Statistical Agencies: Adherence to Guidelines and Coordination of Budgets
(Chapter Report, 08/09/95, GAO/GGD-95-65).
Pursuant to a congressional request, GAO evaluated the performance of
the Bureaus of the Census, Economic Analysis, and Labor Statistics, and
the National Center for Health Statistics based on selected National
Academy of Sciences (NAS) guidelines. GAO also provided information on
the Office of Management and Budget's (OMB) role in coordinating and
overseeing the statistical activities of the 72 agencies that constitute
the federal statistical system.
GAO found that: (1) the four agencies adhered, with only minor
exceptions, to five of the seven selected NAS guidelines; (2) the NAS
guidelines emphasize the importance of a statistical agency maintaining
the credibility of its data and that it be perceived as free from
political interference and policy advocacy; (3) coordination and sharing
between federal, state, and local statistical agencies increased their
effectiveness and efficiency; (4) in general, each agency had a clearly
defined and well-accepted mission statement, cooperated with data users,
treated data providers fairly, openly described to users all aspects of
its data, and widely disseminated its data; (5) the agencies did not
fully adhere to the guideline on protecting their independence from
political influence because they did not always sufficiently communicate
their procedures to data users; (6) the agencies could not fully
coordinate with other statistical agencies because of statute
limitations to protect data providers' confidentiality; (7) OMB
oversight and coordination of agencies' statistical activities is
limited by a lack of staff resources; and (8) OMB is revising its formal
process for reviewing statistical agencies' budgets in order to allocate
its resources for coordination more effectively.
--------------------------- Indexing Terms -----------------------------
REPORTNUM: GGD-95-65
TITLE: Statistical Agencies: Adherence to Guidelines and
Coordination of Budgets
DATE: 08/09/95
SUBJECT: Economic indicators
Statistical data
Interagency relations
Income statistics
Census
Labor statistics
Data collection operations
Data integrity
Economic analysis
Information dissemination operations
IDENTIFIER: Council of Economic Advisors Economic Statistics Initiative
Consumer Price Index
Census Bureau Current Population Survey
National Health Interview Survey
NCHS National Health Care Survey
National Performance Review
BLS Labor Market Information Program
BLS Occupational Safety and Health Statistics Program
BEA National Income Account
BEA National Product Account
OMB 2000
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Cover
================================================================ COVER
Report to Congressional Requesters
August 1995
STATISTICAL AGENCIES - ADHERENCE
TO GUIDELINES AND COORDINATION OF
BUDGETS
GAO/GGD-95-65
Guidelines and Coordination of Budgets
Abbreviations
=============================================================== ABBREV
BEA - Bureau of Economic Analysis
BLS - Bureau of Labor Statistics
CNSTAT - Committee on National Statistics
CPI - consumer price index
CRS - Congressional Research Service
GDP - gross domestic product
NAS - National Academy of Sciences
NCHS - National Center for Health Statistics
NPR - National Performance Review
OIRA - Office of Information and Regulatory Affairs
OMB - Office of Management and Budget
Letter
=============================================================== LETTER
B-260037
August 9, 1995
The Honorable John Glenn
Ranking Minority Member
Committee on Governmental Affairs
United States Senate
The Honorable Joseph Lieberman
United States Senate
This report responds to your request that we use selected guidelines
developed by the National Academy of Sciences to evaluate the
performance of four statistical agencies--the Bureaus of the Census
and Economic Analysis in the Department of Commerce, the Bureau of
Labor Statistics in the Department of Labor, and the National Center
for Health Statistics in the Department of Health and Human Services.
The National Academy of Sciences issued these guidelines to describe
an effective federal statistical agency and its operation. You also
asked that we provide information on the role of the Office of
Management and Budget in coordinating and overseeing the statistical
activities of those agencies that constitute the federal statistical
system.
We are sending copies of this report to the Secretaries of Commerce,
Labor, and Health and Human Services; the Directors of the Bureau of
the Census, Bureau of Economic Analysis, and the National Center for
Health Statistics; the Commissioner of Labor Statistics; the Director
of the Office of Management and Budget; and other interested parties.
Copies will also be made available to others on request.
If you have any questions concerning this report, please call me on
(202) 512-8676. Major contributors to this report are listed in
appendix II.
L. Nye Stevens
Director, Federal Management
and Workforce Issues
EXECUTIVE SUMMARY
============================================================ Chapter 0
PURPOSE
---------------------------------------------------------- Chapter 0:1
The former Chairman of the Senate Committee on Governmental Affairs
and the former Chairman of its former Subcommittee on Regulation and
Government Information asked GAO to evaluate certain aspects of the
performance of four major statistical agencies--the Bureau of the
Census, the Bureau of Labor Statistics (BLS), the Bureau of Economic
Analysis (BEA), and the National Center for Health Statistics
(NCHS)--using selected guidelines developed by the National Academy
of Sciences (NAS). The requesters also asked GAO to provide
information on the activities of the Office of Management and Budget
(OMB) to coordinate and oversee the statistical activities of the
agencies that constitute the federal statistical system.
BACKGROUND
---------------------------------------------------------- Chapter 0:2
Seventy-two federal agencies each requested at least $500,000 in
fiscal year 1995 for statistical activities and constitute the
federal statistical system. Together these agencies requested a
total of about $2.6 billion in direct funding in fiscal year 1995 for
statistical activities, such as data collection and dissemination.
Census, BLS, BEA, and NCHS represent a cross section of the major
agencies of the federal statistical system and accounted for nearly
30 percent ($752 million) of the requested federal budget for
statistical activities in fiscal year 1995. Census publishes a wide
variety of data about the people and the economy of the nation,
including the decennial, economic, and agricultural censuses. BLS
provides data on the U.S. workforce, prices, and consumer
expenditures. BEA primarily analyzes data collected by other
agencies in order to prepare the nation's economic accounts, such as
the gross domestic product. NCHS specializes in data on the U.S.
population's health status, lifestyle, and exposure to unhealthful
influences. OMB is responsible for coordinating the budgets and
activities of the agencies in the federal statistical system and
issues an annual report summarizing federal statistical activities
for agencies with funding levels of $500,000 or more for such
activities.
In 1992, NAS published a report that outlined 11 guidelines that
federal statistical agencies should follow to operate effectively.
GAO used seven of these guidelines that GAO regarded as the most
susceptible to objective assessment to evaluate the four agencies.
These guidelines called for statistical agencies to (1) have clearly
defined and well-accepted missions, (2) cooperate with data users,
(3) have established procedures for the fair treatment of data
providers, (4) be open about the data provided to users, (5) widely
disseminate the data, (6) coordinate with other statistical agencies,
and (7) have a strong measure of independence.
RESULTS IN BRIEF
---------------------------------------------------------- Chapter 0:3
The four agencies adhered, with only minor exceptions, to five of the
seven NAS guidelines GAO used in its review. In general, each agency
had a clearly defined and well-accepted mission statement, cooperated
with data users by soliciting their views on data quality, exhibited
fair treatment of data providers, openly described all aspects of its
data to users, and widely disseminated the data it produced.
However, the four agencies did not or could not adhere to all aspects
of two of the guidelines. First, although all of the agencies had
procedures in place to protect their independence from political
interference, individual agencies had not always sufficiently
communicated these procedures to data users. For instance, data
users had questioned the integrity of BEA estimates of first quarter
1991 Gross Domestic Product, although GAO found no evidence that this
integrity was actually compromised. Second, the four agencies'
coordination with other federal statistical agencies has been limited
by statutes intended to protect the confidentiality of data
providers.
OMB is charged with ensuring that the activities of the statistical
agencies are in line with federal statistical policy by coordinating
agency budget requests and interagency groups working on statistical
issues, issuing statistical standards, and reviewing agency requests
to collect information. Currently, OMB's Statistical Policy Branch
prepares a summary report of the budgets that statistical agencies
submit to Congress. Many observers have commented, however, that the
Branch does not have a staff large enough to do an effective job of
coordinating federal statistical policy. OMB officials acknowledged
that resources for federal statistical activities could be allocated
more effectively if OMB changed its formal process for reviewing
statistical agency budgets. OMB is currently considering changes to
strengthen this process.
GAO'S ANALYSIS
---------------------------------------------------------- Chapter 0:4
THE FOUR AGENCIES GENERALLY
FOLLOWED MOST GUIDELINES
-------------------------------------------------------- Chapter 0:4.1
GAO's analysis of documentation provided by the four agencies showed
that each generally followed five of the seven selected NAS
guidelines. The documents indicate that each agency
had a clearly defined and well-accepted mission that had been in
effect for a number of years;
cooperated with data users by soliciting their views on the
relevance and usefulness of the data the agency provided;
established procedures for fair treatment of its data providers,
including procedures designed to protect the confidentiality of
data providers;
had procedures for openness with data users to make available a
wide range of data products to users and publish information on
how the data were prepared; and
established policies for wide dissemination of data through
release, distribution, and preservation of statistical data.
According to the NAS guidelines, it is essential that a statistical
agency maintain credibility for itself and for its data and that both
must be perceived to be free of political interference and policy
advocacy. This can be difficult to achieve. For example, GAO found
instances where allegations of political manipulation had been made
against BEA, although none of these allegations were substantiated.
In a March 1993 report\1 GAO noted that a collection of articles that
appeared in the press from October 1991 through November 1992 alleged
that BEA had manipulated its first quarter gross domestic product
estimates for political purposes. The report concluded that the
allegations were not substantiated and recommended actions to avoid
such allegations in the future. In response, BEA adopted a "Strategy
to Improve the Perceived Integrity of BEA's Estimates," which calls
for greater communication about BEA's procedures and safeguards to
protect the integrity of its statistical data.
The NAS guidelines also stress the importance of federal statistical
agencies' coordinating with each other as well as with state and
local statistical agencies. In addition, the NAS guidelines state
that statistical agencies are more effective and efficient when they
are able to make use of other agencies' data and administrative
records. However, GAO found that the ability of federal agencies to
share data for purely statistical uses was impeded by laws and
regulations intended to protect the confidentiality of data
providers. For example, agencies that paid Census to collect data
for them at times had only limited access to the data because of
confidentiality laws. OMB and several statistical agencies have been
exploring legislative options that would allow agencies to share data
for statistical purposes, and the National Performance Review has
made a recommendation on the subject with which GAO generally agrees.
GAO found that each of the four agencies cooperated with state and
local governments to the extent necessary to obtain the subnational
data they needed.
--------------------
\1 See Gross Domestic Product: No Evidence of Manipulation in First
Quarter 1991 Estimates
(GAO /GGD-93-58, Mar. 10, 1993).
OMB IS RESPONSIBLE FOR THE
COORDINATION OF THE FEDERAL
STATISTICAL SYSTEM BUDGET
-------------------------------------------------------- Chapter 0:4.2
Because so many federal agencies are involved in producing
statistics, coordination of their activities is essential for the
effective and efficient implementation of federal statistical
programs. The Paperwork Reduction Act of 1980 assigned OMB the
responsibility for coordinating federal statistical policy. The act
specifically directed OMB to review statistical agencies' budget
submissions to ensure that federal statistical activities are
coordinated. At the time of GAO's review, OMB had assigned five
professional staff to its Statistical Policy Branch, which is
responsible for reviewing agencies' budgets as well as other policy
and coordination functions. Published studies of OMB's role in
coordinating the federal statistical system have noted that a staff
of five is not sufficient to do the detailed budget reviews necessary
to ensure the coordination of federal statistical policy. The Branch
currently prepares a summary report of the statistical budgets of
individual agencies as submitted in the President's budget to
Congress. Since the Branch was established, it has issued the report
after Congress has started to determine the agencies' budgets.
