Regulatory Reform: Changes Made to Agencies' Rules Are Not Always Clearly
Documented (Letter Report, 01/08/98, GAO/GGD-98-31).

Pursuant to a congressional request, GAO reviewed the regulatory review
process, focusing on the Office of Information and Regulatory Affairs
(OIRA) and four regulatory agencies, the Department of Housing and Urban
Development (HUD) and Department of Transportation (DOT), the Department
of Labor's Occupational Safety and Health Administration (OSHA), and the
Environmental Protection Agency (EPA), and on whether: (1) the
regulatory agencies had identified for the public the substantive
changes made to their regulations between the draft they submitted to
OIRA and the regulatory actions they subsequently announced; (2) the
regulatory agencies identified for the public the changes made to their
regulations at the suggestion or recommendation of OIRA; and (3) OIRA
had made available to the public all documents exchanged between OIRA
and the selected agencies during OIRA's review.

GAO noted that: (1) EPA, DOT, HUD, and OSHA had complete documentation
available to the public of all of the substantive changes made to their
rules between the draft submitted to OIRA and the actions subsequently
announced for about 26 percent of the 122 regulatory actions that GAO
reviewed; (2) for about 30 percent of the regulatory actions, the
agencies had some documentation available to the public indicating that
changes had been made to the rules while at OIRA, but the information
did not indicate whether all such changes had been documented; (3) for
the remaining 44 percent of the regulatory actions, the agencies had no
documentation available to the public of changes made during OIRA's
review; (4) because Executive Order 12866 does not specifically require
agencies to document that no changes were made to rules while they were
under review at OIRA, the absence of documentation does not necessarily
mean that the agencies were not complying with the order; (5) however,
it was unclear whether the absence of documentation meant that no
changes had been made to the rules or whether changes had been made but
they had not been recorded; (6) the agencies had complete documentation
available to the public of all of the changes that OIRA had suggested or
recommended for about 24 percent of the 122 regulatory actions; (7) for
about 17 percent of the regulatory actions, the agencies had some
documentation available to the public indicating that OIRA had suggested
changes to the rules, but the information did not indicate whether all
such changes had been documented; (8) for the remaining 59 percent of
the actions, the agencies had no documentation available to the public
indicating whether changes had been made at the suggestion or
recommendation of OIRA; (9) for some of these actions, the agencies had
documentation available indicating that changes had been made to the
rules during the rulemaking process, but it was unclear whether any of
the changes were at OIRA's suggestion; (10) even those rules for which
the agencies had complete documentation of all changes made while they
were at OIRA and at the suggestion of OIRA, the documents were not
always available to the public or easy to locate; and (11) GAO could not
identify all of the documents that had been exchanged between the
agencies and OIRA during the regulatory review process, so it could not
be determined whether OIRA had made all such documents available to the
public.

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

 REPORTNUM:  GGD-98-31
     TITLE:  Regulatory Reform: Changes Made to Agencies' Rules Are Not 
             Always Clearly Documented
      DATE:  01/08/98
   SUBJECT:  Federal regulations
             Regulatory agencies
             Executive orders
             Government information dissemination
             Agency proceedings
             Reporting requirements
             Proposed legislation

             
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Cover
================================================================ COVER


Report to the Committee on Governmental Affairs, U.S.  Senate

January 1998

REGULATORY REFORM - CHANGES MADE
TO AGENCIES' RULES ARE NOT ALWAYS
CLEARLY DOCUMENTED

GAO/GGD-98-31

Regulatory Reform

(410190)


Abbreviations
=============================================================== ABBREV

  DOT - Department of Transportation
  EPA - Environmental Protection Agency
  FAA - Federal Aviation Administration
  FHWA - Federal Highway Administration
  FRA - Federal Railroad Administration
  HUD - Department of Housing and Urban Development
  MARAD - Maritime Administration
  NHTSA - National Highway Traffic Safety Administration
  OIRA - Office of Information and Regulatory Affairs
  OMB - Office of Management and Budget
  OSHA - Occupational Safety and Health Administration
  OST - Office of the Secretary of Transportation
  RISC - Regulatory Information Service Center
  RSPA - Research and Special Programs Administration
  TSCA - Toxic Substances Control Act
  USCG - United States Coast Guard

Letter
=============================================================== LETTER


B-276296

January 8, 1998

The Honorable Fred Thompson
Chairman
The Honorable John Glenn
Ranking Minority Member
Committee on Governmental Affairs
United States Senate

The number of federal regulations and their effect on the American
economy have grown dramatically during the past 30 years.  With that
growth has come an increased concern about the manner in which those
regulations are developed by federal agencies.  Executive Order 12866
on "Regulatory Planning and Review," which was issued on September
30, 1993, describes the process by which proposed significant\1 rules
of regulatory agencies (other than those considered to be independent
regulatory agencies) are to be reviewed by the Office of Management
and Budget's (OMB) Office of Information and Regulatory Affairs
(OIRA).\2

One of the stated purposes of Executive Order 12866 is to make the
federal rulemaking process "more accessible and open to the public."
In furtherance of that objective, the order includes requirements to
improve the "transparency" of the process.  Specifically, the order
requires that agencies identify for the public in a complete, clear,
and simple manner the substantive changes that are made to rules
while under review at OIRA and, as a separate requirement, the
changes that are made at the suggestion or recommendation of OIRA. 
The order also requires OIRA to make available to the public at the
conclusion of the rulemaking process all documents exchanged between
OIRA and the agency during the review process. 

In September 1996, we testified on the implementation of Executive
Order 12866.\3 This report responds to your request that we update
and look more deeply into an issue addressed in that testimony--the
transparency of the regulatory review process.  You specifically
asked that we focus our review on OIRA and four regulatory agencies: 
the Departments of Housing and Urban Development (HUD) and
Transportation (DOT), the Department of Labor's Occupational Safety
and Health Administration (OSHA), and the Environmental Protection
Agency (EPA).  The objectives of our review were to determine whether
(1) the regulatory agencies had identified for the public the
substantive changes made to their regulations between the draft
submitted to OIRA and the regulatory actions\4 subsequently
announced, (2) the regulatory agencies had identified for the public
the changes made to their regulations at the suggestion or
recommendation of OIRA, and (3) OIRA had made available to the public
all documents exchanged between OIRA and the selected agencies during
OIRA's review.  To answer these questions, we focused on regulatory
actions related to significant rules that were developed by the four
agencies and that were reviewed by OIRA before publication as final
rules between January 1, 1996, and March 1, 1997. 


--------------------
\1 Significant rules are defined by Executive Order 12866 as ones
that may (1) have an annual effect of $100 million or more on the
economy or have other economic effects; (2) create a serious
inconsistency or interfere with an action planned or taken by another
agency; (3) materially alter the budgetary impact of entitlements,
grants, user fees, or loan programs or alter the rights and
obligations of recipients thereof; or (4) raise novel legal or policy
issues. 

