Paperwork Reduction Act: Increase in Estimated Burden Hours	 
Highlights Need for New Approach (18-JUL-06, GAO-06-974T).	 
                                                                 
Americans spend billions of hours each year providing information
to federal agencies by filling out information collections	 
(forms, surveys, or questionnaires). A major aim of the Paperwork
Reduction Act (PRA) is to minimize the burden that responding to 
these collections imposes on the public, while maximizing their  
public benefit. Under the act, the Office of Management and	 
Budget (OMB) is to approve all such collections and to report	 
annually on the agencies' estimates of the associated burden. In 
addition, agency chief information officers (CIO) are to review  
information collections before submitting them to OMB for	 
approval and certify that the collections meet certain standards 
set forth in the act. GAO was asked to testify on OMB's burden	 
report for 2005 and on a previous study of PRA implementation	 
(GAO-05-424), which focused on the CIO review and certification  
processes and described alternative processes that two agencies  
have used to minimize paperwork burden. To prepare this 	 
testimony, GAO reviewed the current burden report and its past	 
work in this area. For its 2005 study, GAO reviewed a		 
governmentwide sample of collections, reviewed processes and	 
collections at four agencies that account for a large proportion 
of burden, and performed case studies of 12 approved collections 
at the four agencies.						 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-06-974T					        
    ACCNO:   A57089						        
  TITLE:     Paperwork Reduction Act: Increase in Estimated Burden    
Hours Highlights Need for New Approach				 
     DATE:   07/18/2006 
  SUBJECT:   Data collection					 
	     Federal law					 
	     Federal regulations				 
	     Forms						 
	     Information resources management			 
	     Paperwork reduction				 
	     Regulatory agencies				 
	     Standards						 
	     Surveys						 
	     Reporting requirements				 

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GAO-06-974T

     

     * Results in Brief
     * Background
     * Estimated Paperwork Burden Increased in 2005
          * Changes in Paperwork Burden Estimates Can Be Attributed to V
          * IRS Continues to Account for Largest Portion of Estimated Go
          * Fewer Violations Reported in Fiscal Year 2005
     * Agency Processes for Reviewing Information Collections Were
          * Two Agencies Have Developed Processes to Reduce Burden Assoc
          * Agencies Could Strengthen PRA Review and Try Alternative App
     * Contacts and Acknowledgments
     * Attachment 1. Related GAO Products

Madam Chairman and Members of the Subcommittee:

I am pleased to be here today to discuss the implementation of the
Paperwork Reduction Act (PRA).1 As you know, one of the goals of the PRA
is to help ensure that when the government asks the public for
information, the burden of providing this information is as small as
possible and the information itself is used effectively. In other words,
the goal is to minimize the paperwork burden while maximizing the public
benefit and utility of the information collected. To achieve this goal,
the PRA includes provisions that establish standards and procedures for
effective implementation and oversight of information collections. Among
these provisions is the requirement that agencies not establish
information collections without having them approved by the Office of
Management and Budget (OMB), and that before submitting them for approval,
agencies' Chief Information Officers (CIO) certify that the collection
meets 10 specified standards-including that they avoid unnecessary
duplication and reduce the paperwork burden as much as possible.

As you requested, I will begin by discussing the estimates of government
paperwork burden provided in the annual PRA report (known as the
Information Collection Budget) that OMB recently released, which presents
federal agencies' estimates of federal paperwork burden as of the end of
fiscal year 2005. I will also discuss results from a May 2005 report2 that
we issued on PRA processes and compliance, concentrating on our findings
regarding agencies' processes to certify that information collections meet
PRA standards and on alternative processes that two agencies have used to
minimize the paperwork burden.

1The Paperwork Reduction Act was originally enacted into law in 1980 (Pub.
L. 96-511, Dec. 11, 1980). It was reauthorized with minor amendments in
1986 (Pub. L. 99-591, Oct. 30, 1986) and was reauthorized a second time
with more significant amendments in 1995 (Pub. L. 104-13, May 22, 1995).

2GAO, Paperwork Reduction Act: New Approach May Be Needed to Reduce
Government Burden on Public, GAO-05-424  (Washington, D.C.: May 20, 2005).

In preparing this testimony, we reviewed prior work and analyzed OMB and
other documents. For our discussion of the Information Collection Budget,
we examined the current OMB report as well as our reviews of previous
annual PRA reports.3 For our discussion of the certification process, we
drew on our May 2005 report, for which we performed detailed reviews of
paperwork clearance processes and collections at four agencies: the
Departments of Veterans Affairs (VA), Housing and Urban Development (HUD),
and Labor and the Internal Revenue Service (IRS). Together, these four
agencies represent a broad range of paperwork burden, and in 2004, they
accounted for about 82 percent of the almost 8 billion hours of estimated
paperwork burden for all federal agencies. Of this total, IRS alone
accounted for about 80 percent.4 We also selected 12 approved collections
as case studies (three at each of the four agencies) to determine how
effective agency processes were. In addition, we analyzed a random sample
(343) of all OMB-approved collections governmentwide as of May 2004 (8,211
collections at 68 agencies) to determine compliance with the act's
requirements regarding agency certification of the 10 standards and
consultation with the public. We designed the random sample so that we
could determine compliance levels at the four agencies and governmentwide.
Finally, although the Environmental Protection Agency (EPA) was not one of
the agencies whose processes we reviewed, we analyzed documents and
interviewed officials concerning the agency's efforts to reduce the
paperwork burden of its information collections. Further details on our
scope and methodology are provided in the report. All work on which this
testimony is based was performed in accordance with generally accepted
government auditing standards.

3For our most recent testimony on this subject, see GAO, Paperwork
Reduction Act: New Approaches Can Strengthen Information Collection and
Reduce Burden, GAO-06-477T (Washington, D.C.: Mar. 8, 2006).

4Although IRS accounted for about 80 percent of the burden, it did not
account for 80 percent of collections: it accounted for 808 out of the
total 8,211 collections governmentwide as of May 2004.

                                Results in Brief

After 2 years of slight declines, the total paperwork burden imposed by
federal information collections increased in fiscal year 2005 and is
projected to increase again in fiscal year 2006, according to estimates
provided in OMB's July 2006 annual PRA report to Congress. The estimated
total burden for fiscal year 2005 was 8.4 billion hours, which is an
increase of 5.5 percent (441 million burden hours) from the previous
year's total of 8.0 billion hours. Nearly all this increase is the result
of the implementation of new statutes. For example, there was an increase
of about 224 million hours from the implementation of voluntary
prescription drug coverage under Medicare. In addition, adjustments to the
estimates (from such factors as changes in estimation methods and the
population of respondents) accounted for a net increase in the burden of
about 19 million hours, and agency discretionary program changes led to a
net increase of 180,000 hours. With regard to PRA violations (information
collections that did not have OMB approval or for which that approval had
expired), OMB reports that fewer occurred in fiscal year 2005 than
previously, for a total of 97 violations. OMB also stated in this year's
report that IRS began using a new statistical model in fiscal year 2006
that will improve the accuracy and transparency of future taxpayer burden
estimates. Using this new model is expected to result in an increase of
250 million hours in the burden estimate that IRS will report for next
year. However, according to OMB, this expected rise does not reflect any
real change in the burden on taxpayers, but only in how IRS estimates the
paperwork burden.

