Paperwork Reduction Act: Record Increase in Agencies' Burden
Estimates (11-APR-03, GAO-03-619T).
The Paperwork Reduction Act requires federal agencies to minimize
the paperwork burden they impose on the public. The act also
requires agencies to obtain approval from the Office of
Management and Budget (OMB) before collecting covered
information. GAO examined changes during the past fiscal year in
federal agencies' paperwork burden estimates and their causes,
focusing on the Internal Revenue Service (IRS). GAO also examined
changes in the number of violations of the Paperwork Reduction
Act.
-------------------------Indexing Terms-------------------------
REPORTNUM: GAO-03-619T
ACCNO: A06619
TITLE: Paperwork Reduction Act: Record Increase in Agencies'
Burden Estimates
DATE: 04/11/2003
SUBJECT: Current services estimates
Data collection
Federal law
Noncompliance
Productivity in government
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GAO-03-619T
A
Test i mony Before the Subcommittee on Energy, Policy, Natural Resources
and Regulatory Affairs, Committee on
Government Reform, House of Representatives For Release on Delivery
Expected at 10 a. m. EDT PAPERWORK Friday, April 11, 2003 REDUCTION ACT
Record Increase in Agencies* Burden Estimates
Statement of Victor S. Rezendes, Managing Director Strategic Issues Team
GAO- 03- 619T
Mr. Chairman and Members of the Subcommittee: I am pleased to be here
today to discuss the implementation of the Paperwork Reduction Act of 1995
(PRA). As you requested, I will discuss changes in federal paperwork
burden during the past year and their causes, with a particular focus on
the Internal Revenue Service (IRS). I will also revisit an issue that we
have discussed during previous hearings before this Committee* violations
of the PRA in which information collections were either not authorized by
the Office of Management and Budget (OMB) or those authorizations had
expired.
In brief, the agencies* estimate of federal paperwork at the end of fiscal
year 2002 stood at about 8.2 billion burden hours. The paperwork estimate
increased by about 570 million burden hours from last year* nearly double
the previous record increase for a 1- year period that I reported last
year. Two agencies* IRS and the Department of Transportation (DOT)*
accounted for almost 90 percent of the increase. IRS increased its
paperwork estimate by about 330 million burden hours, most of which
involved adjustments to the agency*s burden- hour estimate for Form 1040.
DOT*s burden estimate rose by about 165 million burden hours, an increase
that was almost entirely attributable to the reintroduction and
reestimation of one information collection. Also, federal agencies
identified 244 violations of the PRA that occurred
during fiscal year 2002* a more than 40 percent reduction in the number of
violations that were reported during the previous fiscal year and about
onefourth the number reported for fiscal year 1998. Some agencies reported
fewer violations in each of the last 3 fiscal years, but other agencies
reported increases in 1 or more of those years. Although some longstanding
violations were resolved, others remained open at the end of the fiscal
year and had been in violation for 2 years or more at that point. OMB has
taken several actions to address PRA violations since last year*s hearing*
and deserves a lot of credit for the reductions that have occurred
in the past year. However, 244 violations of the law during a single year
are still troubling and should not be tolerated. We continue to believe
that OMB and the agencies can do more to ensure that the PRA is not
violated and that long- standing violations are resolved.
Background Before discussing these issues in detail, it is important to
recognize that a large amount of federal paperwork is necessary and serves
a useful
purpose. Information collection is one way that agencies carry out their
missions. For example, IRS needs to collect information from taxpayers and
their employers to know the correct amount of taxes owed. The Bureau of
the Census collects information that was used to reapportion congressional
representation and is being used for a myriad of other purposes. The
events of September 11, 2001, have demonstrated the importance of
accurate, timely information. On several occasions, we have recommended
that agencies collect certain data to improve operations and evaluate
their effectiveness. 1
However, under the PRA, federal agencies are required to minimize the
paperwork burden they impose. The original PRA of 1980 established the
Office of Information and Regulatory Affairs (OIRA) within OMB to provide
central agency leadership and oversight of governmentwide efforts to
reduce unnecessary paperwork and improve the management of information
resources. Currently, the act requires OIRA to develop and
maintain a governmentwide strategic information resources management (IRM)
plan. In February 2002, we reported that OMB had not fully developed and
implemented a strategic IRM plan that articulated a comprehensive federal
vision and plan for all aspects of government
information, including reducing information burdens, and we recommended
that the agency develop such a plan. 2 During the past year OMB has taken
a number of actions that demonstrate progress in fulfilling the PRA*s
requirement of providing a unifying IRM vision with a focus on burden
reduction. For example, OMB*s E- Government Strategy outlines the federal
government*s action plan for electronic government. One focus of that
strategy is implementing initiatives that will reduce burden on
1 See, for example, U. S. General Accounting Office, Veterans* Health
Care: VA Needs Better Data on Extent and Causes of Waiting Times, GAO/
HEHS- 00- 90 (Washington, D. C.: May 31, 2000); Public Housing: HUD Needs
Better Information on Housing Agencies* Management Performance, GAO- 01-
94 (Washington, D. C.: Nov. 9, 2000); and
Environmental Information: EPA Needs Better Information to Manage Risks
and Measure Results, GAO- 01- 97T (Washington, D. C: Oct. 3, 2000). 2 U.