OMB officials acknowledged that resources for federal statistical
activities could be more effectively allocated if OMB changed its
formal process for reviewing agency budget requests to ensure that
the requests are more in line with governmentwide statistical system
priorities. OMB is in the midst of strengthening the process for
reviewing statistical agency budgets.
RECOMMENDATIONS
---------------------------------------------------------- Chapter 0:5
GAO is not making any recommendations in this report.
AGENCY COMMENTS
---------------------------------------------------------- Chapter 0:6
BLS, NCHS, and OMB provided comments and the Department of Commerce
offered comments from Census and BEA on a draft of this report. Most
of the comments were suggestions for technical clarifications and
corrections, which have been incorporated as appropriate. BEA asked
that GAO note that the statistical agencies play an active role in
enhancing data sharing among themselves and that BEA has been
actively soliciting input from users as it reviews the performance of
its economic accounts. GAO revised the report to include discussions
of statistical agency data sharing and BEA's review of its economic
accounts. OMB said the draft did not adequately reflect the full
extent of its coordination of the federal statistical system. GAO
expanded its discussion of OMB's statistical budget and policy
coordination functions.
INTRODUCTION
============================================================ Chapter 1
Because of the federal statistical system's decentralized structure,
the collection and issuance of statistical information depends on the
effective performance of many separate statistical agencies and
programs. The former Chairman of the Senate Committee on
Governmental Affairs and the former Chairman of its Subcommittee on
Regulation and Government Information asked us to (1) evaluate the
performance of four prominent federal statistical agencies using
guidelines developed by the National Academy of Sciences (NAS)\1 and
(2) provide information on the role of the Office of Management and
Budget (OMB) to coordinate and oversee the statistical activities of
the agencies that constitute the federal statistical system. The
four agencies were the Bureau of the Census and the Bureau of
Economic Analysis (BEA) within the Department of Commerce, the Bureau
of Labor Statistics (BLS) within the Department of Labor, and the
National Center for Health Statistics (NCHS) within the Department of
Health and Human Services.
--------------------
\1 By agreement with the Committee, we used NAS' report, Principles
and Practices for a Federal Statistical Agency (Washington, D.C.:
1992), as the source of our criteria for evaluating the four
agencies' performance.
BLS, CENSUS, BEA, AND NCHS ARE
PART OF THE FEDERAL STATISTICAL
SYSTEM
---------------------------------------------------------- Chapter 1:1
The federal statistical system is not a system in the ordinary sense
but rather a designation for the numerous government agencies that
collect, process, analyze, and use quantitative data. Few federal
agencies have data collection as their sole or primary mission, but
OMB in its annual report identifies agencies as conducting
statistical activities when they devote $500,000 or more of their
annual budgets to such activities.\2 If this criterion is used for
definition, the agencies in the federal statistical system could
change from year to year, although the list is quite stable over
time. For fiscal year 1995, 72 agencies met or exceeded the $500,000
budget level. Although the majority of these agencies produce
statistical information on a particular subject as a byproduct of
their administrative, regulatory, or operating responsibilities,
several agencies have the production of statistical information as
their principal mission.
Some federal statistics are used by persons with varying information
needs; such statistics are frequently called general-purpose
statistics. Other statistics are special purpose in character and
deal with one subject matter (e.g., education or transportation);
they focus on a particular function of government and are primarily
designed to aid program administrators and policymakers. The bulk of
these other statistics relate to specific federal programs and are
essentially a byproduct of the agencies' administration or monitoring
of these activities.
The four agencies whose conformance with the selected NAS guidelines
we evaluated are major, well-recognized multipurpose agencies\3 of
the federal statistical system. Census tabulates and publishes a
wide variety of data about the people and the economy of the nation.
These data include the Decennial Census of Population and Housing,
the economic and agricultural censuses, and data on U.S. merchandise
trade. BLS collects, processes, analyzes, and disseminates data on
employment, unemployment, characteristics of employment and
employees, and prices and consumer expenditures.
BEA is a research-oriented statistical agency that prepares,
develops, interprets, and publishes the U.S. economic accounts. BEA
integrates large volumes of monthly, quarterly, and annual economic
data--ranging from construction spending to retail sales--produced by
other government agencies and trade sources to produce a complete and
consistent picture of the national economy and its international and
regional dimensions.\4
NCHS specializes in health statistics, including vital statistics
from marriage, birth, and death certificates. It collects, analyzes,
disseminates, and carries out research on the U.S. population's
health status, lifestyles, and exposure to unhealthful influences.
Although Census, BLS, BEA, and NCHS are responsible for a large
portion of the statistics produced by the federal government, they
are only 4 of the 72 agencies that constitute the federal statistical
system. For example, NCHS is not the only agency that collects
health statistics. Within the Department of Health and Human
Services, 13 agencies collect health statistics. The largest of
these are the National Institutes of Health and NCHS' parent
organization, the Centers for Disease Control and Prevention. OMB's
Statistical Policy Branch is responsible for coordinating the
activities of the 72 statistical agencies by reviewing agency budget
requests, issuing statistical standards, facilitating interagency
working groups, and reviewing agency information requests. Appendix
I lists by department the names of the 72 agencies in the federal
statistical system that are expected to spend at least $500,000 on
statistical activities in fiscal year 1995.
--------------------
\2 See Statistical Programs of the United States Government: Fiscal
Year 1995, OMB, Annual Report of the Statistical Policy Branch
(Washington, D.C.: 1995). Statistical activities include the
development and implementation of procedures and methods for
collecting statistics; the classification, presentation, and
dissemination of statistics; and the administration of statistical
programs.
\3 The NAS report defines a federal statistical agency as a unit of
the federal government whose principal function is to compile and
analyze data and to disseminate information for statistical purposes.
\4 In December 1991, the Department of Commerce began to use gross
domestic product (GDP) as the primary measure of economic
performance, rather than the previous gross national product measure.
GDP measures the economic performance of all individuals and firms
located in the United States. The balance of payments is the
statistical summary of all of the country's international
transactions.
THE IMPORTANCE OF STATISTICS
ISSUED BY CENSUS, BEA, BLS, AND
NCHS
---------------------------------------------------------- Chapter 1:2
Since the earliest days of the United States, statistics have been
collected and used to describe various facets of the national economy
and population. The Constitution, notably, mandates a decennial
census to count the population. Government policy and private
decisions depend on the availability of accurate and timely
information. In addition, federal, state, and local governments rely
on statistical information to administer programs under their
jurisdictions. Census, BEA, BLS, and NCHS are responsible for many
of the statistics used by policymakers and those who administer
federal programs.
The statistical activities of these four agencies influence
policymakers in their formulation of national policies. For example,
statistics are fundamental to the federal government's efforts to
allocate its annual budget. Federal income tax brackets and some
benefit payments, for instance, are adjusted to mitigate the effects
of inflation.\5 Statistics are also an important part of many
presidential messages and reports. For example, the annual Economic
Report of the President contains extensive statistical appendixes,
and many of the policies and programs discussed in the report are
based on a statistical foundation provided by the four agencies
discussed in this report.\6 In addition, Census' Decennial Census of
Population and Housing is the basis on which representation in
Congress is apportioned among the states.
The uses of federal statistics extend beyond the government.
Decennial census data are used widely by businesses and the media to
examine social trends. Much of the news on the business and
financial pages of the daily press comes from the release of
statistics by BEA, BLS, and Census. Business analysts regularly use
statistics of economic conditions when planning investments and
operations in their own businesses. Labor organizations and
management use statistics on earnings, hours, employment, and prices
in their collective bargaining negotiations. BLS' consumer price
index (CPI), which measures the change in the prices of a uniform
"market basket" of goods and services, is widely used as the measure
for "escalator clauses" in contracts. In employment contracts, for
example, such a clause might tie increases in wages and pensions to
the CPI to keep employee or retiree earnings in line with inflation.
The administration and Congress use statistics produced by these four
agencies as a basis for measuring the results of government programs.
Some data series are built directly into the administration of
programs such as BLS' inflation and Census' poverty indexes. For
example, if the CPI overstated inflation by as little as 0.2
percentage points annually from 1995 through 1999, an estimated $19.1
billion would be added to the deficit over that 5-year period,
according to OMB estimates.\7 In addition, current defense industry
contracts amounting to $90 billion include a purchases and sales
component that is adjusted by BLS' producer price index. And BEA,
BLS, and Census produce local area unemployment, income, and poverty
statistics that are important components of formula programs that
allocate billions of dollars of federal funds to state and local
governments.
The statistics that NCHS produces and disseminates offer many
indicators of the health of the nation's population. From a public
policy perspective, NCHS data are critical in the government's
monitoring of cost and delivery of health care. The use of these
data in research also helps to bring about improvements in the
prevention or treatment of diseases. Because data are usually
published from each NCHS information system separately, the wide
range of NCHS' data is sometimes not apparent. NCHS' data systems
are used to obtain information from individuals, health care
providers, and vital records, such as birth, death, and marriage
certificates; the data systems are useful in studying public health.
--------------------
\5 See Economic Statistics: Measurement Problems Can Affect the
Budget and Economic Policymaking (GAO/GGD-95-99, May 2, 1995).
\6 See Economic Report of the President, prepared by the Council of
Economic Advisers (Washington, D.C.: 1995).
\7 See GAO/GGD-95-99, May 2, 1995.
FEDERAL BUDGET RESOURCES
DEVOTED TO STATISTICAL
ACTIVITIES
---------------------------------------------------------- Chapter 1:3
According to OMB, the 72 agencies that had budgets of $500,000 or
more for statistical activities requested an estimated total of $2.6
billion in direct funding for statistical activities in fiscal year
1995. Many of these agencies also received reimbursements from other
federal agencies, state and local governments, and the private sector
to perform requested statistical activities. Of the requested
funding for the 72 agencies combined, the 4 agencies' share of direct
funding was about $752 million (29.4 percent). Table 1.1 shows the
share that each of the four agencies requested for statistical
funding.
Table 1.1
Total Requested Funding for the Four
Statistical Agencies and All Agencies in
the Federal Statistical System for
Fiscal Year 1995
(Dollars in millions)
Percent of total
1995 direct funding for 1995
direct governmentwide total
Federal statistical funding\ statistical funding\
agency a activities a
-------------------- -------- ------------------ --------
Census Bureau $309.2 12.1% $463.2
Bureau of Labor 310.8 12.2 381.5\b
Statistics
National Center 83.4 3.3 100.6
for Health
Statistics
Bureau of 48.6 1.9 49.4
Economic Analysis
Total four agencies $752.0 29.4% \d
Total other 1,804.7 70.6 \d
agencies\c
Total federal $2,556.7 100.0% \d
statistical system
------------------------------------------------------------
\a Direct funding is from budget requests, and total funding is from
budget requests plus reimbursable and other funding provided by other
sources to perform statistical activities.
\b Includes $56.3 million BLS receives in Treasury trust funds for
state cooperative agreements.
\c Includes the 68 other federal agencies that have budgets of
$500,000 or more for statistical activities.
\d Cumulative direct and total funding is subject to double counting
(e.g, BLS receives direct funding it in turn pays to Census, where it
is recorded as reimbursable funding); therefore, the totals are not
meaningful.
Source: OMB data.
