Regulatory Management: Communication About Technology-Based Innovations
Can Be Improved (Letter Report, 02/12/2001, GAO/GAO-01-232).

Federal and state agencies are making extensive use of information
technology (IT) to address traditional regulatory management. For
example, the Department of Labor has a system of electronic "advisors"
imitating the interaction that an individual might have with an
employment law expert, and the Environmental Protection Agency is
working with partners in state government to develop a national
environmental information exchange network. Several of the state
innovations include interactive systems that allow regulated entities to
identify their regulatory responsibilities and complete related
transactions. For example, the Texas Railroad Commission has an
electronic process that allows users to obtain oil or gas well permits
on-line, complete the required forms, and pay any associated fees.
Representatives from nongovernmental organizations suggest that federal
agencies improve both the content and access to on-line information,
more broadly and consistently use some existing applications, and adopt
some new applications. Several key factors that facilitate or hinder the
adoption and diffusion of innovative IT applications are (1) top-level
leadership commitment/support, (2) adequate financial resources and
human capital, (3) legislative and executive branch IT initiatives, (4)
internal and external partnerships with critical stakeholders, (5)
reengineering of existing business processes, and (6) development of a
communication infrastructure.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  GAO-01-232
     TITLE:  Regulatory Management: Communication About
	     Technology-Based Innovations Can Be Improved
      DATE:  02/12/2001
   SUBJECT:  Information technology
	     Agency proceedings
	     Regulatory agencies
	     Information resources management
	     ADP procurement
	     Electronic forms

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GAO-01-232

A

Report to Congressional Requesters

February 2001 REGULATORY MANAGEMENT

Communication About Technology- Based Innovations Can Be Improved

GAO-01-232

Lett er

February 12, 2001 The Honorable Fred Thompson Chairman The Honorable Joseph
I. Lieberman Ranking Member Committee on Governmental Affairs United States
Senate

The Honorable Henry A. Waxman Ranking Minority Member Committee on
Government Reform House of Representatives

During the past several years, information technology (IT) has played an
increasingly important role in how federal agencies interact with the public
and accomplish their missions. Sometimes referred to as “electronic

government” or “E- gov,” the use of IT has already changed
how public policy is developed and administered in a variety of areas and
has the potential to introduce even more changes in the future. One area of
public policy that is beginning to feel the effects of IT is regulatory
management, which includes such interrelated processes as rulemaking,
compliance assistance, information collection and dissemination, and
regulatory enforcement. The use of IT in regulatory management can reduce
regulatory burden; improve the transparency of regulatory processes; and,
ultimately, facilitate the accomplishment of regulatory objectives.

Last year, we reported on innovative uses of IT to facilitate public
participation in federal rulemaking. 1 This report responds to your request
that we examine the use of IT in other aspects of regulatory management.
Specifically, we agreed to identify (1) examples of how federal agencies are
innovatively using IT, either individually or in collaboration with other
agencies or levels of government, to facilitate regulatory management; (2)
examples of how state regulatory agencies are innovatively using IT to
facilitate regulatory management; (3) IT applications that representatives

of nongovernmental organizations believe could be more widely used by 1
Federal Rulemaking: Agencies' Use of Information Technology to Facilitate
Public Participation (GAO/ GGD- 00- 135R, June 30, 2000).

federal regulatory agencies; and (4) what officials and staff in federal and
state regulatory agencies and nongovernmental organizations believe are the
key factors that facilitate or hinder the adoption and diffusion of
innovative IT applications in regulatory management. The parties relevant

to each of these objectives (i. e., federal or state agencies and
nongovernmental organizations) identified which applications they considered
“innovative.”

Results in Brief All of the federal agencies that we examined were using
some form of IT to improve regulatory management and to meet legislative and
executive

branch mandates in this area. The IT- based applications that officials and
staff in federal regulatory agencies and others identified as innovative
covered all of the dimensions of regulatory management that we examined, and
most applications covered more than one dimension. Most of the applications
involved using IT to improve traditional regulatory management approaches
within their agencies. However, other applications were more interactive in
nature and appeared to change the

nature of the relationship between regulatory agencies and the relevant
public. For example, the Department of Labor has a system of electronic
“advisors” imitating the interaction that an individual might
have with an employment law expert. The advisors allow users to obtain
tailored compliance assistance information and, in some cases, complete
required reports. A few of the applications attempted to address issues
involving interagency or intergovernmental coordination. The Environmental
Protection Agency, for example, is working with partners in state government
and the Environmental Council of the States to develop a

national environmental information exchange network to deliver accurate,
reliable data to the public, government officials, and industry and
environmental groups and to reduce the burden of reporting environmental
data.

The IT- based applications that state government organizations identified as
innovative, like their federal counterparts, represented the range of
regulatory management functions. Several of the state innovations were
interactive systems that allowed regulated entities to identify their
regulatory responsibilities and complete related transactions. For example,
the Texas Railroad Commission has an electronic compliance and approval
process that allows users to obtain oil or gas well permits on- line,
complete and file the required forms, and pay any associated fees. Other
state government applications were less interactive and involved using IT to
improve traditional management approaches.

Representatives from nongovernmental organizations who participated in our
review recognized and supported federal regulatory agencies' current efforts
to use IT to improve their regulatory management processes. However, the
representatives also said that federal agencies could improve their
performance in this area. Specifically, they suggested that agencies improve
both the content and access to on- line information, more broadly and
consistently use some existing applications, and adopt some new
applications. The representatives also expressed concern that IT- based
applications in regulatory management could (1) make individuals and
businesses more vulnerable to scrutiny and federal enforcement actions and
(2) disadvantage those individuals and businesses with limited

technical resources. Federal and state agency officials and representatives
of nongovernmental organizations identified several factors that they
believed affected the adoption and diffusion of IT- based approaches in
regulatory management.

Those factors were (1) top- level leadership commitment/ support, (2)
adequate financial resources and human capital (given competing priorities),
(3) legislative and executive branch IT initiatives, (4) internal and
external partnerships with critical stakeholders, (5) reengineering of
existing business processes, and (6) development of a communication

infrastructure. In relation to the last fator, federal regulatory officials
said they were sometimes unaware of how other agencies (and, in some cases,
other parts of their own agencies) were using IT to improve regulatory
management.

Increased use of IT in regulatory management has the potential to yield
significant benefits, from improving the quality and quantity of public
participation in rulemaking to reducing burden on regulated entities. As
agencies learn more about regulatory innovations, they are likely to use
those applications in their own agencies and avoid “reinventing the
wheel” when developing their own applications. Therefore, we are
recommending certain actions that could facilitate innovation, avoid
duplication of effort,

and potentially result in a broader and more consistent approach across
federal agencies. Background Several legislative initiatives enacted during
the past decade have

emphasized the potential of IT to improve the federal government's
performance. For example, the Paperwork Reduction Act of 1995 (PRA) requires
the Director of the Office of Management and Budget (OMB) to “promote
the use of information technology to improve the productivity,

efficiency, and effectiveness of Federal programs, including through
dissemination of public information and the reduction of information
collection burdens on the public.” The Information Technology
Management Reform Act of 1996 (known as the Clinger- Cohen Act) also
requires the OMB Director to “promote and be responsible for improving
the acquisition, use, and disposal of information technology by the Federal
Government to improve the productivity, efficiency, and effectiveness of
Federal programs, including through dissemination of public information

and the reduction of information collection burdens on the public.”
Additionally, the Government Paperwork Elimination Act (GPEA) requires the
OMB Director to ensure that federal agencies “provide for the option
of electronic maintenance, submission, or disclosure of information, when
practicable as a substitute for paper” by October 2003. 2 GPEA's full
implementation will give individuals and organizations the option to submit
information or transact business with agencies electronically. Executive
branch initiatives have also encouraged the use of IT in the federal
government. For example, in September 1993, the National Performance Review
(later the National Partnership for Reinventing Government) announced a set
of recommendations that were intended to improve government by reengineering
through the use of information technology. Those recommendations included
the development of integrated electronic access to government information
and service; the creation of a national environmental data index; and the
use of IT and other techniques “to increase opportunities for early,
frequent, and interactive

public participation during the rulemaking process and to increase program
evaluation efforts.” In July 1996, President Clinton issued Executive
Order 13011 on “Federal Information Technology,” which, among
other things, established a Chief Information Officers Council (CIO Council)
as the principle interagency forum to improve agency information resource
management and to “share experiences, ideas, and promising
practices.” A December 17, 1999, presidential memorandum on electronic
government noted that “as public awareness and Internet usage
increase, the demand for online Government interaction and simplified,
standardized ways to access Government information and services becomes
increasingly important” and directed federal agencies to take steps to
address that growing demand. Additionally, this directive called for the
establishment of a “one stop” gateway to government information
available on the Internet. 2 Electronic Government: Government Paperwork
Elimination Act Presents Challenges for Agencies (GAO/ AIMD- 00- 282, Sept.
15, 2000).