S. General Accounting Office, Information Resources Management:
Comprehensive Strategic Plan Needed to Address Mounting Challenges, GAO-
02- 292 (Washington, D. C.: Feb. 22, 2002). Our conclusions in this report
were similar to those in a report issued
several years earlier. See U. S. General Accounting Office, Regulatory
Management: Implementation of Selected OMB Responsibilities Under the
Paperwork Reduction Act,
GAO/ GGD- 98- 120 (Washington, D. C.: July 9, 1998).
businesses by reducing redundant data collection and providing one- stop
streamlined support. In addition, the Federal Enterprise Architecture
Business Reference Model provides an integrated view of the federal
government*s activities, thereby allowing agencies to look at federal
business operations and understand the gaps, overlaps, and opportunities
for consolidation. Although OMB*s strategies and models are promising,
their ability to reduce paperwork burden and accomplish other objectives
depends on how OMB implements them. OIRA also has overall responsibility
for determining whether agencies*
proposals for collecting information comply with the PRA. 3 Agencies must
receive OIRA approval for each information collection request before it is
implemented. Section 3514( a) of the PRA requires OIRA to keep Congress
*fully and currently informed* of the major activities under the act, and
to submit a report to Congress at least annually on those activities. The
report must include, among other things, a list of all PRA violations and
a list of any increases in burden. To satisfy this reporting requirement,
OIRA develops an Information Collection Budget (ICB) by gathering data
from executive branch agencies. In November 2002, the OMB director sent a
bulletin to the heads of executive departments and agencies requesting
information to be used in preparation for the fiscal year 2003 ICB
(reporting on actions during fiscal year 2002). OIRA published its ICB for
fiscal year 2002 (showing changes in agencies* burden- hour estimates
during fiscal year 2001) in April 2002. OIRA officials told us that they
did not expect to publish the ICB for fiscal year 2003 until today*s
hearing. Therefore, we obtained unpublished data from OIRA to identify
changes in governmentwide and agency- specific *burden- hour* estimates
and PRA violations during fiscal year 2002. We then compared the data to
agencies* burden- hour estimates and violations in previous ICBs to
determine changes in the data over time. 3 The act requires the director
of OMB to delegate the authority to administer all functions
under the act to the administrator of OIRA but does not relieve the OMB
director of responsibility for the administration of those functions.
Approvals are made on behalf of the OMB director. In this testimony, we
generally refer to OIRA or the OIRA administrator wherever the act assigns
responsibilities to OMB or the director.
*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. 4 Therefore, the degree to which agency burden-
hour estimates reflect real burden is unclear. Nevertheless, these are the
best indicators of paperwork burden available, and we believe they can be
useful as long as their limitations are kept in mind.
Governmentwide At the end of fiscal year 1995* just before the PRA of 1995
took effect*
Paperwork Burden federal agencies estimated that their information
collections imposed
about 7 billion burden hours on the public. The amendment and Estimate Has
recodification of the PRA that year made several changes in federal
Increased
paperwork reduction requirements. One such change required OIRA to set a
goal of at least a 10- percent reduction in the governmentwide burdenhour
estimate for each of fiscal years 1996 and 1997, a 5 percent
governmentwide burden reduction goal in each of the next 4 fiscal years,
and annual agency goals that reduce burden to the *maximum practicable
opportunity.* Therefore, if federal agencies had been able to meet each of
these goals, the 7- billion burden- hour estimate in 1995 would have
decreased about 35 percent to about 4.6 billion hours by September 30,
2001.
However, as figure 1 shows, this anticipated reduction in paperwork burden
did not occur. In fact, the data we obtained from OIRA show that the
governmentwide burden- hour estimate stood at more than 8.2 billion hours
as of September 30, 2002* about a 1.2 billion hour (17 percent)
increase since the PRA of 1995 took effect. Nearly half of that increase
(about 570 million hours) occurred during fiscal year 2002 alone, and
about 70 percent (about 860 million hours) occurred during the last 2
fiscal years. 4 See U. S. General Accounting Office, EPA Paperwork: Burden
Estimate Increasing Despite Reduction Claims, GAO/ GGD- 00- 59
(Washington, D. C.: Mar. 16, 2000) for how one
agency estimates paperwork burden.
