Paperwork Reduction Act: Burden Increases at IRS and Other Agencies
(Testimony, 04/12/2000, GAO/T-GGD-00-114).

Although the Paperwork Reduction Act of 1995 anticipated a 30-percent
reduction in federal paperwork between fiscal years 1995 and 1999,
preliminary data show that paperwork actually rose during that period.
The increase is primarily due to the Internal Revenue Service. Federal
agencies identified 710 violations of the act during fiscal year 1999--a
decline from the 872 violations identified a year earlier. Problems in
last year's data, however, make it unclear whether the number of
violations is really going down. And even if the number of violations is
going down, 710 violations is far too many, in GAO's view. GAO believes
that the Office of Management and Budget can do more to ensure that
agencies do not use information collections without proper clearance.
GAO also believes that other federal agencies have a role to play in
reducing the number of violations.

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

 REPORTNUM:  T-GGD-00-114
     TITLE:  Paperwork Reduction Act: Burden Increases at IRS and Other
	     Agencies
      DATE:  04/12/2000
   SUBJECT:  Reporting requirements
	     Data collection
	     Noncompliance
	     Statutory law
	     Projections

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GAO/T-GGD-00-114

United States General Accounting Office
GAO

Testimony

Before the Subcommittee on National Economic
Growth, Natural Resources, and Regulatory
Affairs, Committee on Government Reform, House
of Representatives

For Release on Delivery
Expected at
10:00 a.m. EDT
on Wednesday
April 12, 2000
GAO/T-GGD-00-114

PAPERWORK REDUCTION ACT
Burden Increases at IRS and Other Agencies

Statement of Nancy Kingsbury
Acting Assistant Comptroller General
General Government Division

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 (410556)

Statement
Paperwork Reduction Act: Burden Increases at IRS
and Other Agencies
Page 2                           GAO/T-GGD-00-114
     I am pleased to be here today to discuss the
implementation of the Paperwork Reduction Act of
1995 (PRA). As you requested, I will initially
discuss the changes in federal paperwork burden
since last year's hearing, with particular
attention to changes at the Internal Revenue
Service (IRS).  I will then briefly discuss IRS
burden-relief initiatives that are directed at
small businesses and revisit the issue of PRA
violations that we discussed during last year's
hearing.1

     In brief, although the PRA envisioned a 30-
percent reduction in federal paperwork between
fiscal years 1995 and 1999, preliminary data
indicate that paperwork has increased during this
period, and that the increase is primarily
attributable to IRS.  Federal paperwork increased
by about 233 million burden hours during fiscal
year 1999 alone-the largest increase in any 1-year
period since the PRA was enacted.2  Nearly 90
percent of the governmentwide increase during
fiscal year 1999 was attributable to increases at
IRS, which IRS said was primarily a result of new
and existing statutory requirements.  Some non-IRS
agencies appear to have exceeded the burden-
reduction goals envisioned in the PRA.  Although
some of these reductions reflect substantive
program changes, others are revisions to the
agencies' previous burden estimates or are the
result of violations of the act, and therefore
will have no effect on the paperwork burden felt
by the public.

     Federal agencies identified 710 violations of
the PRA during fiscal year 1999-fewer than the 872
violations that were identified during fiscal year
1998.  However, problems in last year's data make
it unclear whether the number of violations is
really going down.  Even if the number of
violations is going down, 710 PRA violations
during fiscal year 1999 is far too many.  As we
said last year, we believe that the Office of
Management and Budget (OMB) can do more to ensure
that agencies do not use information collections
without proper clearance.  We also believe that
other federal agencies have a role to play in
reducing the number of PRA violations.

Background
     Before discussing these issues in detail, it
is important to recognize that at least some
federal paperwork is necessary and can serve a
useful purpose.  Information collection is one way
that agencies carry out their missions.  For
example, the IRS needs to collect information from
taxpayers and their employers to know the amount
of taxes owed.  The Bureau of the Census recently
distributed census forms to millions of Americans
that will be used to apportion congressional
representation and for a myriad of other purposes.

     However, federal agencies have an obligation
under the PRA to keep the paperwork burden they
impose as low as possible, given their statutory
and programmatic responsibilities.  The original
PRA of 1980 established the Office of Information
and Regulatory Affairs (OIRA) within OMB to
provide central agency leadership and oversight of
governmentwide efforts to reduce unnecessary
paperwork and improve the management of
information resources.  Under the act, OIRA has
overall responsibility for determining whether
agencies' proposals for collecting information
comply with the act.3  Agencies must receive OIRA
approval for each information collection request
before it is implemented.  OIRA is also required
to keep Congress "fully and currently informed" of
the major activities under the act, and must
report to Congress on agencies' progress toward
reducing paperwork.  To do so, OIRA develops an
Information Collection Budget (ICB) by gathering
data from executive branch agencies on the total
number of "burden hours" OIRA approved for
collections of information at the end of the
fiscal year and agency estimates of the burden for
the coming fiscal year. OIRA published its ICB for
fiscal year 1999 (showing changes in agencies'
burden-hour estimates during fiscal year 1998)
just before last year's hearing. OIRA officials
provided us with a copy of the fiscal year 2000
ICB last week.  We used that information and the
agencies' ICB submissions to identify changes in
governmentwide and agency-specific burden-hour
estimates during fiscal year 1999.