NATIONAL ACADEMY OF SCIENCES'
GUIDELINES
---------------------------------------------------------- Chapter 1:4
The Committee on National Statistics (CNSTAT) of NAS developed
guidelines that it believed were essential for the operation of
federal agencies that conduct statistical activities.\8 CNSTAT is
composed of professionals in the statistical field who have no direct
relationship with the federal government. Since its founding, CNSTAT
has concentrated on reviewing federal statistics on a selective
basis. It also prepares reports on special studies that are intended
to improve the effectiveness of the federal statistical system.
Considering the diversity of the agencies that make up the federal
statistical system, it is difficult to devise standards against which
to measure the agencies' performance. However, CNSTAT developed
guidelines that it believes are essential for the efficient operation
of federal agencies that conduct statistical activities.
NAS issued a CNSTAT report in 1992 entitled Principles and Practices
for a Federal Statistical Agency. CNSTAT prepared this report
partially in response to requests for advice from congressional and
executive officials proposing the creation of new statistical
agencies, such as a Bureau of Environmental Statistics and a Bureau
of Transportation Statistics.\9 These officials were interested in
CNSTAT's views on what constitutes an effective federal statistical
agency. CNSTAT also prepared the report because it was concerned
that federal statistical agencies might sometimes not meet what it
considered acceptable professional standards.
In the NAS report, CNSTAT outlined guidelines that it believes should
be followed by federal statistical agencies. According to NAS, the
guidelines contain principles and practices that are statements of
"best practices," rather than legal requirements or scientific rules.
The guidelines, however, were intended to be consistent with current
laws and statistical theory and practice.
In the report, CNSTAT discussed the following three principles it
found to be essential for the effective operation of a federal
statistical agency. According to these principles, a federal
statistical agency should
be in a position to provide information that is relevant to issues
of public policy,
have a relationship of mutual respect and trust with those who use
its data and information, and
have a relationship of mutual respect and trust with respondents
who provide data and with all data subjects from which it
obtains information.
In the report, CNSTAT also discussed the following 11 guidelines it
found to be essential for the effective operation of a federal
statistical agency. These guidelines are intended as specific
applications of the three broad principles. According to these
guidelines, a federal statistical agency needs
a clearly defined and well-accepted mission,
cooperation with data users by soliciting their views on data
quality,
established procedures for the fair treatment of data providers,
openness about the data provided to users,
coordination with other statistical agencies,
a wide dissemination of data,
a strong measure of independence,
commitment to quality and professional standards,
an active research program,
professional advancement of staff, and
caution in conducting nonstatistical activities.
--------------------
\8 NAS is a private, nonprofit society of scholars established by
Congress in 1863 to advise the federal government on scientific and
technical matters. NAS organized the National Research Council in
1916 to combine the broad community of science and technology with
NAS' purposes of furthering scientific knowledge and providing
information to the federal government.
\9 The proposed legislation for the creation of the Bureau of
Environmental Statistics was not enacted. The Bureau of
Transportation Statistics was established in 1991 by P.L. 102-240.
OBJECTIVES, SCOPE, AND
METHODOLOGY
---------------------------------------------------------- Chapter 1:5
We undertook this review at the request of the former Chairman of the
Senate Committee on Governmental Affairs and the former Chairman of
its former Subcommittee on Regulation and Government Information. To
evaluate the four agencies' performance, we compared their activities
to the seven NAS guidelines for the effective operation of a federal
statistical agency that we regarded as the most susceptible to
objective assessment. We did not include the other four NAS
guidelines that are of a more subjective nature. The original
request for this review specified evaluating Census, BLS, and NCHS.
With the agreement of the requesters, we added BEA to the review
because of its key responsibilities for providing economic data. The
requesters also asked us to provide information on OMB's role in
coordinating and overseeing the statistical activities of those
agencies that constitute the federal statistical system.
Our first objective was to determine to what extent the four
statistical agencies followed the seven NAS guidelines that we used
for comparison. Specifically, we examined whether the four agencies
(1) had clearly defined and well-accepted missions, (2) cooperated
with data users, (3) had established procedures for the fair
treatment of data providers, (4) were open about the data provided to
users, (5) widely disseminated the data, (6) coordinated with other
statistical agencies, and (7) had a strong measure of independence.
To understand the context for these guidelines, we interviewed CNSTAT
officials to document the procedures they used in preparing and
issuing the guidelines. We also interviewed executive branch
officials and other knowledgeable experts about the NAS guidelines;
reviewed relevant literature, such as other NAS publications and
reports about the federal statistical system; and compared the NAS
guidelines to comparable international guidelines for statistical
agencies.
To determine agency compliance with the selected NAS guidelines, we
interviewed officials from each of the four agencies and OMB and
asked them to provide documents to demonstrate their compliance.
These documents included information on missions, activities, and
resource history; legal basis for agency organization and operations;
data dissemination; cooperation with data users; and
coordination/contacts with other governmental organizations and
professional societies. In general, our criterion for compliance
with a guideline was whether agencies had such documentation. We
relied upon interviews and other sources of data to ensure that we
adequately understood the context of this documentation. The
agencies also provided us with background briefing books,
descriptions of statistical programs and publications, agency orders
and operational procedures, budget documents, and other
documentation. We attended meetings of selected agency advisory
committees and boards, meetings with independent groups, and
agency-sponsored user conferences. We also met with key agency
officials to discuss their programs and policies in the context of
the selected guidelines. For example, to determine if the agencies
had clearly defined and well-accepted missions, we discussed with
agency officials the process by which the mission statements were
developed (i.e., through planning conferences or other means) and
compared the mission statements to authorizing legislation and agency
activities to carry out their statistical missions.
Our second objective was to provide information on OMB's role in
coordinating and overseeing the statistical activities of those
agencies that constitute the federal statistical system. To do so,
we reviewed the requirements contained in the Paperwork Reduction Act
for OMB's responsibilities to coordinate the federal statistical
system. We also reviewed published studies on organization and
coordination of the federal statistical system. In agreement with
the requesters, we predominantly focused on OMB's role in
coordinating federal statistical agencies' budgets and did not
address the other aspects of OMB's role, such as assessing the
quality of statistical data, statistical standards, and paperwork
reduction. We reviewed OMB's annual reports on statistical
activities of the U.S. government and the four agencies' budget
submissions for fiscal years 1983 to 1995. We met with officials
from OMB's Statistical Policy Branch, which is responsible for
coordinating the budgets and policies of the federal statistical
system, to discuss the Branch's budget coordination mission and the
resources it has to carry out this mission.
We did our work between June 1992 and February 1995 in Washington,
D.C., in accordance with generally accepted government auditing
standards.
AGENCY COMMENTS AND OUR
EVALUATION
---------------------------------------------------------- Chapter 1:6
The Department of Commerce, BLS, NCHS, and OMB provided comments on a
draft of this report. Commerce's written comments incorporated
comments from BEA and Census. All of Census' and most of BEA's
comments were suggestions for technical clarifications and
corrections, and we have incorporated these suggestions where
appropriate. BEA said that our report underscores the efforts
statistical agencies have made to operate effectively and to maintain
user confidence in the data they produce. BEA also noted that it
agrees in principle with the NAS guidelines and the way we applied
them to the statistical agencies. BEA expressed its appreciation for
our portrayal of how it handled the integrity issues involving
previous GDP estimates. BEA also cited two issues that it believed
needed to be clarified in the report. First, BEA thought that we
portrayed the statistical agencies as passive participants in efforts
to enhance data sharing among themselves. This was not our
intention, and we have revised the report on page 27 to acknowledge
an interagency task force that was formed to develop proposals for
enhanced data sharing. The second issue raised by BEA involved our
discussion of its efforts to get input from data users. BEA felt we
should have mentioned its Mid-Decade Strategic Review and Plan, which
is intended to maintain and review the performance of BEA's economic
accounts. According to BEA, this review includes seeking user input
on how the accounts can be improved. We have revised the report on
page 21 to include a discussion of the mid-decade review and plan.
On June 7, 1995, we met with the Chief Statistician and a senior
economist in OMB's Office of Information and Regulatory Affairs. The
officials generally agreed with our evaluation of the four agencies'
adherence to the selected NAS guidelines. However, the officials
said that our report appeared to indicate that coordination among the
statistical agencies is limited to their data-sharing arrangements.
The officials noted that the agencies coordinate in many ways,
including through working groups on statistical standards, survey
design, and data collection. We did not intend to convey the
impression that agency coordination is limited to data sharing, and
we have revised the report on page 27 to clarify the extent of
coordination among statistical agencies.
The OMB officials also said that the draft did not adequately reflect
the full extent of the coordination activities performed by OMB's
Statistical Policy Branch. We have revised the report on pages 43 to
45 to reflect the description of the Branch's budget coordination
function, which includes working with the major statistical agencies
and the OMB program examiners assigned to them to coordinate the
statistical budgets of these agencies. The officials also said that
the draft did not adequately describe the Branch's role in the
coordination of federal statistical policy. We agree that the Branch
plays an important role in the coordination of federal statistical
policy, but our report focused on its budget coordination function.
However, we have revised the report on pages 17, 18, and 43 to
clarify that the Branch has other responsibilities in addition to
budget coordination. The officials also offered suggestions for
technical corrections and clarifications, which we have incorporated
where appropriate.
BLS and NCHS provided oral comments on the draft report. On June 5,
1995, we met at BLS with the Chief, Division of Management Functions
and the Chief, Division of Financial Planning and Management. The
officials made suggestions for technical corrections and
clarifications, which we have incorporated. On June 6, we spoke with
the Chief of NCHS' Planning, Budget and Legislative staff, who also
made suggestions for technical corrections and clarifications, and
these have also been incorporated.
THE FOUR AGENCIES GENERALLY
FOLLOWED SELECTED GUIDELINES, WITH
SOME EXCEPTIONS
============================================================ Chapter 2
The four agencies adhered to five of the seven selected guidelines
with only minor exceptions. The agencies (1) had clearly defined and
well-accepted mission statements, (2) cooperated with data users by
soliciting their views on data quality, (3) treated data providers
fairly, (4) openly described all aspects of their data to users, and
(5) widely disseminated the data they produced.
However, we found that the agencies did not or could not meet all
aspects of the other two guidelines, which involved the agencies'
coordination with other statistical agencies and their measure of
independence. First, although the agencies coordinated to some
extent with other statistical agencies, their coordination was
limited by data provider confidentiality statutes, and initiatives to
modify the limitations through legislative change have not yet
succeeded. Second, the agencies themselves were generally
politically independent, but we have reported on one instance when a
statistical agency--BEA--had not been successful in conveying this
independence to data users, judging by allegations of political
interference in their work. In a March 1993 report\1 GAO noted that
a collection of articles that appeared in the press from October 1991
through November 1992 alleged that BEA had manipulated its first
quarter gross domestic product estimates for political purposes. The
report concluded that the allegations were not substantiated and
recommended actions to avoid such allegations in the future.
Following our recommendation, BEA has formulated a strategy to
counter misperceptions on the matter of its independence.
--------------------
\1 See Gross Domestic Product: No Evidence of Manipulation in First
Quarter 1991 Estimates (GAO/GGD-93-58, Mar. 10, 1993).
A CLEARLY DEFINED AND
WELL-ACCEPTED MISSION
---------------------------------------------------------- Chapter 2:1
According to the NAS guidelines, a statistical agency should have "a
clearly defined and well-accepted mission." The guidelines note that
an agency's mission should be spelled out in legislation and used in
implementing its regulations so that there is "a clear understanding
of the mission of an agency, the scope of its program, and its
authority and responsibilities." The NAS guideline on mission further
states:
"An agency's mission should include responsibility for assessing
needs for information and determining sources of data,
measurement methods, and efficient methods of collection and
ensuring the public availability of needed data, including, if
necessary, the establishment of a data collection program."
