification of information collections. The 1995
amendments required agencies to establish centralized processes for
reviewing proposed information collections within the CIO's office.
Among other things, the CIO's office is to certify, for each
collection, that the 10 standards in the act have been met, and the CIO
is to provide a record supporting these certifications.
The four agencies that we reviewed for our May 2005 report all had
written directives that implemented the review requirements in the act,
including the requirement for CIOs to certify that the 10 standards in
the act were met. However, in the 12 case studies that we reviewed,
this CIO certification occurred despite a lack of rigorous support that
all standards were met. Specifically, the support for certification was
missing or partial on 65 percent (66 of 101) of the
certifications.[Footnote 19] Table 4 shows the result of our analysis
of the case studies.
Table 4: Support Provided by Agencies for Paperwork Reduction Act
Standards in 12 Case Studies:
Standards: The collection is necessary for the proper performance of
agency functions;
Total[A]: 12;
Support provided: Yes: 6;
Support provided: Partial: 6;
Support provided: No: 0.
Standards: The collection avoids unnecessary duplication;
Total[A]: 11;
Support provided: Yes: 2;
Support provided: Partial: 2;
Support provided: No: 7.
Standards: The collection reduces burden on the public, including small
entities, to the extent practicable and appropriate;
Total[A]: 12;
Support provided: Yes: 5;
Support provided: Partial: 7;
Support provided: No: 0.
Standards: The collection uses plain, coherent, and unambiguous
language that is understandable to respondents;
Total[A]: 12;
Support provided: Yes: 1;
Support provided: Partial: 0;
Support provided: No: 11.
Standards: The collection will be consistent and compatible with
respondents' current reporting and recordkeeping practices to the
maximum extent practicable;
Total[A]: 12;
Support provided: Yes: 3;
Support provided: Partial: 0;
Support provided: No: 9.
Standards: The collection indicates the retention period for any
recordkeeping requirements for respondents.[B];
Total[A]: 6;
Support provided: Yes: 3;
Support provided: Partial: 3;
Support provided: No: 0.
Standards: The collection informs respondents of the information they
need to exercise scrutiny of agency collections (i.e., the reasons the
information is collected; the way it is used; an estimate of the
burden; whether responses are voluntary, required to obtain a benefit,
or mandatory; and a statement that no person is required to respond
unless a valid OMB control number is displayed).[B];
Total[A]: 12;
Support provided: Yes: 4;
Support provided: Partial: 8;
Support provided: No: 0.
Standards: The collection was developed by an office that has planned
and allocated resources for the efficient and effective management and
use of the information to be collected;
Total[A]: 11;
Support provided: Yes: 2;
Support provided: Partial: 0;
Support provided: No: 9.
Standards: The collection uses effective and efficient statistical
survey methodology (if applicable);
Total[A]: 1;
Support provided: Yes: 1;
Support provided: Partial: 0;
Support provided: No: 0.
Standards: The collection uses information technology to the maximum
extent practicable to reduce burden and improve data quality, agency
efficiency, and responsiveness to the public;
Total[A]: 12;
Support provided: Yes: 8;
Support provided: Partial: 4;
Support provided: No: 0.
Standards: Totals;
Total[A]: 101;
Support provided: Yes: 35;
Support provided: Partial: 30;
Support provided: No: 36.
Sources: Paperwork Reduction Act. GAO.
[A] The total number of certifications is not always 12 because not all
certifications applied to all collections.
[B] For these two standards, the presence on the forms of the
information indicated was categorized as support, the absence of some
elements was categorized as partial support, and the absence of all
elements was categorized as no support.
[End of table]
Under one of the standards mandated by the act, CIOs are required to
certify that each information collection is not unnecessarily
duplicative. According to OMB instructions, agencies are to (1)
describe efforts to identify duplication and (2) show specifically why
any similar information already available cannot be used or modified
for the purpose described. In 2 of 11 cases, agencies provided the
description requested, and in an additional 2 cases, partial support
was provided.[Footnote 20] In 7 cases, support for these certifications
was missing. An example of missing support is the following statement,
used on all three IRS collections:
We have attempted to eliminate duplication within the agency wherever
possible.
This assertion provides no information on what efforts were made to
identify duplication or perspective on why similar information, if any,
could not be used. Further, the files contained no evidence that the
CIO reviewers challenged the adequacy of this support or provided
support of their own to justify their certification.