The federal government has taken some steps to establish electronic gateways
that provide one- stop access to information from a variety of agencies,
including regulatory agencies. For example, the “FirstGov” Web

site (www. firstgov. gov), which was launched on September 22, 2000,
provides links to all on- line federal resources- from applying for student
loans to tracking Social Security benefits. Also, the U. S. Business Advisor
site (www. business. gov) provides businesses with one- stop access to
federal information on such topics as taxes, international trade, financial

assistance, and laws and regulations. The laws and regulations link allows
users to connect with the Federal Register, the United States Code, and
compilations of laws and regulations affecting small businesses. The U. S.
Business Advisor site was created by the Small Business Administration
(SBA), the National Performance Review, and an interagency task force and is
maintained and funded by SBA.

In our report issued last year, we identified a number of examples of how
federal agencies were using IT to facilitate public participation in
rulemaking. 3 Although all of the departments and agencies we contacted

were developing some type of IT- based participation vehicles, officials and
staff in those agencies questioned the need for standardization of those
practices across agencies. They said that agencies need to be able to design

their procedures to fit their particular circumstances, and that
standardization would require scarce agency resources. However, agency
officials and staff were supportive of efforts to better coordinate the use
of those participation mechanisms to avoid each agency's reinventing the
wheel.

OMB's Office of Information OMB's Office of Information and Regulatory
Affairs (OIRA), which was

and Regulatory Affairs created by the PRA of 1980, is responsible for
providing guidance and

oversight for both IT and regulatory issues. The OIRA Administrator sits on
the CIO Council, which is chaired by OMB's Deputy Director for Management.
Executive Order 12866 identifies OIRA as “the repository of expertise
concerning regulatory issues” and makes the office responsible for
coordinating agencies' regulatory missions. The executive order also

established a Regulatory Working Group that is chaired by the OIRA
Administrator and is comprised of representatives of the heads of each
agency with significant domestic regulatory responsibilities. The order also
says that the Regulatory Working Group “shall serve as a forum to
assist 3 GAO/ GGD- 00- 135R.

agencies in identifying and analyzing important regulatory issues,”
including “the development of innovative regulatory techniques.”
OIRA has taken some steps to encourage the use of IT specifically to improve
regulatory management in federal agencies. For example, in April 2000, the
OIRA Administrator launched an initiative focusing on using IT to improve
the quality of the information that the government collects, while
minimizing the burden. The initiative began with a public forum that
featured senior officials from a number of federal regulatory agencies
presenting information on their agencies' initiatives, followed by a series
of roundtable discussions. Additionally, OIRA and OMB have provided guidance
to agencies on a variety of information policy issues, including

the implementation of GPEA, privacy, and data exchanges with the states. The
guidance applies to regulatory management as well as other agency functions.

Objectives, Scope, and The objectives of our review were to identify (1)
examples of how federal Methodology

agencies are using IT innovatively, either individually or in collaboration
with other agencies or levels of government, to facilitate regulatory
management; (2) examples of how state regulatory agencies are using IT
innovatively to facilitate regulatory management; (3) IT applications that
representatives of nongovernmental organizations believe could be more
widely used by federal regulatory agencies; and (4) what officials and staff

in federal and state regulatory agencies and nongovernmental organizations
believe are the key factors that facilitate or hinder the adoption and
diffusion of IT applications in regulatory management.

We focused our efforts regarding the first objective on the Departments of
Agriculture (USDA); Labor (DOL); Health and Human Services (HHS); and
Transportation (DOT) and the Environmental Protection Agency (EPA). We
selected these agencies because they are primarily responsible for federal
health, safety, and environmental regulations that have been the target of
reform initiatives. In each agency, we identified the IT and regulatory
management officials and staff to interview, either through our designated

liaisons or through publications that featured relevant IT applications,
including the agencies' Web sites and agency documents. We asked each of
these officials and staff to identify IT- based regulatory management
applications that they considered innovative. We did not attempt to define
the word “innovative” but made it clear that the application
should not

simply be that the agency had a page on the Web. We also obtained
information on the agencies' innovative or “best practice” uses
of IT in

regulatory management from individuals and groups focusing on regulatory
reform, including the Regulatory Working Group, the Council for Excellence
in Government, and academics. In each agency, we asked a series of
structured questions that were keyed

to our reporting objectives. For each of the federal IT- based regulatory
management applications that the agencies or others identified, we conducted
a structured, follow- up interview that was designed to obtain more detailed
information from relevant agency officials. Specifically, we asked, among
other things, for a detailed description of the innovation and

for information on the regulatory purpose( s), status, scope, and results of
the IT- based application. Additionally, we asked about lessons learned,
including obstacles and facilitators to development. We also reviewed
information on the innovations on agencies' Web sites and other relevant
documents.

In some cases, the innovations we identified were primarily located in one
part of the agency. For example, in HHS, the innovations identified for this
study were primarily in the Department's Food and Drug Administration

(FDA). 4 Additionally, in some instances, we selected certain innovations
for presentation in this report from a longer list of suggestions that was
provided by the agency. For example, FDA officials provided a list of more
than a dozen applications that they considered innovative. Working with FDA
officials, we selected applications for inclusion in this report that
represented different types of functions.

For the second objective, we interviewed officials from organizations
representing state governments (e. g., the National Governors Association
and the Environmental Council of the States) to identify promising
regulatory IT applications at the state level. Again, we allowed these
organizations to define the word innovative. We also identified state IT
applications in the regulatory arena that other organizations (e. g., the
Council for Excellence in Government and the National Association of State
Information Resource Executives) or publications identified as

examples of best practices. For each of the identified state IT- based
applications, we talked to officials or staff in the state agencies involved
in the development and/ or implementation of the application and reviewed

information on the agencies' Web sites. 4 In GAO/ GGD- 00- 135R, we
identified innovative uses of IT to facilitate public participation in
federal rulemaking in other parts of HHS.

For the third objective, we interviewed representatives of business
associations, consumer advocacy groups, and academic centers that deal with
regulatory reform issues. Although we recognize that there are

numerous organizations that are interested in regulatory issues, we
judgmentally selected these nongovernmental organizations to contact because
they have been actively involved in recent regulatory reform initiatives and
represent alternative perspectives on regulatory reform. We contacted the
following organizations: the National Federation of

Independent Businesses, the National Association of Manufacturers, the U. S.
Chamber of Commerce, the American Hospital Association, the Natural
Resources Defense Council, Public Citizen, OMB Watch,

Information Renaissance, the American Bar Association, the Heritage
Foundation, Citizens for a Sound Economy, the Mercatus Center of George
Mason University, American University's Washington College of Law, and

Washington University's Center for the Study of American Business. Some of
these organizations provided extensive information, while others gave us
more limited answers to our questions. We also reviewed available Web

sites for the organizations and looked at relevant publications discussing
IT applications that may have potential for improving federal regulatory
management. For the fourth objective, we asked all of the individuals that
we interviewed

what they viewed as the key factors that facilitate or hinder the adoption
and diffusion of IT applications in regulatory management.

Our review was intended to provide examples of innovative IT- based
applications in regulatory management and should not be viewed as a
compendium of all such applications, even within the federal agencies and
states that are the focus of this report. Also, the suggestions offered by
representatives of the nongovernmental organizations in relation to the
third objective are not intended to be comprehensive of all possible
suggestions. We did not attempt to validate federal or state agency
officials' views or data regarding the performance of the innovations that
they

identified. We conducted our work between June 2000 and December 2000 in
Washington, D. C., in accordance with generally accepted government auditing
standards. We provided a draft of this report to the Director of OMB for his
review and comment. OMB officials said that they had no

comments on the draft report. We also provided federal and state agency
officials with the relevant draft report sections attributed to them to
ensure that we correctly characterized their systems and comments.

