Paperwork Reduction Act: Burden Estimates Continue to Increase	 
(24-APR-01, GAO-01-648T).					 
								 
This report discusses the implementation of the Paperwork	 
Reduction Act of 1995 (PRA). The data indicate that federal	 
paperwork increased by nearly 180 million burden hours during	 
fiscal year 2000--the second-largest one-year increase since the 
act was passed. This increase is largely attributed to the	 
Internal Revenue Service (IRS), which raised its paperwork	 
estimate by about 240 million burden hours. The rest of the	 
government decreased its burden estimate by about 70 million	 
burden hours during the fiscal year. Within that non-IRS	 
grouping, some agencies were more successful than others in	 
reducing their paperwork estimates and some increased their	 
estimates. In addition, federal agencies identified a total of	 
487 violations of the PRA during fiscal year 2000--fewer than the
710 they identified during fiscal year 1999. These 487		 
violations, however, represent substantial opportunity costs and 
many have persisted for years. GAO believes that the Office of	 
Management and Budget can do more to ensure that agencies do not 
use information collections without proper clearance.		 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-01-648T					        
    ACCNO:   A00881						        
  TITLE:     Paperwork Reduction Act: Burden Estimates Continue to    
             Increase                                                         
     DATE:   04/24/2001 
  SUBJECT:   Data collection					 
	     Noncompliance					 
	     Reporting requirements				 

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GAO-01-648T

GAO United States General Accounting Office

Testimony Before the Subcommittee on Energy Policy, Natural Resources, and
Regulatory Affairs, Committee on

Government Reform, House of Representatives For Release on Delivery 10: 00
a. m. EDT Tuesday April 24, 2001

PAPERWORK REDUCTION ACT

Burden Estimates Continue to Increase

Statement of J. Christopher Mihm, Director, Strategic Issues

GAO- 01- 648T

Page 1 GAO- 01- 648T

I am pleased to be here today to discuss the implementation of the Paperwork
Reduction Act of 1995 (PRA). As you requested, I will discuss changes in
federal paperwork burden during the past year, with a particular focus on
the Internal Revenue Service (IRS) and its small business initiatives. I
will also revisit an issue that we have discussed during previous hearings-
violations of the PRA in which information collection authorizations from
the Office of Management and Budget (OMB) either

expired or were otherwise inconsistent with the act?s provisions. In brief,
the data indicate that federal paperwork increased by nearly 180 million
burden hours during fiscal year 2000- the second- largest 1- year increase
since the act was passed. This increase is largely attributable to IRS,
which raised its paperwork estimate by about 240 million burden

hours. The rest of the government decreased its burden estimate by about 70
million burden hours during the fiscal year. Within that non- IRS grouping,
some agencies were more successful than others in reducing their paperwork
estimates and some increased their estimates. Also, some of the reductions
in agencies? estimates were not attributable to proactive

agency actions to reduce burden. Federal agencies identified a total of 487
violations of the PRA during fiscal year 2000-- fewer than the 710 that they
identified during fiscal year 1999. However, even though the number of
violations appears to be going down, 487 PRA violations in a 1- year period
is hardly a cause for celebration. Also, some of these PRA violations have
been going on for years, and they collectively represent substantial
opportunity costs. As we have said for

the past 2 years, we believe that OMB can do more to ensure that agencies do
not use information collections without proper clearance.

Page 2 GAO- 01- 648T

Background Before discussing these issues in detail, it is important to
recognize that some federal paperwork is necessary and serves a useful
purpose. Information collection is one way that agencies carry out their
missions. For example, IRS needs to collect information from taxpayers and
their employers to know the amount of taxes owed. Last year, the Bureau of
the Census distributed census forms to millions of Americans, yielding data
that will be used to reapportion congressional representation and for a

myriad of other purposes. On several occasions, we have recommended that
agencies collect certain data to improve operations and evaluate their
effectiveness. 1 However, under the PRA, federal agencies are required to
minimize the paperwork burden they impose. The original PRA of 1980
established the Office of Information and Regulatory Affairs (OIRA) within
OMB to provide central agency leadership and oversight of governmentwide
efforts to reduce unnecessary paperwork and improve the management of

information resources. OIRA has overall responsibility for determining
whether agencies? proposals for collecting information comply with the act.
2 Agencies must receive OIRA approval for each information collection
request before it is implemented. OIRA is also required to keep Congress
?fully and currently informed? of the major activities under the act, and

must report to Congress on agencies? progress toward reducing paperwork. To
do so, OIRA develops an Information Collection Budget (ICB) by gathering
data from executive branch agencies on the total number of