Figure 1: Governmentwide Paperwork Burden- Hour Estimate Continues to Grow
10
Burden hour estimate (in billions) 9 8 7 6
10% burden reduction 10% burden
5
reduction 5% burden reduction 5% burden
5% burden
4
reduction reduction 5% burden reduction
3 2 1 0
FY 1995 FY 1996 FY 1997 FY 1998 FY 1999 FY 2000 FY 2001 FY 2002
Fiscal year Agencies* burden- hour estmates Burden- reduction goals
envisioned in PRA
Source: OMB and agencies* ICB submissions. Note: Data are as of the end of
each fiscal year. The governmentwide burden- hour estimate as of September
30, 2002, was about 8.2 billion hours.
It is also important to understand how the most recent estimate of federal
paperwork is allocated by the purpose of the collections. As figure 2
shows, data that we obtained from the Regulatory Information Service
Center (RISC) indicate that almost 95 percent of the 8.2 billion hours of
estimated paperwork burden in place governmentwide as of September 30,
2002, was being collected primarily for the purpose of regulatory
compliance. 5 Less than 5 percent was being collected as part of
applications for benefits, and about 1 percent was collected for other
purposes.
5 RISC is part of the General Services Administration but works closely
with OIRA to provide information to the President, Congress, and the
public about federal regulations. It maintains a database that includes
information on all information collection review actions by OIRA.
Figure 2: As of September 30, 2002, Most Federal Paperwork Was Primarily
Collected for Regulatory Compliance
4.7%
Application for benefits 0.4%
Program planning/ management 0.7%
Other 94.3% Regulatory/ compliance
Source: OMB and RISC.
Note: The governmentwide burden- hour estimate as of September 30, 2002,
was about 8.2 billion hours. The *other* category includes program
evaluation, general purpose statistics, audit, and research. Addition of
individual elements does not total 100 percent due to rounding.
Figure 3 shows that more than 60 percent of the governmentwide burden
estimate was primarily directed toward businesses or other for- profit
organizations. About one- third of the burden was primarily on individuals
or households, and less than 3 percent was on state, local, or tribal
governments.
Figure 3: As of September 30, 2002, Most Federal Paperwork Was Primarily
Directed at Businesses
33.8% Individuals
62.2% 2.1%
State, local, or tribal governments 1.9%
Other Businesses
Source: OMB and RISC.
Note: The governmentwide burden- hour estimate as of September 30, 2002,
was about 8.2 billion hours. The *other* category includes farms,
nonprofit organizations, and the federal government.
As of September 20, 2002, IRS accounted for about 99 percent of the
Department of the Treasury*s burden- hour estimate* nearly 6.7 billion
burden hours. In fact, as figure 4 shows, IRS accounted for about 81
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 Health
and Human Services (HHS) and Labor (DOL), DOT, the Environmental
Protection Agency (EPA), and the Securities and Exchange Commission (SEC).
Because IRS constitutes such a significant portion of the
governmentwide burden- hour estimate, changes in IRS* estimate can have a
significant* and even determinative* effect on the governmentwide
estimate.
Figure 4: IRS Accounted for Most of the Federal Paperwork Burden- Hour
Estimate as of September 30, 2002
IRS
1.7%
EPA
1.7%
SEC
2.8%
HHS
3.1%
DOT
81.1% 18.9%
Other
2.4%
DOL
7.2%
Other Source: OMB and the Department of the Treasury. Note: The
governmentwide burden- hour estimate as of September 30, 2002, was about
8.2 billion hours.
Changes in Individual As table 1 shows, only a few agencies* paperwork
burden estimates
Agencies* Estimates During decreased during fiscal year 2002, most notably
the Federal
Fiscal Year 2002 Communications Commission (FCC)* from more than 40
million hours to
less than 27 million hours. Other agencies, most notably the Department of
the Treasury (including IRS), DOT, HHS, and SEC, significantly increased
their burden hour estimates. Still other agencies with relatively small
burden- hour totals experienced large percentage increases in their
estimates* most notably the Department of Housing and Urban
Development (HUD) (an 81 percent increase) and the Department of State (a
76 percent increase).
Tabl e 1: Changes in Federal Agencies* Burden- Hour Estimates During
Fiscal Year 2002
Burden hours in millions
Program changes FY 2001
New Lapses in Agency Tot al FY 2002 estimate statutes OMB approval action
Tot al Adjustments change estimate
Governmentwide 7,651. 4 570. 5 8,221. 7 Non- Treasury 1,235. 6 236. 3
1,471. 8
Departments
Agriculture 86. 7 1.5 0.5 (0.3) 1.8 0.0 1.8 88.5 Commerce 10. 3 0.2 0.0
1.2 1.3 (0.5) 0.9 11.2 Defense 92. 1 * 0.5 0.6 1.0 (0.7) 0.3 92.4
Education 40. 5 0.2 (0.1) (3.2) (3.1) 1.0 (2. 1) 38.4 Energy 3.9 * * 0.1
0.1 (0.2) (0. 1) 3.8 Health and Human Services 186. 6 35. 9 1.4 (2.0) 35.