The PRA requires that CIOs review information collections and certify that
they meet standards to minimize burden and maximize utility; however,
these reviews were not always rigorous. As we reported in 2005, agency
CIOs generally reviewed information collections before they were submitted
to OMB and certified that the required standards in the act were met.
However, our review of 12 case studies showed that CIOs provided these
certifications despite missing or inadequate support from the program
offices sponsoring the collections. Further, although the law requires
CIOs to provide support for certifications, agency files contained little
evidence that CIO reviewers had made efforts to improve the support
offered by program offices. Numerous factors have contributed to these
problems, including a lack of management support and weaknesses in OMB
guidance. Because these reviews were not rigorous, OMB, the agency, and
the public have reduced assurance that the standards in the act-such as
avoiding duplication and minimizing burden-were consistently met.

In contrast, our May 2005 report discussed how IRS and EPA have used
additional evaluative processes that focus specifically on reducing
burden. These processes are targeted, resource-intensive efforts that
involve extensive outreach to stakeholders. According to these agencies,
their processes led to significant reductions in burden on the public
while maximizing the utility of the information collections. For example,
in this year's PRA report, OMB cites a decrease of about 19 million hours
from streamlining IRS's Form 1041 to make it easier and faster to
understand and file.

In our report, we recommended that OMB and agencies take steps to improve
review processes and compliance with the act. We also suggested that
Congress should consider mandating pilot projects to target some
collections for rigorous analysis along the lines of the approaches used
by IRS and EPA. OMB and the agencies agreed with most of the
recommendations. Since our study was issued, the four agencies have
reported taking steps to strengthen their support for CIO certifications,
such as providing additional resources and guidance for the process, and
OMB has updated parts of its guidance to agencies. However, the updated
guidance is not aimed at all information collections, but rather at
conducting surveys that are used for general-purpose statistics or as part
of program evaluations or research studies. 5 In addition, it does not
provide clear guidance on one of the topics mentioned in our
recommendation: determining whether small entities are affected by a
collection and reducing reporting burden on these entities.

5 The updated guidance is focused on surveys and statistical information
collections, but it includes some general PRA requirements applicable to
any information collection, namely, general information on submissions to
OMB and the scope of the definition of information collection (explaining,
for example, that focus groups are included).

                                   Background

Collecting information is one way that federal agencies carry out their
missions. For example, IRS needs to collect information from taxpayers and
their employers to know the correct amount of taxes owed. The U.S. Census
Bureau collects information used to apportion congressional representation
and for many other purposes. When new circumstances or needs arise,
agencies may need to collect new information. We recognize, therefore,
that a large portion of federal paperwork is necessary and often serves a
useful purpose.

Nonetheless, besides ensuring that information collections have public
benefit and utility, federal agencies are required by the PRA to minimize
the paperwork burden that the collection of information imposes. Among the
provisions of the act aimed at this purpose are requirements for the
review of information collections by OMB and by agency CIOs.

Under PRA, federal agencies may not conduct or sponsor the collection of
information unless approved by OMB; information collections for which OMB
approval is expired or missing are considered violations of the PRA.
Before approving collections, OMB is required to determine that the
agency's collection of information is necessary for the proper performance
of the functions of the agency, including whether the information will
have practical utility.6 Consistent with the act's requirements, OMB has
established a process to review all proposals by executive branch agencies
(including independent regulatory agencies) to collect information from 10
or more persons, whether the collections are voluntary or mandatory.

In addition, the act as amended in 1995 requires every agency to establish
a process under the official responsible for the act's implementation (now
the agency's CIO7) to review program offices' proposed collections. This
official is to be sufficiently independent of program responsibility to
evaluate fairly whether information collections should be approved. Under
the law, the CIO is to review each collection of information before
submission to OMB, including reviewing the program office's evaluation of
the need for the collection and its plan for the efficient and effective
management and use of the information to be collected, including necessary
resources.8 As part of that review, the agency CIO must ensure that each
information collection instrument (form, survey, or questionnaire)
complies with the act, certify that the collection meets 10 standards (see
table 1), and provide support for these certifications.

644 U.S.C. 3508.

7The 1995 amendments used the 1980 act's reference to the agency "senior
official" responsible for implementation of the act. A year later,
Congress gave that official the title of agency Chief Information Officer
(the Information Technology Management Reform Act, Pub. L. 104-106, Feb.
10, 1996, which was subsequently renamed the Clinger-Cohen Act, Pub. L.
104-208, Sept. 30, 1996).

844 U.S.C. 3506(c)(1)(A).

Table 1: Standards for Information Collections Set by the Paperwork
Reduction Act

Standards                                                                  
The collection is necessary for the proper performance of agency           
functions.                                                                 
The collection avoids unnecessary duplication.                             
The collection reduces burden on the public, including small entities, to  
the extent practicable and appropriate.                                    
The collection uses plain, coherent, and unambiguous language that is      
understandable to respondents.                                             
The collection will be consistent and compatible with respondents' current 
reporting and recordkeeping practices to the maximum extent practicable.   
The collection indicates the retention period for any recordkeeping        
requirements for respondents.                                              
The collection informs respondents of the information they need to         
exercise scrutiny of agency collections information (the reasons the       
information is collected; the way it is used; an estimate of the burden;   
whether responses are voluntary, required to obtain a benefit, or          
mandatory; and a statement that no person is required to respond unless a  
valid OMB control number is displayed).                                    
The collection was developed by an office that has planned and allocated   
resources for the efficient and effective management and use of the        
information to be collected.                                               
The collection uses effective and efficient statistical survey methodology 
(if applicable).                                                           
The collection uses information technology to the maximum extent           
practicable to reduce burden and improve data quality, agency efficiency,  
and responsiveness to the public.                                          

Source: Paperwork Reduction Act, Pub. L. 104-13, 109 Stat. 173-4, sec.
3506(c)(3).

In addition, the original PRA of 1980 (section 3514(a)) requires OMB to
keep Congress "fully and currently informed" of the major activities under
the act and to submit a report to Congress at least annually on those
activities. Under the 1995 amendments, this report must include, among
other things, a list of any increases in burden. To satisfy this
requirement, OMB prepares the annual PRA report, which reports on agency
actions during the previous fiscal year, including changes in agencies'
burden-hour estimates as well as violations of the PRA.

The 1995 PRA amendments also required OMB to set specific goals for
reducing burden from the level it had reached in 1995: at least a 10
percent reduction in the governmentwide burden-hour estimate for each of
fiscal years 1996 and 1997, a 5 percent governmentwide burden reduction
goal in each of the next 4 fiscal years, and annual agency goals that
reduce burden to the "maximum practicable opportunity." At the end of
fiscal year 1995, federal agencies estimated that their information
collections imposed about 7 billion burden hours on the public. Thus, for
these reduction goals to be met, the burden-hour estimate would have had
to decrease by about 35 percent, to about 4.6 billion hours, by September
30, 2001. In fact, on that date, the federal paperwork estimate had
increased by about 9 percent, to 7.6 billion burden hours.

Over the years, we have reported on the implementation of PRA many times.9
In a succession of reports and testimonies, we noted that federal
paperwork burden estimates generally continued to increase, rather than
decrease as envisioned by the burden reduction goals in PRA. Further, we
reported that some burden reduction claims were overstated. For example,
although some reported paperwork reductions reflected substantive program
changes, others were revisions to agencies' previous burden estimates and,
therefore, would have no effect on the paperwork burden felt by the
public. In our previous work, we also repeatedly pointed out ways that OMB
and agencies could do more to ensure compliance with PRA. In particular,
we have often recommended that OMB and agencies take actions to improve
the paperwork clearance process.