A second standard mandated by the act is that each information
collection should reduce burden on the public, including small
entities,[Footnote 21] to the extent practicable and appropriate. OMB
guidance emphasizes that agencies are to demonstrate that they have
taken every reasonable step to ensure that a given collection of
information is the least burdensome necessary for the proper
performance of agency functions. In addition, OMB instructions and
guidance direct agencies to provide specific information and
justifications: (1) estimates of the hour and cost burden of the
collections and (2) justifications for any collection that requires
respondents to report more often than quarterly, respond in fewer than
30 days, or provide more than an original and two copies of
documentation.
With regard to small entities, OMB guidance states that the standard
emphasizes such entities because these often have limited resources to
comply with information collections.[Footnote 22] The act and OMB
guidance give various techniques for reducing burden on these small
entities.[Footnote 23]
Our review of the case examples found that for the certification on
reducing burden on the public, the files generally contained the
specific information and justifications called for in the guidance.
However, none of the case examples contained support that addressed how
the agency ensured that the collection was the least burdensome
necessary. According to agency CIO officials, the primary cause for
this absence of support is that OMB instructions and guidance do not
direct agencies to provide this information explicitly as part of the
approval package.
In addition, four of our case studies did not provide complete
information that would support certification that the collection
specifically addressed reducing burden for small entities.[Footnote 24]
Specifically, 7 of the 12 case studies involved collections that were
reported to impact businesses or other for-profit entities, but the
files for 4 of these 7 did not explain either:
* why small businesses were not affected, or:
* even though such businesses were affected, that burden could or could
not be reduced.
Instead, the files included statements such as "not applicable," which
do not inform the reviewer whether or not there was an effort made to
reduce burden on small entities. When we asked agencies about these
four cases, they indicated that the collections did, in fact, affect
small business.
OMB's instructions to agencies on minimizing burden on small entities
require agencies to describe any methods used to reduce burden only if
the collection of information has a "significant economic impact on a
substantial number of small entities." This does not appropriately
reflect the act's requirements concerning small business: the act
requires that the CIO certify that the information collection reduces
burden on small entities in general, to the extent practical and
appropriate, and provides no thresholds for the level of economic
impact or the number of small entities affected. OMB officials
acknowledged that their instruction is an "artifact" from a previous
form and more properly focuses on rulemaking rather than on the
information collection process.
The lack of support for the 10 certifications required by the act
appeared to be influenced by a variety of factors. In some cases, as
described above, OMB guidance and instructions were not comprehensive
or entirely accurate. In the case of the duplication standard
specifically, IRS officials said that the agency did not need to
further justify that its collections are not duplicative because (1)
tax data are not collected by other agencies, so there is no need for
the agency to contact them about proposed collections, and (2) IRS has
an effective internal process for coordinating proposed forms among the
agency's various organizations that may have similar information.
Nonetheless, the law and instructions require support for these
assertions, which was not provided.
Further, agency reviewers told us that management assigns a relatively
low priority and few resources to reviewing information collections.
Further, program offices have little knowledge of and appreciation for
the requirements of the PRA. As a result of these conditions and a lack
of detailed program knowledge, reviewers often have insufficient
leverage with program offices to encourage them to improve their
justifications.
When support for the PRA certifications is missing or inadequate, OMB,
the agency, and the public have reduced assurance that the standards in
the act, such as those on avoiding duplication and minimizing burden,
have been consistently met.
Two Agencies Have Developed Processes to Reduce Burden Associated with
Information Collections:
IRS and EPA have supplemented the standard PRA review process with
additional processes aimed at reducing the burden while maximizing the
public benefit and utility of the information collected. These
agencies' missions require them both to deal extensively with
information collections, and their management has made reduction of
burden a priority.[Footnote 25]
In January 2002, the IRS Commissioner established an Office of Taxpayer
Burden Reduction, which includes both permanently assigned staff and
staff temporarily detailed from program offices that are responsible
for particular information collections. This office chooses a few forms
each year that are judged to have the greatest potential for burden
reduction (these forms have already been reviewed and approved through
the CIO process). The office evaluates and prioritizes burden reduction
initiatives by:
* determining the number of taxpayers impacted;
* quantifying the total time and out-of-pocket savings for taxpayers;
* evaluating any adverse impact on IRS's voluntary compliance efforts;
* assessing the feasibility of the initiative, given IRS resource
limitations; and:
* tying the initiative into IRS objectives.