3 1.9 37. 2 223.8 Housing and Urban Development 12. 1 0.0 9.9 0.0 9.9
(0.1) 9.8 21.9
Interior 7.6 0.1 0.1 0.3 0.4 (0.3) 0.1 7.7 Justice 40. 5 5.1 (0.0) 0.8 5.9
0.2 6.1 46.6 Labor 186. 1 0.1 * 2.4 2.5 0.7 3.1 189.2 State 16. 6 12. 1
0.4 * 12. 5 0.1 12. 6 29.2 Transportation 80. 3 0.8 * 163. 2 164. 0 1.2
165. 2 245.5 Tr eas ur y 6,415. 9 64. 1 (0.1) (9.5) 54. 6 279. 6 334. 2
6,750. 0 Veterans Affairs 5.3 * 0.3 * 0.3 1.8 2.1 7.4
Agencies
Environmental Protection Agency 130. 8 0.1 * 0.6 0.7 9.0 9.7 140.5 Federal
Acquisition Regulatory Council 23. 8 * * 0.7 0.7 * 0.7 24.5
Federal Communications Commission 40. 1 (0.5) * (1.7) (2.3) (11.1) (13.3)
26.8 Federal Deposit Insurance Corporation 10. 5 * * 0.1 0.1 (0.7) (0. 5)
10.0
Federal Emergency Management Agency 5.5 0.0 0.0 0.3 0.3 2.0 2.3 7.8
Federal Energy Regulatory Commission 4.4 * 0.0 0.0 0.0 * 0.0 4.4 Federal
Trade Commission 72. 6 * * * * (2.9) (2. 9) 69.7 National Aeronautic and
Space Administration 6.9 * (0.9) 0.0 (0.9) 0.0 (0. 9) 6.0
(Continued From Previous Page)
Burden hours in millions
Program changes FY 2001
New Lapses in Agency Tot al FY 2002
estimate statutes OMB approval action Total Adjustments change estimate
National Science Foundation 4.8 * * 0.0 0.0 (0.3) (0. 3) 4.5
Nuclear Regulatory Commission 8.2 * * * * 0.2 0.2 8.4 Securities and
Exchange Commission 114. 3 0.2 * 4.3 4.5 17. 8 22. 3 136.6
Small Business Administration 1.9 * 0.3 0.0 0.4 0.5 0.9 2.8
Social Security Administration 24. 2 0.4 * 0.3 0.7 0.0 0.6 24.8 Source:
OMB and agencies* ICB submissions.
Note: Data on the Federal Acquisition Regulatory Council were submitted by
the General Services Administration. Data from the 27 departments and
agencies may not equal the governmentwide figure because smaller agencies*
requirements are also included. Cells with *0.0* values were non- zero
values rounded to zero. Cells with *** entries were zero values. Addition
of individual elements may not equal totals due to rounding.
However, changes in agencies* bottom- line burden- hour estimates do not
tell the whole story and can be misleading. It is also important to
understand how the agencies accomplished these results. OIRA classifies
modifications in agencies* burden- hour estimates as either *program
changes* or *adjustments.* Program changes are the result of deliberate
federal government action (e. g., the addition or deletion of questions on
a form) and can occur as a result of new statutory requirements, agency-
initiated actions, or through the expiration or reinstatement of OIRA-
approved collections.
Adjustments are not the result of deliberate federal government action,
but rather are caused by factors such as changes in the population
responding to a requirement or agency reestimates of the burden associated
with a collection of information. For example, if the economy declines and
more people complete applications for food stamps, the resultant increase
in the Department of Agriculture*s (USDA) paperwork estimate is considered
an adjustment because it is not the result of deliberate federal action.
The agencies* ICB submissions identified what drove the changes in
agencies* bottom- line burden- hour estimates during fiscal year 2002. For
example, more than 80 percent of the 13 million hour decline in the FCC
estimate was due to the adjustment of one information collection. However,
OMB does not require agencies to explain the causes of significant
adjustments in agencies* burden- hour estimates. Therefore, it is not
clear whether the FCC adjustment reflected a real reduction in the
burden felt by the public (e. g., a change in the population responding to
the collection), or was simply a reestimation of the burden that already
existed. In any event, it appears that most of the FCC decrease was not
the result of
agency burden- reduction initiatives. In contrast, HHS indicated that the
37 million burden- hour increase in its paperwork estimate during fiscal
year 2002 was almost entirely driven by a statutory program change in a
single collection related to the enactment of the Health Insurance
Portability and Accountability Act of 1996. 6 In its ICB
submission, HHS said the purpose of this statutory change was *to
establish standards for electronic transactions and for code sets to be
used in those transactions.* HUD indicated that the 87 percent increase in
its burden estimate was entirely driven by program changes* specifically
the reinstatement of two information collections that had been in
violation of the PRA (i. e., HUD continued to collect the information
without OMB approval). Therefore, although the department*s burden
estimate increased, the actual burden imposed on the public by the
collection did not change.