                  Estimated Paperwork Burden Increased in 2005

After 2 years of slight declines, OMB reports that burden hours increased
in fiscal year 2005 and are expected to increase again in fiscal year
2006. According to OMB's most recent PRA report to Congress, the estimated
total burden hours imposed by government information collections in fiscal
year 2005 was 8.4 billion hours; this is an increase of 441 million burden
hours (5.5 percent) from the previous year's total of 8.0 billion hours.
It is also almost a billion and a half hours larger than it was in 1995
and 3.8 billion larger than the PRA target for the end of fiscal year 2001
(4.6 billion burden hours). OMB's report also states that burden will
increase in fiscal year 2006 by an estimated 303 million hours to about
8.7 billion hours; however, according to OMB, most of this projected
increase (250 million hours or 83 percent) is attributable to a new method
of estimating burden that is being implemented by IRS, rather than to any
increase in the actual burden. Finally, according to OMB, fewer violations
of the act were reported than in previous years.

9We have included a list of related GAO products at the end of this
statement.

Changes in Paperwork Burden Estimates Can Be Attributed to Various Causes

Changes in paperwork burden estimates result from several causes, which
OMB assigns to two main categories. OMB classifies all changes-either
increases or decreases-in agencies' burden-hour estimates as either
program changes or adjustments.

           0M Program changes are the result of deliberate federal government
           action (e.g., the addition or deletion of questions on a form);
           these can occur as a result of

                        0M new statutes,
                        0M agency-initiated actions, or
                        0M the expiration or reinstatement of OMB-approved
                        collections.10

           0M Adjustments do not result from federal activities but from
           external factors. For example:

                        0M an agency may reestimate the burden associated
                        with a collection of information, or
                        0M the population responding to a requirement may
                        change-such as if the economy declines and more
                        people complete applications for food stamps; the
                        resulting increase in the Department of Agriculture's
                        paperwork estimate is considered an adjustment
                        because it is not the result of deliberate federal
                        action.

           As shown above, within the category of program changes, OMB
           distinguishes between changes due to new statutes and changes due
           to agency action, which it also refers to as agency discretionary
           actions. However, this term should not imply that agencies have no
           discretion in how they implement new statutes. A major goal of the
           PRA is to ensure that agencies consider how to make the burden of
           information collections, whether old or newly established, as
           small as possible. In the second part of my statement, I will
           address one of the ways set forth in the PRA to help achieve this
           goal.

           Table 2 shows the changes in reported burden totals from fiscal
           year 2004 to fiscal year 2005.

           Table 2: Changes in Governmentwide Reported Burden Totals by
           Category

           In millions

           Source: OMB annual PRA report.

           Note: Numbers do not add exactly because of rounding.

           As the table shows, the change due to new statutes was by far the
           largest factor in the increase for fiscal year 2005. OMB reports
           that the statute having the largest impact on burden was the
           statute establishing voluntary prescription drug coverage under
           Medicare;11 implementing the program mandated by this statute
           required the collection of significant amounts of information,
           leading to an increase in burden of 224 million hours.12 An
           additional significant increase-about 116 million hours-resulted
           from the implementation by the Federal Communications Commission
           (FCC) of the CAN-SPAM Act, which requires disclosure of certain
           information contained in unsolicited commercial e-mails.

           In contrast to changes due to new statutes, changes due to agency
           action did not contribute significantly to the overall change in
           burden this year, adding 180,000 hours out of the total rise of
           441 million. Although the overall result was a slight increase,
           agencies did take many actions that decreased burden; without
           these actions, the governmentwide increase would have been
           greater. The annual report does not list all these actions, but it
           does highlight actions that led to significant paperwork
           reductions and increases. (These include increases and decreases
           in burden from statutory requirements and miscellaneous agency
           actions, as well as burden reductions from changing regulations,
           cutting redundancy, changing forms, and using information
           technology.) From both an individual agency perspective and a
           governmentwide perspective, the relatively small increase due to
           agency action is the result of large increases and decreases that
           mostly offset each other:

           0M From an individual agency perspective, the net change in an
           agency's burden estimate is generally the result of disparate
           actions, some of which reduce burden and some of which increase
           it. An example is the IRS, which as an agency was responsible for
           a net decrease of about 3 million hours. Among the burden
           reductions that the annual report highlights are two IRS actions
           to change forms, both of which reduced burden by simplification
           and streamlining, for a reduction of about 19 million hours.13 The
           ICB also reports that in January 2006 IRS completed an initiative
           to simplify the process of applying for an extension to file an
           income tax return, which is associated with a burden reduction of
           8 million hours. Elsewhere, on the other hand, five IRS actions
           are highlighted that together resulted in an increase of about 24
           million hours.14 Examples of reasons IRS took these actions
           included increasing accuracy and improving the agency's ability to
           monitor compliance with the law.
           0M Similarly, from a governmentwide perspective, the overall
           change is the result of some agencies whose actions produced a net
           decrease and others whose produced a net decrease. In fiscal year
           2005, agencies with net decreases produced a reduction of about
           14.02 million hours. This reduction was offset, however, by
           agencies with net increases, which totaled about 14.20 million
           hours.

           Compared to program changes as a whole, adjustments to the
           estimates were a relatively small factor (as table 2 also shows),
           accounting for a net increase in the burden of about 19 million
           hours. In previous years, adjustments have had a much greater
           impact and have tended to decrease overall burden estimates, thus
           masking the effect of increases from program changes. In fiscal
           years 2003 and 2004, the impact of adjustments was large enough to
           lead to overall burden estimates that were lower than for the year
           before. In fiscal year 2004, OMB reported a decrease of about 156
           million hours in adjustments versus an increase of about 29
           million hours in program changes; the result was a lower overall
           burden estimate than for the previous year. Similarly, overall
           burden in fiscal year 2003 was slightly less than in fiscal year
           2002, also as a result of a decrease in adjustments (about 182
           million hours) that more than offset an increase in program
           changes (about 72 million hours).

           Besides these large decreases due to adjustments, another reason
           for the slight decrease in total burden in fiscal years 2004 and
           2003 was that increases due to program changes were relatively
           small, as shown in table 3. This year, both program changes and
           adjustments went up, so adjustments did not have the effect of
           masking increases in program changes. As the table also shows,
           fiscal year 2005 saw the largest net increase from program changes
           since 1998.

           Table 3: Increases in Burden Hours Due to Program Changes between
           Fiscal Years 1998 and 2005

           In millions

           Source: OMB.

10 When an agency allows OMB approval of a collection to lapse but
continues to collect the information, this is a violation of the PRA.
However, the expired collection is accounted for as a decrease in burden.
When the approval is reinstated, the reinstatement is accounted for as an
increase in burden in OMB's accounting system. The lapse and reinstatement
thus generally cancel each other out, unless the reinstatement involves
changed burden estimates based on new analysis.

                                      Change from fiscal year 2004 PRA report
Category of change                                      Hours      Percent 
Baseline: fiscal year 2004 total                      7971.18 
Fiscal year 2005 program changes:                           0 
Changes due to agency action               0.18             0         0.00 
Changes due to new statutes              418.89             0        +5.26 
Changes due to lapses in OMB                                               
approval                                   2.80             0        +0.04
Total program changes                                  422.00        +5.29 
Fiscal year 2005 adjustments                            19.14        +0.24 
Fiscal year 2005 total                                8412.27        +5.53 

11 The Medicare Prescription Drug, Improvement, and Modernization Act of
2003 (Pub. L. 108-173).

12 The prescription drug program, which began on January 1, 2006, is also
projected to result in an increase of about 5 million hours in fiscal year
2006.