     "Burden hours" has been the principal unit of
measure of paperwork burden for more than 50
years, and has been accepted by agencies and the
public because it is a clear, easy-to-understand
concept.  However, it is important to recognize
that these estimates have limitations.  Estimating
the amount of time it will take for an individual
to collect and provide information or how many
individuals an information collection will affect
is not a simple matter.  Therefore, the degree to
which agency burden-hour estimates reflect real
burden is unclear.  Nevertheless, these are the
best indicators of paperwork burden available, and
we believe they can be useful as long as their
limitations are kept in mind.

Federal Paperwork Burden Estimate Continues to
Increase
     Federal agencies estimated that their
information collections imposed about 7 billion
burden hours on the public at the end of fiscal
year 1995-just before the PRA of 1995 took effect.
The PRA made several changes in federal paperwork
reduction requirements.  One such change required
OIRA to set a goal of at least a 10-percent
reduction in the governmentwide burden-hour
estimate for each of fiscal years 1996 and 1997, a
5-percent governmentwide burden reduction goal in
each of the next 4 fiscal years, and annual agency
goals that reduce burden to the "maximum
practicable opportunity."  Therefore, if federal
agencies had been able to accomplish the reduction
in burden contemplated by the PRA for the 4-year
period ending on September 30, 1999, the 7 billion
burden-hour estimate would have fallen 30 percent,
or to about 5 billion hours.

However, as figure 1 shows, the data reported by
the agencies indicate that the anticipated 30-
percent reduction in burden during this 4-year
period did not occur.  In fact, the governmentwide
burden-hour estimate increased by nearly 3 percent
during this period, and was about 7.2 billion
hours as of September 30, 1999.4  During fiscal
year 1999 alone, the estimate increased by about
233 million hours-the largest increase in any year
since the PRA was enacted in 1995.

Figure 1: Changes in Estimated Governmentwide
Burden-Reduction Goals

Note: Data are as of the end of each fiscal year.
Source: OMB.

     The record burden-hour increase during fiscal
year 1999 may not be a record for very long.  The
new ICB indicates that federal paperwork is
expected to increase by more than 260 million
burden hours during fiscal year 2000-about 30
million hours more than the increase during fiscal
year 1999. By September 30, 2000, the
governmentwide paperwork estimate is expected to
be nearly 7.5 billion burden hours.

Governmentwide Increase Largely Attributable to
IRS
     A variety of factors appear relevant in
explaining why federal paperwork burden estimates
have not declined during the past 4 fiscal years.
However, as we said last year, the primary reason
seems to be IRS' inability to reduce its estimated
burden.  IRS accounts for about 80 percent of the
governmentwide burden-hour estimate.  Therefore,
changes in IRS' estimate can have a highly
significant-and even determinative-effect on the
governmentwide total.

     As figure 2 shows, IRS' burden-hour estimate
increased by 570 million burden hours between
fiscal years 1995 and 1999-from less than 5.3
billion burden hours to nearly 5.9 billion hours.
This increase in IRS' estimate more than offset
the 371 million burden hours of reductions in all
of the other agencies, and was largely responsible
for the nearly 3-percent increase in the
governmentwide paperwork estimate.  During fiscal
year 1999 alone, IRS' paperwork estimate increased
by more than 203 million burden hours.  However,
unlike in previous years, the increase in IRS'
burden-hour estimate during fiscal year 1999 was
not offset by lower estimates in the non-IRS
departments and agencies.  In fact, non-IRS
agencies collectively increased their burden
estimates by nearly 26 million burden hours during
fiscal year 1999.

Figure 2: Change in IRS, Non-IRS, and
Governmentwide Burden-Hour Estimates Between
Fiscal Years 1995 and 1999

Note: The governmentwide burden-reduction goal for
this 4-year period was 30 percent.

Sources: OMB and the Department of the Treasury.

     According to IRS, increases in its burden-
hour estimates are primarily driven by statutory
changes and the requirements in existing statutes.
For example, IRS said in its ICB submission for
the fiscal year 2000 ICB that the Taxpayer Relief
Act of 1997 (P.L. 105-34) and the Tax and Trade
Relief Extension Act of 1998 (P.L. 105-277) had
increased the agency's paperwork requirements by
nearly 93 million burden hours during fiscal year
1999 alone.  Specific elements of this increase
include the following:

ï¿½    IRS added several new lines and worksheets in
the instructions to Form 1040 and accompanying
schedules for, among other things, (1) the student
loan interest deduction to reflect new Code
section 221, (2) the child tax credit to reflect
new Code section 24, (3) the education credits
(the HOPE and Lifetime Learning Credits) to
reflect Code section 25A, and (4) the additional
(refundable) amount of the child tax credit to
reflect new Code section 32(n).  Taken together,
IRS said these new sections created by the
Taxpayer Relief Act resulted in nearly 39 million
additional burden hours to its estimate for Form
1040.
ï¿½    IRS added lines and worksheets to the
instructions for Form 1040A to implement the same
changes to the tax code created by the Taxpayer
Relief Act that I described in the previous
example, resulting in more than 24 million
additional burden hours.
ï¿½    IRS added new attachments and Code references
to the instructions for Form 1120S, Schedule D,
and Schedule K-1 primarily due to the Taxpayer
Relief Act, resulting in an increase of more than
11 million burden hours.