In some cases, we found the agencies* explanations in their ICB
submissions for the changes in their burden estimates somewhat misleading
and/ or inconsistent. For example, DOT indicated in its summary table that
virtually all of the department*s 165 million burdenhour increase in its
estimate was driven by program changes* specifically, an *agency action.*
However, the narrative that the department submitted to OMB indicated that
almost all of this change was driven by the
reinstatement of a collection that had been in violation (* Driver*s
Records of Duty Status*) and an adjustment to the collection*s burden
estimate. 7 DOT*s estimate of the burden associated with this collection
declined about
42 million burden hours when the violation occurred during fiscal year 6
Pub. Law 104- 191. 7 This collection is used by DOT to determine the
compliance of motor carriers and commercial motor vehicle drivers with the
maximum driving and duty time limitations prescribed in the Federal Motor
Carrier Safety Regulations. For a discussion of how DOT*s burden- hour
estimate for this collection changed, see 67 Fed. Reg. 1396 (Jan. 10,
2002).
2001, so the adjustment was about 120 million hours. Documentation that we
obtained from DOT*s Office of the Chief Information Officer indicated that
the adjustment was caused by significant increases in the department*s
estimates of the time needed for drivers and motor carriers to perform
certain tasks. Therefore, the actual burden associated with this
information collection did not change. The same information was being
collected when the authorization had lapsed during fiscal year 2001 and
when it was reinstated during fiscal year 2002. The rest of the increase
was caused by the department*s reestimation of the burden, not a change in
the burden itself. Reasons for Changes in IRS
The increase in the IRS burden- hour estimate during fiscal year 2002
(about Burden Estimate
330 million burden hours) was more than the increase in the rest of the
government combined. Therefore, although all agencies must ensure that
their information collections impose the least amount of burden possible,
it is clear that the key to controlling federal paperwork governmentwide
lies in understanding and controlling the increases at IRS.
The Department of the Treasury*s ICB submission indicated that more than
80 percent of the increase in the department*s estimate during fiscal year
2002 (about 280 million burden hours) was caused by adjustments. An IRS
official told us that this adjustment was largely driven by an increase in
the number of taxpayers using Form 1040.
IRS identified a number of burden- hour increases that it said were caused
by the underlying statutes. For example, IRS said that it added more than
18 million burden hours to its estimate because of changes to Form 1040
and its associated schedules and instructions that were precipitated by
the Economic Growth and Tax Relief Reconciliation Act of 2001. 8 Also, IRS
said it added nearly 17 million hours to the burden associated with Form
4562 (* Depreciation and Amortization*) because of changes made by the Job
Creation and Worker Assistance Act of 2002. 9 8 Pub. Law 107- 16.
9 Pub. Law 107- 147. IRS said that the provisions that affected Form 4562
include an additional 30 percent depreciation deduction for qualified
property placed in service after September 10, 2001, and an increase in
the section 179 expense deduction for property placed in service in the
New York Liberty Zone.
However, IRS said that other increases in its burden- hour estimate were
made at the agency*s initiative* not because of new statutes. For example,
the agency said that an increase of more than 22 million hours in its
estimate for Form 941 and related forms were due to changes *requested by
IRS.* 10
The Department of the Treasury also indicated in its ICB submission that
it had taken a number of initiatives to reduce paperwork burden. For
example, beginning with the 2002 tax year, Treasury said that IRS had
eliminated the requirement on small corporate filers (i. e., those with
total
receipts and assets of less than $250, 000) to file certain schedules with
their returns, resulting in a reduction of about 26 million burden hours.
Treasury also said it had decided to increase the threshold for taxpayers
having to file Schedule B (Form 1040) from $400 to $1,500. As a result,
the department said that more than 10 million fewer taxpayers would have
to file the schedule* about one- third of those who previously had to
file. However, Treasury did not estimate how many burden hours would be
reduced as a result of that action.
Focusing on IRS to Control In summary, the agencies* information
collection estimates for the ICB Paperwork
being released today indicate that federal paperwork continues to increase
at a record pace, and that IRS continues to account for most of the
increases in estimated burden. Because IRS constitutes such a significant
portion of the annual increases and the governmentwide burden- hour
estimate, one strategy to address increases in federal paperwork could be
to focus more of OIRA*s burden- reduction efforts on that agency. Just as
increases in IRS*s estimates have had a determinative effect on the
governmentwide estimates, reduction in the IRS estimates can have an
equally determinative effect. For example, just one IRS information
collection (related to Form 1040) is estimated to impose more paperwork
burden than all of the non- Treasury collections combined. Just five IRS
information collections represent about half of the 8.2 billion hour
paperwork estimate governmentwide. A small reduction in the burden
associated with those five collections could have a major effect on the
governmentwide effort to reduce paperwork burden. 10 Form 941 is used by
employers to report payments made to employees subject to income and
social security/ Medicare taxes and the amounts of those taxes.