Once the forms are chosen, the office performs highly detailed, in-
depth analyses, including extensive outreach to the public affected,
users of the information within and outside the agency, and other
stakeholders. This analysis includes an examination of the need for
each data element requested. In addition, the office thoroughly reviews
form design.[Footnote 26]
The office's director[Footnote 27] heads a Taxpayer Burden Reduction
Council, which serves as a forum for achieving taxpayer burden
reduction throughout IRS. IRS reports that as many as 100 staff across
IRS and other agencies can be involved in burden reduction initiatives,
including other federal agencies, state agencies, tax practitioner
groups, taxpayer advocacy panels, and groups representing the small
business community.
The council directs its efforts in five major areas:
* simplifying forms and publications;
* streamlining internal policies, processes, and procedures;
* promoting consideration of burden reductions in rulings, regulations,
and laws;
* assisting in the development of burden reduction measurement
methodology; and:
* partnering with internal and external stakeholders to identify areas
of potential burden reduction.
According to IRS, this targeted, resource-intensive process has
achieved significant reductions in burden. For example, it reported
that about 95 million hours of taxpayer burden were reduced through
increases in the income reporting threshold on various IRS
schedules.[Footnote 28] Another example, mentioned earlier, was given
in OMB's latest annual PRA report: in January 2006 IRS completed an
initiative to simplify the process of applying for an extension to file
an income tax return, which is associated with a burden reduction of 8
million hours.[Footnote 29] Another example from the annual PRA report
is a reduction of about 19 million hours from a redesign of IRS form
1041 to streamline the requirements and make it easier to read and
file.
Similarly, EPA officials stated that they have established processes
for reviewing information collections that supplement the standard PRA
review process. These processes are highly detailed and evaluative,
with a focus on burden reduction, avoiding duplication, and ensuring
compliance with PRA. According to EPA officials, the impetus for
establishing these processes was the high visibility of the agency's
information collections and the recognition, among other things, that
the success of EPA's enforcement mission depended on information
collections being properly justified and approved: in the words of one
official, information collections are the "life blood" of the agency.
According to these officials, the CIO staff are not generally closely
involved in burden reduction initiatives, because they do not have
sufficient technical program expertise and cannot devote the extensive
time required.[Footnote 30] Instead, these officials said that the CIO
staff's focus is on fostering high awareness within the agency of the
requirements associated with information collections, educating and
training the program office staff on the need to minimize burden and
the impact on respondents, providing an agencywide perspective on
information collections to help avoid duplication, managing the
clearance process for agency information collections, and acting as
liaison between program offices and OMB during the clearance process.
To help program offices consider PRA requirements such as burden
reduction and avoiding duplication as they are developing new
information collections or working on reauthorizing existing
collections, the CIO staff also developed a handbook[Footnote 31] to
help program staff understand what they need to do to comply with PRA
and gain OMB approval.
In addition, program offices at EPA have taken on burden reduction
initiatives that are highly detailed and lengthy (sometimes lasting
years) and that involve extensive consultation with stakeholders
(including entities that supply the information, citizens groups,
information users and technical experts in the agency and elsewhere,
and state and local governments). For example, EPA reported that it
amended its regulations to reduce the paperwork burden imposed under
the Resource Conservation and Recovery Act. One burden reduction method
EPA used was to establish higher thresholds for small businesses to
report information required under the act. EPA estimated that the
initiative will reduce burden by 350,000 hours and save $22 million
annually. Another example is an ongoing EPA initiative reported in this
year's PRA report, the Central Data Exchange; this is an e-government
initiative that is designed to enable fast, efficient, and more
accurate environmental data submissions and exchange from state and
local governments, industry, and tribes through the use of electronic
reporting procedures. The estimated reduction for this initiative,
which is expected to be complete in 2008, is 166,000 hours.