Each agency provided us with statements that described the mission of
the agency, the scope of its program, and its authority and
responsibilities. In addition, officials from each agency described
the process by which the mission statements were developed (e.g.,
through planning conferences). We found some mission statements
contained in legislation; others were issued by the agencies
administratively, which is permissible under the NAS guidelines for
agencies that have only very general legislative authority.
Implementing regulations and official publication releases also
mentioned the missions of the four agencies. All of these agencies
had mission statements that had been in effect for a number of years.
COOPERATION WITH DATA USERS
---------------------------------------------------------- Chapter 2:2
The NAS guideline states:
"A statistics agency should consult with a broad spectrum of
users of its data in order to make its products more useful. It
should:
--seek advice on data concepts, methods, and products in a
variety of formal and informal ways, from data users as well as
from professional and technical subject-matter experts.
--seek advice from external groups on its statistical program as
a whole, on setting statistical priorities, and on the
statistical methodologies it uses.
--endeavor to meet the needs for access to data while
maintaining appropriate safeguards for the confidentiality of
individual responses.
--exercise care to make its data equally accessible to all
potential users."
We found each of the four agencies had policies for requesting and
receiving feedback from data users, including other statistical
agencies, by a variety of means. The agencies also cooperated with
data users by maintaining appropriate confidentiality safeguards of
respondents and making data available to all potential users.
Census, BLS, BEA, and NCHS have communicated with data users mainly
through formal advisory committees of users and statistical data
centers of individual state governments (such as the Census State
Data Center network). The agencies have consulted these advisory
committees and state government units on issues of users' data needs,
including the frequency of surveys, content, geographic level, and
type of product. For example, in conducting its Mid-Decade Strategic
Review and Plan, BEA publicly reviewed the status of its economic
accounts and actively solicited wide user input--including organizing
a well-attended user conference.
In addition to consulting formal advisory groups, all four of the
agencies have on occasion contracted with independent groups to
receive advice on the agencies' respective methodologies. These
contacts also helped make data accessible to all potential users.
For example, BLS contracted with the American Statistical Association
to conduct an independent review of BLS' downward revision of the
March 1991 benchmark for the monthly payroll survey of employment
estimates. Also, at the request of NCHS, NAS and the Institute of
Medicine convened a panel of experts to evaluate NCHS' plans for the
National Health Care Survey.\2 NAS also has convened two ongoing
panels of experts, which were formed at congressional and agency
request, to advise Census on the data requirements of the 2000
Decennial Census and on possible methodological approaches that
Census should take to meet these requirements.
Employees of all four agencies frequently participated in statistical
conferences to exchange ideas with researchers and statisticians from
other federal agencies, universities, and private sector
organizations. In addition, agency employees take part in meetings
with various organizations and professional associations, such as
CNSTAT, the American Statistical Association, the American Economic
Association, the National Association of Business Economists, and
other organizations and associations that are relevant to their
statistical activities and research.
Census, BLS, and NCHS have regular conferences with cooperating state
statistical agencies. On occasion, these three agencies also sponsor
user conferences. For example, BLS sponsored user conferences in
1994 concerning the major redesign of the Current Population Survey
and NCHS has biennial user conferences. In addition, other forms of
contact with data users can include agencies' conducting OMB-approved
surveys on specific data measures. Comments from users are also
sometimes solicited through a published Federal Register notice.
As we noted in chapter 1, government agencies are extensive users of
federal statistics, and the statistical agencies maintain contacts
with these users and among themselves as well. For example, OMB
chairs monthly meetings with executive branch statistical agency
heads to help coordinate agencies' statistical activities.
--------------------
\2 See Toward a National Health Care Survey: A Data System for the
21st Century, National Research Council and Institute of Medicine, a
report of NAS (Washington, D.C.: 1992).
FAIR TREATMENT OF DATA
PROVIDERS
---------------------------------------------------------- Chapter 2:3
The NAS guideline, in part, states:
"To maintain credibility and a relationship of respect and trust
with data subjects and other data providers, an agency must
observe fair information practices. Such practices include:
-- policies and procedures to maintain the confidentiality of
individual responses. An agency avoids activities that might
lead to a misperception that confidentiality assurances have
been breached.
-- informing respondents of the conditions of participation in a
data collection and the anticipated uses of the information.
-- minimizing the contribution of time and effort asked of
respondents, consistent with the purposes of the data collection
activity."
We found that all four agencies had laws, regulations, or policies in
place to maintain the confidentiality of data providers. The
confidentiality provisions of Census, BEA, and NCHS are statutorily
based. BLS relies on a commissioner's order, which is similar in
language to a statutory confidentiality provision, to state its
treatment of the confidential nature of BLS' records.
Census is subject by law to strict confidentiality provisions
controlling data it collects.\3 The Census Bureau cannot "make any
publication whereby the data furnished by any particular
establishment or individual under this title can be identified." The
law also provides penalties for inappropriate disclosure of
information or for uses other than statistical purposes and restricts
access to data to Census employees.
Two statutes contain confidentiality provisions that apply
specifically to BEA. The provision in one statute broadly pertains
to "any statistical information furnished in confidence" to BEA and
provides that the information "shall be held to be confidential, and
shall be used only for the statistical purposes for which it was
supplied."\4 The provision of the other statute--the International
Investment and Trade Services Survey Act-- covers BEA's direct
investment and international services surveys. The provision
specifies that the individual company data collected under the act
can be used only for analytical and statistical purposes, and it
limits access to the data to officials and employees of government
agencies that are specifically designated by the president to perform
functions under the act. A 1990 amendment to the act permits BEA to
share data with Census and BLS to obtain those agencies' more
detailed, establishment-level data for the foreign-owned U.S.
enterprises that report to BEA.\5
NCHS is bound by the Public Health Service Act, as amended. Under
the act, no information NCHS obtains in the course of statistical
activities may be used for any purpose other than that for which it
was supplied, unless authorized under regulations of the Secretary of
Health and Human Services.\6
BLS relies on a commissioner's order to state its treatment of the
confidential nature of BLS' records. The order provides specific
detail on how data are to be safeguarded. BLS sought legislation in
1990 to codify certain confidentiality protection, but Congress did
not act on the legislation.
We did not evaluate the effectiveness of statutory provisions or
regulations in maintaining the confidentiality of the four agencies'
data providers. However, in 1993 NAS issued a report that dealt with
confidentiality issues.\7 The report concluded that opportunities
existed for federal agencies to improve data protection without
diminishing data access. Specifically, the report noted that unless
pledges of confidentiality are backed by legal authority, they
provide an inadequate shield against unauthorized administrative
uses.
In addition, the four agencies provided us with documentation that
shows how they inform respondents of the conditions of participation
in agency data collection and the anticipated uses of the data. For
example, the agencies print on their questionnaires a notice of the
confidential treatment to be accorded the information provided by
respondents. The four agencies also attempt to minimize the time and
effort asked of respondents by following the processes established by
OMB under the Paperwork Reduction Act.\8 Under these processes, OMB
must review and approve data collection questionnaires to ensure that
the paperwork burden on the public is minimized.
--------------------
\3 See 13 U.S.C. 9.
\4 See 15 U.S.C. 176a.
\5 See 22 U.S.C. 3104 (c); see also 22 U.S.C. 3144.
\6 See 42 U.S.C. 242 m(d).
\7 See Private Lives and Public Policies: Confidentiality and
Accessibility of Government Statistics (Washington, D.C.: 1993).
\8 P.L. 96-511, see 44 U.S.C. 3501 et seq.
OPENNESS ABOUT THE DATA
PROVIDED
---------------------------------------------------------- Chapter 2:4
The NAS guideline states:
"An agency should fully describe its data and comment on their
relevance to specific major uses. It should describe the
methods used, the assumptions made, the limitations of data, the
manners by which data linkages are made, and the results of
research on the methods and data."
We found that all four agencies had documentation that established
procedures for openness with data users in describing all aspects of
the agencies' data. (We did not verify agency compliance with these
documented procedures.) Each agency makes a wide range of statistics
and related information available to users and provides publications
explaining the types of statistics it produces. Each agency also
publishes analyses that include the relevance, methodology,
assumptions, and results of the data. For example, monthly
publications, such as BEA's Survey of Current Business and BLS'
Monthly Labor Review, contain statistics and articles that describe
how those statistics were compiled as well as the limitations of the
data. Each of the four agencies provided us with documentation
showing the procedures it is to follow for agency operations and data
dissemination, including publication policies, types of data
products, and publication and release schedules.
WIDE DISSEMINATION OF DATA
---------------------------------------------------------- Chapter 2:5
According to the NAS guideline:
"-- Dissemination of data and information (basic series,
analytic reports, press releases, public-use tapes) should be
timely and public. Avenues of dissemination should be chosen to
reach as broad a public as reasonably possible.
-- Release of information should not be subject to actual or
perceived political interference.
-- An agency should have an established publications policy that
describes, for a data collection program, the types of reports
and other data releases to be made available, the audience to be
served, and the frequency of release.
-- A policy for the preservation of data should guide what data
to retain and how they are to be archived for secondary
analysis."
In its guidelines, NAS included a series of steps that an agency
should follow in releasing and preserving the data for which it is
responsible. We found that the four agencies have policies in place
for data dissemination and preservation that would meet this
guideline. However, one aspect of this guideline indicates that the
release of data should be free of political interference. As we
discuss in the section on the NAS guideline for statistical agency
independence, our previous work\9 indicates that BEA has been subject
to unfounded accusations that its data have been politically
manipulated.
The four agencies disseminate statistics and information on those
statistics to the public. We found that all four generally choose
methods of dissemination of information to reach a broad public
audience. The processes and management of the distribution of
statistical products (e.g., printed, microfiche, film, CD-ROM) are
similar for each of the four agencies. All of the agencies have
publications that describe the types of reports and other
publications on statistical censuses and surveys that are available
to the public. The purpose of these publications is also to
introduce users to the data systems, to suggest research
opportunities, and to indicate how and when data are made available.
Each of these agencies has established orders and policies for the
publishing, release, and distribution of statistics. Each agency
requires all printed and electronic materials and speeches to be
cleared by designated offices (e.g., the Office of Publications and
Special Studies in BLS) before their release. The frequency of
release of economic statistics for all federal statistical agencies
is covered by an OMB directive.
The processes and management regarding policies on archival
preservation and records management are also similar for each of the
four agencies. Each agency is subject to the standards established
by the National Archives and Records Administration and the General
Services Administration for records maintenance and the disposition
of records through transfer to federal records centers.
--------------------
\9 See GAO/GGD-93-58, March 10, 1993.
COORDINATION WITH OTHER
STATISTICAL AGENCIES
---------------------------------------------------------- Chapter 2:6
This NAS guideline emphasizes the importance of federal statistical
agencies' coordinating with each other as well as with state, local,
foreign, and international statistical agencies when appropriate.\10
The guidelines indicate that the most important aspect of
coordination among federal agencies is the sharing of data. The
statistical agencies have been active in recommending and supporting
efforts to enhance data sharing. For example, for the past several
years, the Statistics 2000 task force--composed of members from the
major statistical agencies-- has worked with OMB and Congress in
developing proposals for enhanced data sharing. However, we found
that data sharing among federal agencies was limited by the
provisions designed to protect the confidentiality of individual data
providers. The guideline also states that federal agencies should,
when possible and appropriate, cooperate with state and local
statistical agencies in the provision of subnational data. We found
that the four agencies cooperated with state and local governments to
the extent necessary to obtain the subnational data they needed.
