Regulatory Flexibility Act

Status of Agencies' Compliance Gao ID: GGD-94-105 April 27, 1994

The Regulatory Flexibility Act requires federal agencies to assess the effects of their proposed rules on small entities, which include small businesses, small government jurisdictions, and small not-for-profit groups. As a result of their assessments, agencies must either do an analysis describing the impact of the proposed rules on small entities or certify their rules will not have "a significant economic impact on a substantial number of small entities." This report reviews (1) the Small Business Administration's (SBA) annual compliance with the act and generalizes from the reports about which agencies have or have not implemented the act effectively and (2) SBA annual reports and related documents on the extent to which they have complied with the act's requirements that they periodically examine their rules.

GAO found that: (1) the SBA annual reports indicate that agencies' compliance with the act's requirements varies widely; (2) agencies have not uniformly or fully complied with the act's requirements because the act does not authorize SBA to interpret its key provisions, require SBA to develop criteria to guide agencies in reviewing their rules, or authorize SBA or any other entity to compel rulemaking agencies to comply with the act's provisions; (3) the Office of Management and Budget (OMB) has helped certain rulemaking agencies comply with the act by reviewing and commenting on their regulatory actions when SBA notifies it of their compliance concerns; (4) OMB can return most regulatory actions to agencies for further consideration if it finds that the actions are inconsistent with applicable laws; and (5) OMB enforcement authority is limited because it cannot review independent regulatory agency rules or agricultural marketing orders, has not established any compliance criteria or procedures, and it is often unaware of SBA concerns regarding an agency's compliance.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

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