Overall, EPA and IRS reported that they have produced significant
reductions in paperwork burden by making a commitment to this goal and
dedicating resources to it. In contrast, for the 12 information
collections we examined, the CIO review process resulted in no
reduction in burden. Further, the Department of Labor reported that its
PRA reviews of 175 proposed collections over nearly 2 years did not
reduce burden.[Footnote 32] Similarly, both IRS and EPA addressed
information collections that had undergone CIO review and received OMB
approval and nonetheless found significant opportunities to reduce the
paperwork burden.
Agencies Could Strengthen PRA Review and Try Alternative Approaches to
Reducing Burden:
In our 2005 report, we concluded that the CIO review process was not
working as Congress intended: It did not result in a rigorous
examination of the burden imposed by information collections, and it
did not lead to reductions in burden. In light of these findings, we
suggested options that Congress might want to consider when it next
reauthorizes the act, including mandating pilot projects to test and
review alternative approaches to achieving PRA goals. Such pilot
projects could build on the lessons learned at IRS and EPA, which have
used a variety of approaches to reducing burden, sharing information
(for example, by facilitating cross-agency information exchanges),
standardizing data for multiple uses, and integrating data to avoid
duplication; and re-engineering work flows. Pilot projects would be
most appropriate for agencies for which information collections are a
significant aspect of the mission.
In addition, we recommended (among other things) that agencies
strengthen the support provided for CIO certifications and that OMB
update its guidance to clarify and emphasize this requirement
(including that agencies provide support showing that they have taken
steps to reduce burden, determined whether small entities are affected
and reduced reporting burden on them, and established a plan to manage
and use the information to be collected, including the identification
of necessary resources). OMB and the agencies agreed with most of the
recommendations, although they disagreed with aspects of GAO's
characterization of agencies' compliance with the act's
requirements.[Footnote 33]
Since our report was issued, the four agencies have reported taking
steps to strengthen their support for CIO certifications:
* According to the HUD CIO, the department established a senior-level
PRA compliance officer in each major program office, and it revised its
certification process to require that before collections are submitted
for review, they be approved at a higher management level within
program offices.
* The Treasury CIO established an Information Management Sub-Council
under the Treasury CIO Council and added resources to the review
process.
* According to the VA's 2007 budget submission, the department obtained
additional resources to help review and analyze its information
collection requests.
* According to the Office of the CIO at the Department of Labor, the
department intends to provide guidance to components regarding the need
to provide strong support for clearance requests and has met with
component staff to discuss these issues.
OMB has updated parts of its guidance and plans to incorporate other
guidance into an automated system to be used by agencies submitting
information collections for clearance. In January 2006, OMB revised its
guidance to agencies on surveys and statistical information
collections.[Footnote 34] This guidance, among other things, is aimed
at strengthening the support that agencies must provide for certifying
collections, as we recommended. For example, the guidance requires
agencies submitting requests for approval to include context and detail
that will allow OMB to evaluate the practical utility of the
information to be collected. However, this guidance does not apply to
all information collections. Rather, it applies only to surveys that
are used for general-purpose statistics or as part of program
evaluations or research studies. In addition, it does not provide clear
guidance on one of the topics mentioned in our recommendation:
determining whether small entities are affected by the collection and
reducing reporting burden on these entities.
OMB also reported that its guidance to agencies will be updated through
a planned automated system that is to begin operating this
month.[Footnote 35] According to the former acting head of OMB's Office
of Information and Regulatory Affairs, the new system will permit
agencies to submit clearance requests electronically, and the
instructions will provide clear guidance on the requirements for these
submissions, including the support required. This official stated that
OMB has worked with agency representatives with direct knowledge of the
PRA clearance process in order to ensure that the system and its
instructions clearly reflect the requirements of the process. If this
system is implemented as described and OMB withholds clearance from
submissions that lack adequate support, it could lead agencies to
strengthen the support provided for their certifications.
In conclusion, Madam Chairman, the PRA puts in place mechanisms to
focus agency attention on the need to minimize the burden that
information collections impose--while maximizing the public benefit and
utility of government information collections--but these mechanisms
have not succeeded in achieving the ambitious reduction goals set forth
in the 1995 amendments. Achieving real reductions in the paperwork
burden is an elusive goal, as attested by years of OMB's annual PRA
reports, including the latest. That report shows the largest rise in
estimated burden for the last several years, mostly due to new
statutory requirements and how they have been implemented. As we have
seen, the tendency is for burden to rise unless agencies take active
steps to reduce it. Agencies have taken such actions--by cutting
redundancy, changing forms, and using information technology, among
other things--but these have not been enough to make up for the
increases.