However, significant reduction of the burden hours associated with these
and other IRS information collections may ultimately depend upon
congressional action. IRS officials maintain that the agency*s paperwork
burden totals reflect the information that is needed to administer the tax
laws. Therefore, they suggest that significant reductions in IRS*s
paperwork burden would require changes to the tax laws. Within the current
tax laws, however, IRS has some discretion that can affect paperwork
burden. For example, in January 2001 IRS altered the threshold over which
businesses must pay employment taxes on a quarterly rather than a more
frequent basis. In general, when considering reductions in the amount or
frequency of data collection, IRS must also balance the potential for
decreasing its ability to ensure that taxpayers fulfill their tax
obligations with the amount of burden imposed.
Agencies Identified I would now like to turn to the other main topic that
you asked us to
Fewer PRA Violations address* PRA violations. The PRA prohibits an agency
from conducting or
sponsoring a collection of information unless (1) the agency has submitted
the proposed collection and other documents to OIRA, (2) OIRA has approved
the proposed collection, and (3) the agency displays an OMB control number
on the collection. The act also requires agencies to establish a process
to ensure that each information collection is in compliance with these
clearance requirements. OIRA is required to submit an annual report to
Congress that includes a list of all violations. Under the PRA, no one can
be penalized for failing to comply with a collection of information
subject to the act if the collection does not display a valid OMB control
number. OIRA may not approve a collection of information for more than 3
years, and there are currently about 8, 000 approved collections.
As table 2 shows, the agencies indicated in their ICB submissions that a
total of 244 PRA violations occurred during fiscal year 2002 (i. e., were
either carried over from the previous year or were new violations). As in
previous years, most (217) of these violations were collections whose OIRA
approvals had expired and had not been reauthorized. Four cabinet
departments were responsible for nearly 60 percent of the violations*
USDA, the Department of Commerce (DOC), HUD, and the Department of
Veterans Affairs (DVA).
Tabl e 2: Reported Violations of the PRA During Fiscal Year 2002 Expired
information Other
Tot al collections violations violations Departments
Agriculture 65 1 66 Commerce 28 2 30 Defense 7 0 7 Education 3 1 4 Energy
0 0 0 Health and Human Services 11 7 18 Housing and Urban Development 24 0
24 Interior 6 0 6 Justice 16 1 17 Labor 0 0 0 State 4 0 4 Transportation 0
0 0 Tr ea s u r y 0 0 0 Veterans Affairs 23 0 23
Agencies
Environmental Protection Administration 0 1 1 Federal Acquisition
Regulation 0 0 0 Federal Communications Commission 2 0 2 Federal Deposit
Insurance Corporation 0 0 0 Federal Emergency Management Agency 6 8 14
Federal Energy Regulatory Commission 1 0 1 Federal Trade Commission 0 0 0
National Aeronautics and Space
12 0 12 Administration National Science Foundation 0 0 0
Nuclear Regulatory Commission 0 0 0 Securities and Exchange Commission 0 0
0 Small Business Administration 9 0 9 Social Security Administration 0 6 6
Tot al 217 27 244 Sources: OMB and agencies* ICB submissions.
Number of Violations Has As figure 5 shows, the number of PRA violations
that the agencies
Declined in Recent Years identified has fallen markedly during the past 5
fiscal years* from 872
violations during fiscal year 1998 to 244 during fiscal year 2002. The
decline in the number of violations between fiscal year 2001 and fiscal
year 2002 is particularly notable. Last year, OIRA only asked the cabinet
departments and EPA to report data on violations. The number of violations
during fiscal year 2002 in just those agencies was less than half the
number reported by the same agencies during fiscal year 2001 (200 versus
402). Figure 5: The Number of PRA Violations Has Declined During the Past
5 Fiscal
Years 1000
Number of violations
872
750
710
500
487 402 250
244
0 1998
1999 2000 2001 2002 Fiscal year
Source: OMB and agencies* ICB submissions. Note: In fiscal year 2001, OMB
reported the violations only for the cabinet- level departments and the
EPA. Therefore, the data for that year does not include information for 12
independent agencies included in the other years.
As figure 6 shows, federal agencies vary in the extent and the consistency
with which they have been able to reduce their number of violations. In
some agencies, the number of violations has gone down in each of the last
3 fiscal years (e. g., USDA and the Department of Justice). In other
agencies, the number of violations has gone up during this period (e. g.,
DOC) or exhibited an inconsistent pattern (e. g., HUD and DVA).
Figure 6: Agencies Exhibit Varying Patterns of Compliance with the PRA 120
Number of violations
112
100
96 99
80
67 66 64
60
44
40
40 30 22
24 21
23
20
16 17
0 USDA
DOC HUD DOJ DVA Federal Department
FY 2000 FY 2001 FY 2002 Source: OMB and agencies* ICB submissions.