 Statutory requirements can also prompt reductions
in federal paperwork burden.  For example, the
only significant burden reduction that IRS
identified in its submission for the fiscal year
2000 ICB was a 4.7 million hour reduction caused
by changes made by the Taxpayer Relief Act that
allowed most taxpayers to exclude gain on home
sales after May 6, 1997, thereby making the filing
of Form 2119 unnecessary.

     Overall, though, IRS said that more than 148
million of the 203 million burden-hour increase
that occurred during fiscal year 1999 was due to
new statutes.  Most of the remaining increase was
caused by adjustments that IRS said was driven by
growth in the economy.  IRS attributed only a
small part of the increase during fiscal year 1999
(about 14 million burden hours) to agency actions.
As they have done in previous years, IRS officials
told us that the agency would not be able to
reduce its paperwork burden if new statutes
requiring information collections continue to be
enacted and unless changes are made to the
substantive requirements in the current tax code.

Non-IRS Agencies' Burden Reduction Results Varied,
and Require Careful Interpretation
     As I previously mentioned, non-IRS
departments and agencies reduced their estimated
paperwork burden by 371 million burden hours, or
nearly 22 percent, between fiscal years 1995 and
1999.  However, some agencies were clearly more
successful in reducing their estimates than
others.  For example, the Department of
Agriculture (USDA) reduced its burden-hour
estimate by 47 percent during this 4-year period,
from 131 million hours to about 68 million hours.
The Departments of Defense (DOD), Labor (DOL), and
Veterans Affairs (DVA) had similarly impressive
reductions during the period.  On the other hand,
the Department of Health and Human Services' (HHS)
estimate increased by nearly 12 million burden
hours, or nearly 8 percent between fiscal years
1995 and 1999.  The Environmental Protection
Agency's (EPA) estimate increased by nearly 10
percent-from less than 109 million burden hours to
about 119 million hours.

     However, these changes in agencies' bottom
line burden-hour estimates do not tell the whole
story.  At least as important is understanding how
the agencies accomplished these results.  OIRA
classifies modifications in agencies' burden-hour
estimates as either "program changes" or
"adjustments." Program changes are (1) the result
of deliberate federal government action and (2)
additions or reductions to existing paperwork
requirements that are imposed either through new
statutory requirements or an agency's own
initiative (e.g., the addition or deletion of
questions on a form). Adjustments are not the
result of deliberate federal government action,
but rather are caused by factors such as changes
in the population responding to a requirement or
agency reestimates of the burden associated with a
collection of information.

     Understanding and distinguishing between
these categories is an important part of
overseeing agencies' paperwork reduction claims.
For example, we recently published a report that,
in part, examined EPA's claim that it had reduced
its paperwork requirements by 24 million burden
hours between fiscal years 1995 and 1998.5  In its
annual report, EPA claimed that it had
accomplished these reductions by "streamlining
processes, eliminating outdated provisions, and
consolidating duplicative requirements"-in other
words, program changes.  We examined 13
information collections that accounted for more
than 70 percent of EPA's claimed reductions and
concluded that a substantial portion were (1)
revisions of previous agency estimates that had no
impact on the burden borne by the public or (2)
were other kinds of adjustments because of changes
in the economy or respondents' technology for
which EPA should not claim credit.  Therefore, we
concluded that EPA's claims regarding how it had
reduced its estimate and that its efforts had
saved businesses and communities hundreds of
millions of dollars were misleading.

     The summary table in the ICB for fiscal year
1999 reflected, for the first time, the program
changes and adjustments made in each agency.
Therefore, readers could better understand what
caused changes in an agency's burden-hour
estimates from the previous year.  However, these
broad "program change" and "adjustment" categories
can, themselves, mask a number of meaningful
differences.  For example, a 1 million hour
reduction in an agency's burden estimate that is
characterized as a program change may have been
caused by aggressive action on the part of the
agency to eliminate unnecessary requirements or by
changes in the underlying statute that the agency
simply carried out.

     Agencies may also be credited with program
changes even though they are violating the PRA.
For example, suppose that an agency's OIRA
authorization to administer 1 million burden-hour
information collection lapses but the agency
continues to collect the information.  The summary
table in the ICB will show a 1-million burden-hour
reduction that OIRA considers a program change
because the ICB counts the burden associated with
authorized information collections.  If the agency
subsequently obtains OIRA approval to collect the
information, the 1 million burden hours would be
reinserted into the agency's burden-hour estimate,
and would also be identified as a program change.