\2 Throughout this report we use OIRA, instead of OMB, when
discussing OMB responsibilities that have been delegated to OIRA. 

\3 Regulatory Reform:  Implementation of the Regulatory Review
Executive Order (GAO/T-GGD-96-185, Sept.  25, 1996). 

\4 In Executive Order 12866 and this report, proposed rules and final
rules are each considered separate "regulatory actions." The order
requires that, after the completion of each such action, the agencies
document changes that were made to the rules. 


   RESULTS IN BRIEF
------------------------------------------------------------ Letter :1

EPA, DOT, HUD, and OSHA had complete documentation available to the
public of all of the substantive changes made to their rules between
the draft submitted to OIRA and the actions subsequently announced
for about 26 percent of the 122 regulatory actions that we reviewed. 
For about 30 percent of the regulatory actions, the agencies had some
documentation available to the public indicating that changes had
been made to the rules while at OIRA, but the information did not
indicate whether all such changes had been documented.  For the
remaining 44 percent of the regulatory actions, the agencies had no
documentation available to the public of changes made during OIRA's
review.  Because Executive Order 12866 does not specifically require
agencies to document that no changes were made to rules while they
were under review at OIRA, the absence of documentation does not
necessarily mean that the agencies were not complying with the order. 
However, it was unclear whether the absence of documentation meant
that no changes had been made to the rules or whether changes had
been made but they had not been recorded. 

The agencies had complete documentation available to the public of
all of the changes that OIRA had suggested or recommended for about
24 percent of the 122 regulatory actions.  For about 17 percent of
the regulatory actions, the agencies had some documentation available
to the public indicating that OIRA had suggested changes to the
rules, but the information did not indicate whether all such changes
had been documented.  For the remaining 59 percent of the actions,
the agencies had no documentation available to the public indicating
whether changes had been made at the suggestion or recommendation of
OIRA.  For some of these actions, the agencies had documentation
available indicating that changes had been made to the rules during
the rulemaking process, but it was unclear whether any of the changes
were at OIRA's suggestion.  Again, the absence of documentation does
not mean that the agencies were not complying with the order. 
However, it was unclear whether the absence of documentation meant
that changes had not been made at OIRA's suggestion or whether
documentation of such changes was missing. 

Even those rules for which the agencies had complete documentation of
all changes made while they were at OIRA and at the suggestion of
OIRA, the documents were not always available to the public or easy
to locate.  Some agencies did not include this information in their
public rulemaking dockets.  Other agencies had the information in
their dockets but the dockets had no indexes; therefore, the public
would have to review the entire docket to find any documentation of
rule changes.  In contrast, some agencies' dockets were
well-organized, with a consistently structured index for all rules
and specific sections for information related to OIRA's review. 
Several agencies had also begun to automate their dockets so that
both indexes and eventually the entire rulemaking record could be
accessed electronically by the public. 

We could not identify all of the documents that had been exchanged
between the agencies and OIRA during the regulatory review process,
so we could not determine whether OIRA had made all such documents
available to the public.  OIRA officials said that most of OIRA's
interactions with the agencies during the regulatory review process
are by telephone or in face-to-face meetings, not by exchanging
documents.  They said that any documents that are exchanged are
usually drafts of the rules themselves and any related economic
analyses.  Nearly all of the draft rules and analyses that the
agencies' dockets indicated had been sent to OIRA were in OIRA's
public files, but memorandums and other documents that the agencies'
dockets indicated had been exchanged were often not in the OIRA
files. 


   BACKGROUND
------------------------------------------------------------ Letter :2

Executive Order 12291, which was issued by President Reagan in 1981,
authorized OMB to review all proposed and final federal regulations,
except those of independent regulatory agencies.\5 The order also
required OMB to monitor agencies' compliance with the order's
requirements and to coordinate its implementation.  OIRA's reviews
under this order were highly controversial, with critics contending
that OIRA exerted too much control over the development of rules and
that decisions were being made without appropriate public scrutiny. 

Executive Order 12866 revoked Executive Order 12291 but continued the
basic framework of the regulatory review process.  It also reaffirmed
the legitimacy of OIRA's centralized review function and its
responsibility for providing guidance to the agencies.\6 However,
Executive Order 12866 also made changes to address criticisms of the
regulatory program under Executive Order 12291.  In its recent draft
report to Congress on the costs and benefits of federal regulations,
OMB said that one of these changes was "to increase the openness and
accountability of the review process."\7 Specifically, section 6 of
Executive Order 12866 requires OIRA to "make available to the public
all documents exchanged between OIRA and the agency during the review
by OIRA under this section." Section 6 of the order also requires
agencies to (1) "[i]dentify for the public, in a complete, clear, and
simple manner, the substantive changes between the draft submitted to
OIRA for review and the action subsequently announced" and (2)
"[i]dentify for the public those changes in the regulatory action
that were made at the suggestion or recommendation of OIRA." The
order does not require agencies to document when no changes are made
during OIRA's review or at the suggestion or recommendation of OIRA. 

In October 1993, the OIRA Administrator issued guidance to the heads
of executive departments and agencies regarding the implementation of
Executive Order 12866.  The section of that guidance on "Openness and
Public Accountability" that discussed the order's transparency
requirements essentially repeated those requirements without
elaboration. 

In previous reports on the implementation of Executive Order 12866,
OIRA has cited increased openness and accountability as a major
success of the executive order.  Also, at the September 1996 hearing
on the implementation of the order, the OIRA Administrator said the
following: 

     "Executive Order 12866 created a more open and accountable
     review process.  The order called for more public involvement,
     and it specifically delineated who is responsible for what and
     when, so that interested parties would know the status and
     results of the Executive review.  I have since heard no
     complaints about accountability and transparency--and I take
     that as a success."

However, in response to our testimony at the same hearing that EPA
and DOT frequently had not documented the changes made to their rules
that had been suggested or recommended by OIRA, the Administrator
acknowledged that agencies had not "been scrupulously attentive" to
that requirement in the order. 

S.  981, the proposed "Regulatory Improvement Act of 1997," includes
several provisions to strengthen and clarify the executive order's
requirements for public disclosure of and access to information on
regulatory review actions.  One section of the bill requires agencies
to include in the rulemaking record (1) a document identifying in a
complete, clear, and simple manner, the substantive changes between
the draft submitted to OIRA and the rule subsequently announced; (2)
a document identifying changes in the rule made at the suggestion or
recommendation of OIRA; and (3) all written communications exchanged
between OIRA and agencies during the review.  The bill differs from
the order in that it requires (1) agencies (not OIRA) to include in
the rulemaking record all written communications (not "documents")
exchanged between OIRA and the agencies\8 and (2) agencies to
identify changes made to rules while they were at OIRA and changes
made at the suggestion of OIRA in a single document.\9


--------------------
\5 For a description of and statistics relating to OIRA's review
process under Executive Order 12291, see Regulatory Review: 
Information on OMB's Review Process (GAO/GGD-89-101FS, July 14,
1989). 