13 The two forms are Form 1041, U.S. Income Tax Return for Estates and
Trusts and Form 8879, IRS e-file Signature Authorization.

14 These actions were associated with Form 1120, U.S. Corporation Income
Tax Return; Form 1023, Application for Recognition of Exemption; Form
4070, Employee's Report of Tips to Employer; Form 941, Employer's
Quarterly Federal Tax Return; and Form 8858, Information Return of U.S.
Persons With Respect to Foreign Disregarded Entities.

               Total governmentwide burden-hour  Net increase in burden hours 
Fiscal year                         estimate        due to program changes 
2005                                 8,412.3                         422.0 
2004                                 7,971.2                          28.5 
2003                                 8,105.4                          72.1 
2002                                 8,223.2                         294.1 
2001                                 7,651.4                         158.7 
2000                                 7,361.0                         188.0 
1999                                 7,183.9                         189.0 
1998                                 6,951.1                          41.1 

IRS Continues to Account for Largest Portion of Estimated Governmentwide Burden

In fiscal year 2005, IRS accounted for about 76 percent of the
governmentwide paperwork burden: about 6.4 billion hours. As shown in
figure 1, no other agency's estimate approaches this level. Six agencies
had burden-hour estimates of 100 million hours or more (the Departments of
Health and Human Services, Labor, and Transportation; EPA; FCC; and the
Securities and Exchange Commission). Thus, as we have previously reported,
changes in paperwork burden experienced by the federal government have
been largely attributable to changes associated with IRS.15

15GAO, Paperwork Reduction Act: Agencies' Paperwork Burden Estimates Due
to Federal Actions Continue to Increase, GAO-04-76T (Washington, D.C.:
Apr. 20, 2004).

Figure 1: Distribution of Paperwork Burden among Agencies, Fiscal Year
2005

OMB reports that starting in fiscal year 2006, IRS began using a new
methodology based on a statistical model-the Individual Taxpayer Burden
Model-to estimate the reporting burden imposed on individual taxpayers.
Among other things, this new model, which was developed to improve the
accuracy and transparency of taxpayer burden estimates, reflects the major
changes over the past two decades in the way that taxpayers prepare and
file their returns, including the use of electronic preparation methods.
According to OMB, rather than estimating burden on a form-by-form basis,
the new methodology takes into account broader and more comprehensive
taxpayer characteristics and activities, considering how the taxpayer
prepares the return (e.g., with or without software or a paid preparer) as
well as the taxpayer's activities, such as gathering tax materials,
completing forms, recordkeeping, and tax planning. In contrast, the
previous methodology primarily focused on the length and complexity of
each tax form. OMB states that this new model will make it possible to
estimate the burden implications of new legislative and administrative tax
proposals.

OMB projects that these changes will create a one-time increase of about
250 million hours in the estimate of IRS burden levels in fiscal year
2006. This increase represents most (83 percent) of the total projected
governmentwide increase for fiscal year 2006 of 303 million hours.
However, according to OMB, this increase does not reflect any change in
the actual burden experienced by taxpayers, but rather a change in the way
the burden is measured.

In the past, we reported that IRS's previous estimation model ignored
important components of burden and had limited capabilities for analyzing
the determinants of burden.16 The new model is the result of work that IRS
has performed over the past several years to improve its model and address
these and other limitations. At this time, we have not analyzed IRS's new
model to determine the extent to which it improves the accuracy of burden
estimates, and we have not assessed the accuracy of the new model's
estimates. However, IRS's efforts to increase the accuracy of its model
appear to be an important step towards addressing the previous model's
shortcomings.

These changes in IRS's estimation methodology highlight the importance,
when trying to interpret the annual burden estimates, of bearing in mind
their limitations. For more than 50 years, the "burden hour" has been the
principal unit of paperwork burden and has been accepted by agencies and
the public because it is a clear, easy-to-understand concept. But as IRS's
efforts show, burden-hour estimates are not a simple matter. The degree to
which agency burden-hour estimates reflect real burden is unclear. It is
challenging to estimate the amount of time it will take for a respondent
to collect and provide information or to estimate how many individuals an
information collection will affect.17 In addition, like all estimates,
paperwork burden estimates are not precise; changes from year to year,
particularly small ones, may not be meaningful. However, as long as the
limitations are clearly understood, these estimates can be useful as the
best indicators of paperwork burden available.

16GAO, Tax Administration: IRS Is Working to Improve Its Estimates of
Compliance Burden, GAO/GGD-00-11  (Washington, D.C.: May 22, 2000).

11See GAO, EPA Paperwork: Burden Estimate Increasing Despite Reduction
Claims, GAO/GGD-00-59 (Washington, D.C.: Mar. 16, 2000), for how one
agency estimates paperwork burden.

Fewer Violations Reported in Fiscal Year 2005

OMB reports reductions in PRA violations for fiscal year 2005 compared to
previous years. The PRA prohibits an agency from conducting or sponsoring
the collection of information unless (1) the agency has submitted the
proposed collection to OMB, (2) OMB has approved the proposed collection,
and (3) the agency displays an OMB control number on the collection.
According to OMB's annual report, agencies have made great progress in
recent years in reducing the number of violations of these conditions and
in resolving them more promptly. OMB attributed this reduction to several
initiatives it had taken, including meeting with agency officials to
discuss ways to reduce violations and adding reporting requirements.

According to OMB, during fiscal year 2005, agencies reported a total of 97
violations: 60 information collections that expired during the year, and
another 37 that had expired before October 1, 2004, and were not
reinstated until fiscal year 2005. Of the 27 agencies included in the
annual report, the three agencies with the greatest number of violations
were the Departments of the Treasury and Homeland Security and the Small
Business Administration. In addition, OMB reported no unresolved
violations at the end of fiscal year 2005 and only 6 violations during the
first 8 months of fiscal year 2006. The 97 violations reported in fiscal
year 2005 is much less than the 164 violations in fiscal year 2004 and the
223 violations in fiscal year 2003.

Although the reduction in violations is a positive trend, we should note
that the violations reported may not be comprehensive; they include only
those that agencies identified and reported to OMB. As a result, the
statistics would omit violations of which agencies were unaware. In our
May 2005 review, we examined forms posted on Web sites for four agencies
(VA, HUD, Labor, and IRS). We found examples of violations among these
forms of which the agencies were generally unaware.18 Based on our
examination, we projected that the four agencies overall had an estimated
69 violations: 61 collections in use without OMB approval and 8 expired
collections. For example, we estimated 16 violations at VA; at that time,
OMB's report reflected VA's belief that it had no violations. Based on
these results, we recommended that the four agencies periodically review
their Web sites to ensure that all forms comply with PRA requirements; we
also recommended that OMB alter its guidance so that all federal agencies
would be required to periodically review Web sites in this way. Since
then, VA has reported to us that it removed forms from its Web site that
were in violation of PRA.  However, OMB has not yet issued governmentwide
guidance directing these types of reviews, so it is possible that some PRA
violations remain undetected.

Agency Processes for Reviewing Information Collections Were Not Effective

Among the PRA provisions intended to help achieve the goals of minimizing
burden while maximizing utility are the requirements for CIO review and
certification of information collections. The 1995 amendments required
agencies to establish centralized processes for reviewing proposed
information collections within the CIO's office. Among other things, the
CIO's office is to certify, for each collection, that the 10 standards in
the act have been met, and the CIO is to provide a record supporting these
certifications.