Notably, some cabinet departments were able to completely eliminate their
violations during the past fiscal year* the Department of the Treasury
(from 14 violations during fiscal year 2001 to zero during fiscal year
2002); DOT (from 12 violations to zero); DOL (from 8 violations to zero);
and the Department of Energy (from 6 violations to zero).
OIRA Efforts to Reduce OIRA deserves a great deal of the credit for the
reduction in the number of
Violations PRA violations during the past year. In June 2002* 2 months
after last
year*s hearing before this Committee* the OIRA Administrator sent a
memorandum to agency chief information officers (CIOs), general counsels,
and solicitors emphasizing the importance of compliance with the PRA. The
Administrator said that, despite recent progress, the number of overall
and unresolved violations was still *unacceptably high,* and asked each
agency to identify progress on violations reported in the ICB for fiscal
year 2001 and to identify any new violations that had occurred since
September 30, 2001. He also asked the agencies to describe the procedures
that they had in place to prevent future violations, and said OIRA was
planning to meet with the CIOs and general counsels of the five agencies
with the highest number of overall, long- standing, or high- burden
violations* USDA, HHS, HUD, the Department of State, and DVA. In November
2002, the OIRA Administrator sent another memorandum to the CIOs, noting
that although most agencies had done a good job of
resolving existing violations, some were still having problems in this
area. He also reported that six agencies had reported 10 or more new
violations from October 2001 through June 2002* USDA, DOC, the Department
of State; the Federal Emergency Management Administration, the National
Aeronautics and Space Administration, and the Small Business
Administration. The Administrator said OIRA*s goal was *to achieve zero
violations by no later than April 1, 2003,* and urged each agency to
reexamine the efficacy of its PRA clearance system. To assist in that
effort, he attached a list of collections that had expired in the previous
30 days and those that were due to expire in the next 150 days, and asked
the agencies to take action to resolve existing violations and to prevent
future ones.
Long- standing Violations In our previous testimonies on the
implementation of the PRA, we noted Still a Problem
that many of the agencies* PRA violations had been occurring for years.
The agencies appear to have made some progress in this area, resolving
certain long- standing violations by either obtaining OMB clearance or
discontinuing the collections. For example, during fiscal year 2002, the
Department of the Interior resolved three violations that had been
occurring since 1993 or 1994. DVA resolved five violations that had been
occurring since 1996 or 1997. However, the agencies also indicated that
many other long- standing violations had not been addressed. Of the 244
violations that occurred during fiscal year 2002, 120 were still occurring
at the end of the fiscal year (September 30, 2002). Forty- five of these
120 violations had been occurring for at least 1 year at that point, and
27 had been occurring for at least 2
years. Some agencies had a particularly large number of long- standing
unresolved violations.
USDA indicated that 27 of its 66 violations were unresolved as of
September 30, 2002. Of these, 14 had been occurring for more than 1
year, and 6 had been in violation for more than 2 years. Three of the USDA
collections had been in violation for at least 5 years* since 1997. HUD
indicated that 23 of its 24 violations during fiscal year 2002 were
unresolved as of September 30, 2002. Of these, 17 had been occurring
for at least 1 year, and 13 had been in violation for at least 2 years.
SBA indicated that 8 of its 9 violations during fiscal year 2002 were
unresolved as of September 30, 2002. Of these, 6 had been occurring for at
least 1 year, and 4 had been occurring for at least 2 years. Federal
agencies brought a number of their unresolved violations into
compliance after the fiscal year ended. For example, by the end of January
2003, HUD had resolved 15 of its 23 violations that were open at the end
of fiscal year 2002. USDA resolved 12 of its 27 open violations by January
2003. Overall, 46 of the 120 violations that were still occurring as of
September 30, 2002, were resolved between that date and the end of January
2003. However, that still leaves 74 violations occurring during fiscal
year 2002 that had not been resolved by the end of January 2003.
Violations and Costs In our testimony in previous years, we provided an
estimate of the monetary cost associated with certain PRA violations. To
estimate that cost, we multiplied the number of burden hours associated
with the violations by an OMB estimate of the *average value of time*
associated with each hour of paperwork. 11 Although the ICBs list the
information
collections that were in violation during the previous year, they do not
show the number of burden hours associated with each of the violations.
Therefore, we obtained data from OIRA on the estimated number of burden
hours for the 45 information collections that had been in violation for at
least 1 year as of September 30, 2002.
The data suggest that PRA violations may constitute significant costs for
those who provide the related information. The 45 violations that we
examined involved an estimated 48 million burden hours of paperwork, or
11 Office of Management and Budget, Draft Report to Congress on the Costs
and Benefits of Federal Regulations, 67 Fed. Reg. 15014 (Mar. 28, 2002).
In this report, OMB used an average value of time of $30 per hour to
estimate the cost associated with paperwork burden.