\6 Section 2(b) of Executive Order 12866 states that, "[t]o the
extent permitted by law, OMB shall provide guidance to agencies .  . 
.  ," and that OIRA "is the repository of expertise concerning
regulatory issues, including methodologies and procedures that affect
more than one agency .  .  .  ."

\7 Draft Report to Congress on the Costs and Benefits of Federal
Regulations, OMB, Federal Register, Vol.  62, No.  140, July 22,
1997. 

\8 "Written communications" may or may not be broader than
"documents." Executive Order 12866 does not indicate whether
"documents" includes all types of "written communications."

\9 For our comments on certain provisions in this bill, see
Regulatory Reform:  Comments on S.  981--The Regulatory Improvement
Act of 1997 (GAO/T-GGD/RCED-97-250, Sept.  12, 1997). 


   OBJECTIVES, SCOPE, AND
   METHODOLOGY
------------------------------------------------------------ Letter :3

Our first two objectives were to determine whether EPA, DOT, HUD, and
OSHA had (1) identified for the public the substantive changes
between the draft submitted to OIRA for review and the regulatory
action subsequently announced and (2) identified for the public those
changes in the regulatory action that were made at the suggestion or
recommendation of OIRA.  Our third objective was to determine whether
OIRA had made available to the public all documents exchanged between
OIRA and the agency during the review process. 

We included in our review all of the four agencies' regulations that
were reviewed by OIRA before publication as final rules between
January 1, 1996, and March 1, 1997.  We obtained a list of all such
rules and any related notices of proposed rulemaking from the
Regulatory Information Service Center (RISC).\10 We deleted from the
list all rules that were withdrawn by the agencies and all proposed
rules that were reviewed by OIRA before Executive Order 12866 was
issued on September 30, 1993.\11 The proposed rules and final rules
comprised the universe of regulatory actions that we reviewed.  Table
1 shows the number of proposed rules, final rules, and the total
number of regulatory actions that we examined in each agency. 



                                Table 1
                
                  The Number of Proposed Rules, Final
                Rules, and Total Regulatory Actions for
                              Each Agency

                                                     Final
Agency                          Proposed rules       rules       Total
------------------------------  --------------  ----------  ==========
HUD                                          2          23          25
OSHA                                         1           2           3
DOT                                         12          27          39
EPA                                         25          30          55
======================================================================
Total                                       40          82         122
----------------------------------------------------------------------
Source:  RISC. 

We asked officials in each agency how to locate the information that
is required by Executive Order 12866 for these rules.  In almost all
cases, the agencies said that the information was in their public
rulemaking dockets.\12 We then reviewed those dockets and other
agency files to determine the extent to which documentation of
changes made while under review at OIRA met the requirements of
executive order.  The order says that the agencies must "identify for
the public, in a complete, clear, and simple manner, the substantive
changes made" between the draft submitted to OIRA for review and the
regulatory action subsequently announced.  However, the order does
not define these terms or provide criteria for determining whether
agencies have complied with these provisions. 

To describe differences in the extent of documentation available to
the public in the agencies' files, we coded each regulatory action
into one of the following three categories:  (1) complete
documentation, which could be a "redline/strikeout" version of the
rule showing all changes made during the review, a memorandum to the
file listing all of the changes, or a memorandum indicating that
there were no such changes; (2) some documentation, which means we
found indications of changes that had been made during OIRA's review
(e.g., memorandums or redline/strikeout versions), but the files did
not indicate whether all such changes had been documented; and (3) no
documentation, which means that there were no changes made during the
review or that changes were made, but were not documented.  The last
two descriptive categories do not necessarily indicate whether the
agencies have complied with the executive order.  However, the
categories do provide a relative sense of how transparent a
regulatory review is to the interested public.  If the agencies'
files indicated that all changes had been documented, we did not
verify that assertion. 

We followed the same general procedure to describe the extent to
which the agencies had documented for the public the changes made to
the regulatory actions at the suggestion or recommendation of OIRA. 
The OIRA Administrator's October 1993 guidance on the implementation
of Executive Order 12866 indicated that the changes made to a
regulatory action at the suggestion or recommendation of OIRA were a
subset of changes made during the period of OIRA's review.  However,
in this review we examined the implementation of these requirements
separately because changes made at OIRA's suggestion or
recommendation are not necessarily a subset of changes made during
the period of OIRA's review.  Both OIRA and agency officials have
said that OIRA frequently comments on draft rules before they are
formally submitted for review.  Changes made to rules as a result of
those comments would not be the same as changes made "between the
draft submitted to OIRA for review and the regulatory action
subsequently announced." Therefore, in this part of the review we
looked for documentation of changes that were made at the suggestion
or recommendation of OIRA whenever they occurred. 

We also noted the extent to which the agencies' documents for the
regulatory actions that we reviewed were actually accessible to the
public in the agencies' public dockets or elsewhere.  Both EPA and
DOT had a number of public dockets, generally corresponding with
different subunits in the agencies.  For example, within DOT we
examined files in the dockets of eight departmental units:  the
Federal Aviation Administration (FAA), the Federal Railroad
Administration (FRA), the Federal Highway Administration (FHWA), the
Maritime Administration (MARAD), the National Highway Traffic Safety
Administration (NHTSA), the Research and Special Programs
Administration (RSPA), the United States Coast Guard (USCG), and the
Office of the Secretary of Transportation (OST).  In HUD, there was
one public docket covering all of the rules in our review.  In OSHA,
the information for our review was not part of the public docket, but
was provided by agency officials. 

As part of the second objective, we also examined EPA and DOT actions
after September 1996 to document changes suggested by OIRA.  In our
September 1996 testimony, we reported that EPA and DOT frequently had
not documented changes to their rules that OIRA had suggested or
recommended.  As a result of that testimony, both EPA and DOT issued
guidance to certain employees emphasizing the executive order's
requirement for documenting such changes.  We examined EPA and DOT
actions after the hearing to determine whether the agencies' staff
were better documenting OIRA-suggested changes.  We also determined
whether OIRA had taken any actions after the hearing to require
agencies to document changes made at OIRA's suggestion. 