The four agencies that we reviewed for our May 2005 report all had written
directives that implemented the review requirements in the act, including
the requirement for CIOs to certify that the 10 standards in the act were
met. However, in the 12 case studies that we reviewed, this CIO
certification occurred despite a lack of rigorous support that all
standards were met. Specifically, the support for certification was
missing or partial on 65 percent (66 of 101) of the certifications.19
Table 4 shows the result of our analysis of the case studies.

18We examined all the forms that we could locate on the VA and Labor Web
sites and examined a stratified random probability sample of forms on the
IRS and HUD Web sites. We randomly selected 119 forms from the 492 on the
IRS Web site and selected a stratified random sample of 253 forms from the
423 on the HUD Web site. With these probability samples, each form in the
population had a known and nonzero probability of being selected. Each
sampled form was subsequently weighted in the analysis to account
statistically for all the members of the population, including those that
were not selected.

Table 4: Support Provided by Agencies for Paperwork Reduction Act
Standards in 12 Case Studies

                                                             Support provided
Standards                                          Totala  Yes  Partial No 
The collection is necessary for the proper             12    6        6  0 
performance of agency functions.                                        
The collection avoids unnecessary duplication.         11    2        2  7 
The collection reduces burden on the public,           12    5        7  0 
including small entities, to the extent                                 
practicable and appropriate.                                            
The collection uses plain, coherent, and               12    1        0 11 
unambiguous language that is understandable to                          
respondents.                                                            
The collection will be consistent and compatible       12    3        0  9 
with respondents' current reporting and                                 
recordkeeping practices to the maximum extent                           
practicable.                                                            
The collection indicates the retention period for       6    3        3  0 
any recordkeeping requirements for respondents.b                        
The collection informs respondents of the              12    4        8  0 
information they need to exercise scrutiny of                           
agency collections (i.e., the reasons the                               
information is collected; the way it is used; an                        
estimate of the burden; whether responses are                           
voluntary, required to obtain a benefit, or                             
mandatory; and a statement that no person is                            
required to respond unless a valid OMB control                          
number is displayed).b                                                  
The collection was developed by an office that has     11    2        0  9 
planned and allocated resources for the efficient                       
and effective management and use of the                                 
information to be collected.                                            
The collection uses effective and efficient             1    1        0  0 
statistical survey methodology (if applicable).                         
The collection uses information technology to the      12    8        4  0 
maximum extent practicable to reduce burden and                         
improve data quality, agency efficiency, and                            
responsiveness to the public.                                           
Totals                                                101   35       30 36 

Sources: Paperwork Reduction Act. GAO.

aThe total number of certifications is not always 12 because not all
certifications applied to all collections.

bFor these two standards, the presence on the forms of the information
indicated was categorized as support, the absence of some elements was
categorized as partial support, and the absence of all elements was
categorized as no support.

Under one of the standards mandated by the act, CIOs are required to
certify that each information collection is not unnecessarily duplicative.
According to OMB instructions, agencies are to (1) describe efforts to
identify duplication and (2) show specifically why any similar information
already available cannot be used or modified for the purpose described. In
2 of 11 cases, agencies provided the description requested, and in an
additional 2 cases, partial support was provided.20 In 7 cases, support
for these certifications was missing. An example of missing support is the
following statement, used on all three IRS collections:

19The total number of certifications does not total 120 (12 cases times 10
standards) because some standards did not apply to some cases.

We have attempted to eliminate duplication within the agency wherever
possible.

This assertion provides no information on what efforts were made to
identify duplication or perspective on why similar information, if any,
could not be used. Further, the files contained no evidence that the CIO
reviewers challenged the adequacy of this support or provided support of
their own to justify their certification.

A second standard mandated by the act is that each information collection
should reduce burden on the public, including small entities,21 to the
extent practicable and appropriate. OMB guidance emphasizes that agencies
are to demonstrate that they have taken every reasonable step to ensure
that a given collection of information is the least burdensome necessary
for the proper performance of agency functions. In addition, OMB
instructions and guidance direct agencies to provide specific information
and justifications: (1) estimates of the hour and cost burden of the
collections and (2) justifications for any collection that requires
respondents to report more often than quarterly, respond in fewer than 30
days, or provide more than an original and two copies of documentation.

20 The following is an example of support that we judged to be partial:
for one collection, the agency described how it attempted to identify
duplicative sources, but it did not discuss why information from other
sources could not be used, at least in part, to satisfy the needs of the
collection.

21OMB's instructions to agencies state that a small entity may be (1) a
small business, which is deemed to be one that is independently owned and
operated and that is not dominant in its field of operation; (2) a small
organization, which is any not-for-profit enterprise that is independently
owned and operated and is not dominant in its field; or (3) a small
government jurisdiction, which is a government of a city, county, town,
township, school district, or special district with a population of less
than 50,000.

With regard to small entities, OMB guidance states that the standard
emphasizes such entities because these often have limited resources to
comply with information collections.22 The act and OMB guidance give
various techniques for reducing burden on these small entities.23

Our review of the case examples found that for the certification on
reducing burden on the public, the files generally contained the specific
information and justifications called for in the guidance. However, none
of the case examples contained support that addressed how the agency
ensured that the collection was the least burdensome necessary. According
to agency CIO officials, the primary cause for this absence of support is
that OMB instructions and guidance do not direct agencies to provide this
information explicitly as part of the approval package.

In addition, four of our case studies did not provide complete information
that would support certification that the collection specifically
addressed reducing burden for small entities.24 Specifically, 7 of the 12
case studies involved collections that were reported to impact businesses
or other for-profit entities, but the files for 4 of these 7 did not
explain either

           0M why small businesses were not affected, or
           0M even though such businesses were affected, that burden could or
           could not be reduced.

           Instead, the files included statements such as "not applicable,"
           which do not inform the reviewer whether or not there was an
           effort made to reduce burden on small entities. When we asked
           agencies about these four cases, they indicated that the
           collections did, in fact, affect small business.

           OMB's instructions to agencies on minimizing burden on small
           entities require agencies to describe any methods used to reduce
           burden only if the collection of information has a "significant
           economic impact on a substantial number of small entities." This
           does not appropriately reflect the act's requirements concerning
           small business: the act requires that the CIO certify that the
           information collection reduces burden on small entities in
           general, to the extent practical and appropriate, and provides no
           thresholds for the level of economic impact or the number of small
           entities affected. OMB officials acknowledged that their
           instruction is an "artifact" from a previous form and more
           properly focuses on rulemaking rather than on the information
           collection process.

           The lack of support for the 10 certifications required by the act
           appeared to be influenced by a variety of factors. In some cases,
           as described above, OMB guidance and instructions were not
           comprehensive or entirely accurate. In the case of the duplication
           standard specifically, IRS officials said that the agency did not
           need to further justify that its collections are not duplicative
           because (1) tax data are not collected by other agencies, so there
           is no need for the agency to contact them about proposed
           collections, and (2) IRS has an effective internal process for
           coordinating proposed forms among the agency's various
           organizations that may have similar information. Nonetheless, the
           law and instructions require support for these assertions, which
           was not provided.

           Further, agency reviewers told us that management assigns a
           relatively low priority and few resources to reviewing information
           collections. Further, program offices have little knowledge of and
           appreciation for the requirements of the PRA. As a result of these
           conditions and a lack of detailed program knowledge, reviewers
           often have insufficient leverage with program offices to encourage
           them to improve their justifications.