Changes in Agencies' Recent Burden Estimates
Varied
     The fiscal year 2000 ICB indicates, for the
first time, whether each agency's program changes
were due to (1) new statutes,6 (2) expired or
reinstated collections, or (3) agency actions
(e.g., the addition or removal of information
collection requirements at the initiation of the
agency).  Using that information and information
from the fiscal year 2000 ICB, we prepared a table
(table 1) that shows the program changes (with the
subcategories) and adjustments during fiscal year
1999 for major departments and agencies.  In
brief, the table shows that federal paperwork
burden estimates rose by about 233 million burden
hours during fiscal year 1999, and that the
Department of the Treasury accounted for about 207
million of that increase.  As I mentioned earlier,
IRS alone increased its estimate between fiscal
years 1998 and 1999 by more than 203 million
burden hours.  Also notable is that "agency
actions," where one would expect to find evidence
of agency burden-reduction efforts, resulted in an
18.4 million burden-hour increase governmentwide.
Even in the non-Treasury agencies, "agency
actions" resulted in a 4.2 million burden-hour
increase.

Table 1: Reported Changes in Federal Agencies'
Burden-Hour Estimates During Fiscal Year 1999
Burden hours in millions
                           FY       Program changes      Adjust- Total     FY
                         1998                            ments change   1999
                        estim                                        estima
                          ate                                            te
                                 New Reinstat Agency Total                   
                              statut     ed/ action
                                  es Expired     s
Governmentwide          6,951  163.8     6.8  18.4 189.0  43.7 232.7 7,183.
                           .1                                             9
Non-Treasury            1,248   13.8     6.8   4.2  24.8   1.1  25.9 1,274.
                           .9                                             8
Departments                                                                
    Agriculture          72.0    0.2   (7.2) (1.3) (8.3)   4.1 (4.2)   67.8
    Commerce             13.5    0.1   (0.1)   0.8   0.8   0.0   0.8   14.3
    Defense             119.0    0.0     0.0 (7.0) (7.0) (0.3) (7.3)  111.7
    Education            40.9    0.2     0.0   6.3   6.5 (5.3)   1.2   42.1
    Energy                4.5    0.0     0.0   0.0   0.0   0.0   0.0    4.5
    Health and Human    139.3    8.8     4.3 (0.1)  12.9  12.1  25.1  164.4
Services
    Housing and Urban    18.5    1.0   (0.4)   0.6   1.2   0.1   1.3   19.8
Development
    Interior              4.6    0.2   (0.2) (0.2) (0.2)   0.0 (0.2)    4.4
    Justice              25.8    1.6     8.5   1.3  11.4 (0.6)  10.8   36.6
    Labor               199.0    0.0     0.3   0.6   0.9 (3.9) (3.0)  196.0
    State                28.9    0.0     0.0   0.0   0.0   0.0   0.0   29.0
    Transportation      138.8    0.7     0.0 (0.3)   0.4   0.9   1.3  140.1
    Treasury (including 5,702  150.0     0.0  14.2 164.2  42.6 206.8 5,909.
IRS)                       .2                                             1
    Veterans Affairs      2.6    0.0     2.5   0.1   2.6   0.0   2.6    5.3
Agencies                                                                   
    Environmental       119.2    0.0     0.0   2.0   2.0 (2.3) (0.3)  118.9
Protection Agency
    Federal Acquisition  24.4    0.0     0.0 (0.5) (0.5) (0.5) (1.0)   23.4
Regulation
    Federal              30.3    0.8     0.1   2.3   3.2 (1.0)   2.2   32.5
Communications
      Commission
    Federal Deposit       7.6    0.0     0.0   0.0   0.0   0.4   0.4    8.0
Insurance
      Corporation
    Federal Emergency     4.7    0.0     0.1   0.0   0.2   0.1   0.3    5.0
Management
      Agency
    Federal Energy        5.5    0.0     0.0 (1.5) (1.5)   0.0 (1.5)    4.0
Regulatory
      Commission
    Federal Trade       127.0    0.0     0.0   0.0   0.0 (0.4) (0.4)  126.6
Commission
    National Aeronautic   7.7    0.0     0.0 (0.4) (0.4)   0.0 (0.4)    7.3
and
      Space
Administration
    National Science      4.7    0.0     0.0   0.0   0.0   0.0   0.0    4.7
Foundation
    Nuclear Regulatory    9.7    0.0     0.0   0.0   0.0 (0.1) (0.1)    9.5
Commission
    Securities and       75.7    0.0     0.0   2.2   2.2 (1.3)   0.9   76.6
Exchange
      Commission
    Small Business        3.1    0.0   (1.2) (0.2) (1.4)   0.0 (1.4)    1.7
Administration
    Social Security      22.1    0.3     0.0 (0.3)   0.1 (0.9) (0.8)   21.2
Administration
Notes: The fiscal year 1998 governmentwide burden-
hour estimate that appeared in the ICB for fiscal
year 1999 was 6,967.2 million burden hours, and
included 16 million burden hours for other
agencies not individually listed in the table.
However, the fiscal year 1998 governmentwide
burden-hour estimate in the ICB for fiscal year
2000 does not include this estimate.  OIRA
estimated that these collections imposed about 16
million burden hours for fiscal year 1999.
Therefore, the governmentwide burden-hour estimate
for fiscal year 1999 is about 7.2 billion burden
hours.  Data on the Federal Acquisition Regulation
were submitted by the General Services
Administration.  Addition of individual elements
may not equal totals due to rounding.