--------------------
\10 Cooperation with foreign and international statistical agencies
occurs, for example, when U.S. agencies work with Canada to improve
the accuracy of trade statistics or work with the United Nations to
standardize international reporting concepts for national accounts.
See Measuring U.S.-Canada Trade: Shifting Trade Winds May Threaten
Recent Progress (GAO/GGD-94-4, Jan. 19, 1994).
DATA SHARING LIMITED BY
CONFIDENTIALITY STATUTES
-------------------------------------------------------- Chapter 2:6.1
According to the NAS guideline:
"Data sharing and statistical uses of administrative records
make a statistical agency more effective as well as efficient."
The issue of data sharing among federal agencies for statistical
purposes has been a long-standing and complicated problem. Because
the federal statistical system is decentralized, different agencies
are sometimes responsible for the various stages of statistics
production. For example, Census conducts the Current Population
Survey, which is the source of the nation's monthly unemployment
estimates, but BLS calculates and releases these estimates.
Decentralization also results in different agencies' obtaining data
from the same source; for instance, both Census and the Department of
Agriculture survey farm owners.
However, agency confidentiality provisions discussed earlier that
permit data to be seen only by the employees of a single agency
present a formidable barrier to meeting the data sharing envisioned
by the NAS guideline. In some instances, to comply with
confidentiality requirements, agencies must duplicate the work being
done by other agencies. For example, the National Agricultural
Statistics Service of the Department of Agriculture must compile its
own list of farms because it does not have access to the list of
farms compiled by Census for conducting the agricultural census.
Similarly, other agencies are not allowed access to Census' Standard
Statistical Establishment List for statistical sampling purposes.
Because of provisions limiting access to Census records, other
statistical agencies at times have had only limited access to data
the agencies had paid Census to collect. While BLS and BEA have
recently been allowed more access to these data from the Census
Bureau, the problem still exists for other statistical agencies,
including NCHS.
Over the past decade, OMB has sought legislative changes that would
allow greater sharing of data and information on data sources among
agencies, but its efforts have met with little success. The
Paperwork Reduction Act of 1980 gave the Director of OMB the
authority to direct a statistical agency to share information it had
collected with another statistical agency. However, this authority
was limited since it did not apply to information that was covered by
laws prohibiting disclosure outside the collecting agency. In the
early 1980s, the statistical agencies, under OMB's leadership, tried
to further enable federal statistical agencies to share data. They
attempted to synthesize, in a single bill, a set of confidentiality
policies that could be applied consistently to all federal agencies
or their components that collected data for statistical purposes.
This effort, known as the "statistical enclave" bill, would have
allowed statistical agencies to exchange information under specific
controls intended to preserve the confidentiality of the data
providers. A bill was introduced in Congress but was not enacted.
During the Bush administration, OMB drafted legislation that would
have permitted disclosure of information to statistical agencies on a
case-by-case basis and only for statistical purposes. The
legislation was not introduced in Congress.
Some recent laws that established new statistical agencies or data
requirements do permit data sharing among federal statistical
agencies. The confidentiality provisions of the laws that created
the National Agricultural Statistics Service\11 and the National
Center for Education Statistics\12 allow these agencies to share
their data with other agencies as long as confidentiality is
maintained. The National Agricultural Statistics Service, for
example, has used its statutory authority to facilitate data exchange
agreements with Census. Similarly, to improve the quality of data on
foreign direct investment in the United States, the Foreign Direct
Investment and International Financial Data Improvements Act of 1990
required BEA and Census to share data and required BEA to provide
data to BLS to develop establishment-level information on foreign
direct investment in the United States. The act stipulated that the
agencies maintain the confidentiality of data providers.
The National Performance Review (NPR) recommended the elimination of
legislative barriers to the exchange of business data among federal
statistical agencies, and we agree with this recommendation.\13 The
NPR recommendation does not address the sharing of information on
individuals. The NAS guideline on data sharing does not distinguish
between data on businesses and data on individuals. Some officials
of statistical agencies and Members of Congress, however, have argued
that a distinction should be made between the sharing of business
data and the sharing of personal data about individuals. They note
that breaches of confidentiality protection for personal information
may be more serious.
--------------------
\11 See 7 U.S.C. 2276.
\12 See 20 U.S.C. 1221e-1.
\13 See Management Reform: GAO's Comments on the National
Performance Review's Recommendations (GAO/OCG-94-1, Dec. 3, 1993),
p. 23.
FEDERAL AGENCIES' CONTACT
WITH STATE AND LOCAL
GOVERNMENTS TO COOPERATE IN
THE COLLECTION AND
DISSEMINATION OF DATA VARIES
-------------------------------------------------------- Chapter 2:6.2
According to the NAS guidelines:
"When possible and appropriate, federal statistical agencies
should cooperate with state and local statistical agencies in
the provision of data for subnational areas."\14
Each of the four agencies had cooperative arrangements with state and
local governments for obtaining and disseminating statistical data.
However, the extent and nature of these relationships differed by
agency. BEA received most of the data necessary for its estimates on
the domestic economy from other federal agencies and, as a result,
had less direct contact with state agencies. BEA's contacts with
state and local governments were entirely focused on data
dissemination. BEA provides state and county personal income
estimates to over 200 state offices that disseminate the data to
users within each state. BEA also makes its long-term regional
projections of employment available before they are finalized to
state planning offices to aid them in preparing their own
projections.
Census has extensive contact with state and local governments to
cooperate in both disseminating and obtaining data. Census makes
data available to state and local governments through designated
State Data Centers at state statistical agencies or universities.
Census also relies heavily upon state governments as data sources for
data needed for population estimates, apart from the decennial
census, and obtains financial and employment data from state and
local governments for the economic census (including the Census of
Governments) as well as for current economic reports. It also
obtains comments from state and local governments on preliminary
decennial census counts. Census does not, however, provide funding
to state and local governments for any of the assistance they
provide.
NCHS has extensive contact with states to cooperate in collecting and
disseminating health statistics. NCHS relies heavily on states for
health-related information from birth, death, and marriage
certificates. In 1995, NCHS provided $12.9 million to states to
support their health statistical systems. NCHS also works with the
states to develop designated state centers for health statistics that
collect and disseminate data, but it does not provide direct funding
for these centers.
BLS has had extensive contacts with states since 1917 when BLS
inaugurated its current employment statistics program. This program
encouraged states to develop their own statistical offices to
standardize, increase coverage of, and prevent duplication of data on
the part of federal and state governments. BLS relies on states to
collect data for the Labor Market Information program and the
Occupational Safety and Health Statistics program. BLS provides
guidance, training, and federal funds for operational expenses. BLS'
fiscal year 1995 budget proposed purchasing $80.8 million in
statistical services from state and local governments.
--------------------
\14 The NAS guidelines also note that statistical agencies should
cooperate with foreign and international agencies to exchange
information and to develop common classifications and procedures to
promote international comparability of information. Because
international cooperation is not relevant to all of the agencies that
are the subject of this review, we did not include a discussion of
this aspect of the guidelines in this report. However, in our
previous work at Census and BEA, we found several instances where
these agencies worked with foreign and international statistical
agencies. For example, BEA and Census have been working with foreign
statistical agencies through the United Nations to develop a system
of national accounts that would conform with international
guidelines.
A STRONG MEASURE OF
INDEPENDENCE
---------------------------------------------------------- Chapter 2:7
This NAS guideline emphasizes that statistical agencies must be
independent in order to assure users that the data they produce are
free from political interference and policy advocacy. The NAS
guideline on independence states:
"Circumstances of different agencies may govern the exact form
independence takes. Some aspects of independence, not all of
which are required, are the following:
-- independence mandated in organic legislation or encouraged by
organizational structure. In essence, a statistical agency must
be distinct from the enforcement and policy-making activities
carried out by the department in which the agency is located.
To be credible, a statistical agency must clearly be impartial.
It must avoid even the appearance that its collection and
reporting of data might be manipulated for political purposes or
that individually identifiable data might be turned over for
administrative, regulatory, or enforcement purposes.
-- independence of the agency head and recognition that he or
she should be professionally qualified. Appointment by the
President with approval by the Senate, for a specific term not
coincident with that of the administration, strengthens the
independence of an agency head. Direct access to the secretary
of the department or head of the independent agency in which the
statistical agency is located is important.
-- broad authority over scope, content, and frequency of data
collected, compiled, or published. Most statistical agencies
have broad authority, limited by budgetary restraints,
departmental pressures, Office of Management and Budget (OMB)
review, and congressional mandates.
-- primary authority for selection and promotion of professional
staff.
-- recognition by policy officials outside the statistical
agency of its authority to release statistical information
without prior clearance.
-- authority for statistical agency heads and qualified staff to
speak on the agency's statistical program before Congress, with
congressional staff, and before public bodies.
-- adherence to predetermined schedules in public release of
important economic or other indicator data to prevent
manipulation of release dates for political purposes.
-- maintenance of a clear distinction between the release of
statistical information and the policy interpretations of such
statements by the secretary of the department, the President, or
others."
Since the guideline states that agencies need not meet all the
aspects to be independent, we generally examined how each agency
safeguards its independence. We found that for each agency laws
and/or regulations existed to protect the agency's independence.
However, we found that BEA has had problems in one of the most
important aspects of this guideline--avoiding the appearance that its
data are subject to manipulation. Although we found no evidence that
BEA's data have been subject to political manipulation, BEA at times
has had to address allegations that the data were politically
tainted.
AGENCIES GENERALLY COMPLIED
WITH MOST ASPECTS OF THE
INDEPENDENCE GUIDELINE
-------------------------------------------------------- Chapter 2:7.1
Legislative mandates and organizational placement afford a degree of
independence to each of the four agencies. Each agency is
organizationally distinct from its department's enforcement and
policymaking activities. Officials from each of the four agencies
told us that the agencies were not directly involved in their
respective department's policymaking or program implementation.
However, the agencies differ in their organizational placement within
their parent departments, ranging from BLS at the highest
organizational level to NCHS several levels lower. We were unable to
establish whether the level of organizational placement affected the
independence of the four statistical agencies.
The BLS Commissioner and the Census Director are appointed by the
president and confirmed by the Senate, while the directors of BEA and
NCHS are appointed within their respective departments and are not
subject to Senate confirmation. The BLS Commissioner reports
directly to the Secretary of Labor. Census and BEA are in the
Economics and Statistics Administration of the Commerce Department,
and their directors report to the Under Secretary in charge of that
Administration. NCHS is a division of the Centers for Disease
Control and Prevention of the Public Health Service, which are all
within the Department of Health and Human Services. From its
inception in 1977 until 1987, NCHS was placed in the Office of the
Assistant Secretary for Health. Some observers argue that a
statistical agency is more appropriately placed at an assistant
secretary level, primarily because this is a higher level within the
department and can exercise more budgetary control. We were unable
to determine the amount of access the four agency heads had to the
secretaries of the departments in which their agencies are located.
According to members of the CNSTAT panel that wrote the guidelines,
BLS served as a model for CNSTAT in fashioning those aspects of the
guideline dealing with the process for appointing agency heads. The
BLS Commissioner is appointed by the president, confirmed by the
Senate, and has a 4-year term, which is renewable. The fact that the
Commissioner can be reappointed has helped BLS maintain its
continuity of leadership over the years. The previous Commissioner,
who was appointed in 1979, served three terms until December 1991.
Since its inception in 1884, BLS has had only 11 commissioners.