           When support for the PRA certifications is missing or inadequate,
           OMB, the agency, and the public have reduced assurance that the
           standards in the act, such as those on avoiding duplication and
           minimizing burden, have been consistently met.

22"Particularly for small businesses, paperwork burdens can force the
redirection of resources away from business activities that might
otherwise lead to new and better products and services, and to more and
better jobs. Accordingly, the Federal Government owes the public an
ongoing commitment to scrutinize its information requirements to ensure
the imposition of only those necessary for the proper performance of an
agency's functions." H. Report 104-37 (Feb. 15, 1995) p. 23.

23Techniques give in the act include (a) establishing different compliance
or reporting requirements or timetables for respondents with fewer
available resources; (b) clarifying, consolidating, or simplifying
compliance and reporting requirements; and (c) exempting certain
respondents from coverage of all or part of the collection. OMB guidance
gives techniques that might be used to simplify requirements for small
entities, such as asking fewer questions, taking smaller samples than for
larger entities, and requiring small entities to provide information less
frequently.

24In our governmentwide sample, some agencies did cite activities that are
consistent with this standard, such as exempting certain small businesses
and providing assistance to small businesses and other small entities.

Two Agencies Have Developed Processes to Reduce Burden Associated with
Information Collections

IRS and EPA have supplemented the standard PRA review process with
additional processes aimed at reducing the burden while maximizing the
public benefit and utility of the information collected. These agencies'
missions require them both to deal extensively with information
collections, and their management has made reduction of burden a
priority.25

In January 2002, the IRS Commissioner established an Office of Taxpayer
Burden Reduction, which includes both permanently assigned staff and staff
temporarily detailed from program offices that are responsible for
particular information collections. This office chooses a few forms each
year that are judged to have the greatest potential for burden reduction
(these forms have already been reviewed and approved through the CIO
process). The office evaluates and prioritizes burden reduction
initiatives by

           0M determining the number of taxpayers impacted;
           0M quantifying the total time and out-of-pocket savings for
           taxpayers;
           0M evaluating any adverse impact on IRS's voluntary compliance
           efforts;
           0M assessing the feasibility of the initiative, given IRS resource
           limitations; and
           0M tying the initiative into IRS objectives.

           Once the forms are chosen, the office performs highly detailed,
           in-depth analyses, including extensive outreach to the public
           affected, users of the information within and outside the agency,
           and other stakeholders. This analysis includes an examination of
           the need for each data element requested. In addition, the office
           thoroughly reviews form design.26

           The office's director27 heads a Taxpayer Burden Reduction Council,
           which serves as a forum for achieving taxpayer burden reduction
           throughout IRS. IRS reports that as many as 100 staff across IRS
           and other agencies can be involved in burden reduction
           initiatives, including other federal agencies, state agencies, tax
           practitioner groups, taxpayer advocacy panels, and groups
           representing the small business community.

           The council directs its efforts in five major areas:

           0M simplifying forms and publications;
           0M streamlining internal policies, processes, and procedures;
           0M promoting consideration of burden reductions in rulings,
           regulations, and laws;
           0M assisting in the development of burden reduction measurement
           methodology; and
           0M partnering with internal and external stakeholders to identify
           areas of potential burden reduction.

           According to IRS, this targeted, resource-intensive process has
           achieved significant reductions in burden. For example, it
           reported that about 95 million hours of taxpayer burden were
           reduced through increases in the income reporting threshold on
           various IRS schedules.28 Another example, mentioned earlier, was
           given in OMB's latest annual PRA report: in January 2006 IRS
           completed an initiative to simplify the process of applying for an
           extension to file an income tax return, which is associated with a
           burden reduction of 8 million hours.29 Another example from the
           annual PRA report is a reduction of about 19 million hours from a
           redesign of IRS form 1041 to streamline the requirements and make
           it easier to read and file.

           Similarly, EPA officials stated that they have established
           processes for reviewing information collections that supplement
           the standard PRA review process. These processes are highly
           detailed and evaluative, with a focus on burden reduction,
           avoiding duplication, and ensuring compliance with PRA. According
           to EPA officials, the impetus for establishing these processes was
           the high visibility of the agency's information collections and
           the recognition, among other things, that the success of EPA's
           enforcement mission depended on information collections being
           properly justified and approved: in the words of one official,
           information collections are the "life blood" of the agency.

           According to these officials, the CIO staff are not generally
           closely involved in burden reduction initiatives, because they do
           not have sufficient technical program expertise and cannot devote
           the extensive time required.30 Instead, these officials said that
           the CIO staff's focus is on fostering high awareness within the
           agency of the requirements associated with information
           collections, educating and training the program office staff on
           the need to minimize burden and the impact on respondents,
           providing an agencywide perspective on information collections to
           help avoid duplication, managing the clearance process for agency
           information collections, and acting as liaison between program
           offices and OMB during the clearance process. To help program
           offices consider PRA requirements such as burden reduction and
           avoiding duplication as they are developing new information
           collections or working on reauthorizing existing collections, the
           CIO staff also developed a handbook31 to help program staff
           understand what they need to do to comply with PRA and gain OMB
           approval.

           In addition, program offices at EPA have taken on burden reduction
           initiatives that are highly detailed and lengthy (sometimes
           lasting years) and that involve extensive consultation with
           stakeholders (including entities that supply the information,
           citizens groups, information users and technical experts in the
           agency and elsewhere, and state and local governments). For
           example, EPA reported that it amended its regulations to reduce
           the paperwork burden imposed under the Resource Conservation and
           Recovery Act. One burden reduction method EPA used was to
           establish higher thresholds for small businesses to report
           information required under the act. EPA estimated that the
           initiative will reduce burden by 350,000 hours and save $22
           million annually. Another example is an ongoing EPA initiative
           reported in this year's PRA report, the Central Data Exchange;
           this is an e-government initiative that is designed to enable
           fast, efficient, and more accurate environmental data submissions
           and exchange from state and local governments, industry, and
           tribes through the use of electronic reporting procedures. The
           estimated reduction for this initiative, which is expected to be
           complete in 2008, is 166,000 hours.

           Overall, EPA and IRS reported that they have produced significant
           reductions in paperwork burden by making a commitment to this goal
           and dedicating resources to it. In contrast, for the 12
           information collections we examined, the CIO review process
           resulted in no reduction in burden. Further, the Department of
           Labor reported that its PRA reviews of 175 proposed collections
           over nearly 2 years did not reduce burden.32 Similarly, both IRS
           and EPA addressed information collections that had undergone CIO
           review and received OMB approval and nonetheless found significant
           opportunities to reduce the paperwork burden.

25"IRS is committed to reducing taxpayer burden and established the Office
of Taxpayer Burden Reduction in January 2002 to lead its efforts."
Congressional testimony by the IRS Commissioner, April 20, 2004, before
the Subcommittee on Energy Policy, Natural Resources, and Regulatory
Affairs, House Committee on Government Reform.

26In congressional testimony, the IRS Commissioner stated that OMB had
referred another agency to IRS's Office of Taxpayer Burden Reduction as an
example of a "best practice" in burden reduction in government.

27The director reports to the IRS Commissioner for the Small Business and
Self-Employed Division.

28In addition, the office reports that IRS staff positions could be freed
up through its efforts to raise the reporting threshold on various tax
forms and schedules. Fewer IRS positions are needed when there are fewer
tax forms and schedules to be reviewed.