Regarding the third objective, which was to determine whether OIRA
had made available to the public all of the documents exchanged
between OIRA and the agencies during the reviews by OIRA, we first
noted any evidence in the agencies' files that documents had been
exchanged between the agencies and OIRA during the rulemaking
process.  In this review, we defined "documents" to include not only
drafts of the rule sent to OIRA, but also letters, faxes, memorandums
of telephone conversations, and decision memorandums.  We then
examined OIRA's public files for each final action for which the
agencies' files indicated documents had been exchanged.  In addition,
we reviewed OIRA's files for selected other final actions for which
the agencies' files did not indicate that documents had been
exchanged.  These actions were selected to obtain dispersion across
the agencies and, when combined with the files we were already
examining, to review at least one-half of the 82 final regulatory
actions.  We did not examine OIRA files for any of the related
proposed rules because OIRA had already sent most of these older
files out to be archived.  We coded each of the actions on the basis
of whether (1) OIRA and agency files had the same documents, (2) OIRA
files did not have documents that we found in the agency files, (3)
OIRA files had documents that were not in the agency files, or (4)
both OIRA and the agency had documents not found in the other's
files. 

We conducted this review between March and December 1997 in the
Washington, D.C., headquarters offices of each of the four regulatory
agencies and OIRA in accordance with generally accepted government
auditing standards.  We provided a draft of this report to the
Director of OMB and the Secretaries of HUD, Labor, and DOT, and the
Administrator of EPA for their review and comment.  Their comments
are reflected in the agency comments section of this report. 


--------------------
\10 RISC is part of the General Services Administration and works
closely with OMB to provide information to the president, Congress,
and the public about federal regulations.  Its primary role is to
coordinate the development of the Unified Agenda of Federal
Regulatory and Deregulatory Actions, which is a comprehensive listing
of proposed and final regulations.  RISC maintains a database that
includes information on all regulatory actions reviewed by OIRA. 

\11 We excluded rules that were withdrawn by the agencies because
Executive Order 12866 only requires agencies to make information
about changes to regulatory actions available to the public if they
are published in the Federal Register or otherwise issued to the
public. 

\12 As will be discussed later in this report, one agency indicated
that the required information was not in its public rulemaking
docket, but was "available to the public." In this report, we refer
to these few instances of documentation that were "available" as
being in the rulemaking docket. 


   AGENCIES OFTEN DID NOT DOCUMENT
   WHETHER CHANGES WERE MADE TO
   RULES WHILE AT OIRA
------------------------------------------------------------ Letter :4

Executive Order 12866 directs agencies to "identify for the public,
in a complete, clear, and simple manner, the substantive changes
between the draft submitted to OIRA for review and the action
subsequently announced." The 4 agencies had complete documentation of
the changes for about 26 percent of the 122 regulatory actions that
we reviewed.  The agencies had some documentation of changes made
during OIRA's review for another 30 percent of the actions, but the
files did not indicate whether all such changes had been documented. 
The remaining 44 percent of the actions had no documentation
available to the public indicating whether changes were made to the
draft rule submitted to OIRA. 

We considered agencies to have completely documented the changes made
to the rules during OIRA's review if the docket included memorandums
to the file listing all of the changes made, drafts of the rules
indicating all changes that had been made, or agency certifications
that no changes had been made.  For example, OSHA's records for its
two final rules contained a memorandum to the file that summarized
telephone contacts and a meeting between OSHA and OIRA during the
review, and all of the changes that were made to the rule resulting
from these contacts.  The memorandum also indicated whether the
changes were in the body of the regulation or in its preamble, and
identified some changes as simply minor word adjustments.  Some of
the DOT dockets, particularly those in FAA and OST, contained a
certification signed by a senior agency official indicating that no
changes had been made to the rules. 

The dockets for the regulatory actions that had only some
documentation contained memorandums and other records in the files
indicating that certain changes had been made to the rules in
question, but it was unclear whether all of the changes made during
OIRA's review had been recorded.  For example, in EPA's Air and
Radiation docket three documents identified changes that had been
made to one of the final rules as a result of communications with
OIRA at different phases of the review process.  However, it was not
clear whether these three documents reflected all of the changes that
had been made to the rule during OIRA's review, or whether other
changes had been made but not documented. 

The dockets for other regulatory actions had no documentation of
changes made during OIRA's review.  For example, NHTSA's public
rulemaking docket contained a great deal of information related to
the development of the four NHTSA rules included in our review. 
However, the docket did not contain any documents indicating that the
rules had been submitted to OIRA, or that changes had been made
during or as a result of OIRA's review.  Some of the HUD files
contained documents that had been submitted to OIRA, but did not
indicate whether any changes were made to the rules. 

As figure 1 shows, some differences existed among the four agencies
in the degree to which they had documented changes made to rules
during OIRA's review.  Although all four of the agencies had at least
some documentation for over one-half of their regulatory actions, the
agencies differed in the degree to which the documentation was
complete.  Two of the agencies (DOT and EPA) had no documentation for
about one-half of their regulatory actions.  The remaining agencies
(HUD and OSHA) had no documentation for about one-third of their
regulatory actions. 

   Figure 1:  Differences Among
   Agencies in Documentation of
   Changes During OIRA's Review

   (See figure in printed
   edition.)

Note:  Numbers may not add to 100 percent because of rounding. 

Source:  GAO analysis. 


   AGENCIES OFTEN DID NOT DOCUMENT
   WHETHER CHANGES WERE MADE TO
   RULES AT THE SUGGESTION OR
   RECOMMENDATION OF OIRA
------------------------------------------------------------ Letter :5

Executive Order 12866 also directs agencies to identify changes to
each regulatory action made at the suggestion or recommendation of
OIRA.  About 24 percent of the regulatory actions that we examined in
the four agencies had complete documentation of these changes. 
Another 17 percent of the actions had some documentation of changes
that had been made to the rules, but the files did not indicate
whether all such changes had been made at OIRA's suggestion or
whether all OIRA-suggested changes had been documented.  The
remaining 59 percent of the regulatory actions had no documentation
of changes that had been suggested or recommended by OIRA. 

The manner in which the agencies completely documented the changes
made to the rules at OIRA's suggestion included memorandums to the
file listing all such changes, drafts of the rules indicating all
changes made because of OIRA, and agency certifications that no
OIRA-directed changes had been made.  For example, the public docket
for the two FRA actions that we examined had memorandums to the file
detailing changes made to the draft "pursuant to meetings of
appropriate OMB staff and FRA staff." One of the HUD regulatory
actions had a clear, simple memorandum to the file documenting not
only the changes the agency made to the rule at the suggestion of
OIRA, but also OIRA-suggested changes that the agency decided not to
make.  For an FAA final regulatory action, changes were noted in a
redline/strikeout copy of the rule that identified them as "OMB
changes." An accompanying certification form indicated that all
information required by the order was included, so we considered the
documentation to be complete. 