Source:  OMB.

Nearly half of the non-Treasury agencies were able
to reduce their burden-hour estimates to some
extent during this 1-year period, but the size of
the agency increases were, on average, larger than
the reductions.  Only 2 of the 16 agencies with at
least 10 million burden hours in fiscal year 1998
were able to meet the 5-percent burden-reduction
goal for fiscal year 1999 envisioned in the
PRA-DOD and USDA.  DOD's 7.3 million burden-hour
reduction in its paperwork estimate was almost
entirely due to agency-initiated program
changes-specifically, DOD's efforts to reduce and
simplify the burden on contractors.  In contrast,
USDA's burden estimate declined by more than 4
million hours during fiscal year 1999, but the
decline was almost entirely attributable to the
expiration of USDA's authority to collect more
than 7 million burden hours worth of information.
However, this program change does not mean that
the Department imposed 7 million hours less
paperwork burden on the public.  As I will discuss
in more detail later, USDA was one of 2
departments with more than 100 violations of the
PRA during fiscal year 1999.  In those cases, the
departments' authority to collect the information
expired, but the departments continued to collect
the information in violation of the PRA.

Other agencies were also able to claim significant
burden reductions during fiscal year 1999, but
were not able to meet the 5-percent burden-
reduction goal envisioned in the PRA for that
year.  Again, it is important to understand how
these reductions occurred.  For example, DOL's
burden estimate declined by more than 3 million
hours, or about 1.5 percent.  However, virtually
all of the decrease in DOL's estimate was because
of adjustments (e.g., reestimates or adjustments
reflecting changes in the economy for which DOL
should not claim credit).

     Other agencies' burden-hour estimates
increased during this 1-year period, with some
estimates rising substantially.  For example, HHS'
estimate rose more than 25 million hours during
fiscal year 1999, or about 18 percent.  The HHS
increase was nearly evenly divided between program
changes and adjustments.  The Department of
Justice's estimate rose by nearly 11 million hour
between fiscal years 1998 and 1999-an increase of
more than 40 percent.  There, the increase was
entirely due to program changes-primarily
reinstated collections.

     Although these changes in non-Treasury
departments and agencies are interesting, they
pale in comparison to the size of the changes at
IRS.   IRS' burden-hour estimate increased nearly
seven times as much as the net increases from all
other agencies combined.  Therefore, although all
agencies must ensure that their information
collections impose the least amount of burden
possible, the key to controlling federal paperwork
governmentwide lies in controlling the increases
at IRS.

IRS Small Business Initiatives
     Mr. Chairman, you also asked us to identify
any substantive changes in IRS paperwork
requirements directed at small businesses during
the past year.  IRS' ICB submission to OIRA for
fiscal year 2000 identified several initiatives
that the agency said were designed to increase
accessibility for small businesses.  For example,
IRS said that it

ï¿½    Was working with the Senate Committee on
Small Business to survey small business owners and
identify the most complex IRS forms, schedules,
instructions, and other publications confronting
taxpayers, with a goal of reducing tax filing and
recordkeeping requirements encountered by small
business.
ï¿½    Had launched a web page for small business on
the IRS internet homepage to, among other things,
give tax assistance and expand electronic filing.
ï¿½    Had established a "Small Business Laboratory
Prototype" to increase voluntary compliance,
lessen compliance burden, and provide improved
customer service to the small business community.
ï¿½    Was working with the Small Business
Administration to develop new tax training for
small business owners.

The ICB also identified several planned
initiatives for fiscal year 2000 that were
designed to address the needs of small business.
These initiatives included enhanced outreach to
new small businesses and penalty relief to small
businesses with Y2K problems in the first quarter
of the year 2000.  Also, IRS officials told us
during the development of this testimony that the
agency had several other initiatives designed to
reduce the burden associated with IRS paperwork on
small businesses.  However, neither the ICB nor
the IRS officials with whom we spoke indicated how
many burden hours these various initiatives would
reduce from the agency's paperwork estimate.  IRS
officials told us that the agency's burden-
estimation methodology does not allow them to
measure the number of hours reduced as a result of
some of the small business initiatives that the
agency has made or intends to make.

Agencies Identified Hundreds of PRA Violations
During Fiscal Year 1999
     I would now like to turn to the last main
topic you asked us to address-PRA violations.  The
PRA prohibits an agency from conducting or
sponsoring a collection of information unless (1)
the agency has submitted the proposed collection
and other documents to OIRA, (2) OIRA has approved
the proposed collection, and (3) the agency
displays an OMB control number on the collection.
OIRA may not approve a collection of information
for more than 3 years, and there are about 7,000
approved collections at any point in time.  The
PRA also says no one can be penalized for failing
to comply with a collection of information subject
to the act if the collection does not display a
valid OMB control number. The act requires that
OIRA's annual report to Congress include a list of
all violations of the act, and requires agencies
to establish a process to ensure that each
information collection is in compliance with these
clearance requirements.