29We did not verify the accuracy of IRS's reported burden-hour savings. As
discussed earlier, IRS's revision to the methodology that it uses to
compute burden is expected to result in different estimates of burden
hours and burden-hour savings.

30These officials added that in exceptional circumstances the CIO office
has had staff available to perform such projects, but generally in
collaboration with program offices.

31EPA Office of Environmental Information, Collection Strategies Division,
ICR Handbook: EPA's Guide to Writing Information Collection Requests Under
the Paperwork Reduction Act of 1995, draft (revised March 2005).

Agencies Could Strengthen PRA Review and Try Alternative Approaches to Reducing
Burden

In our 2005 report, we concluded that the CIO review process was not
working as Congress intended: It did not result in a rigorous examination
of the burden imposed by information collections, and it did not lead to
reductions in burden. In light of these findings, we suggested options
that Congress might want to consider when it next reauthorizes the act,
including mandating pilot projects to test and review alternative
approaches to achieving PRA goals. Such pilot projects could build on the
lessons learned at IRS and EPA, which have used a variety of approaches to
reducing burden, sharing information (for example, by facilitating
cross-agency information exchanges), standardizing data for multiple uses,
and integrating data to avoid duplication; and re-engineering work flows.
Pilot projects would be most appropriate for agencies for which
information collections are a significant aspect of the mission.

In addition, we recommended (among other things) that agencies strengthen
the support provided for CIO certifications and that OMB update its
guidance to clarify and emphasize this requirement (including that
agencies provide support showing that they have taken steps to reduce
burden, determined whether small entities are affected and reduced
reporting burden on them, and established a plan to manage and use the
information to be collected, including the identification of necessary
resources). OMB and the agencies agreed with most of the recommendations,
although they disagreed with aspects of GAO's characterization of
agencies' compliance with the act's requirements.33

32These reviews did result in a 1.3 percent reduction in calculated burden
by correcting mathematical errors in program offices' submissions.

Since our report was issued, the four agencies have reported taking steps
to strengthen their support for CIO certifications:

           0M According to the HUD CIO, the department established a
           senior-level PRA compliance officer in each major program office,
           and it revised its certification process to require that before
           collections are submitted for review, they be approved at a higher
           management level within program offices.
           0M The Treasury CIO established an Information Management
           Sub-Council under the Treasury CIO Council and added resources to
           the review process.
           0M According to the VA's 2007 budget submission, the department
           obtained additional resources to help review and analyze its
           information collection requests.
           0M According to the Office of the CIO at the Department of Labor,
           the department intends to provide guidance to components regarding
           the need to provide strong support for clearance requests and has
           met with component staff to discuss these issues.

           OMB has updated parts of its guidance and plans to incorporate
           other guidance into an automated system to be used by agencies
           submitting information collections for clearance. In January 2006,
           OMB revised its guidance to agencies on surveys and statistical
           information collections. 34 This guidance, among other things, is
           aimed at strengthening the support that agencies must provide for
           certifying collections, as we recommended. For example, the
           guidance requires agencies submitting requests for approval to
           include context and detail that will allow OMB to evaluate the
           practical utility of the information to be collected. However,
           this guidance does not apply to all information collections.
           Rather, it applies only to surveys that are used for
           general-purpose statistics or as part of program evaluations or
           research studies. In addition, it does not provide clear guidance
           on one of the topics mentioned in our recommendation: determining
           whether small entities are affected by the collection and reducing
           reporting burden on these entities.

           OMB also reported that its guidance to agencies will be updated
           through a planned automated system that is to begin operating this
           month.35 According to the former acting head of OMB's Office of
           Information and Regulatory Affairs, the new system will permit
           agencies to submit clearance requests electronically, and the
           instructions will provide clear guidance on the requirements for
           these submissions, including the support required. This official
           stated that OMB has worked with agency representatives with direct
           knowledge of the PRA clearance process in order to ensure that the
           system and its instructions clearly reflect the requirements of
           the process. If this system is implemented as described and OMB
           withholds clearance from submissions that lack adequate support,
           it could lead agencies to strengthen the support provided for
           their certifications.

           In conclusion, Madam Chairman, the PRA puts in place mechanisms to
           focus agency attention on the need to minimize the burden that
           information collections impose-while maximizing the public benefit
           and utility of government information collections-but these
           mechanisms have not succeeded in achieving the ambitious reduction
           goals set forth in the 1995 amendments. Achieving real reductions
           in the paperwork burden is an elusive goal, as attested by years
           of OMB's annual PRA reports, including the latest. That report
           shows the largest rise in estimated burden for the last several
           years, mostly due to new statutory requirements and how they have
           been implemented. As we have seen, the tendency is for burden to
           rise unless agencies take active steps to reduce it. Agencies have
           taken such actions-by cutting redundancy, changing forms, and
           using information technology, among other things-but these have
           not been enough to make up for the increases.

           Besides demonstrating once again how challenging it is for the
           government to achieve true burden reduction, this year's results
           highlight the need to look for new ways to achieve this and the
           other goals of the PRA. Among the mechanisms already in place is
           the CIO review and certification process. However, as it was
           implemented at the time of our review, this process had limited
           effect on the quality of support provided for information
           collections, and it appeared to have no appreciable impact on
           burden.

           The targeted approaches to burden reduction used by IRS and EPA
           appear promising, but the experience of these agencies suggests
           that success requires top-level executive commitment, extensive
           involvement of program office staff with appropriate expertise,
           and aggressive outreach to stakeholders. However, such an approach
           would probably also be more resource-intensive than the CIO
           certification process, and thus it may not be warranted at
           agencies where paperwork issues do not rise to the level of those
           at IRS and similar agencies. Consequently, it is critical that
           efforts to expand the use of the IRS and EPA models take these
           factors into consideration.

           Madam Chairman, this completes my prepared statement. I would be
           pleased to answer any questions.

33For example, OMB, the Treasury, and HUD disagreed with our finding that
certain forms have been improperly treated as certifications and elections
that are not subject to the PRA. Our view was and is that the forms in
question did not properly fall into this category, because they entailed
significant burden.

34 OMB, Guidance to Agencies on Surveys and Statistical Information
Collections, (Washington, D.C.: Jan. 20, 2006).

35The new system, ROCIS (the RISC/OIRA Consolidated Information System),
is operated for OMB's Office of Information and Regulatory Affairs by the
Regulatory Information Service Center of the General Services
Administration.

                          Contacts and Acknowledgments

For future information regarding this testimony, please contact Linda
Koontz, Director, Information Management, at (202) 512-6420, or
[email protected]. Other individuals who made key contributions to this
testimony were Barbara Collier, Nancy Glover, and Alan Stapleton.

                       Attachment 1. Related GAO Products

Paperwork Reduction Act: New Approaches Can Strengthen Information
Collection and Reduce Burden. GAO-06-477T. Washington, D.C.: March 8,
2006.

Paperwork Reduction Act: Subcommittee Questions Concerning the Act's
Information Collection Provisions. GAO-05-909R. Washington, D.C.: July 19,
2005.

Paperwork Reduction Act: Burden Reduction May Require a New Approach.
GAO-05-778T. Washington, D.C.: June 14, 2005.

Paperwork Reduction Act: New Approach May Be Needed to Reduce Government
Burden on Public. GAO-05-424. Washington, D.C.: May 20, 2005.