The Census Director is appointed by the president and confirmed by
the Senate, but the term traditionally has been concurrent with
administrations, and the director has served at the "pleasure of the
President." The Director of NCHS is a career position and not a
presidential appointment. The BEA Director also is a career position
and is appointed by the Under Secretary of Commerce for Economic
Affairs.
Although the NAS guideline indicates that independence is best
ensured when a statistical agency head is appointed by the president
and confirmed by the Senate, BEA and NCHS have benefited from the
continuity of having career directors, particularly BEA. Throughout
its history, BEA has had stable leadership from career civil servants
who have been experts in the field of economic statistics. BEA's
first Director was also Director of BEA's predecessor, the Office of
Business Economics, and he served from 1950 to 1964. The second BEA
Director served from 1964 to 1985. The third Director served until
1992, and the fourth Director, who left office this year, previously
served as Deputy Director.
In contrast to BEA, the recent experiences of Census and BLS
illustrate that presidential appointment and confirmation procedures
can take a year or longer, leaving an agency without a formal head
for extended periods of time. For example, for the last 15 years
Census has had an acting director for 42 months (23 percent of the
time); in the last 5 years, Census has had an acting director for 23
months (38 percent of the time). The position of Director of the
Census Bureau was vacant from January 1993 until October 1994.
Similarly, BLS was without a Commissioner from the previous
Commissioner's retirement in December 1991 until the current
Commissioner's confirmation in October 1993. Currently, BEA and NCHS
have acting directors.
The recent heads of the four agencies have professional
qualifications for their positions. Each had advanced degrees in
statistics, economics, or other relevant fields (e.g., medicine).
Each also came from a profession that entails extensively dealing
with statistical data and measurement issues.
Congress is a major user of the statistics produced by all four of
the agencies. The heads of the agencies testify before congressional
committees about the results of their statistical activities and to
explain their budget requests. The agency heads also appear
regularly at user conferences to discuss aspects of their statistical
programs.
As the NAS guideline indicates, one of the ways in which the federal
statistical system can guard against the perception of political
interference is by carefully controlling the release of important
statistical data. The release of economic statistical data produced
by Census, BLS, and BEA is governed by OMB Statistical Policy
Directive No. 3. (Because NCHS produces health and not economic
data, it is not subject to this policy directive.)
Statistical Policy Directive No. 3 provides guidance to federal
statistical agencies on the compilation, release, and evaluation of
principal federal economic indicators. The directive establishes the
authority of the agencies to release statistical information without
prior clearance or policy interpretations. Procedures established by
this directive were designed to ensure that key economic data that
are the basis for government and private sector actions and plans are
released promptly and on a regular schedule, that no one benefits
from "inside" access to the data before they are available to the
public, and that there is public confidence in the integrity of the
data. Also, the directive does not limit the authority of the
agencies over the scope, content, and frequency of economic data
collected, compiled, or published.
Statistical Policy Directive No. 3 has established procedures to
protect against manipulation of the timing or content of major
economic data. The procedures are also designed to defend against
accusations of political interference.\15
NCHS also controls the release of its data, makes the data available
through the National Technical Information Service, and publishes its
data in other federal publications (e.g., Census' Statistical
Abstracts).
Each December, OMB publishes a schedule of the major economic
statistical releases for the next year. For example, OMB has
announced release dates for quarterly data, such as the GDP and
personal income, before the beginning of each calendar year. The
agencies responsible for economic statistics provide the information
on release schedules to OMB in accordance with the directive.
Because most major federal statistics are released according to a set
schedule, the four statistical agencies do not need to seek clearance
from policy officials in their respective departments. Similarly,
these release schedules help to maintain a distinction between the
four agencies' statistical releases and the policy interpretations of
the statistics by department or administration officials.
The four agencies, for the most part, adhere to the other aspects of
this guideline. According to officials from each of the agencies,
their agencies have some authority over the scope, content, and
frequency of data collection, compilation, or publication. However,
this authority is limited by budgetary constraints and federal
regulations, such as those intended to reduce paperwork burdens on
businesses and individuals. Officials from the four agencies also
noted that the heads of their agencies had primary authority for
selection and promotion of professional staff.
--------------------
\15 See GAO/GGD-93-58, March 10, 1993, p. 24.
ACCUSATIONS OF POLITICAL
INTERFERENCE OCCASIONALLY
OCCUR
-------------------------------------------------------- Chapter 2:7.2
Data such as those issued by the four agencies shed light on economic
and social conditions prevailing in the country. The press and
public use these data as indicators of the impact of the policies of
the administration in office. Political leaders recognize this
impact and have occasionally considered attempting to control the
release of statistical data in advantageous ways. It is therefore
important that the data released by statistical agencies not be
manipulated for political purposes nor tainted by a perception that
such manipulation may have occurred. However, we noted in our 1993
report\16 that some BEA and BLS actions may have contributed to the
perception of interference.
In this 1993 report, we examined how BEA had come to be falsely
accused of manipulating economic data and how it dealt with these
allegations. The incident began in October 1991 when an article
appearing in Barron's alleged that BEA, in order to inflate the first
quarter 1991 GDP for political purposes, did not incorporate BLS'
downward revision of employment levels into its estimates of state
personal income growth. Another Barron's article appeared in
December 1991 asserting that BEA increased other components of the
GDP to ensure that there was no economic impact from the employment
revision in the GDP. Through the rest of 1991 and 1992, the press
continued to raise questions and concerns about the integrity and
accuracy of BEA's economic statistics as well as BLS employment data.
Our 1993 review revealed no evidence of political interference or
manipulation of the first quarter GDP estimates. We found that BEA
had properly incorporated employment revisions in its GDP estimates.
We also noted that both BEA and BLS followed their standard data
release policies and that the integrity of the GDP statistics was
sound. However, we concluded that BEA had not adequately publicly
documented or explained its procedures for incorporating employment
data into its GDP estimates. We also concluded that BEA had not
responded to the allegations when they first occurred, which fueled
suspicions that the estimated GDP had been manipulated. We
recommended that BEA formulate a strategy to provide better
explanation and documentation of its procedures to general users and
assure Congress and the general public of the integrity and
credibility of its estimates. Fulfilling this recommendation in May
1993, the Director of BEA forwarded to the Secretary of Commerce "A
Strategy to Improve the Perceived Integrity of BEA's Estimates." This
strategy calls for BEA to communicate more clearly and widely about
technical factors affecting its estimates through a combination of
new technical notes, testimony, briefings, and availability of the
Director to talk with the media. This strategy is to include greater
communication about BEA's procedures and safeguards to protect the
independence and integrity of its statistical estimates.
--------------------
\16 See GAO/GGD-93-58, March 10, 1993, which contains an appendix on
the chronology of events for first quarter 1991 data.
CONCLUSIONS
---------------------------------------------------------- Chapter 2:8
All four statistical agencies generally followed most aspects of the
NAS guidelines discussed in this report. Each agency had a clear and
well-defined mission and procedures designed to enhance cooperation
with data users. Each agency had procedures to maintain the
confidentiality of data providers, inform respondents of data
collection rights and uses of the data, and minimize the time and
effort asked of respondents. In addition, each agency was open with
data users in describing the statistics available, methodology used,
and related information. We found that the four agencies had
policies that generally provided for the dissemination and
preservation of their data.
One of the NAS guidelines calls for coordination among federal
statistical agencies. Although the four agencies generally followed
this guideline, coordination among federal agencies was sometimes
hampered by legal restrictions designed to protect the
confidentiality of data providers. OMB and the statistical agencies
have unsuccessfully sought legislative changes that would lessen
data-sharing restrictions among federal agencies. Finally, while
each agency has policies and procedures to ensure its independent
authority to release statistical information, we found that a
statistical agency can sometimes communicate data in such a way that
may leave users with the misperception that the data had been
manipulated for political purposes.
COORDINATION OF STATISTICAL
AGENCIES' BUDGETS IS LIMITED
============================================================ Chapter 3
NAS' guidelines focused on the principles and practices that NAS
determined were essential for the effective operation of federal
statistical agencies. However, these agencies do not carry out their
statistical activities in isolation but as part of an interdependent
federal statistical system. An interdependent system requires good
coordination to operate effectively. Such coordination is especially
important considering funding limitations faced by all federal
agencies. Legislation requires that OMB, among other
responsibilities for the statistical system, coordinate the budgets
of the statistical agencies to ensure that the budgets conform to
governmentwide statistical priorities.
FEDERAL STATISTICAL SYSTEM IS A
LARGE COLLECTION OF
INTERDEPENDENT AGENCIES
---------------------------------------------------------- Chapter 3:1
Many of the agencies in the federal statistical system produce
statistics to aid only in the administration of mission-related
programs for which they are responsible. However, several, including
the four agencies that are the focus of this report, produce
statistics as their primary missions. Since no one agency is
responsible for the collection and production of all of the nation's
statistical needs, agencies often must work together to ensure that
these statistical needs are met efficiently. Thus, agencies that
collect information in a particular statistical area often must
coordinate with the agencies that analyze and disseminate this
information. For example, BLS relies on Census to conduct the
monthly Current Population Survey from which BLS derives monthly
unemployment statistics. Similarly, although the U.S. Customs
Service collects information on the country's imports and exports,
Census is responsible for analyzing and disseminating this
information as the nation's merchandise trade statistics. The
agencies of the federal statistical system also must share the
limited funds available for performing statistical activities.
AGENCIES IN THE FEDERAL
STATISTICAL SYSTEM ARE
FINANCIALLY INTERDEPENDENT
-------------------------------------------------------- Chapter 3:1.1
The financial interdependence of the federal statistical system is
illustrated by the flow of funds among the four agencies and between
these and other agencies throughout the government. For example,
NCHS pays Census to conduct NCHS' National Health Interview Survey,
which is a source of much of the health data that NCHS issues.
Similarly, BLS pays Census for a major part of the cost of the
Current Population Survey, which BLS uses to produce unemployment
estimates. BEA relies greatly on the data provided by BLS, Census,
and other agencies to produce the National Income and Product
Accounts.\1 OMB estimated in the President's 1995 budget that federal
agencies provided $467 million to the federal statistical agencies
through reimbursements for statistical work, such as conducting
surveys. This amount represents about 15 percent of total federal
funding for the 72 statistical agencies. Moreover, these statistical
agencies were collectively budgeted $232.5 million, which is 9.1
percent of their total direct funding, to purchase, through
reimbursable agreements, statistical services from each other.
Figures 3.1 and 3.2 show fiscal year 1995 reimbursable services and
purchases of statistical data, respectively, as a percentage of total
funding among the four agencies discussed in this report.
Figure 3.1: Fiscal Year 1995
Reimbursable Services as a
Percentage of Total Funding
Among the Four Agencies
(See figure in printed
edition.)
Note: According to OMB budget-scoring rules, BLS' reimbursable
services includes $56.3 million that it receives in Treasury trust
funds for state cooperative agreements. Excluding these trust funds
would result in BLS' reimbursable services being 3.8 percent of its
total funding.
Source: OMB estimates.
Figure 3.2: Fiscal Year 1995
Purchases of Statistical Data
as a Percentage of Total
Funding Among the Four Agencies
(See figure in printed
edition.)
Source: OMB estimates.
--------------------
\1 The National Income and Product Accounts provides a statistical
depiction of the production, distribution, consumption, and saving
undertaken in the U.S. economy.