Federal Agencies Used All of the federal agencies included in our review
were using some form of IT in Different Ways to IT to improve regulatory
management and to meet legislative and executive

branch mandates in this area. The applications that the agencies and others
Facilitate Regulatory identified as innovative covered all of the dimensions
of regulatory Management management that we examined, and most applications
covered more than one dimension. Most of the applications involved using IT
to improve

traditional regulatory management approaches within their agencies. Other
applications were more interactive in nature and appeared to change the
nature of the relationship between regulatory agencies and the relevant
public. A few of the applications attempted to address issues involving
interagency or intergovernmental coordination. Although agency officials

were able to identify perceived benefits for the innovations, few agencies
had performance data clearly demonstrating the effect of the innovations on
the agencies' effectiveness or efficiency, burden reduction, or other
regulatory outcomes. Most Innovative Federal IT The innovative IT- based
applications that attempted to improve traditional Applications Attempted to
regulatory management approaches addressed several of the different Improve
Traditional dimensions of regulatory management- rulemaking, information

Regulatory Management collection, compliance assistance, information
dissemination, and other Approaches

compliance/ enforcement actions. Many of these applications also had
implications for burden reduction and/ or improved transparency of the
regulatory process.

Rulemaking Several of the federal IT- based applications and initiatives
that agency officials and others identified as innovative were attempting to
improve the internal management of the rulemaking process.

? DOT's Docket Management System (DMS) is an electronic, image- based
database covering every agency and every rulemaking within the Department. A
DOT official said that the DMS not only offered easier

access to rulemaking materials to the public, but it also made it easier for
DOT lawyers, analysts, managers, and others involved in the rulemaking to
find the information they needed when they needed it.

For example, they said agency professionals could review public comments on
proposed rules at their desks or even from their homes as they develop final
rules. As noted in our previous report, the DMS has become the official
rulemaking record for the Department, enabling DOT to save more than $1
million each year in administrative costs. 5 ? USDA's Risk Management
Agency- the agency responsible for crop

insurance programs- developed an Internet- based Regulatory Processing
Management Tracking System that monitors proposed and final rules through
all steps in the rulemaking process. The system permits agency employees and
others to identify planned regulations

and their estimated time frames, the status of rules being developed
(including the number of days in each processing step), and the next steps
required in the process. The system also has a forecasting feature

that allows users to develop a list of process steps required for
publication of rules and to calculate estimated dates of publication that
are based on best and worst case scenarios. Other features are planned for
the future, and other agencies within USDA have expressed interest in
developing similar systems.

? DOT's Federal Aviation Administration (FAA) has developed an Internet-
based Integrated Rulemaking Management Information System (IRMIS) to track
the status of rulemaking projects, including their

corresponding schedules and associated documents. IRMIS also provides users
with access to other rulemaking- related systems, including DOT's DMS;
federal regulations; and the agency's Regulatory Guidance Library. 6 DOT
officials said the Department expects to implement a DOT- wide tracking
system within a year that will interact with IRMIS and other agency tracking
systems.

5 GAO/ GGD- 00- 135R. 6 We have an ongoing study evaluating the FAA
rulemaking process. An assessment of IRMIS will be included in a report
scheduled for issuance later this year.

Information Collection Several agencies have developed IT- based
applications that involve the collection of information through some form of
electronic reporting. Two agencies' efforts in this area are particularly
noteworthy- EPA and FDA.

? EPA has established a central Office of Environmental Information (www.
epa. gov/ oei/) to coordinate the agency's information collection and
dissemination activities and to develop integrated, standardized collections
of information (among other things). EPA is also taking a

number of actions to make electronic reporting available to all regulated
communities for all environmental compliance reports, including (1)
developing electronic data interchange (EDI) standards; (2) developing user-
friendly Web- based forms, which would be appropriate for electronic
reporting by companies that are not EDI- capable; and (3) implementing a
“central data exchange facility” to provide a single, onestop

point of entry for data submitted to EPA. In addition, the agency is
developing electronic reporting and recordkeeping best practices and
implementation support to help state and local agencies accept electronic
reports under EPA- delegated programs. 7 EPA does not yet have any data on
the amount of burden actually reduced through the use of electronic
reporting. However, on the basis of industry experience

with electronic commerce, EPA officials estimated that these initiatives
could ultimately reduce regulated entities' paperwork time and costs by as
much as 20 percent for a given entity, allow EPA and state and local
agencies potentially to save millions of dollars in processing costs, and
reduce data entry errors. ? FDA's Operational and Administrative System for
Import Support is an automated system for processing and making
admissibility

determinations for shipments of foreign- origin, FDA- regulated products
seeking to enter domestic commerce. Agency officials said that admissibility
decisions are transmitted to importers' agents within minutes after shipment
data are electronically submitted to FDA, and that 85 percent of shipments
are cleared without any submission of paper. Automated screening functions
also reportedly enhance FDA's ability to detect problems, thereby keeping
certain products from

7 For other views on EPA's information initiatives, see Environmental
Information: EPA Needs Better Information to Manage Risks and Measure
Results (GAO- 01- 97T, Oct. 3, 2000);

Managing for Results: EPA Faces Challenges in Developing Results- Oriented
Performance Goals and Measures (GAO/ RCED- 00- 77, Apr. 28, 2000);
Environmental Information: EPA Is Taking Steps to Improve Information
Management, but Challenges Remain (GAO/ RCED- 99261, Sept. 17, 1999); and
environment. gov: Transforming Environmental Protection for the 21 st
Century, National Academy of Public Administration, November 2000.

entering the country. An FDA contractor estimated that the system would save
the import industry $1.2 billion during a 7- year period, and FDA believes
that the system will also improve the effectiveness and productivity of
agency employees. This system has won a number of awards, including the CIO
Council's and Industry Advisory Council's 1998 Best IT Practices in the
Federal Government and Government

Executive magazine's 1998 Government Technology Leadership Award. ? FDA's
Center for Devices and Radiological Health has developed an

Internet- based Mammography Program Reporting and Information System to
support the agency's statutorily mandated responsibility for certification
and inspection of all mammography facilities in the United States. The
system permits the electronic tracking and monitoring of a facility's
accreditation, certification, inspection, and compliance history. FDA and
state inspectors use laptop computers to record inspection

results and send the results to a centralized database, which is also used
by FDA- approved accreditation bodies. The system allows access to data from
all authorized user locations and was built to accommodate a variety of
users' computing environments. ? FDA's Center for Food Safety and Applied
Nutrition's Voluntary

Cosmetics Registration System provides Internet- based access to a database
that allows cosmetic companies to obtain a registration number and
subsequently submit formulation information and

ingredient lists to the center in a secure manner. FDA officials said that
cosmetic companies are more willing to voluntarily register with the agency
through the system because it reduces the amount of time the companies spend
registering and submitting information. ? FDA's Center for Biologics
Evaluation and Research has designed and

implemented an Electronic Regulatory Submission Review Program to support
the required performance goals in the Prescription Drug User Fee Act and
proposed international standards. The purpose of the

program is to move from a largely paper- based, regulatory submission and
review environment toward one that works with an all- electronic regulatory
submission. Agency officials said that the program would enable the
efficient receipt, viewing, storage, and archiving of electronic
submissions, thereby allowing access to information from any reviewer's
desktop and automating analytical and administrative processes.