?burden hours? OIRA approved for collections of information at the end of
the fiscal year and agency estimates of the burden for the coming fiscal
year. OIRA published its ICB for fiscal year 2000 (showing changes in
agencies? burden- hour estimates during fiscal year 1999) on April 12,

2000- the date of last year?s hearing. OIRA officials told us that they did
not expect to publish the ICB for fiscal year 2001 until after today?s
hearing. Therefore, we obtained unpublished data from OIRA to identify
changes in 1 See, for example, Consumer Product Safety Commission: Better
Data Needed to Help Identify and Analyze Potential Hazards (GAO/ T- HEHS-
98- 23, Oct. 23, 1997) and Managing for Results: Opportunities for Continued
Improvements in Agencies? Performance Plans (GAO/ GGD/ AIMD- 99- 215, July
20, 1999).

2 The act requires the Director of OMB to delegate the authority to
administer all functions under the act to the Administrator of OIRA but does
not relieve the OMB Director of responsibility for the administration of
those functions. Approvals are made on behalf of the OMB Director. In this
testimony, we generally refer to OIRA or the OIRA Administrator wherever the
act assigns responsibilities to OMB or the Director.

Page 3 GAO- 01- 648T

governmentwide and agency- specific burden- hour estimates during the last
fiscal year. We also compared those data to agency estimates in previous
ICBs.

?Burden hours? has been the principal unit of measure of paperwork burden
for more than 50 years, and has been accepted by agencies and the public
because it is a clear, easy- to- understand concept. However, it is
important to recognize that these estimates have limitations. Estimating

the amount of time it will take for an individual to collect and provide
information or how many individuals an information collection will affect is
not a simple matter. 3 Therefore, the degree to which agency burden- hour
estimates reflect real burden is unclear. Nevertheless, these are the best
indicators of paperwork burden available, and we believe they can be useful
as long as their limitations are kept in mind.

Governmentwide Paperwork Burden Estimate Has Increased

Federal agencies estimated that their information collections imposed about
7 billion burden hours on the public at the end of fiscal year 1995- just
before the PRA of 1995 took effect. The PRA made several changes in federal
paperwork reduction requirements. One such change required OIRA to set a
goal of at least a 10- percent reduction in the governmentwide burden- hour
estimate for each of fiscal years 1996 and 1997, a 5 percent governmentwide
burden reduction goal in each of the next 4 fiscal years,

and annual agency goals that reduce burden to the ?maximum practicable
opportunity.? Therefore, if federal agencies had been able to meet these
goals, the 7 billion burden- hour estimate in 1995 would have fallen 35
percent, or to about 4.9 billion hours, by September 30, 2000.

However, as figure 1 shows, this 35- percent reduction in paperwork burden
did not occur. In fact, the data we obtained from OIRA shows that the
governmentwide burden- hour estimate has increased by about 5 percent during
this period, and stood at nearly 7.4 billion hours as of September 30, 2000.
During fiscal year 2000 alone, the governmentwide estimate increased by
nearly 180 million hours- the second largest increase in any year since
1995. 3 See EPA Paperwork: Burden Estimate Increasing Despite Reduction
Claims (GAO/ GGD- 00- 59, Mar. 16, 2000) for how one agency estimates
paperwork burden.

Page 4 GAO- 01- 648T

Figure 1: Governmentwide Burden- Reduction Goals Are Not Being Met

Note: Data are as of the end of each fiscal year. Source: OIRA and agencies?
ICB submissions.

As figure 2 shows, as of September 30, 2000, IRS accounted for about 83
percent of the governmentwide burden- hour estimate (up from about 75
percent in September 1995). Other agencies with burden- hour estimates of
100 million hours or more as of that date were the Departments of Labor

(DOL), Transportation (DOT), and Health and Human Services (HHS); and the
Environmental Protection Agency (EPA). Because IRS constitutes such a
significant portion of the governmentwide burden- hour estimate, changes

in IRS? estimate can have a significant- and even determinative- effect on
the governmentwide estimate.

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