FUNDING FOR STATISTICAL
ACTIVITIES LIMITED
-------------------------------------------------------- Chapter 3:1.2
In the past few years, limited funding has been available for all
statistical activities, and, as discussed earlier, some statistical
agencies reimburse other agencies for performing statistical
services. Figure 3.3 shows actual budgets for all federal
statistical activities, including decennial censuses, for the period
from 1981 through 1995 in current dollars\2 for the year when the
budgets were approved and in constant 1995 dollars\3 to adjust for
inflation over time. Figure 3.4 shows the same information,
excluding the 10-year cycle of spending for decennial censuses, which
peaks during the year the census is conducted. (The 10- year cycle
of the decennial Census of Population and Housing is not the only
periodic cycle in the data. Several other Census programs, such as
the Economic Census and the Census of Agriculture, are conducted on a
5-year cycle, including 1992.)
Figure 3.3: Actual Budgets for
All Federal Statistical
Activities From 1981 Through
1995 in Current and Constant
Dollars (Dollars in millions)
(See figure in printed
edition.)
Note 1: Constant dollars are in 1995 dollars.
Note 2: Amounts for 1994 and 1995 are estimated for both current and
constant dollars.
Source: OMB data.
Figure 3.4: Actual Budgets for
All Federal Statistical
Activities From 1981 Through
1995 in Current and Constant
Dollars Excluding Decennial
Censuses (Dollars in millions)
(See figure in printed
edition.)
Note 1: Constant dollars are in 1995 dollars.
Note 2: Amounts for 1994 and 1995 are estimated for both current and
constant dollars.
Note 3: Totals include funding for the 5-year Agriculture and
Economic Censuses. The total cost for the 1992 Agriculture and
Economic Censuses were $80 million and $162 million, respectively.
Source: OMB data.
Funding for federal statistical activities, excluding the 10-year
large spending cycle for decennial censuses, has increased in the
past 10 years in constant dollars, from $1,947 million in 1986 to an
estimated $2,508 million in 1995. However, the increase was less
than the amount of funding that federal statistical agency officials
believed would have been needed to adequately maintain the federal
statistical system, given the changes in the economy and society. In
1990, the Bush administration introduced the Economics Statistics
Initiative to improve the coverage and quality of economic
statistics.\4 In fiscal years 1993 and 1994, Census, BLS, and BEA
collectively received 51 percent of their requests for funds for
Economics Statistics Initiative work. In its 1993 budget message,
the Bush administration noted that, because parts of the Economics
Statistics Initiative were not funded by Congress, some statistical
activities had to absorb reductions in order to provide funding for
limited improvements in economic statistics. The message went on to
state that further improvements in economic statistics would require
more resources.
The Clinton administration also supported improving economic
statistics, and its budget included improvement initiatives proposed
by Census, BLS, and BEA. In its fiscal year 1995 budget, the
administration requested $38.3 million in additional funding for
economics statistics improvements. The budget states:
"Our measurements of economic performance are perforated with
gaps in areas of vital importance, areas of public policy
concern are poorly measured if measured at all, the data
gathering system imposes too great a workload on both the
agencies that gather the data and the firms that provide it, and
the resulting product goes underutilized in a world in which
timely and accurate information is often the key to competitive
business success."
As a consequence, the budget proposed increases of $8.6 million for
Census, $17.2 million for BLS (including $5.2 million for its 10-year
CPI revision), $8.1 million for BEA, and $4.4 million for other
statistical agencies.
The two administrations requested a total of $94 million for fiscal
years 1990 through 1994 for improving the quality and coverage of
economic statistics; Congress appropriated about $49 million.
--------------------
\2 The term current dollars refers to the value of a good or service
in terms of the time under consideration, which reflects the
then-prevailing prices of the good or service.
\3 A constant dollar value is measured in terms of prices of a base
period to remove the influence of inflation. The resulting constant
dollar value is the value that would exist if prices had remained the
same as in the base period.
\4 See Economic Statistics: Status Report on the Initiative to
Improve Economic Statistics (GAO/GGD-95-98, June 7, 1995).
OMB IS RESPONSIBLE FOR THE
COORDINATION OF THE FEDERAL
STATISTICAL SYSTEM BUDGET
---------------------------------------------------------- Chapter 3:2
Because agencies often share responsibilities for the production of
federal statistics, it is important that they closely coordinate
their efforts to the extent permitted by law so that the quality of
the end statistical product is maintained. It is also important that
the efforts of these agencies be coordinated in order to avoid
duplication and to ensure that the limited funding available for
statistical activities is used as effectively and efficiently as
possible. The Paperwork Reduction Act of 1980 assigned
responsibility for coordination of the federal statistical system to
OMB. Budget reviews are one way to ensure such coordination among
statistical agencies. The Statistical Policy Branch in OMB is
responsible for, among other responsibilities, coordinating the
budgets of these agencies. The Branch prepares a consolidated report
on budgets for agency statistical programs that have recently been
submitted to Congress after it has begun acting on individual agency
budgets. In many respects, this is due to the difficulty in
determining resources allocated for statistical programs in the 60 or
so agencies that are not primarily statistical in character.
Consequently, Congress has not had a current consolidated picture of
federal statistical activities during its budget deliberations that
would provide a basis for setting priorities and allocating funding
accordingly. The Paperwork Reduction Act of 1995\5 reauthorizes
OMB's budget coordination responsibilities for statistical
activities.
--------------------
\5 P.L. 104-13.
OMB IS RESPONSIBLE FOR
COORDINATING STATISTICAL
BUDGETS
-------------------------------------------------------- Chapter 3:2.1
OMB and its predecessor, the Bureau of the Budget, have been
responsible for oversight of the federal statistical system by
coordinating federal statistical agency budgets for decades. During
the 1960s, OMB's Statistical Policy and Coordination Office had a
staff of about 50 and was responsible for setting statistical policy
and budgetary priorities. The broad-based, detailed budget reviews
by the Bureau of the Budget, and later by OMB, were in part intended
to determine if agency budgets supported these priorities. OMB also
prepared an analysis of budgetary needs for the federal statistical
system that was included in the Presidents' budgets when they were
submitted to Congress in January every year. The Statistical Policy
and Coordination Office at OMB was abolished in 1977, and its
functions and some staff were transferred to the Department of
Commerce. While at the Department of Commerce, staff attended OMB
decision sessions, but they had little input in decisionmaking.
Before the functions were transferred, the office employed 25 staff.
In 1980, the Paperwork Reduction Act returned to OMB the statistical
policy and coordination functions and the staff to carry them out.
Currently, OMB's Statistical Policy Branch is responsible for these
functions and has a professional staff of five.\6 The act does not
determine the number of employees needed to carry out these
functions. The former broad-based, crosscutting review of
statistical programs was not part of the budget process after the
1980 act was implemented.
The need for strong oversight and coordination of the decentralized
federal statistical system was recognized in law by the enactment of
the Paperwork Reduction Act of 1980.\7 The act created the Office of
Information and Regulatory Affairs (OIRA) in OMB and assigned the
Director of OMB and the Administrator of OIRA the responsibility for
overseeing the federal statistical system and coordinating its
activities. OIRA's Statistical Policy Branch functions include the
following:
developing and reviewing long-range plans for the improved
coordination and performance of federal statistical activities
and programs;
reviewing agencies' budget proposals to ensure that the proposals
are consistent with the plans;
coordinating the functions of the federal government that concern
gathering, interpreting, and disseminating statistical
information;
developing and implementing governmentwide policies, principles,
standards, and guidelines concerning data sources, data
collection procedures and methods, and data dissemination;
evaluating statistical program performance and agency compliance
with governmentwide policies, principles, standards, and
guidelines; and
integrating these functions with other information resources
management functions of the government.
The Statistical Policy Branch is headed by a chief statistician who
is appointed by the Administrator of OIRA. The Statistical Policy
Branch currently has a professional staff of four working with the
chief statistician, whose professional responsibilities are divided
as follows:
An economist is responsible for economic statistics, statistical
policy directives, standard industrial classification, standard
occupational classification, and the definition of poverty and
serves as the BEA paperwork clearance desk officer.
A mathematical statistician is responsible for methodology; natural
resource, energy, environment, and agriculture statistics; and
statistical legislation and serves as the Bureau of the Census'
economic surveys paperwork clearance desk officer.
A policy analyst is responsible for international statistical
coordination; health and education statistics; the Survey of
Income and Program Participation; the Branch's annual report,
Statistical Programs of the U.S. Government; a schedule of
release dates for principal economic indicators; and
classification of race and ethnicity.
A statistician is responsible for demographic statistics, the
decennial census, metropolitan areas, and the Federal Committee
on Statistical Methodology and serves as Census' demographic
surveys paperwork clearance desk officer.
--------------------
\6 For a detailed history, see Griffith, Jeanne E., "Oversight of
Statistical Policy," Office of Management and Budget: Evolving Roles
and Future Issues, Senate Committee on Governmental Affairs (Senate
Print 99-134, Feb. 1986), pp. 245- 255.
\7 P.L. 96-511.
PREVIOUS STUDIES CITED
CONCERNS ABOUT OMB'S
RESOURCES FOR STATISTICAL
COORDINATION
-------------------------------------------------------- Chapter 3:2.2
The resources OMB devotes to carrying out its statistical policy
responsibilities have been a subject of controversy since the
Paperwork Reduction Act returned these responsibilities to OMB in
1980. Before the act established the chief statistician position in
OMB, a commission appointed by President Carter to study the
reorganization of the federal statistical system recommended that the
responsibility for coordinating the system be placed in an office in
the Executive Office of the President. The commission further
recommended that such an office should have a staff of about 200 to
carry out this coordinating function. After the act returned
responsibility for both policy and statistical coordination of the
federal statistical system to OMB, several members of the statistical
community voiced concern that the professional staff of five OMB
assigned to its Statistical Policy Branch lacked the capacity for
such a challenging task. For example, the Executive Director of
President Carter's commission wrote in 1983 that:
"The greatest industrial nation in the world with the largest,
most complex society and economy now lacks effective capacity
for central coordination of its statistical activities. This is
a crippling loss since ours is the most decentralized, if not
fragmented, statistical system in the industrial world."\8
In the decade since this statement was made, the controversy over the
ability of the Statistical Policy Branch to adequately coordinate the
federal statistical system has continued. According to an Office of
Technology Assessment report:
"Economic policy will require the best possible measure of the
factors critical for growth and an awareness of areas where
uncertainty prevails. Serving the needs of policy makers in a
time of change will require a coordinated response of the
Nation's statistical agencies. The present management of the
statistical agencies makes such a response difficult."\9
In a 1991 report, NAS noted that in addition to budget and staffing
constraints, the interagency coordination of the federal statistical
system in the previous decade had suffered a reduction in its ability
to draw on and integrate information from a range of databases,
particularly administrative records, and a lag in the reporting of
the classification of business categories, such as the service
industry.\10 NAS concluded that the results of this reduction and lag
were reductions in the timeliness, quantity, and quality of
policy-relevant data and an inaccurate portrayal of the nation's
economy.
In a 1992 report, the Congressional Research Service (CRS) came to a
similar conclusion. It characterized the coordination of the federal
statistical system as "an opera without a conductor."\11 CRS stated
that one of the major barriers to coordinating the statistical system
was OMB's insufficient funding to maintain adequate staff to carry
out this coordination responsibility. CRS noted that OMB's
responsibilities for the oversight and coordination of the
statistical system and those for the reduction of paperwork competed
against other OMB responsibilities for funding and staff.
--------------------
\8 Bonnen, Dr. James T., "Federal Statistical Coordination Today: A
Disaster or a Disgrace?" The American Statistician, Aug. 1983, vol.
37, no. 3.