     In the ICB for fiscal year 1999 that was
published last April, OIRA listed a total of 872
violations of the PRA.  Of these violations, 795
were instances in which OIRA authorizations had
expired and 77 were collections that had not
received OIRA approval. In our April 1999
testimony before this Committee, we concluded that
OIRA had done little to address agencies' PRA
violations and suggested several ways that OIRA
could improve its performance.

     Shortly after the hearing, in May 1999, the
Acting Administrator of OIRA sent a memorandum to
agency chief information officers calling their
attention to the violations in the ICB and noting
that more than 370 of them remained unresolved
(i.e., the agencies still had not obtained OIRA
authorization or had not indicated that they were
no longer collecting the information).  He said
"[t]his situation is unacceptable; we must fix it
immediately and prevent it from happening again."
He requested that each agency (1) provide a
timetable for resolution of each violation listed
in the ICB; (2) provide a timetable for resolution
of each expiration of OIRA authorization since the
end of fiscal year 1998, indicating for each
collection whether or not the agency had
discontinued its use; and (3) describe the
procedures by which the agency's chief information
officer would prevent future violations. The
Deputy Director of OMB also notified the
President's Management Council of the need to
resolve the violations identified in the ICB and
encouraged the members of the Council to work with
the chief information officers to ensure they have
the necessary resources and authority.

     Most of the agencies responded to the Acting
Administrator's memorandum, and they frequently
indicated that they planned to improve their
performance.7  For example, the Chief Information
Officer at USDA indicated that 47 of the more than
100 information collections that were listed in
the ICB as violations had been reinstated, and 5
other collections were pending approval by OMB.
The Acting Chief Information Officer at DVA said
that they would make every effort to prevent
violations in the future, and that the agency's
first challenge was to "eliminate all expired
collections of information by September 30, 1999."
(Emphasis in original.)

     Some of the agencies also indicated that some
of the information collections identified in the
ICB for fiscal year 1999 as being in violation of
the PRA were not violations.  For example, USDA's
Chief Information Officer said that five of the
collections were intentional expirations.  The
Assistant Secretary for Management and Budget at
HHS indicated that six of the collections were
incorrectly listed as violations for a variety of
reasons.  Therefore, the number of PRA violations
during fiscal year 1999 appears to have been
somewhat less than the 872 reported in the ICB,
although the precise number of violations during
that year remains unclear.

     In September 1999, the OIRA Administrator
sent letters to the agencies notifying them of
continuing and possible new violations and
encouraging them to bring those violations into
compliance.  For example, in his letter to the
Department of Justice, the Administrator said
OIRA's records indicate that "there may be eight
uncorrected violations dating back to last fiscal
year, as well as at least 43 additional violations
through unintentional expirations this year."

     In addition to corresponding with the
agencies, OIRA has taken other actions designed to
reduce the number of violations.  For example, for
years, OIRA has sent agencies a monthly list of
agency information collections whose OMB
authorizations will expire within the next few
months.  OIRA has also added information about
expired approvals to OMB's Internet home page.  As
a result, the Acting OIRA Administrator said last
year that potential respondents would be able to
inform the collecting agency, OMB, and Congress of
the need for the agency to either obtain
reinstatement of OMB approval or discontinue the
collection.

Agencies Again Reported Hundreds of PRA Violations
     The fiscal year 2000 ICB indicates that PRA
violations are still a serious problem.  Table 2
shows the number of information collections in
each agency for which OIRA authorizations had
expired (and the agencies appear to have continued
to collect the information beyond the expiration
dates), collections that did not receive OIRA
authorizations, and the total number of PRA
violations in each agency.  As you can see, the 27
agencies indicated that 710 of their information
collections were in violation of the PRA at some
point during fiscal year 1999.  Of these, 620 were
instances in which OIRA authorizations had
expired, and 90 were collections that had not
received OIRA approval. USDA and DVA had the most
violations-more than 100 in each agency.  Four
other departments (Health and Human Services,
Housing and Urban Development, Interior, and
Justice) collectively reported 281 violations.