Agencies' public rulemaking dockets for other regulatory actions had
some documentation of OIRA-suggested changes.  For some of these
actions, the dockets indicated that changes had been made to the
rules in question, but it was unclear which specific changes could be
traced to OIRA.  In other cases, it was unclear whether all
OIRA-suggested changes had been documented.  For example, OSHA's file
for its methylene chloride final rule contained 10 documents
indicating that a number of issues had been raised during the months
that the rule had been reviewed at OIRA.  Some of the documents
indicated that specific changes had been made to the rule at OIRA's
suggestion, but the files did not indicate whether these documents
reflected all of the changes that OIRA had suggested or recommended. 
Other documents indicated that OIRA had suggested certain changes to
the rule, but it was unclear whether those changes had been made. 

As figure 2 shows, the agencies differed somewhat in the degree to
which they documented OIRA-suggested changes.  Also, a comparison of
figures 1 and 2 indicates that HUD, DOT, and EPA were less likely to
have any documentation of OIRA-suggested changes than documentation
of changes made during OIRA's review. 

   Figure 2:  Differences Among
   Agencies in Documentation of
   Changes Made at the Suggestion
   or Recommendation of OIRA

   (See figure in printed
   edition.)

Note:  Numbers may not add to 100 percent because of rounding. 

Source:  GAO analysis. 


      EPA AND DOT DOCUMENTATION OF
      OIRA-SUGGESTED CHANGES
      IMPROVED LITTLE AFTER
      CONGRESSIONAL HEARING
---------------------------------------------------------- Letter :5.1

In our September 1996 testimony on the implementation of Executive
Order 12866, we reported that only a few of the rules that we
examined at EPA and DOT had information in the agencies' public
rulemaking dockets that clearly indicated what changes had been made
to the rules at the suggestion or recommendation of OIRA.  As a
result of our review, both agencies sent guidance to certain staff
instructing them to better document OIRA-suggested changes to their
rules.  In September 1996, EPA's Director of Regulatory Management
and Information sent a memorandum to the agency's steering committee
representatives and regional regulatory contacts instructing them to
ensure that the order's transparency requirements were satisfied for
all rules then under development.  He suggested using
redline/strikeout versions of the draft rule to satisfy these
requirements. 

In a November 1996 memorandum, DOT's Assistant General Counsel for
Regulation and Enforcement reminded regulatory officers throughout
the Department of their responsibilities under section 6 of Executive
Order 12866 to identify for the public the drafts of rulemaking
actions provided to OIRA and the substantive changes between the
draft submitted to OIRA for review and the action subsequently
announced.  The memorandum also said that a signed, standard form
certifying that these executive order requirements had been met would
have to accompany any rules accepted in the rulemaking docket from
OST.  Those completing the form were required to indicate that the
rule was not reviewed by OIRA, that no substantive changes had been
made after the rule was submitted, or that the required information
was attached.  Although the certification form was required only for
OST rules, the Assistant General Counsel suggested that other units
within DOT use the same form. 

We examined documentation for EPA and DOT regulatory actions both
before and after the September 1996 hearing to determine whether the
agencies had better complied with Executive Order 12866 requirements
on documenting OIRA-suggested changes.  From January through
September 1996, OIRA reviewed 18 EPA and 15 DOT final rules.  In the
period between October 1996 and March 1997, OIRA reviewed 12 EPA and
12 DOT final rules.  As shown in table 2, the percentage of EPA rules
with no documentation in the rulemaking dockets decreased in the
later period, and the percentage of rules with some (but not
complete) documentation increased.  The percentage of DOT rules with
no documentation also decreased, but the percentage with complete
documentation increased.  Although DOT did not issue its guidance
until November 1996, use of the certification form suggested in that
the guidance resulted in more rules with complete documentation in
the later period. 



                                Table 2
                
                 Percentage of EPA and DOT Final Rules
                Reviewed Before and After September 30,
                 1996, That Had Complete, Some, and No
                             Documentation

                                             EPA             DOT
                                        --------------  --------------

                                        Before   After  Before   After
                                         9/30/   9/30/   9/30/   9/30/
Documentation                               97      97      97      97
--------------------------------------  ------  ------  ------  ------
Complete                                   28%     17%     27%     42%
Some                                        11      33      13       8
None                                        61      50      60      50
======================================================================
Total                                     100%    100%    100%    100%
----------------------------------------------------------------------
Source:  GAO analysis. 

The rulemaking docket for all but one of the six FAA rules that we
reviewed had the certification form that the DOT Assistant General
Counsel for Regulation and Enforcement had suggested to indicate
compliance with Executive Order 12866.  However, in each case these
certifications were added to the rulemaking dockets the day of or the
day before our review of those dockets.  Therefore, it appeared that
the certifications were added for our benefit, not as a result of
DOT's guidance. 


      OIRA HAS NOT ISSUED GUIDANCE
      ON TRANSPARENCY REQUIREMENTS
      SINCE THE SEPTEMBER 1996
      HEARING
---------------------------------------------------------- Letter :5.2

As of December 1, 1997, OIRA had not taken any action since the
September 1996 hearing to require agencies to document changes made
pursuant to OIRA's suggestion or recommendation.  In fact, the OIRA
Administrator has indicated that she does not support this
transparency requirement.  For example, in testimony before the
Senate Governmental Affairs Committee on September 12, 1997, the OIRA
Administrator said she opposed including a similar provision in S. 
981 because "[b]ased on my four-and-a-half years overseeing the
regulatory review process, I strongly believe that this provision is
counterproductive to everything we have sought to achieve in carrying
out meaningful review." She also said that "in our review process, it
is very often not entirely clear who suggests or recommends a change
in a regulation" and that having this requirement may "result in
resistance to change lest the `record' reflect a series of `gotchas'
by OMB."


   INFORMATION ABOUT CHANGES IN
   REGULATIONS WAS SOMETIMES NOT
   READILY AVAILABLE TO THE PUBLIC
------------------------------------------------------------ Letter :6

One purpose of Executive Order 12866's transparency requirements is
to make information about the rulemaking process available to the
public.  However, some documents clearly identifying changes made
during the OIRA review or at the suggestion of OIRA were not in the
public rulemaking dockets.  More frequently, however, documents
describing changes to the rules were in the public dockets, but they
were difficult to locate because the dockets either did not have
indexes or had indexes that were difficult to use without special
expertise. 