(at $30 per hour) about $1.4 billion in costs. Just 2 of the 45
collections accounted for more than $1 billion in estimated opportunity
costs. Many of the information collections that were in violation were
being administered for regulatory purposes, so if the respondents knew
that the collections were not valid they might not have completed the
required forms. However, other violations involved collections in which
individuals or businesses were applying for benefits such as loans or
subsidies.
Therefore, it is not clear whether these individuals or businesses would
have refused to complete the required forms if they knew that the
collections were being conducted in violation of the PRA.
OIRA Can Do More to Although OIRA and the agencies have clearly made
progress in reducing
Address Violations the overall number of PRA violations in recent years,
more progress is
needed. As I am sure that the Administrator would agree, 244 violations of
the law in 1 year is not acceptable. Agencies can and should achieve
OIRA*s goal of zero violations.
As I noted earlier, OIRA has taken a number of steps during the past year
to try to address this problem. As we recommended last year, OIRA has used
its database to identify information collections that (1) have recently
expired and attempted to determine whether the agencies are continuing to
collect the information and (2) are about to expire, thereby attempting to
prevent future violations. OIRA has also asked the agencies to describe
the procedures that they have in place to prevent future violations and
has met with agencies that have the highest number of overall, long-
standing, or high- burden violations. We believe that these actions
precipitated the improvements that occurred during fiscal year 2002, and
will have positive benefits for years to come.
However, OIRA still has not taken some of the actions that we previously
recommended to improve compliance with the PRA. For example, OIRA could
notify the budget side of OMB that an agency is collecting information in
violation of the PRA and encourage the appropriate resource management
office to use its influence to bring the agency into compliance. OIRA
could also encourage the use of *best practices* learned from agencies
with a good record of PRA compliance. Agencies that have recently
eliminated their violations altogether (e. g., the Department of the
Treasury, DOT, and DOL) may have much to teach agencies that continue to
violate the act.
Although OIRA's current workload is clearly substantial, we do not believe
the kinds of actions that we suggested would require significant
additional resources. Primarily, the actions require a continued
commitment by OIRA leadership to improve the operation of the current
paperwork clearance process. However, we also recognize that OIRA cannot
eliminate PRA violations by itself. Federal agencies committing these
violations need to evidence a similar level of resolve.
Mr. Chairman, this completes my prepared statement. I would be pleased to
answer any questions. (450192)
GAO United States General Accounting Office
A
As of September 30, 2002, federal agencies estimated that there was about
8.2 billion *burden hours* of paperwork governmentwide. IRS accounted for
about 6.7 billion burden hours (81 percent) of this estimate. The federal
paperwork estimate increased by about 570 million burden hours during
fiscal year 2002* nearly double the previous record increase for a 1- year
period. IRS and the Department of Transportation (DOT) accounted for
almost 90 percent of the increase. IRS increased its paperwork estimate by
about 330 million burden hours during fiscal year 2002, which the agency
said was primarily caused by growth in the number of taxpayers using Form
1040. DOT*s burden estimate rose by about 165 million burden hours, an
increase that the department said was almost entirely attributable to the
reintroduction and reestimation of one information collection. Federal
agencies identified 244 violations of the PRA during fiscal year
2002* a significant reduction from the number of violations reported
during the previous fiscal year. OMB deserves a great deal of credit for
this decrease in violations. However, 244 violations of the law during a
single fiscal year are still troubling and should not be tolerated. Also,
although
some longstanding violations have been resolved, others remained open at
the end of the fiscal year and, in some cases, had been open for 2 years
or more. OMB has not taken some of the actions that we previous
recommended to improve compliance with PRA.
IRS Accounted for More than 80 Percent of the Estimated 8.2 Billion Hours
of Federal Paperwork Burden as of September 30, 2002)
The Paperwork Reduction Act requires federal agencies to minimize the
paperwork burden
they impose on the public. The act also requires agencies to obtain
approval from the Office of
Management and Budget (OMB) before collecting covered information. At the
Subcommittee*s request, GAO examined changes during the past fiscal year
in federal agencies*
paperwork burden estimates and their causes, focusing on the Internal
Revenue Service (IRS). GAO also examined changes in the
number of violations of the Paperwork Reduction Act. GAO is not making any
recommendations. However, because IRS accounts for most federal paperwork
and for most of the increase in the governmentwide estimate, OMB could
focus more of its burden reduction efforts on that
agency. Also, OMB and the agencies could do more to reduce violations. For
example, OMB could promote the use of *best practices* used in agencies
with good compliance records. www. gao. gov/ cgi- bin/ getrpt? GAO- 03-
619T. To view the full report, including the scope
and methodology, click on the link above. For more information, contact
Victor Rezendes at (202) 512- 6806 or rezendesv@ gao. gov. Highlights of
GAO- 03- 619T, testimony
before the Subcommittee on Energy Policy, Natural Resources and Regulatory
Affairs, Committee on Government Reform, House of Representatives April
11, 2003
PAPERWORK REDUCTION ACT
Record Increase in Agencies' Burden Estimates
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