Table 2: Reported Violations of the PRA During
Fiscal Year 1999
                                                     Expired Unapprove Total
                                                     informa        d
                                                        tion informati
                                                     collect       on
                                                        ions collectio
                                                                   ns
Departments                                                                
    Agriculture                                           98       18   116
    Commerce                                              14       13    27
    Defense                                               31        1    32
    Education                                              7        3    10
    Energy                                                 0        0     0
    Health and Human Services                             49       11    60
    Housing and Urban Development                         80        0    80
    Interior                                              25       18    43
    Justice                                               98        0    98
    Labor                                                 20        3    23
    State                                                 26        6    32
    Transportation                                         1        6     7
    Treasury                                               3        0     3
    Veterans Affairs                                     115        0   115
Agencies                                                                   
    Environmental Protection  Agency                       1        1     2
    Federal Acquisitions Regulation                        0        0     0
    Federal Communications Commission                      5        0     5
    Federal Deposit Insurance Corporation                  2        0     2
    Federal Emergency Management Agency                   22        5    27
    Federal Energy Regulatory Commission                   0        0     0
    Federal Trade Commission                               0        0     0
    National Aeronautics and Space                         0        0     0
      Administration
    Nuclear Regulatory Commission                          0        0     0
    National Science Foundation                            0        0     0
    Small Business Administration                         19        0    19
    Securities and Exchange Commission                     0        0     0
    Social Security Administration                         4        5     9
Total                                                    620       90   710
Note:  The General Services Administration
administers the Federal Acquisitions Regulation.

Source:  OMB.

     OIRA indicated that many of the 710
violations had been resolved by the end of fiscal
year 1999 (i.e., OIRA authorization for the
collection had been reinstated or the collection
had been discontinued).  However, more than 250
violations had not been resolved and, in some
cases, had been occurring for years.  For example,
OIRA authorization for 28 of USDA's collections
had been expired since at least 1997 and no action
had been taken to reinstate those authorizations
or discontinue the collections by the end of the
fiscal year.

As I indicated earlier, it is unclear whether the
number of violations is going down, going up, or
staying about the same.  On the surface, it
appears that the number of violations is going
down (from 872 to 710).  However, some of the
expirations that OIRA identified as violations in
the fiscal year 1999 ICB were not violations, so
the real extent of change is less than it appears.
At USDA and DVA, though, it is clear that not much
progress has been made.  In fiscal year 1998,
there were 103 violations at USDA; the recently
published ICB lists 116 violations during fiscal
year 1999.  Last year's ICB indicated that there
were 128 violations at DVA during fiscal year
1998; the agency's submission for this year lists
115 violations during fiscal year 1999.  Even if
the number of PRA violations governmentwide is
going down, we believe that 710 violations of the
act in 1 year is still far too many.

In last year's testimony, we provided an estimate
of the monetary cost associated with 28 PRA
violations that had been the subject of
correspondence between OIRA and the Subcommittee.
To estimate that cost, we multiplied the number of
burden hours associated with the violations by an
OMB estimate of the "opportunity cost" associated
with each hour of IRS paperwork.  As a result, we
estimated that the 28 violations imposed nearly $3
billion in unauthorized burden on the public.
However, we were unable to estimate the
opportunity costs of all PRA violations because
the ICB did not provide information on the number
of burden hours associated with each of the
violations.

The fiscal year 2000 ICB also does not identify
the number of burden hours for each violation, so
we again cannot provide an estimate of the
opportunity costs that all of these violations
represent.  Nevertheless, we continue to believe
that these violations represent potentially
significant opportunity costs to the public.
Several of the USDA-expired collections that we
highlighted last year continued to be violations
during fiscal year 1999, and each collection
imposed substantial costs on the public. For
example:

ï¿½    USDA's authorization to collect the report of
acreage information collection expired on June 30,
1997, with an annual estimated burden of 2.8
million burden hours.  In November 1997, OIRA
disapproved reinstatement of this collection as
"lacking need and practical utility."
Nevertheless, USDA continues to collect the
information.  As of September 30, 1999, the
collection had imposed 6.4 million burden hours of
paperwork without OIRA approval (2.25 years times
2.85 million burden hours per year).  At a wage
rate of $26.50 per burden hour, the opportunity
cost for this violation was nearly $170 million.8
ï¿½    USDA's authorization to collect the
noninsured crop disaster assistance  information
collection expired on May 31, 1998, with an annual
estimated burden of 10.1 million burden hours.  As
of September 30, 1999, the collection had imposed
13.5 million burden hours of paperwork without
OIRA approval.  Therefore, the opportunity cost
associated with this violation was about $357
million.

     Not all of the expired collections were this
large.  Furthermore, reauthorization of these
collections will not save the public the estimated
opportunity costs.  Nevertheless, another way to
view paperwork burden is in monetary terms, and
these figures illustrate the significance of the
violations that continue to occur.

OIRA and Agencies Can Do More to Ensure Compliance
With the PRA
As I indicated earlier, OIRA has undertaken
several efforts since last year's hearing to
encourage agencies to comply with the PRA.
However, with 710 violations of the PRA during
fiscal year 1999, it is reasonable to question the
effectiveness of those efforts, and even whether
OIRA alone can deal with this situation.

     For example, although adding information
about expired approvals to OMB's Internet home
page is a step in the right direction, this
approach places the burden of responsibility to
detect unauthorized collections on the public. As
we emphasized during last year's hearing, it is
OIRA, not the public, that has the statutory
responsibility to review and approve agencies'
collections of information and identify all PRA
violations.