Compliance Assistance Compliance assistance has long been recognized as a
way to reduce the burden associated with federal regulations, but those
efforts have not always proved successful. In our 1996 report on federal
regulatory burden,

federal agencies said that several private sector companies we contacted

during our review had misstated or misinterpreted statutory or regulatory
requirements, sometimes incurring unnecessary expenses. 8 Some of the
companies told us that it was difficult to obtain clear compliance
information from federal agencies. We observed in our report that the
mechanisms agencies used to provide information on regulatory requirements
appeared fragmented both between and within agencies, and

that this fragmented approach may be contributing to ineffective
communication between regulatory agencies and the business community. Some
of the IT- based applications that agency officials and others

identified as innovative during this review were intended to inform
regulated entities of their responsibilities under applicable statutes and
regulations. ? EPA has partnered with industry associations, environmental
groups,

universities, and other government agencies to create 10 compliance
assistance centers for specific sectors, many of which are heavily populated
with small businesses and other small entities. (See www. assistancecenters.
net.) Sectors served by the centers include agriculture, automotive services
and repair, metal finishers, printing, transportation, local governments,
and federal facilities. EPA manages two of the centers (agriculture and
federal facilities), with the other

eight managed by organizations outside of EPA. The centers offer a range of
communication services, including Internet sites, E- mail groups, fax- back
systems, and telephone assistance hotlines.

Information provided through these mechanisms include plain- language
compliance guides, updates on industry- specific regulatory developments,
on- line access and search capabilities for state

regulations, and training and satellite conferences. According to EPA, the
centers were used more than 400,000 times by regulated entities and the
public in fiscal year 2000, a 56- percent increase from fiscal year 1999. ?
DOL's Occupational Safety and Health Administration (OSHA) offers electronic
Compliance Assistance Tools (e- CAT) that help businesses

identify workplace hazards in specific areas. They also provide safety and
health information to help businesses address the identified hazards. (See
www. osha- slc. gov/ dts/ osta/ oshasoft/ osha- advisors.) The six available
e- CATs cover compliance requirements for baggage

8 Regulatory Burden: Measurement Challenges and Concerns Raised by Selected
Companies (GAO/ GGD- 97- 2, Nov. 18, 1996).

handling, nursing homes, the logging industry, respirator protection, silica
protection, and lockout/ tagout inspections.

Information Dissemination Although all of the selected agencies had IT-
based systems to provide information to the public, four EPA systems were
particularly noteworthy. ? “Envirofacts” (www. epa. gov/
enviro/) is an Internet- based system that allows users to retrieve
environmental information about different

media and issues (e. g., air and water quality, hazardous wastes, and toxic
releases) from several EPA databases. Envirofacts also includes (1) mapping
programs that allow users to identify sources of pollution within the users'
community and (2) a Facility Registry System database that provides a
single, integrated source of comprehensive information about particular
facilities. Envirofacts has received numerous awards, including the
Government Computer News Agency Excellence Award in 2000 and the 1999
Government Technology Leadership Award.

? EPA's Integrated Data for Enforcement Analysis (IDEA) database (www. epa.
gov/ oeca/ idea/) is a comprehensive source of environmental performance
information on any EPA- regulated facility, retrieving data from across
agency program offices. The database provides federal and state employees
with facility- specific historical profiles of inspections, enforcement
actions, penalties assessed, toxic chemicals released, and emergency
hazardous spills. Public users can obtain access to certain information in
the system by registering with EPA and paying for computing services. ? EPA
has also developed a separate but related Sector Facility Indexing

Project (SFIP) database (www. epa. gov/ oeca/ sfi) to provide information
from the IDEA database to the public in a more user- friendly and accessible
manner. SFIP currently provides information about compliance and enforcement
history, pollutant releases and spills,

production capacities, and the demographics of the surrounding community for
facilities in five industrial sectors: pulp mills, petroleum refining,
automobile assembly, iron and steel, and primary nonferrous metals. EPA
officials said they plan to expand the database to include federal
facilities in the near future. ? EPA's “AirNow” Program (www.
epa. gov/ airnow/) is a Web site that provides environmental information to
the public through links to regional cameras that show air quality in
various parts of the country. The site also provides public health
information on the environmental effects of air pollution, featuring
interactive ozone maps, air quality forecasts, and health advisories that
help keep users informed about the air they breathe. The site won a
Government Technology Leadership

award in 1998 and was selected by Government Executive magazine as one of
the “Best Feds on the Web” for 2000.

Some Federal IT The applications previously discussed, although innovative
in many Applications Offered New

respects, are not interactive or transactional in nature and generally do
not Ways of Interacting With the represent significant departures from
traditional regulatory management

Public functions. On the other hand, a few of the applications that the
agencies and others identified as innovative have gone beyond the
traditional constructs and provide new forms of interaction with the public.

DOL's “Elaws” Advisors One such application is DOL's set of
Employment Laws Assistance for Workers and Small Businesses (elaws)
advisors. (See http:// www. dol. gov/ elaws/.) Elaws is a set of interactive
advisors that is available on the Internet to help workers and small
businesses understand their rights and responsibilities under federal
employment laws and regulations. Each advisor imitates the interaction that
an individual might have with a DOL employment law expert, asking questions
and providing

answers that are based on the responses provided. For example, the Confined
Spaces Advisor leads the user through a series of questions designed to
determine whether a particular business is covered by the applicable
regulations. Among other things, the advisor asks whether the space in
question

? is large enough for a worker to enter bodily; ? is configured so that a
worker can perform work inside; ? has a restricted entry or exit; ? is
designed for continuous worker occupancy; ? has a hazardous atmosphere; and
? has a floor that slopes down to a narrower cross section.

At the end of this series of questions, the advisor informs the user whether
OSHA considers the space in question to be a confined space, and whether a
permit is required for its use. The advisor also directs the user to an
overview of OSHA guidance on permit- required confined spaces.

The elaws advisors differ in the types of interactions they support. For
example, the Posters Advisor not only allows business owners to identify any
DOL- required posters their business must display, but also allows them

to print the required posters. Other advisors help users fill out required
forms and submit them electronically. As of November 2000, DOL had elaws
advisors covering a variety of issues and DOL- administered statutes,

including the Fair Labor Standards Act, the Drug- Free Workplace Act of
1988, and the Family and Medical Leave Act. According to DOL, the various
advisers were accessed more than 450, 000 times during fiscal year 2000, and
their use is increasing.

OSHA's Expert Advisors In addition to its on- line Fire Safety and Confined
Spaces advisors as part of the DOL elaws system, OSHA also has a set of
downloadable expert advisors. 9 These advisors run on personal computers and
enable businesses and others to receive answers off- line on how OSHA
regulations apply to their work sites. (See www. osha- slc. gov/ dts/ osta/
oshasoft /.) An OSHA official said that off- line advisors allow users to
input detailed

information about their companies without privacy or enforcement concerns
associated with on- line systems connected to the agency. The OSHA advisors
include (1) a Hazard Awareness Advisor to identify hazards in general
industry workplaces; (2) an Asbestos Advisor for building

owners, managers, and others; and (3) a Lead in Construction Advisor to help
clarify the coverage of OSHA's rule, the use of exposure data, and other
issues. In each of these advisors, users are interviewed about relevant
issues; asked follow- up questions that are based on the answers previously
provided; and, in most cases, provided a written report tailored to the

circumstances described. In August 2000, the Ford Foundation and Harvard
University's John F. Kennedy School of Government named OSHA's expert
advisors as a finalist in the Innovations in American Government Award,
which recognizes responsive and innovative

government programs. DOT's “Do It Yourself” System Another
interactive IT- based application used in federal regulatory

management is DOT's “Do It Yourself” (DIY) system. (See http://
diy. dot. gov.) The DIY system was developed by DOT's finance office and
permits regulated entities to file for required licenses and certifications
and to make related payments using a credit card through a central DOT

Web site or through the regulating agency's Web site. DOT agencies using the
DIY system as of November 2000 included, among others, (1) the Federal Motor
Carrier Safety Administration (FMCSA) (for registration applications,
insurance payments, and fine payments); (2) the National Highway Traffic
Safety Administration (for import fee payments, technical information
services payments, and Freedom of Information Act request

payments); and (3) FAA (for aircraft registration and airman data). Users 9
OSHA began developing expert systems to provide compliance assistance to
small businesses before DOL initiated the elaws program in 1996.