Paperwork Reduction Act: Agencies' Paperwork Burden Estimates Due to
Federal Actions Continue to Increase. GAO-04-676T. Washington, D.C.: April
20, 2004.

Paperwork Reduction Act: Record Increase in Agencies' Burden Estimates.
GAO-03-619T. Washington, D.C.: April 11, 2003.

Paperwork Reduction Act: Changes Needed to Annual Report. GAO-02-651R.
Washington, D.C.: April 29, 2002.

Paperwork Reduction Act: Burden Increases and Violations Persist.
GAO-02-598T. Washington, D.C.: April 11, 2002.

Information Resources Management: Comprehensive Strategic Plan Needed to
Address Mounting Challenges. GAO-02-292. Washington, D.C.: February 22,
2002.

Paperwork Reduction Act: Burden Estimates Continue to Increase.
GAO-01-648T. Washington, D.C.: April 24, 2001.

Electronic Government: Government Paperwork Elimination Act Presents
Challenges for Agencies. GAO/AIMD-00-282. Washington, D.C.: September 15,
2000.

Tax Administration: IRS Is Working to Improve Its Estimates of Compliance
Burden. GAO/GGD-00-11. Washington, D.C.: May 22, 2000.

Paperwork Reduction Act: Burden Increases at IRS and Other Agencies.
GAO/T-GGD-00-114. Washington, D.C.: April 12, 2000.

EPA Paperwork: Burden Estimate Increasing Despite Reduction Claims.
GAO/GGD-00-59. Washington, D.C.: March 16, 2000.

Federal Paperwork: General Purpose Statistics and Research Surveys of
Businesses. GAO/GGD-99-169. Washington, D.C.: September 20, 1999.

Paperwork Reduction Act: Burden Increases and Unauthorized Information
Collections. GAO/T-GGD-99-78. Washington, D.C.: April 15, 1999.

Paperwork Reduction Act: Implementation at IRS. GAO/GGD-99-4. Washington,
D.C.: November 16, 1998.

Regulatory Management: Implementation of Selected OMB Responsibilities
Under the Paperwork Reduction Act. GAO/GGD-98-120. Washington, D.C.: July
9, 1998.

Paperwork Reduction: Information on OMB's and Agencies' Actions.
GAO/GGD-97-143R. Washington, D.C.: June 25, 1997.

Paperwork Reduction: Governmentwide Goals Unlikely to Be Met.
GAO/T-GGD-97-114. Washington, D.C.: June 4, 1997.

Paperwork Reduction: Burden Reduction Goal Unlikely to Be Met.
GAO/T-GGD/RCED-96-186. Washington, D.C.: June 5, 1996.

Environmental Protection: Assessing EPA's Progress in Paperwork Reduction.
GAO/T-RCED-96-107. Washington, D.C.: March 21, 1996.

Paperwork Reduction: Burden Hour Increases Reflect New Estimates, Not
Actual Changes. GAO/PEMD-94-3. Washington, D.C.: December 6, 1993.

(310744)

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www.gao.gov/cgi-bin/getrpt? GAO-06-974T .

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For more information, contact Linda Koontz at (202) 512-6240 or
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Highlights of GAO-06-974T , a testimony before the Subcommittee on
Regulatory Affairs, Committee on Government Reform, House of
Representatives

July 18, 2006

PAPERWORK REDUCTION ACT

Increase in Estimated Burden Hours Highlights Need for New Approach

Americans spend billions of hours each year providing information to
federal agencies by filling out information collections (forms, surveys,
or questionnaires). A major aim of the Paperwork Reduction Act (PRA) is to
minimize the burden that responding to these collections imposes on the
public, while maximizing their public benefit. Under the act, the Office
of Management and Budget (OMB) is to approve all such collections and to
report annually on the agencies' estimates of the associated burden. In
addition, agency chief information officers (CIO) are to review
information collections before submitting them to OMB for approval and
certify that the collections meet certain standards set forth in the act.

GAO was asked to testify on OMB's burden report for 2005 and on a previous
study of PRA implementation ( GAO-05-424 ), which focused on the CIO
review and certification processes and described alternative processes
that two agencies have used to minimize paperwork burden. To prepare this
testimony, GAO reviewed the current burden report and its past work in
this area. For its 2005 study, GAO reviewed a governmentwide sample of
collections, reviewed processes and collections at four agencies that
account for a large proportion of burden, and performed case studies of 12
approved collections at the four agencies.

After 2 years of slight declines, OMB reports that paperwork burden grew
in fiscal year 2005 and is expected to increase further in fiscal year
2006. Estimates in OMB's annual report to Congress show that the total
paperwork burden imposed by federal information collections increased last
year to about 8.4 billion hours-an increase of 5.5 percent from the
previous year's total of about 8.0 billion hours. Nearly all this increase
resulted from the implementation of new laws (for example, about 224
million hours were due to the implementation of voluntary prescription
drug coverage under Medicare). The rest of the increase came mostly from
adjustments to the estimates due to such factors as changes in estimation
methods and in the numbers of respondents. Looking ahead to fiscal year
2006, OMB expects an increase of about 250 million hours because of a new
model for estimating burden being implemented by the Internal Revenue
Service (IRS). According to OMB, this expected rise does not reflect any
real change in the burden on taxpayers, but only in how IRS estimates it.

The PRA requires that CIOs review information collections and certify that
they meet standards to minimize burden and maximize utility; however,
these reviews were not always rigorous, reducing assurance that these
standards were met. In 12 case studies at four agencies, GAO determined
that CIOs certified collections proposed by program offices despite
missing or inadequate support. Providing support for certifications is a
CIO responsibility under the PRA, but agency files contained little
evidence that CIO reviewers had made efforts to improve the support
offered by program offices. Numerous factors contributed to these
problems, including a lack of management attention and weaknesses in OMB
guidance. Based on its review, GAO recommended (among other things) that
agencies strengthen the support provided for certifications and that OMB
update its guidance to clarify and emphasize this requirement. Since GAO's
study was issued, the four agencies have reported taking steps to
strengthen their support for CIO certifications, such as providing
additional resources and guidance for the process, and OMB has updated
parts of its guidance.

In contrast to the CIO review process, which did not lead to reduced
paperwork burden in GAO's 12 case studies, IRS and the Environmental
Protection Agency (EPA) have set up alternative processes specifically
focused on reducing burden. These agencies, whose missions involve
numerous information collections, have devoted significant resources to
targeted burden reduction efforts that involve extensive outreach to
stakeholders. According to the two agencies, these efforts have led to
significant reductions in paperwork burden on the public. In light of
these promising results, the weaknesses in the current CIO review process,
and the persistent increases in burden, a new approach to burden reduction
appears warranted. GAO suggested that Congress should consider mandating
pilot projects to target some collections for rigorous analysis along the
lines of the IRS and EPA approaches.

United States Government Accountability Office

GAO

Testimony

Before the Subcommittee on Regulatory Affairs, Committee on Government
Reform, House of Representatives

For Release on Delivery

2:00 p.m. EDT Tuesday, July 18, 2006

PAPERWORK REDUCTION ACT

Increase in Estimated Burden Hours Highlights Need for New Approach

Statement of Linda D. Koontz, Director

Information Management

GAO-06-974T

This is a work of the U.S. government and is not subject to copyright
protection in the United States. It may be reproduced and distributed in
its entirety without further permission from GAO. However, because this
work may contain copyrighted images or other material, permission from the
copyright holder may be necessary if you wish to reproduce this material
separately.
*** End of document. ***