Of the two types of PRA violations (collections
without OMB authority and collections whose
authority has expired), collections whose OMB
authority has expired are the most numerous and
the easiest to identify.  However, OIRA's current
procedures do not appear capable of detecting even
these violations in a timely manner.  For example,
although OIRA has sent agencies a monthly list of
information collections whose OMB approvals are
about to expire, the agencies are not required to
respond to these notifications.  Therefore, OIRA
does not know which information collections are
being administered in violation of the PRA until
it collects the information as part of the annual
ICB process-after the violations have occurred.

Even when OIRA becomes aware of PRA violations,
OIRA officials told us they have no authority to
require agencies to come into compliance.
Ultimately, they said, it is up to the agencies to
comply with the law.  We do not believe that OIRA
is as powerless as this explanation would suggest.
In our previous testimony we identified several
actions that OIRA could take to encourage agencies
to come into compliance, including the following:

ï¿½    Publicly announce that the agency is out of
compliance with the PRA in meetings of the Chief
Information Officer's Council and the President's
Management Council.
ï¿½    Notify the "budget" side of OMB that the
agency is collecting information in violation of
the PRA and encourage the appropriate resource
management office to use its influence to bring
the agency into compliance.
ï¿½    Notify the Vice President of the agency's
violation. (The Vice President is charged under
Executive Order 12866 with coordinating the
development and presentation of recommendations
concerning regulatory policy, planning, and
review.)
ï¿½    Place a notice in the Federal Register
notifying the affected public that they need not
provide the agency with the information requested
in the expired information collection.

 OIRA officials told us that the issue of PRA
violations had been raised during at least one
meeting of the Chief Information Officer's Council
and the President's Management Council.  They also
said that the resource management offices receive
copies of the ICBs listing the violations.
Although they said that OIRA desk officers
sometimes communicate with staff in OMB resource
management offices about PRA violations, they also
said that they do not do so routinely.  Neither
has OIRA notified the Vice President about the
violations or placed the suggested notices in the
Federal Register.

In our testimony last year we also said that OIRA
could notify agencies that the PRA requires them
to establish a process to ensure that each
information collection is in compliance with the
act's clearance requirements.  Agencies that
continue to collect information without OMB
approval or after OMB approval has expired are
clearly not complying with this requirement.  Some
agencies do not appear to have established sound
clearance processes.  Just 6 of the 27 PRA
agencies in table 2 (USDA, DVA, and the
Departments of Health and Human Services, Housing
and Urban Development, Interior, and Justice)
accounted for more than 70 percent of all
violations.

At least some of the problem may be certain
agencies' minimal human capital investment in
paperwork clearance.  According to OIRA officials,
USDA has only one staff member responsible for
reviewing the entire Department's paperwork
requirements-a condition that they said
contributes to the agency's poor PRA performance.
Likewise, DVA indicated in its response to OIRA's
May 1999 memorandum that it had "one full-time
equivalent (FTE) person to support the PRA."

Although OIRA's current workload is clearly
substantial, we do not believe the kinds of
actions that we suggested would require
significant additional resources.  Primarily, the
actions require a commitment by OIRA leadership to
improve the operation of the current paperwork
clearance process.  However, we also recognize
that OIRA cannot eliminate PRA violations by
itself.  Federal agencies committing these
violations need to evidence a similar level of
resolve.

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

_______________________________
1Paperwork Reduction Act:  Burden Increases and
Unauthorized Information Collections (GAO/T-GGD-99-
78, Apr. 15, 1999).
2In this testimony, we use the term "during fiscal
year 1999" to refer to the period between
September 30, 1998, and September 30, 1999.
3The act requires the Director of OMB to delegate
the authority to administer all functions under
the act to the Administrator of OIRA but does not
relieve the OMB Director of responsibility for the
administration of those functions.  Approvals are
made on behalf of the OMB Director.  In this
testimony, we generally refer to OIRA or the OIRA
Administrator wherever the act assigns
responsibilities to OMB or the Director.
4 The data from the fiscal year 2000 ICB (shown in
table 1of this testimony) indicates that the
governmentwide burden-hour estimate for fiscal
year 1999 was 7,183.9 million burden hours.
However, that figure does not include about 16
million burden hours from agencies not listed in
the table.  Therefore, the actual governmentwide
burden-hour estimate for fiscal year 1999 was
about 7,200 million burden hours.
5EPA Paperwork:  Burden Estimate Increasing
Despite Reduction Claims (GAO/GGD-00-59, Mar. 16,
2000).  These reductions were more than offset by
additions to EPA's collections, resulting in a net
gain of about 10 million burden hours during this
period.
6OMB instructed the agencies to consider only
those statutes passed since January 1, 1995, as
"new."
7OIRA was not able to provide us with responses
from the Departments of Education and Energy, the
Federal Energy Regulatory Commission, the National
Science Foundation, and the Social Security
Administration.
8As we noted last year, OMB has estimated the
opportunity cost associated with filling out tax
forms at $26.50 per hour.  Although OMB noted that
the hourly cost of a technical employee (including
overhead and fringe benefits) may exceed $40 per
hour, we used $26.50 as the applicable wage rate
in our calculations.
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