are guided through a series of screens that ask for confirmation of
transaction requests and address information. Built- in error messages in
the on- line forms help users complete the forms correctly, thereby
eliminating rework for both the users and the agency. The final screens take
the user through the credit card part of the transaction and provide the
user with a transaction number that can be used to track orders. DOT
officials said that, in most cases, users should be able to complete the
transactions in 10 minutes or less. The DIY system was designed to provide

better service to customers, reduce paperwork, and introduce efficiencies
into DOT's operations, and agency officials said the system has already
demonstrated its effectiveness. For example, they said the DIY system has
helped FMCSA eliminate a 5- week backlog of applications from truckers
wanting to engage in interstate hauling because staff no longer have to

contact truckers about errors and no longer have to follow a series of steps
to process the application and payment. A Few Applications

A few of the federal regulatory management innovations that the agencies
Involved Interagency or or others identified involved interagency or
intergovernmental

Intergovernmental cooperation- one EPA effort involving the states and
separate efforts at Cooperation

DOT and FDA involving multiple federal agencies. EPA's National
Environmental EPA is working with the states to develop a “national
environmental Information Exchange Network

information exchange network” that the agency believes can improve
both the quality and access to environmental data. The exchange network is a
voluntary, standards- based system that links different state systems and
EPA systems, using common language and secure connections through the

Internet. In October 2000, a team comprising participants from EPA,
individual states, and the Environmental Council of the States released a
Blueprint for a National Environmental Information Exchange Network that
lays out the network design and partnership agreements for implementing the
network. Both federal and state officials consider

coordination and cooperation between EPA and the states essential to
successful implementation of the environmental electronic reporting
initiative previously discussed. Government- wide International DOT has been
involved in an interagency effort to develop an Integrated

Trade Data System Government- wide International Trade Data System (ITDS)
that the

developers hope will coordinate the collection, use, and dissemination of
international trade information. When fully developed (in an estimated 5 to
6 years), ITDS will be the public and interagency interface for all

international trade and transportation transactions for the movement of
cargo in either direction across U. S. borders. ITDS goals include improving
compliance with trade requirements; reducing burden on both the trade
community and the government; and providing more accurate, timely, and
thorough international trade data. According to system developers, ITDS will
provide the primary inspector with “one look” at the truck, its
goods, and the driver's compliance with key federal requirements before the
truck enters the United States. Truckers will electronically file transport
declarations and goods declarations before arriving at the port of entry.
ITDS will pass relevant data to the agency for selective screening and

determination of appropriate action. In October 2000, DOT's FMCSA agreed to
participate in the first deployment of ITDS at the federal ports of entry in
Buffalo, NY, in 2001. Also expected to participate in the Buffalo

pilot are the Customs Service within the Department of Commerce, the
Immigration and Naturalization Service within the Department of Justice,
FDA, and the trade and transportation communities.

Food Safety Initiative Ensuring the safety of the nation's food supply is
the responsibility of an interlocking monitoring system that watches over
food production and distribution at every level of government- local, state,
and national. Given the complex set of food safety laws, regulations, and
responsibilities, even obtaining information about which entity has
responsibility for what task can be daunting. 10 In 1997, the Clinton
administration created a Food Safety Initiative to strengthen the fight
against food- borne illnesses, which afflict between 6. 5 million and 33
million Americans every year. The President directed the Secretaries of the
U. S. Department of Agriculture and HSS and

the Administrator of EPA to identify ways to further improve the safety of
the food supply. One outgrowth of the Food Safety Initiative has been the
development of a gateway Web site (www. foodsafety. gov) that is maintained
by the FDA's Center for Food Safety and Applied Nutrition. The site provides
links to a wide range of information on food safety, including information
on relevant laws, regulations, and enforcement responsibilities. Also
included are links

to dozens of federal, state, and local agencies involved in food safety and
10 See, for example, Food Safety: U. S. Needs a Single Agency to Administer
a Unified, RiskBased Inspection System (GAO/ T- RCED- 99- 256, Aug. 4, 1999)
and Food Safety: Federal Efforts to Ensure the Safety of Imported Foods Are
Inconsistent and Unreliable (GAO/ RCED- 98- 103, Apr. 30, 1998).

buttons on the site's home page that provide safety alerts and methods to
report illnesses and product complaints. States Are Using IT to A number of
agencies in the state governments that we contacted were also Facilitate
Regulatory

using IT to facilitate regulatory management. The applications these state
government organizations identified as innovative, like their federal
Management counterparts, represented the range of regulatory management
functions. Several of the state innovations were interactive systems that
allowed regulated entities to identify their regulatory responsibilities and
sometimes to complete the related transactions. One of the innovations

was proactive, notifying users of opportunities to participate in
rulemaking. States also used other less interactive or proactive IT- based
applications to improve traditional management approaches.

Interactive IT Applications Agencies in four of the states we contacted
(Florida, Texas, Virginia, and Help Regulated Entities

the State of Washington) have developed IT- based regulatory management
Comply With State systems with extensive interactive capabilities. Most of
these systems help Requirements regulated entities comply with state
requirements.

For example, Florida's Department of Environmental Protection (DEP) has a
“One- Stop Permit Registry” (OSPREY) allowing users to obtain
information about all environmental permits administered by the department.
(See http:// osprey. dep. state. fl. us.) According to a DEP official,
OSPREY was developed as a result of customer comments on how difficult it
was to (1) identify the right DEP contact, (2) determine the appropriate
permits that had to be filed, (3) determine where the permits had to be
filed, and (4) identify the responsible officials for permit approval. To
determine what permits a particular activity requires, users first select
the

Florida county in which the activity will be performed and then identify the
type of activity involved (e. g., home building, construction of a boat
launch, or road building). OSPREY then asks a series of questions,
culminating in a “Consultation Summary” that lists applicable
permit requirements and contact points and provides links to the application
forms. The site also contains links to help users determine the fees
associated with an application and a link to allow users to check on the
status of a submitted application. Although the department has not developed
any performance

measures for the system, a DEP official said that customer feedback has been
very positive.

Another interactive state application is the Texas Railroad Commission's
Electronic Compliance and Approval Process (ECAP) system. (See http:// www.
rrc. state. tx. us/ ecap.) ECAP streamlines regulatory requirements by
implementing a totally paperless workflow that allows users to obtain oil or
gas well permits on- line and captures, stores, and transmits oil or gas
well permitting information electronically. The system encompasses all
aspects of permit requirements, including security/ authentication, fee
collection, data reuse, and electronic

transmission of required attachments. ECAP users can file the appropriate
forms, pay the associated fees, and submit the required attachments online.
Once the commission receives the information, it processes the forms and
issues the permit. The industry information is stored by the system so that
the user needs to enter facility data only once.

The ECAP project is being implemented through a 3- phase pilot project that
will provide the ability to electronically file, process, and approve a
drilling permit application. According to commission officials, the first
phase of the project has been completed and the second phase will soon be
released. The last phase, scheduled for implementation in September 2001,

includes data entry of a complex permit, complete integration with existing
mainframe computer systems, comprehensive on- line permit approval, and
concurrent update of its two database environments. Industry estimates that
ECAP will save them between $3 million to $6 million annually for drilling
permits alone. By 2005, when ECAP is expanded to include all

permits and performance reports, commission officials estimate that the
savings to industry will be over $17 million per year, and that the savings
for the Railroad Commission could be up to $1 million per year.

A third example of an interactive state system is the Virginia Department of
Motor Vehicle's (DMV) Virtual Customer Service Center. (See http:// www.
dmv. state. va. us.) Through this system, users are able, among other
things, to renew licenses and vehicle registrations on- line. A user's
information (including digital photographs) is stored within the system,
thereby allowing on- line renewals. The Virtual Customer Service Center
started by allowing customers to view the catalogue of over 150 different
license plates. A customer was able to access the site and determine if a

particular personalized message was still available and, if it was, to
reserve that message for 90 days. To go further and allow customers to avoid
waiting in line, the DMV was able to modify its IT architecture to support
Internet- based applications. This involved reviewing the various activities
performed by DMV personnel for the different functions and then writing a

program that could emulate the various steps. As a result, the Virginia DMV

was able to provide many of the functions performed at the various customer
service centers via the Internet. The State of Washington's Department of
Labor and Industries has developed several IT- based “assistance
network” systems that are interactive and facilitate compliance with
state rules and regulations. Users can access these systems either through
the department's Web site (http:// www. lni. wa. gov) or through a statewide
portal called “Access

Washington” (http:// access. wa. gov), which links all state agencies
and provides the public with a common access point to state government
information and services. The department provides an assistance network that
enables users to obtain regulatory information and complete transactions.
For example, the systems (1) allow users to determine what labor- related
rules are applicable to their operations, (2) provide computerbased training
to help employers comply with various labor rules, and (3) offer a training
management system to track whether employees are fulfilling training
requirements. The department also maintains a database that the public can
access to identify registered or certified contractors and to report
unregistered contractors. The department is also implementing a site that
will allow employers to pay industrial insurance premiums on- line.
Officials plan to expand the site to include allowing employers to make
other required payments.