      SOME DOCUMENTS WERE NOT IN
      THE PUBLIC DOCKETS
---------------------------------------------------------- Letter :6.1

Some documents identifying changes made during OIRA's review or at
the suggestion of OIRA existed, but they were not available to the
public.  For example, two of the seven USCG regulatory actions that
were included in our review had some documentation of changes made
during OIRA's review or at the suggestion or recommendation of OIRA
in the agency's rulemaking docket.  However, it was unclear whether
all such changes had been documented.  Although, USCG had prepared
detailed summaries for agency decisionmakers of all of the changes
made during OIRA's review, USCG officials said these summaries were
internal communications and, therefore, not available to the public. 

OSHA had complete documentation of the changes made at the suggestion
of OIRA for one of its three regulatory actions included in our
review, and had some documentation for another action.  However, OSHA
maintained the information in files separate from the public
rulemaking docket to ensure that it did not become part of the
official rulemaking record and, therefore, subject to litigation. 
OSHA officials said that they would make the documentation available
to the public upon request.  However, for individuals to request the
information, they must first know that the documents exist. 


      SOME DOCUMENTS WERE
      DIFFICULT TO FIND IN THE
      PUBLIC DOCKETS
---------------------------------------------------------- Letter :6.2

The agencies' public rulemaking dockets varied in the degree to which
they could be easily used to find the information about changes in
regulatory actions that Executive Order 12866 requires be identified
for the public.  The information in the dockets for some of the rules
was quite voluminous, with numerous documents added to the files
during the years in which the rules were being developed. 
Furthermore, many of the dockets did not have an index to the
documents in the files, making it difficult to locate the information
mandated by the order within those files.  For example, the docket
for 1 rule at FRA contained 19 folders of material related to the
development of the rule, some of which were nearly a foot thick.  FRA
did not have a public index to this or other files in its docket,
although the agency did have an internal listing of the contents of
these folders.  FRA officials said the agency's internal index would
become a part of a public, electronic index when the agency moves
onto a DOT automated system that was under development at the time of
our review.  Several other dockets, including those at FAA, USCG, and
HUD, did not have indexes for their rulemaking records. 

Even in the dockets that had indexes to the documents in the files,
the indexes were not always very useful in identifying documents
related to the OIRA review.  Some of the agencies' indexes (e.g.,
NHTSA's index) were simply chronological lists of documents in the
files.  Although a chronological list is better than no list at all,
these lists were often extensive, and the documents in the list were
not always clearly identified.  For example, in EPA's Toxic
Substances Control Act (TSCA) docket, the file index for one of the
rules in our review identified communications between EPA and OIRA
staff by the name of the OIRA staff member who was responsible for
the review (e.g., "Memo from John Doe").  Therefore, a user of this
index would have to know that "John Doe" was the name of an OIRA
staff member to use the index to identify the documents reflecting
OIRA-suggested changes. 

In contrast, other agencies have implemented procedures and practices
that make locating and using information in their dockets much easier
for the public.  For example, EPA's Air and Radiation docket had a
consistently structured index for all of its rules, with specific
sections in which information related to OIRA's reviews could be
found.  OST also had a consistently structured index for rules in its
dockets and had automated its docket so that both the indexes and the
full text of many documents on the rulemaking process could be
accessed electronically.  Using the automated index greatly
facilitated our access to information about documents in the
rulemaking dockets.  DOT officials told us that the automated system
will eventually be extended across the entire Department and that all
DOT dockets will be available on the Internet.  EPA has also taken
some steps to automate its dockets. 


   OIRA MADE SOME DOCUMENTS
   EXCHANGED DURING THE REVIEW
   PROCESS AVAILABLE TO THE PUBLIC
------------------------------------------------------------ Letter :7

Executive Order 12866 requires OIRA, at the conclusion of each
regulatory action, to make available to the public all documents
exchanged between OIRA and regulatory agencies during the review
process.  To determine whether OIRA had complied with this
requirement, we first had to determine what documents had been
exchanged between OIRA and the agencies during the review. 
Therefore, during our examination of the regulatory agencies' files
in relation to the first two transparency requirements, we also noted
any evidence of documents that had been exchanged. 

Relatively few of the agencies' files contained any indication that
documents had been exchanged between the agencies and OIRA.  This
could indicate that documents are usually not exchanged during the
review process or that documents are exchanged, but they are often
not recorded in the agency files (because the order does not require
the agencies to do so).  OIRA officials said that there are
relatively few documents exchanged during the review process, other
than the rules themselves and any related economic analyses. 
Officials in one agency told us that most of OIRA's interactions with
the agency during the review process are by telephone or in
face-to-face meetings, not by exchanging documents. 

Because we could not be sure that we had identified all of the
documents that had been exchanged between the agencies and OIRA
during the regulatory review process, we could not conclusively
determine the extent to which OIRA had made such documents available
to the public.  However, the agencies' files seemed to support the
OIRA's observations that the documents exchanged are most commonly
the draft rules and draft economic analyses.  Other documents that
the agencies' files indicated had been exchanged included letters,
faxes, and memorandums documenting telephone calls or meetings with
OIRA staff summarizing the issues discussed, questions raised, and
positions taken by the agencies and OIRA. 

We examined OIRA's public files for (1) each final action for which
the agencies' files indicated documents had been exchanged and (2)
selected other final actions for which the agencies' files did not
indicate that documents had been exchanged.  In total, we reviewed
the files for 42 of the 82 final regulatory actions that we examined
in the agencies.  For 25 of these 42 actions, the OIRA files had the
same documents that the agencies' files indicated had been exchanged
or had more documents that had been exchanged than the agencies'
files had indicated.  For 17 of the 42 actions, the OIRA files did
not have certain documents that the agencies files said had been
exchanged (although in 7 of these cases, the OIRA files also had
documents that were not in the agencies' files).  The OIRA files
nearly always contained the draft rules that the agencies' files
indicated had been exchanged.  However, OIRA less frequently had the
other types of documents that the agencies' files indicated had been
exchanged (e.g., letters, faxes, and memorandums). 


   CONCLUSIONS
------------------------------------------------------------ Letter :8

Executive Order 12866 requires federal agencies to make the
regulatory review process more transparent by identifying for the
public "in a complete, clear, and simple manner" the substantive
changes made to regulatory actions while under review at OIRA, and to
identify the changes made at the suggestion or recommendation of
OIRA.  We believe that these public disclosure requirements, combined
with the administration's assertion of their effectiveness, can
result in a public perception that information on changes made to
regulations while at OIRA and at the suggestion of OIRA is readily
available.  However, our review of the information available to the
public at four agencies indicated that this was usually not the case. 

The public rulemaking dockets for many of the 122 regulatory actions
that we examined did not contain complete documentation of the
changes made during OIRA's review or at OIRA's suggestion.  Some of
the files in those dockets indicated that certain OIRA-suggested
changes had been made to the rules in question, but these files did
not indicate whether all such changes had been documented.  Other
files contained no documentation of changes made during OIRA's review
or at OIRA's suggestion.  It was unclear whether this absence of
documentation meant that no changes had been made to the rules or
that the changes were made, but they had not been documented.  Some
agencies had prepared or collected documentation of these changes,
but the documents were not in the public rulemaking dockets.  Some of
the files in the dockets were extremely voluminous, and, without
indexes to the documents in those files, it was difficult to locate
the information that the order requires be made available to the
public. 