\9 Office of Technology Assessment, Statistical Needs for a Changing
U.S. Economy (Washington, D.C.: 1989), p. 1.
\10 Citro, Constance F. and Hanushek, Eric A., Improving Information
for Social Policy Decisions: The Uses of Microsimulation Modeling,
National Academy Press (Washington, D.C.: 1991).
\11 Morrison, Sylvia, Federal Economic Statistics: Would Closer
Coordination Make for Better Numbers? (92-784E), Congressional
Research Service, 1992.
OMB COMPILES STATISTICAL
AGENCY BUDGETS
-------------------------------------------------------- Chapter 3:2.3
As part of its responsibility for coordinating the federal
statistical system, the Statistical Policy Branch is to coordinate
the statistical agencies' budget requests, which it does in detail
for the 10 largest statistical agencies. The budget process can be
one of the primary tools for ensuring that the nation's statistical
needs are being addressed effectively and efficiently by federal
statistical agencies. However, according to published studies of
OMB's coordination role, including those by CRS, the Office of
Technology Assessment, and NAS, the Branch does not do the detailed,
systemwide budget reviews required by the act. These reviews are to
enable OMB to determine if the budgetary resources available for
statistical programs are being directed where they are most needed.
The Branch's current role in coordinating federal statistical agency
budgets consists of reviewing budget submissions from the major
statistical agencies and coordinating with OMB Resource Management
Offices responsible for individual agency accounts to promote
compliance with the administration's funding priorities for
statistical agencies. The Branch also reviews some other budget
requests on an ad hoc basis determined by the importance of the
statistical product being funded. For example, the Branch reviews
budget requests relevant to data feeding into National Income and
Product Accounts estimates.
The Branch also compiles agency budget requests for an annual report
to Congress on funding for statistical activities. However, this
report is basically a compilation of the budgets for the statistical
agencies approved by Congress and the current budget requests that
the administration sent to Congress for statistical activities. The
report is not the product of a systematic review of statistical
activities. Since the Branch was established in 1981, it has
delivered the report several months after the individual statistical
agencies have submitted their budgets to OMB and then to Congress.
According to OMB officials, the delay is attributable to delays in
getting necessary data from agencies whose statistical functions are
incorporated in other programs. The officials note that such data
are readily available for the approximately 10 agencies that are the
major components of the federal statistical system. Thus,
congressional committee deliberations have already begun or even, as
in fiscal year 1995, have ended before Congress has received the
report. Therefore, Congress has not had a current, comprehensive
picture of all resources the administration has requested for
statistical activities during budget deliberations. As a result,
Congress is handicapped in its ability to direct funding where it is
most needed, particularly with respect to funding for agencies that
are not among the major statistical agencies.
As noted earlier, for a staff of five, the Statistical Policy Branch
has broad responsibilities. Consequently, according to Branch
officials, the Statistical Policy Branch is sometimes required to
adjust its priorities on the basis of such factors as the imposition
of new administration initiatives or a general shortage of staff.
Statistical Policy Branch officials told us that resources for
federal statistical activities could be allocated more effectively if
a strengthened process were instituted for reviewing statistical
agency budgets. The officials said that they would like OMB to
reinstate its crosscutting review of statistical agency budget
requests to help the administration make any necessary reallocation
of resources within the federal statistical system. Until 1978, such
a review appeared when the president's budget was submitted to
Congress. As the federal government continues to face budget
constraints, it is likely that there will be an increasing need to
reallocate the limited funding available for statistical activities.
In a speech at a recent symposium sponsored by BEA, the Vice Chairman
of the Federal Reserve Board called for a reallocation of funding for
statistical activities.\12 He noted that as a policymaker, he
recognized the importance of accurate statistics on the economy. He
went on to state that reallocating funding resources could help close
some of the gaps in economic statistics, particularly gaps in
statistics on the increasingly important service sector.
OMB is currently settling into a major reorganization, OMB 2000, that
is partly designed to encourage crosscutting reviews of federal
programs. It remains to be seen whether OMB 2000 or other actions
will result in the Statistical Policy Branch leading a crosscutting
review that would coordinate the analysis of statistical agency
budget requests. The Paperwork Reduction Act of 1995 reauthorizes
(1) OMB review of statistical agencies' budget proposals to ensure
that the proposals are consistent with long-range plans and (2) the
development of an annual report to Congress summarizing and analyzing
statistical activities. However, the act does not necessarily
provide additional staff to OMB to perform these responsibilities.
--------------------
\12 Remarks by Alan S. Blinder, Vice Chairman of the Federal Reserve
Board, before the Symposium on Mid-Decade Strategic Review on
Economic Accounts, reprinted in Regulation, Economics and Law, Bureau
of National Affairs, Washington, D.C.: (Mar. 21, 1995).
CONCLUSIONS
---------------------------------------------------------- Chapter 3:3
The federal statistical system is a collection of agencies with
interrelated responsibilities for meeting the nation's statistical
needs. For the federal statistical agencies to work effectively, it
is important that they closely coordinate their activities. The
Paperwork Reduction Act of 1980 assigned OMB the responsibility for,
among other things, coordinating the federal statistical system. The
act specifically directed OMB to review statistical agencies' budget
submissions to ensure that the proposals are consistent with
systemwide priorities.
OMB's Statistical Policy Branch currently reviews the major
statistical agencies' budget submissions. It also prepares a summary
of individual agencies' statistical budgets as submitted in the
president's budget to Congress. Since the Branch was established in
1981, the report has been issued after Congress has already started
to determine the agencies' budgets. To adequately coordinate the
systemwide activities of federal statistical agencies, OIRA would
also need to closely review budget submissions of the smaller
statistical agencies before they are sent to Congress. Such reviews
could identify such inefficiencies as duplication of effort and help
to ensure that the limited federal funds for statistical activities
are spent as effectively as possible.
OMB's current reorganization is intended to improve its ability to
review federal programs. Recent legislation also addresses OMB's
responsibilities. Because of the reorganization, recent legislation,
and the fact that we did not analyze the many other priorities
competing for OMB's attention and resources, we are not making any
recommendations in this report.
LISTING OF FEDERAL STATISTICAL
AGENCIES WITH BUDGETS FOR
STATISTICAL ACTIVITIES OF $500,000
OR MORE
=========================================================== Appendix I
Department Agency
------------------ ----------------------------------------
Agriculture Economic Research Service
Foreign Agricultural Service
Food and Nutrition Service
Forest Service
Human Nutrition Information Service
National Agricultural Statistics Service
Soil Conservation Service
Commerce Bureau of Economic Analysis
Bureau of the Census
International Trade Administration
National Marine Fisheries Service
National Oceanic and Atmospheric
Administration
Office of Business Analysis
Defense Army Corps of Engineers
Defense Manpower Data Center
Office of the Secretary of Defense,
Deputy Assistant Secretary for
Administration
Education National Center for Education Statistics
Energy Energy Information Administration
Office of Energy Research
Federal Energy Regulatory Commission
Office of the Assistant Secretary for
Environment, Safety
and Health
Health and Human Administration for Children and
Services Families
Agency for Health Care Policy and
Research
Administration on Aging
Substance Abuse and Mental Health
Services
Administration
Agency for Toxic Substance and Disease
Registry
Centers for Disease Control and
Prevention
National Center for Health Statistics
Health Care Financing Administration
Health Resources and Services
Administration
Indian Health Service
National Institutes of Health (16
components reporting)
Office of the Assistant Secretary for
Planning and
Evaluation
Social Security Administration
Housing and Urban Community Planning and Development
Development Office of the Assistant Secretary for
Housing
Office of the Assistant Secretary for
Policy Development
and Research
Office of Fair Housing and Equal
Opportunity
Interior Bureau of Mines
United States Fish and Wildlife Service
Minerals Management Service
National Park Service
United States Geological Survey
Justice Bureau of Justice Statistics
Bureau of Prisons
Drug Enforcement Administration
Federal Bureau of Investigation
Immigration and Naturalization Service
Labor Bureau of Labor Statistics
Employment Standards Administration
Employment and Training Administration
Mine Safety and Health Administration
Occupational Safety and Health
Administration
Transportation Bureau of Transportation Statistics
Federal Aviation Administration
Federal Highway Administration
Federal Transit Administration
Maritime Administration
National Highway Traffic Safety
Administration
Office of the Secretary of
Transportation
Research and Special Programs
Administration
Treasury United States Customs Service
Internal Revenue Service
Statistics of Income Division
Veterans Affairs Department of Veterans Affairs
Other Agency for International Development
Consumer Product Safety Commission
Equal Employment Opportunity Commission
Environmental Protection Agency
National Aeronautics and Space
Administration
National Science Foundation
Small Business Administration
------------------------------------------------------------
Source: OMB.
MAJOR CONTRIBUTORS TO THIS REPORT
========================================================== Appendix II
GENERAL GOVERNMENT DIVISION,
WASHINGTON, D.C.
-------------------------------------------------------- Appendix II:1
James M. McDermott, Assistant Director
Patrick R. Mullen, Evaluator-in-Charge
Edward J. Laughlin, Senior Evaluator
Kiki Theodoropoulos, Communications Analyst
RELATED GAO PRODUCTS
============================================================ Chapter 1
Economic Statistics: Status Report on the Initiative to Improve
Economic Statistics (GAO/GGD-95-98, July 7, 1995).
Economic Statistics: Measurement Problems Can Affect the Budget and
Economic Policymaking (GAO/GGD-95-99, May 2, 1995).
Implementation of the National Performance Review's Recommendations
(GAO/OCG-95-1, Dec. 5, 1994).
Measuring U.S.-Canada Trade: Shifting Trade Winds May Threaten
Recent Progress (GAO/GGD-94-4, Jan. 19, 1994).
Management Reform: GAO's Comments on the National Performance
Review's Recommendations (GAO/OCG-94-1, Dec. 3, 1993).
Decennial Census: Focused Action Needed Soon to Achieve Fundamental
Breakthroughs (GAO/T-GGD-93-32, May 27, 1993).
Gross Domestic Product: No Evidence of Manipulation in First Quarter
1991 Estimates (GAO/GGD-93-58, Mar. 10, 1993).
Census Reform: Major Expansion in Use of Administrative Records for
2000 is Doubtful (GAO/T-92-54, June 26, 1992).
Decennial Census: Opportunities for Fundamental Reform
(GAO/T-GGD-92-51, June 10, 1992).
Decennial Census: 1990 Results Show Need for Fundamental Reform
(GAO/GGD-92-94, June 9, 1992).
Formula Programs: Adjusted Census Data Would Redistribute Small
Percentage of Funds to States (GAO/GGD-92-12, Nov. 7, 1991).
1990 Census: Reported Net Undercount Obscured Magnitude of Error
(GAO/GGD-91-113, Aug. 22, 1991).
Expanding the Role of Local Governments: An Important Element of
Census Reform (GAO/T-GGD-91-46, June 15, 1991).
1990 Census Adjustment: Estimating Census Accuracy--A Complex Task
(GAO/GGD-91-42, Mar. 11, 1991).
The Decennial Census: Potential Risks to Data Quality Resulting From
Budget Reductions and Cost Increases (GAO/T-GGD-90-30, Mar. 27,
1990).
1990 Census: Overview of Key Issues (GAO/GGD-89-77BR, July 3, 1989).
Decennial Census: Local Government Uses of Housing Data
(GAO/GGD-87-56BR, Apr. 8, 1987).
Status of the Statistical Community After Sustaining Budget
Reductions (GAO/IMTEC-84-17, July 18, 1984).