Both the Departments of Ecology and Labor and Industries in the State of
Washington have developed proactive systems that notify customers by Email
of upcoming regulatory actions, including the publication of proposed rules,
rulemaking hearings, the issuance of interpretive statements, and semiannual
regulatory agenda updates. The departments' goal in developing these systems
was to provide the public with accurate, current,

user- friendly, and timely information related to their rulemaking
activities by informing users of new rules or revisions. According to a 1999
Department of Ecology report, the public downloaded more than 3,000 rules
per month in its first year of operation, saving the department about
$132,000 in printing and mailing costs. 11

11 Regulatory Review Progress Report, Department of Ecology, State of
Washington (Oct. 1999).

States Also Use Less Some of the IT- based regulatory management
applications that the states Interactive IT Applications

and others identified were less interactive or proactive, often focusing on
providing regulatory information to the public. For example, the previously
mentioned Virtual Customer Service Center in the State of Virginia also

provides the public with information on a variety of topics- from licensing
requirements to waiting times at customer service and telephone centers.
Customers are also able to ask questions on- line and receive a response
within the next business day. The State of Washington's Departments of
Ecology

(http:// www. ecy. wa. gov/) and Labor and Industry have also developed
systems that facilitate the dissemination of information to the public. The
Department of Ecology's index of rules, regulations, and related documents
is located at one Web site so users can “one- stop shop” for
information. This index was created to give the public a crosswalk between
the

department's various rules and publications. The Department of Labor and
Industries also has an index of rules and regulations grouped by program
area to provide the public with easier access to the information.

Washington's Department of Ecology is in the process of implementing an on-
line comment site that will allow the public the opportunity to submit their
comments electronically and have questions addressed by department
personnel. Users wishing to comment on a proposed rule will be able to

visit the department's Web site and use an on- line form to submit written
comments. This form will generate an explanatory statement that combines all
comments and responses on a particular proposed rule. Userspecific

information will be maintained by the system, thereby making it easier for
an individual to comment multiple times on various rules and only submit
personal information once.

Representatives of Representatives from the nongovernmental organizations
who participated

Nongovernmental in our review recognized and supported federal regulatory
agencies'

current efforts to use IT to improve their regulatory management
Organizations

processes. However, the representatives also said that federal agencies
Suggested Regulatory could improve their performance in this area.
Specifically, they suggested

Management that agencies improve both the content and access to on- line
information,

more broadly and consistently use some existing applications, and adopt
Improvements, some new applications. The representatives also expressed
concern that Identified Concerns

the use of IT- based applications in regulatory management could (1) make
individuals and businesses more vulnerable to scrutiny and federal

enforcement actions and (2) disadvantage those individuals and businesses
with limited technical resources. Improve On- line

The representatives of nongovernmental organizations affected by federal
Information/ Access

regulations recognized that federal agencies' Web sites already provide
regulated entities and others with a great deal of useful information.
However, several of the representatives said that these sites vary
considerably in terms of their format, content, and ease of navigability.
They also said some sites provide a clear link on their home pages to
regulatory information, but, in other sites, users must search for the same

types of information. One of the representatives said that some agencies are
not providing the public with some types of information that could be
useful, and that the agencies could do more to disseminate that information

electronically to the public and other agencies. Most of the representatives
agreed that agencies should provide as much regulatory information as
possible on- line, including information developed during the rulemaking
process (e. g., economic analyses, hearing transcripts, and comments from
the public) and other types of information (e. g., agencies' agendas of
upcoming regulatory actions). Several representatives specifically mentioned
the DOT docket management system as a model that could be followed by other
agencies. One representative suggested that OMB implement a DOT- type docket
system itself and become the model or standard system that other agencies
could emulate.

Broader Use of Existing Several of the representatives suggested that other
innovative regulatory Applications

management applications that certain agencies are beginning to implement
also should be used more broadly. For example, several representatives
suggested that more agencies allow the public to comment on proposed rules
electronically and make all of the comments the agencies received on a
proposed rule available on- line. One person said permitting electronic
comments should allow the agencies to save money because fewer staff would
be needed to handle the comments received. Other representatives suggested
wider use of proactive electronic notification systems (e. g., list servers)
to increase the dialog between regulated entities and the public and to
encourage more people to get involved in regulatory issues. Another

representative suggested that agencies make greater use of video technology
and make their public hearings available, either live or on tape, through
the agencies' Web sites. According to the representative, this

approach would enable more people to participate in the process,
particularly those who were in remote locations or otherwise unable to
attend a public hearing on a rule in which they were interested. Use of New
Applications Some of the applications that the representatives suggested do
not, to our knowledge, currently exist. For example, one representative
suggested that

agencies could develop a “rule cost calculator” that would
include all of the costs of complying with a rule. By entering pertinent
information about its own business (e. g., type of business or number of
employees), a regulated entity could calculate the potential cost of the
proposed rule to its business. Others said that they would like to be able
to go to one place and find out all applicable federal regulations. One
representative said that this kind of one- stop shopping is particularly
appealing to small businesses.

Areas of Concern Although these representatives of affected communities
generally encouraged agencies' efforts to use IT in regulatory management,
some also indicated that regulated entities are sometimes nervous about how
an

agency's use of technology may affect them. For example, they said regulated
entities are concerned that they may be opening themselves up to additional
scrutiny and enforcement actions as a result of the electronic trail they
might leave if they access or query a regulator's Web site for information.
They said this was of particular concern to regulated entities

that must provide private or proprietary information about their business in
order for the agency to electronically develop a list of applicable
regulations. In addition, some of the representatives also expressed
concerns about the “digital divide”- that is, differences within
the regulated community in terms of their technological capabilities. One
representative said that some regulated entities, particularly small
businesses, do not have the latest technological equipment or the financial
or staff resources available to take

advantage of the IT- based applications that some of the agencies are
developing. Therefore, the representative suggested that it would be best
for agencies to make the use of IT for regulatory compliance purposes
voluntary, and to continue to allow businesses to comply with regulations
and obtain information using traditional approaches.

Factors Facilitating the Federal and state agency officials and
representatives of nongovernmental

Development and organizations identified a number of factors that they
believed affect the

adoption and diffusion of IT- based approaches in regulatory management:
Diffusion of Innovative

(1) top- level leadership commitment/ support, (2) adequate financial IT-
based Regulatory resources and human capital, (3) legislative and executive
branch Management

initiatives, (4) internal and external partnerships with critical
stakeholders, (5) reengineering of existing business processes, and (6) the
development Approaches of a communication infrastructure.

Top- Level Leadership Federal and state agency officials and staff said that
the commitment and Commitment/ Support

support of top- level leaders is critical to the successful development and
implementation of IT- based systems to improve regulatory management.
Federal officials said that leadership commitment is very important in
overcoming resistance to changing the traditional ways that agencies conduct
business. Officials in DOL said that projects could languish without
commitment from the top. Therefore, before beginning to develop an elaws
advisor in a new DOL agency, they require that the agency commit the
resources- both dollars and people- to ensure successful development.

In some cases, the federal officials indicated that leadership support could
be positively influenced by factors outside of the agencies. For example,
several officials pointed to the importance of presidential initiatives (e.
g.,

the Clinton administration's E- gov initiative) and congressional mandates
(e. g., GPEA) in focusing the agencies' attention and in obtaining the
commitment and resources needed to carry out initiatives. An HHS official
said that leadership support can also be stimulated by a few pioneers in the
agency who have a vision and can sell the idea to agency management.