Besides demonstrating once again how challenging it is for the
government to achieve true burden reduction, this year's results
highlight the need to look for new ways to achieve this and the other
goals of the PRA. Among the mechanisms already in place is the CIO
review and certification process. However, as it was implemented at the
time of our review, this process had limited effect on the quality of
support provided for information collections, and it appeared to have
no appreciable impact on burden.
The targeted approaches to burden reduction used by IRS and EPA appear
promising, but the experience of these agencies suggests that success
requires top-level executive commitment, extensive involvement of
program office staff with appropriate expertise, and aggressive
outreach to stakeholders. However, such an approach would probably also
be more resource-intensive than the CIO certification process, and thus
it may not be warranted at agencies where paperwork issues do not rise
to the level of those at IRS and similar agencies. Consequently, it is
critical that efforts to expand the use of the IRS and EPA models take
these factors into consideration.
Madam Chairman, this completes my prepared statement. I would be
pleased to answer any questions.
Contacts and Acknowledgments:
For future information regarding this testimony, please contact Linda
Koontz, Director, Information Management, at (202) 512-6420, or
koontzl@gao.gov. Other individuals who made key contributions to this
testimony were Barbara Collier, Nancy Glover, and Alan Stapleton.
Attachment 1. Related GAO Products:
Paperwork Reduction Act: New Approaches Can Strengthen Information
Collection and Reduce Burden. GAO-06-477T. Washington, D.C.: March 8,
2006.
Paperwork Reduction Act: Subcommittee Questions Concerning the Act's
Information Collection Provisions. GAO-05-909R. Washington, D.C.: July
19, 2005.
Paperwork Reduction Act: Burden Reduction May Require a New Approach.
GAO-05-778T. Washington, D.C.: June 14, 2005.
Paperwork Reduction Act: New Approach May Be Needed to Reduce
Government Burden on Public. GAO-05-424. Washington, D.C.: May 20,
2005.
Paperwork Reduction Act: Agencies' Paperwork Burden Estimates Due to
Federal Actions Continue to Increase. GAO-04-676T. Washington, D.C.:
April 20, 2004.
Paperwork Reduction Act: Record Increase in Agencies' Burden Estimates.
GAO-03-619T. Washington, D.C.: April 11, 2003.
Paperwork Reduction Act: Changes Needed to Annual Report. GAO-02-651R.
Washington, D.C.: April 29, 2002.
Paperwork Reduction Act: Burden Increases and Violations Persist. GAO-
02-598T. Washington, D.C.: April 11, 2002.
Information Resources Management: Comprehensive Strategic Plan Needed
to Address Mounting Challenges. GAO-02-292. Washington, D.C.: February
22, 2002.
Paperwork Reduction Act: Burden Estimates Continue to Increase. GAO-01-
648T. Washington, D.C.: April 24, 2001.
Electronic Government: Government Paperwork Elimination Act Presents
Challenges for Agencies. GAO/AIMD-00-282. Washington, D.C.: September
15, 2000.
Tax Administration: IRS Is Working to Improve Its Estimates of
Compliance Burden. GAO/GGD-00-11. Washington, D.C.: May 22, 2000.
Paperwork Reduction Act: Burden Increases at IRS and Other Agencies.
GAO/T-GGD-00-114. Washington, D.C.: April 12, 2000.
EPA Paperwork: Burden Estimate Increasing Despite Reduction Claims.
GAO/GGD-00-59. Washington, D.C.: March 16, 2000.
Federal Paperwork: General Purpose Statistics and Research Surveys of
Businesses. GAO/GGD-99-169. Washington, D.C.: September 20, 1999.
Paperwork Reduction Act: Burden Increases and Unauthorized Information
Collections. GAO/T-GGD-99-78. Washington, D.C.: April 15, 1999.
Paperwork Reduction Act: Implementation at IRS. GAO/GGD-99-4.
Washington, D.C.: November 16, 1998.
Regulatory Management: Implementation of Selected OMB Responsibilities
Under the Paperwork Reduction Act. GAO/GGD-98-120. Washington, D.C.:
July 9, 1998.