On the other hand, about 26 percent of the 122 regulatory actions
that we reviewed in the 4 agencies had complete documentation
available to the public of the changes made to rules while at OIRA,
and about 24 percent had documentation of changes made at OIRA's
suggestion.  Some of the dockets were well-organized, with clear
indexes indicating where changes made during OIRA's review and at
OIRA's suggestion could be found.  Several agencies had begun to
automate their dockets so that both indexes and eventually the entire
rulemaking record could be accessed electronically by the public. 
These best practices illustrate both how agencies can satisfy the
order's transparency requirements, and how they can organize their
dockets to facilitate public access and disclosure. 

As the agency charged with providing guidance and central review of
the regulatory process, OIRA is in a position to tell the regulatory
agencies how to improve the transparency of the regulatory review
process.  However, OIRA's October 1993 guidance on this issue
essentially repeated the requirements of the executive order.  OIRA
did not issue any further guidance on this issue after we noted in
September 1996 that EPA and DOT frequently had not documented changes
made to rules at OIRA's suggestion.  One resource that OIRA could use
in the development of additional guidance on the order's transparency
requirements could be the best practices that we found in some of the
agencies that we reviewed. 

OIRA's October 1993 guidance indicated that the changes made at the
suggestion or recommendation of OIRA are a subset of the changes made
during the period of OIRA's formal review.  However, OIRA frequently
comments on draft rules before they are formally submitted for
review.  Under OIRA's current guidance, any changes made to the rules
as a result of these comments would not need to be documented for the
public. 

S.  981 contains public disclosure requirements that, if enacted into
law, would provide a statutory foundation for the public's right to
regulatory review information.  We believe that the bill's
requirement that rule changes be described in a single document is a
good idea because it would make understanding regulatory changes much
easier for the public.  However, even if a statute is not enacted,
the agencies would still benefit from guidance on how to improve the
transparency of the regulatory review process under the order. 


   RECOMMENDATION
------------------------------------------------------------ Letter :9

We recommend that the Administrator of OIRA provide the agencies with
guidance on how to implement Executive Order 12866 transparency
requirements.  The guidance should require agencies to include a
single document in the public docket for each regulatory action that
(1) identifies all substantive changes made during OIRA's review and
at the suggestion or recommendation of OIRA or (2) states that no
changes were made during OIRA's review or at OIRA's suggestion or
recommendation.  The guidance should also indicate that agencies
should document changes made at OIRA's suggestion whenever they
occur, not just during the period of OIRA's formal review.  Finally,
the guidance should point to best practices in some agencies to
suggest how other agencies can organize their dockets to best
facilitate public access and disclosure. 


   AGENCY COMMENTS AND OUR
   EVALUATION
----------------------------------------------------------- Letter :10

We sent a draft of this report for review and comment to the Director
of OMB; the Secretaries of HUD, Labor, and DOT; and the Administrator
of EPA.  HUD officials said they had no comments on the draft report. 
The other agencies provided the following comments. 


      EPA, DOT, AND OSHA COMMENTS
--------------------------------------------------------- Letter :10.1

On October 30, 1997, EPA's Director of the Office of Regulatory
Management and Evaluation told us that he believed the draft report
was factually correct for EPA rules and highlighted the need for
improved agency compliance with the docketing requirements of
Executive Order 12866.  He said that EPA will re-examine the content
and implementation of its initial guidance and will issue new
guidance or implementation methods to improve compliance with the
requirements. 

Also on October 30, 1997, we discussed the draft report with DOT
officials, including the Assistant General Counsel for Regulation and
Enforcement.  The Assistant General Counsel suggested that we make
several changes in the final report.  Specifically, he said the
report should more clearly

  -- state that Executive Order 12866 does not require agencies to
     document instances where no changes were made to rules during
     OIRA review, and that the absence of documentation of changes
     made to a rule does not mean that an agency had not complied
     with the order's transparency requirements;

  -- note that the November 1996 guidance he issued regarding
     certification of compliance with the executive order applied
     only to OST and was suggested guidance for the rest of DOT; and

  -- reflect the extent of DOT's efforts to develop best practices
     for improving transparency of regulatory decisionmaking,
     particularly in the area of automation. 

DOT officials also suggested that we modify our recommendation to
state that the OIRA guidance should specifically require agencies to
document for the record when no changes were made during the OIRA
review or at the suggestion or recommendation of OIRA.  We agreed
with all of these suggestions and made the appropriate changes in
this report. 

On November 4, 1997, we met with OSHA officials, including OSHA's
Director of Regulatory Analysis, to discuss the draft report.  We
noted that we had changed the draft to address a question raised
earlier by an OSHA official.  This official had pointed out that one
of the OSHA-proposed rules included in our review had been reviewed
by OIRA before the issuance of Executive Order 12866 and should not
have been subject to the requirements of the order.  We deleted this
proposed rule from our analysis, thereby reducing the number of OSHA
regulatory actions from four to three.  We also deleted 6 proposed
rules in DOT that had been reviewed by OIRA before the issuance of
the order, thereby reducing the number of DOT regulatory actions from
45 to 39.  We then recalculated all related statistics and figures to
account for these changes.  (None of the HUD or EPA proposed rules
was reviewed by OIRA before the issuance of the order.) OSHA
officials also suggested that we provide additional clarification
regarding our criteria for distinguishing between actions
characterized as having "complete documentation" and those having
"some documentation." In this report, we clarified the definition of
"some documentation," emphasizing that the term referred to those
agencies' files that did not indicate whether all changes had been
documented. 

Finally, OSHA officials said that we should make our recommendation
more specific to indicate that the OIRA guidance should require
agencies to document all changes made during the OIRA review and at
the suggestion or recommendation of OIRA in a single, summary
memorandum to the file.  We agreed with this suggestion and made
appropriate changes to the recommendation. 


      OMB COMMENTS
--------------------------------------------------------- Letter :10.2

On November 10, 1997, we received a letter commenting on the draft
report from the Administrator of OIRA.  (See app.  I for a reprint of
those comments.) The Administrator said that OIRA staff were not
surprised by and agreed with several of the issues raised in the
draft report.  For example, she said that she was not surprised that
there may not be a "one-to-one equivalence" between agencies' files
and OIRA files because of differences in Executive Order 12866
requirements between the agencies and OIRA.  She said that OIRA's
database indicated that no changes were made to about 40 percent of
the regulatory actions in the four agencies, which she suggested was
why documentation did not exist in about 40 percent of the actions
that we reviewed (because, as she confirmed, the order itself does
not require documentation of no changes).  She also said that
providing an interested individual with a copy of the draft rule
submitted for review and the draft on which OIRA concluded its review
was an effective way to permit that individual to identify changes
made to the draft rule. 