Some of the officials also indicated that leadership support can be
engendered by success. For example, a DOT official said that obtaining early
demonstrable savings helped obtain top- level support and widespread
interest in the Department's docket management system. On the other hand,
federal officials also said that frequent changes in top agency leadership
could make it difficult to sustain commitment to specific projects.
Therefore, they said, agencies need to devise ways to get longterm
commitment to proposed innovations that transcends changes in leadership.

All of the state officials and staff that we interviewed also cited the
support of top- level management as a key factor in their ability to develop
and

implement innovative systems. State officials said that the support of
department heads, state CIOs, and/ or the states' governors allowed them to
consider new ways to address issues raised by customers and develop
mechanisms to respond to their concerns. For example, officials in both the
State of Washington and the Commonwealth of Virginia cited the enthusiastic
support and leadership of their respective governors. In Washington, the
governor issued an executive order directing all state

agencies to develop and implement technological approaches to regulatory
management. 12 In Virginia, the governor made the application of technology
to all governmental activities a priority.

Adequate Financial Federal and state officials and staff also said that
leadership commitment Resources and Human

involves not only giving initiatives priority and visibility, but also
Capital

committing appropriate financial resources and human capital to implement
IT- based regulatory management applications. Federal officials said that
the lack of adequate resources has been the biggest obstacle to implementing
innovative IT- based approaches in their respective agencies. However, they
recognized that agency leaders must allocate increasingly scarce resources
among competing priorities both across programmatic areas and among IT
initiatives. To resolve this issue, several federal officials said that top
leadership commitment could help to forge partnerships among program areas
and help to obtain the financial resources needed to implement new programs.
For example, several program managers at EPA were able to use financial

resources provided to the Office of Environmental Information to help
develop and implement the agency's electronic reporting initiative. Toplevel
commitment can also help ensure that adequate human capital is invested in
developing these IT- based approaches. One official in the State

of Washington emphasized how important it was to the success of the project
that leaders in the Department of Ecology dedicated the people that
developers needed to complete their work. Without adequate human capital
investment, the official said that the department would not have had the
right mixture of skills necessary for the development of innovative
applications to facilitate regulatory management.

12 Governor's Executive Order 97- 02, Regulatory Improvement (Mar. 25,
1997).

Legislative and Executive Several of the federal and state officials said
that legislative and executive

Branch Initiatives branch IT initiatives had acted as catalysts in
developing IT- based

approaches to facilitate regulatory management. As previously mentioned,
several of the federal officials that we contacted said that the passage of
GPEA had helped them to obtain the top leadership commitment needed to
support IT innovations in their agencies. They also said the legislation had
helped the agencies develop clear schedules for moving toward the use of IT
in regulatory management. OMB officials also said that GPEA had

served as an impetus for developing new IT- based approaches to regulatory
management. In the State of Washington, agency officials credited Executive
Order 97- 02 as the impetus for many of the IT- based developments occurring
in state agencies. The executive order required all state agencies to review
their reporting requirements. The goal of this review was to develop
reporting requirements that are coordinated with

other state agencies requiring similar information, that are economical and
understandable, and that rely on the electronic transfer of information.

Internal and External Federal and state officials and staff said that
creating appropriate Partnerships partnerships- intra- agency, interagency,
and/ or public- private- was also critical in developing systems that
facilitated regulatory management. They said that intra- agency partnerships
helped the agencies eliminate internal “stovepipes” that were a
barrier to developing and implementing innovative

IT approaches. Federal officials particularly cited the need for internal
partnerships between IT and program officials for successful development and
implementation of IT projects. They said that developing IT- based
management programs is often considered strictly an IT issue, and that
program officials (in this case, regulatory officials) often do not get
involved with developing those applications for their areas of
responsibility. However, federal and state officials and staff said it is
essential to involve the people familiar with current regulatory processes

and issues in each stage of planning, developing, and implementing new IT
applications in their areas of expertise. For example, DOL officials told us
that a standard part of the development of a new elaws application is
identifying and involving appropriate regulatory managers, subject matter
experts, consultants, and lawyers who are knowledgeable about the

program. Without this kind of partnership between IT and program office
personnel, they said, agencies are likely to automate inefficient processes
that will not meet new programmatic needs. Federal officials also cited the
importance of external partnerships in developing and disseminating
innovative regulatory management systems.

For example, in developing EPA's electronic reporting initiative, the agency
established partnerships with the states through the National Governors
Association and the Environmental Council of States. As a result of these

partnerships, EPA was able to leverage financial and human capital resources
to develop the National Environmental Information Exchange Network. In
addition, these partnerships helped ensure that all stakeholders shared
information and provided input into the development of system requirements.
Although agency officials said that the development of these partnerships
had been a huge task, they believed that the final system would yield the
results they expected- reduced regulatory burden and consistent data
collection and analysis.

State officials also emphasized the benefits of internal and external
partnerships. In Florida, the Department of Environmental Protection formed
a working group consisting of representatives from other departmental
offices to assist in developing OSPREY. Virginia's DMV was able to develop
its system through the cooperation of other departmental officials who not
only participated in the development process, but also played a key role in
the testing and verification of the system before it was released to the
public. Texas officials cited the importance of partnerships with the
private sector. In Texas, state officials formed a public/ private
partnership with the regulated community as well as with the federal
Department of Energy. Texas officials said that stakeholders' participation

in the developmental process ensured that (1) their issues were addressed
and (2) that they would assume ownership and use of the system that was
developed.

Reengineering of Existing Several of the federal and state agency officials
said that comprehensive

Business Processes reengineering of their business processes before
developing new systems

enabled them to develop more innovative IT- based regulatory management
processes. As a result of reengineering, they said they not only increased
the efficiency of the selected processes but also eliminated processes that
no longer made sense and introduced new ways of relating to the regulated
community and the public. However, federal officials cautioned that
reengineering their regulatory processes is not always possible because
agencies may be legally prohibited from making substantive changes. 13
Federal officials also said it is sometimes important to implement in
segments, rather than undertaking “grand designs.” For example,
DOL staff involved in the development of the elaws advisors emphasized the
importance of modular development within their formal, structured
development model. They said that developing and testing key pieces that

they showed to program management helped maintain support for the program. A
DOT official also told us that developing the basic capability of the DMS
and gradually adding new features and capabilities to meet additional needs
as additional resources became available has worked for them. Also, some
officials in Washington and Virginia said they believed it is better to
seize opportunities and move ahead without substantive

reengineering, particularly in developing interactive Internet- based
applications. As one official said, “it is better to beg for
forgiveness than to ask for permission.”

Communication State officials also indicated that a well- developed
communication

Infrastructure infrastructure was important to facilitate the adoption and
diffusion of

these innovative regulatory management systems. In some cases, the governors
in those states were critical to the establishment of that infrastructure.
For example, the Governor of the State of Washington created a Subcabinet on
Management Improvement and Results that was charged with the responsibility
of overseeing the regulatory process and ensuring that the state government
“pursues a fair, effective, and sensible regulatory strategy.”
The subcabinet's responsibilities included making recommendations for
statutory, administrative, and organizational changes as well as special
projects that result in regulatory improvements in state

government. In Virginia, the governor appointed a Secretary of Technology
who presides as chairman of the governor's Council on Technology Services.
The council consists of 23 representatives from state and local government
agencies and institutions and is charged with implementing electronic
government in various areas, such as procurement, services, communications,
and computing architecture, and coordinating technologies- based systems at
all levels of government. The governor of Florida established a similar type
of interagency working group that facilitated information sharing and served
as a catalyst for partnerships between respective state agencies.