Paperwork Reduction: Information on OMB's and Agencies' Actions. GAO/
GGD-97-143R. Washington, D.C.: June 25, 1997.
Paperwork Reduction: Governmentwide Goals Unlikely to Be Met. GAO/T-
GGD-97-114. Washington, D.C.: June 4, 1997.
Paperwork Reduction: Burden Reduction Goal Unlikely to Be Met. GAO/T-
GGD/RCED-96-186. Washington, D.C.: June 5, 1996.
Environmental Protection: Assessing EPA's Progress in Paperwork
Reduction. GAO/T-RCED-96-107. Washington, D.C.: March 21, 1996.
Paperwork Reduction: Burden Hour Increases Reflect New Estimates, Not
Actual Changes. GAO/PEMD-94-3. Washington, D.C.: December 6, 1993.
FOOTNOTES
[1] The Paperwork Reduction Act was originally enacted into law in 1980
(Pub. L. 96-511, Dec. 11, 1980). It was reauthorized with minor
amendments in 1986 (Pub. L. 99-591, Oct. 30, 1986) and was reauthorized
a second time with more significant amendments in 1995 (Pub. L. 104-13,
May 22, 1995).
[2] GAO, Paperwork Reduction Act: New Approach May Be Needed to Reduce
Government Burden on Public, GAO-05-424 (Washington, D.C.: May 20,
2005).
[3] For our most recent testimony on this subject, see GAO, Paperwork
Reduction Act: New Approaches Can Strengthen Information Collection and
Reduce Burden, GAO-06-477T (Washington, D.C.: Mar. 8, 2006).
[4] Although IRS accounted for about 80 percent of the burden, it did
not account for 80 percent of collections: it accounted for 808 out of
the total 8,211 collections governmentwide as of May 2004.
[5] The updated guidance is focused on surveys and statistical
information collections, but it includes some general PRA requirements
applicable to any information collection, namely, general information
on submissions to OMB and the scope of the definition of information
collection (explaining, for example, that focus groups are included).
[6] 44 U.S.C. 3508.
[7] The 1995 amendments used the 1980 act's reference to the agency
"senior official" responsible for implementation of the act. A year
later, Congress gave that official the title of agency Chief
Information Officer (the Information Technology Management Reform Act,
Pub. L. 104-106, Feb. 10, 1996, which was subsequently renamed the
Clinger-Cohen Act, Pub. L. 104-208, Sept. 30, 1996).
[8] 44 U.S.C. 3506(c)(1)(A).
[9] We have included a list of related GAO products at the end of this
statement.
[10] When an agency allows OMB approval of a collection to lapse but
continues to collect the information, this is a violation of the PRA.
However, the expired collection is accounted for as a decrease in
burden. When the approval is reinstated, the reinstatement is accounted
for as an increase in burden in OMB's accounting system. The lapse and
reinstatement thus generally cancel each other out, unless the
reinstatement involves changed burden estimates based on new analysis.
[11] The Medicare Prescription Drug, Improvement, and Modernization Act
of 2003 (Pub. L. 108-173).
[12] The prescription drug program, which began on January 1, 2006, is
also projected to result in an increase of about 5 million hours in
fiscal year 2006.
[13] The two forms are Form 1041, U.S. Income Tax Return for Estates
and Trusts and Form 8879, IRS e-file Signature Authorization.
[14] These actions were associated with Form 1120, U.S. Corporation
Income Tax Return; Form 1023, Application for Recognition of Exemption;
Form 4070, Employee's Report of Tips to Employer; Form 941, Employer's
Quarterly Federal Tax Return; and Form 8858, Information Return of U.S.
Persons With Respect to Foreign Disregarded Entities.
[15] GAO, Paperwork Reduction Act: Agencies' Paperwork Burden Estimates
Due to Federal Actions Continue to Increase, GAO-04-76T (Washington,
D.C.: Apr. 20, 2004).
[16] GAO, Tax Administration: IRS Is Working to Improve Its Estimates
of Compliance Burden, GAO/GGD-00-11 (Washington, D.C.: May 22, 2000).
[17] [1] See GAO, EPA Paperwork: Burden Estimate Increasing Despite
Reduction Claims, GAO/GGD-00-59 (Washington, D.C.: Mar. 16, 2000), for
how one agency estimates paperwork burden.