However, the Administrator also indicated that OIRA disagreed with
the draft report in at least three respects.  First, she said that
OIRA disagreed with the draft report's recommendation that OIRA issue
guidance to agencies on how to organize their rulemaking dockets to
best facilitate public access and disclosure.  She said agencies have
developed their own methods of organizing their rulemaking dockets
and "it is not the role of OMB to advise other agencies on general
matters of administrative practice." Second, she said that OMB
interprets some of the transparency requirements in the order
differently than we did.  We believe that the order requires agencies
to document OIRA-suggested changes whenever they occur.  The
Administrator said that the order requires agencies to document only
OIRA-suggested changes made during the formal period of OIRA's
review, not any changes made at OIRA's suggestion before that period. 
Third, the Administrator said that she believes that the requirement
that agencies document the changes made at the suggestion of OIRA is
"counterproductive," and that it is irrelevant who gets the "credit"
for suggesting changes. 

The OIRA Administrator's statement, in response to our
recommendation, that it is not OMB's role to advise agencies on
general matters of administrative practice seems to run counter to
the requirements placed on the agency in Executive Order 12866. 
Section 2(b) of the order states that "[t]o the extent permitted by
law, OMB shall provide guidance to agencies .  .  .  ," and that OIRA
"is the repository of expertise concerning regulatory issues,
including methodologies and procedures that affect more than one
agency .  .  .  ." Furthermore, as the Administrator pointed out,
OIRA has already provided agencies with general guidance on the
implementation of the order, including the transparency requirements. 
Therefore, we retained our recommendation, and, as suggested by DOT
and OSHA, made it more specific by suggesting that the guidance
require agencies to include a single document in the public docket
for each regulatory action that (1) identifies all substantive
changes made during OIRA's review and at the suggestion or
recommendation of OIRA or (2) states that no changes were made during
OIRA's review or at OIRA's suggestion or recommendation. 

Executive Order 12866 requires that agencies identify for the public
(1) the substantive changes that are made to rules while under review
at OIRA and (2) the changes that are made at the suggestion or
recommendation of OIRA.  We believe the Administrator's view that the
second of these transparency requirements only applies to suggestions
or recommendations made during the period of OIRA's formal review
reflects a narrow interpretation of the order, and is inconsistent
with the intent of the order's transparency requirements.  In her
letter, the Administrator said that OIRA tries to consult with
agencies "early and often" in the rulemaking process because OIRA can
become "deeply" involved in important agency rules "before an agency
has become invested in its decision." However, her interpretation of
the order that agencies do not have to document any changes made at
OIRA's suggestion or recommendation during this period would result
in agencies' failing to document OIRA's early involvement in the
rulemaking process.  The transparency requirements were included in
the order because of concerns during previous administrations that
the public could not determine what changes OIRA was making to
agencies' rules.  Limiting the disclosure of OIRA-suggested or
OIRA-recommended changes only to those made during the relatively
narrow window of OIRA's formal review, and specifically excluding
changes made during a period in which the Administrator said OIRA can
have its greatest impact, is not consistent with the order's
transparency objective. 

Furthermore, the OIRA Administrator's comment that "an interested
individual" can identify changes made to a draft rule by comparing
drafts of the rule seems to change the focus of responsibility as it
is stated in Executive Order 12866.  The order requires agencies to
identify for the public changes made to draft rules.  It does not
place the responsibility on the public to identify changes made to
agency rules.  Also, comparison of a draft rule submitted for review
with the draft on which OIRA concluded review would not indicate
which of the changes were made at OIRA's suggestion, which is a
specific requirement of the order. 

Finally, the Administrator's position that the order's requirement
that agencies document the changes made at OIRA's suggestion is
"counterproductive" is unpersuasive for several reasons.  First, this
transparency requirement was put in place because of criticisms that
OIRA exerted too much control over the development of rules and that
decisions were being made without appropriate public scrutiny. 
Therefore, the purpose of this requirement is to allow the public to
be able to understand why certain changes were made during the
rulemaking process; it has nothing to do with who gets the "credit"
for those changes.  Second, the Administrator cites no evidence of a
counterproductive effect of the requirement that agencies document
OIRA-suggested changes.  Even if evidence of negative effects were
presented, those effects would need to be weighed against the
transparency and public disclosure that the requirement permits. 
Finally, if the Administrator believes that this requirement is
counterproductive and will result in resistance to change, she could
recommend that the President revise the executive order and delete
this requirement.  Four years after the issuance of the order and the
imposition of this requirement, the Administrator has not done so. 
In response to this comment, we clarified our interpretation of the
order's requirements in the body of the report and specified that
OIRA's guidance should indicate that agencies should document changes
made at OIRA's suggestion whenever they occur. 


--------------------------------------------------------- Letter :10.3

We are sending copies of this report to the Director of OMB; the
Secretaries of HUD, Labor, and DOT; and the Administrator of EPA.  We
are also sending this report to the Chairmen and Ranking Minority
Members of (1) the House Committee on Government Reform and
Oversight; (2) that Committee's Subcommittee on National Economic
Growth, Natural Resources, and Regulatory Affairs; and (3) the House
Committee on the Judiciary, Subcommittee on Commercial and
Administrative Law.  We will make copies available to others on
request. 

Major contributors to this report are listed in appendix II.  Please
contact me on (202) 512-8676 if you or your staff have any questions
concerning this report. 

L.  Nye Stevens
Director, Federal Management
 and Workforce Issues




(See figure in printed edition.)Appendix I
COMMENTS FROM THE OFFICE OF
MANAGEMENT AND BUDGET
============================================================== Letter 



(See figure in printed edition.)



(See figure in printed edition.)



(See figure in printed edition.)



(See figure in printed edition.)



(See figure in printed edition.)


MAJOR CONTRIBUTORS TO THIS REPORT
========================================================== Appendix II


   GENERAL GOVERNMENT DIVISION,
   WASHINGTON, D.C. 
-------------------------------------------------------- Appendix II:1

Curtis Copeland, Assistant Director, (202) 512-8101
Elizabeth Powell, Senior Evaluator
Thomas Beall, Technical Advisor


   OFFICE OF THE GENERAL COUNSEL,
   WASHINGTON, D.C. 
-------------------------------------------------------- Appendix II:2

Alan Belkin, Assistant General Counsel
Susan Michal-Smith, Senior Attorney

*** End of document. ***