State officials said that the availability of organizations that serve as
clearinghouses of information about technological applications in other 13
As we noted in Regulatory Burden: Some Agencies' Claims Regarding Lack of
Rulemaking Discretion Have Merit (GAO/ GGD- 99- 20, Jan. 8, 1999), statutory
provisions underlying regulations often give rulemaking agencies little or
no discretion in how they can develop regulations. For example, we reported
that EPA has no discretion to consider cost or available treatment
technologies in developing water quality criteria pursuant to the Clean
Water Act.

states helped in not only developing their own systems, but also in
disseminating information about their systems to other states. Officials
cited several organizations, such as the National Association of State
Information Resource Executives, the National Association of State Chief
Administrators, the National Governors Association, and the Environmental
Council of States, for having served as information conduits among states.
They said these organizations sponsor conferences, newsletters, and
databases that members may use as mechanisms to inform other entities about
the development of systems to address various

regulatory management requirements. State officials also said that involving
segments of the regulated community provided valuable insights to the
process and ensured stakeholder ownership of the resulting system. Officials
in Texas, Washington, and Florida said their states had involved members of
the regulated community during the development of their systems, and, in
each case, the states benefited from the collaboration. In Texas, the oil
and gas industries not only provided input into the

development process but were also a valuable funding source for the system.
In Washington and Florida, members of the regulated community participated
in developing the system requirements. This participation in the development
process facilitated the implementation of the system since

this key group of stakeholders perceived themselves as part of the system,
not as having the system imposed on them. Federal Agencies Suggested

Federal regulatory officials and staff said they were aware of some, but not
Improvements in all, of the IT- based applications that other agencies, or
even other offices Communication About

within their own agencies, were using to improve regulatory management.
Innovations They said that most of their knowledge about other agencies'
practices came about through ad hoc and informal mechanisms, such as brown-
bag

lunches by career officials assisting the Regulatory Working Group and
meetings sponsored by GAO and others. They told us that there was a need for
some type of communication infrastructure to promote more consistent and
structured sharing of information about IT innovations to facilitate the
diffusion of those innovations across agencies. They said that a new
organization was not needed, and that they preferred to use existing groups
to share information. Several federal agency officials also recommended
greater use of IT to assist in disseminating information on what other
agencies are doing. Some thought that there should be a governmentwide
portal focused on

regulatory issues or a section of a portal, such as FirstGov, that would be
a single point of entry for regulatory agencies as well as the public. One
official suggested that there should be an inventory of best practices in
the

use of IT in federal regulatory management available on- line. There was
widespread interest among federal officials and staff in several types of
best practices, including electronic dockets, new options for developing and
implementing electronic reporting, and certain interactive models that
enable agencies to change the way they interact with the public. Federal
officials also said that OMB needed to play a role in facilitating
communication regarding this issue. For example, one agency official
suggested that OMB devote one meeting each year to discussing innovative
applications of IT in regulatory management.

OMB officials noted that the electronic government committee of the CIO
Council has more than 1,000 best practices in its inventory of innovative IT
applications, and that this information would be available on the Internet

soon. Although regulatory management applications are not separately
identified, these applications could be highlighted for use in regulatory
management. The OMB officials also noted that the agency had taken a number
of steps to encourage the use of IT in regulatory management, and that the
CIO Council and the National Association of State Information Resource
Executives were setting up a working structure for continuing discussion of
IT issues between state and federal agencies. Nevertheless, they recognized
that more could be done to improve communications among the agencies. For
example, they said OMB could encourage

interagency forums on the topic of IT in regulatory management and could
highlight regulatory issues as part of the agency's oversight of the
implementation of GPEA. Conclusions Federal and state regulatory agencies
are already making extensive use of IT to address traditional regulatory
problems and improve regulatory management. However, they are just beginning
to realize the full capabilities of IT and the Internet to develop
interactive regulatory management practices and facilitate interagency and
intergovernmental

uses. Our work during this review and during our review last year indicates
that innovative IT- based approaches to regulatory management have the
potential to increase the amount and quality of public participation in
rulemaking, increase regulatory transparency, reduce burden on regulated
entities and help them understand their responsibilities, save regulatory
agencies money, and improve the quality of agencies' regulatory programs.
Most of the agencies that we contacted cited benefits of their innovative IT
applications, although few had performance data yet that clearly

demonstrated the effect of the innovations on the agencies' efficiency or
effectiveness, burden reduction, or other regulatory management

outcomes. Such performance data would be useful as other agencies try to
decide which IT- based applications to adopt or adapt in their own agencies.
A key factor in encouraging greater use of IT- based innovations in
regulatory management is, ironically, information. Officials in federal
regulatory agencies were sometimes unaware of the innovative uses of IT to
improve regulatory management in other agencies, and sometimes in

other parts of their own agencies. As a result, federal agencies may either
not adopt innovative approaches that could be useful to them or reinvent the
wheel as they develop their own approaches in those areas. Federal
regulatory agency officials told us that there is a need for better
communication and sharing of information about innovative IT applications
and indicated that existing organizations, such as the CIO Council and the
Regulatory Working Group, be used to facilitate information sharing.

Representatives of the nongovernmental organizations and officials and staff
in the regulatory agencies themselves also called for greater consistency
across agencies' IT- based regulatory management systems. However, both
parties cautioned against mandatory conformity. As agency officials told us
during our first review, agencies may need to have somewhat different
systems because of differences in their operating environments. Also, common
IT- based approaches may be more appropriate for some aspects of regulatory
management than others. For example, federal rulemaking processes are
somewhat similar across federal agencies, so common approaches regarding
that aspect of regulatory management may be more appropriate than in other,
more

idiosyncratic parts of the process (e. g., enforcement or licensing
requirements.) Specific options in the rulemaking area could include common
approaches for accepting electronic comments on proposed rules, similarly
structured electronic docketing systems, and tracking systems that allow
agencies to understand the causes of delays in their rulemaking processes.
Compliance assistance functions similar to DOL's elaws and OSHA's expert
advisor programs appear to have broad

applicability. OIRA is responsible for providing guidance and oversight for
both IT and regulatory issues. The OIRA Administrator sits on the CIO
Council, which Executive Order 13011 says should allow agencies to
“share experiences, ideas, and promising practices.” The OIRA
Administrator chairs the Regulatory Working Group, which Executive Order
12866 says “shall serve as a forum to assist agencies in identifying
and analyzing important

regulatory issues,” including “the development of innovative
regulatory techniques.” Although OIRA has taken some steps to
encourage the use of IT in regulatory agencies, we believe that it could do
more to encourage

information sharing among the agencies on IT innovations. For example, OIRA
could encourage additional forums on the use of IT in regulatory management,
devote a portion of its Web site to innovative IT applications, or work with
the CIO Council to encourage dialogue between the regulatory and IT elements
of agencies' workforces. It could also make the use of IT in regulatory
management a specific focus in its implementation

of GPEA. We also believe that OIRA can work with the agencies to identify
specific types of innovative IT- based approaches that multiple agencies
could use to improve regulatory management. By implementing common
approaches regarding regulatory functions that are used in multiple
agencies, the regulatory management approaches can begin to have a more
consistent “look and feel,” which some nongovernmental and
federal

representatives believed is needed. Recommendations for

We recommend that the OIRA Administrator develop a systematic process
Executive Action

by which federal agencies can share information regarding the use of
innovative IT- based applications in regulatory management. We also
recommend that the Administrator work with federal agencies to identify
types of innovative IT- based approaches that multiple agencies could use to
improve regulatory management.

Agency Comments On December 20, 2000, we sent a draft of this report to the
Director of OMB for his review and comment. OMB officials told us that OMB
had no

comments on the draft report. We also provided federal and state agency
officials with the relevant draft report sections attributed to them to
ensure that we correctly characterized their systems and comments. These
officials provided several technical corrections, which we incorporated as
appropriate.

As we arranged with your offices, unless you publicly announce this report's
contents earlier, we plan no further distribution of it until 30 days after
the date of this letter. We will then send copies to Representative Dan
Burton, Chairman of the House Committee on Government Reform. We will also
provide copies to the Honorable Mitchell E. Daniels, Jr., Director, OMB; the
Honorable Ann Veneman, Secretary of Agriculture; the

Honorable Tommy Thompson, Secretary of Health and Human Services; the
Honorable Elaine Chao, Secretary of Labor; the Honorable Norman Y. Mineta,
Secretary of Transportation; and the Honorable Christine Todd

Whitman, Administrator, EPA. We will also make copies available to others
and post this report on GAO's home page at www. gao. gov. If you have any
questions regarding this report, please contact me or Curtis Copeland on
(202) 512- 6806. Key contributors to this assignment were Elizabeth Powell,
Joseph Santiago, and Ellen Grady. Carlotta C. Joyner

Director, Strategic Issues

(410582) Lett er

GAO United States General Accounting Office

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