[18] We examined all the forms that we could locate on the VA and Labor
Web sites and examined a stratified random probability sample of forms
on the IRS and HUD Web sites. We randomly selected 119 forms from the
492 on the IRS Web site and selected a stratified random sample of 253
forms from the 423 on the HUD Web site. With these probability samples,
each form in the population had a known and nonzero probability of
being selected. Each sampled form was subsequently weighted in the
analysis to account statistically for all the members of the
population, including those that were not selected.
[19] The total number of certifications does not total 120 (12 cases
times 10 standards) because some standards did not apply to some cases.
[20] The following is an example of support that we judged to be
partial: for one collection, the agency described how it attempted to
identify duplicative sources, but it did not discuss why information
from other sources could not be used, at least in part, to satisfy the
needs of the collection.
[21] OMB's instructions to agencies state that a small entity may be
(1) a small business, which is deemed to be one that is independently
owned and operated and that is not dominant in its field of operation;
(2) a small organization, which is any not-for-profit enterprise that
is independently owned and operated and is not dominant in its field;
or (3) a small government jurisdiction, which is a government of a
city, county, town, township, school district, or special district with
a population of less than 50,000.
[22] "Particularly for small businesses, paperwork burdens can force
the redirection of resources away from business activities that might
otherwise lead to new and better products and services, and to more and
better jobs. Accordingly, the Federal Government owes the public an
ongoing commitment to scrutinize its information requirements to ensure
the imposition of only those necessary for the proper performance of an
agency's functions." H. Report 104-37 (Feb. 15, 1995) p. 23.
[23] Techniques give in the act include (a) establishing different
compliance or reporting requirements or timetables for respondents with
fewer available resources; (b) clarifying, consolidating, or
simplifying compliance and reporting requirements; and (c) exempting
certain respondents from coverage of all or part of the collection. OMB
guidance gives techniques that might be used to simplify requirements
for small entities, such as asking fewer questions, taking smaller
samples than for larger entities, and requiring small entities to
provide information less frequently.
[24] In our governmentwide sample, some agencies did cite activities
that are consistent with this standard, such as exempting certain small
businesses and providing assistance to small businesses and other small
entities.
[25] "IRS is committed to reducing taxpayer burden and established the
Office of Taxpayer Burden Reduction in January 2002 to lead its
efforts." Congressional testimony by the IRS Commissioner, April 20,
2004, before the Subcommittee on Energy Policy, Natural Resources, and
Regulatory Affairs, House Committee on Government Reform.
[26] In congressional testimony, the IRS Commissioner stated that OMB
had referred another agency to IRS's Office of Taxpayer Burden
Reduction as an example of a "best practice" in burden reduction in
government.
[27] The director reports to the IRS Commissioner for the Small
Business and Self-Employed Division.
[28] In addition, the office reports that IRS staff positions could be
freed up through its efforts to raise the reporting threshold on
various tax forms and schedules. Fewer IRS positions are needed when
there are fewer tax forms and schedules to be reviewed.
[29] We did not verify the accuracy of IRS's reported burden-hour
savings. As discussed earlier, IRS's revision to the methodology that
it uses to compute burden is expected to result in different estimates
of burden hours and burden-hour savings.
[30] These officials added that in exceptional circumstances the CIO
office has had staff available to perform such projects, but generally
in collaboration with program offices.
[31] EPA Office of Environmental Information, Collection Strategies
Division, ICR Handbook: EPA's Guide to Writing Information Collection
Requests Under the Paperwork Reduction Act of 1995, draft (revised
March 2005).
[32] These reviews did result in a 1.3 percent reduction in calculated
burden by correcting mathematical errors in program offices'
submissions.
[33] For example, OMB, the Treasury, and HUD disagreed with our finding
that certain forms have been improperly treated as certifications and
elections that are not subject to the PRA. Our view was and is that the
forms in question did not properly fall into this category, because
they entailed significant burden.
[34] OMB, Guidance to Agencies on Surveys and Statistical Information
Collections, (Washington, D.C.: Jan. 20, 2006).
[35] The new system, ROCIS (the RISC/OIRA Consolidated Information
System), is operated for OMB's Office of Information and Regulatory
Affairs by the Regulatory Information Service Center of the General
Services Administration.
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