oversight

Bureau of the Census Cost Estimates for Mid-Decade Census Proposals

Published by the Government Accountability Office on 1971-07-27.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

                  HE SUBCOMMITTEE
                  ND STATISTICS
                  ON POST OFFICE
                  ERVICE
                 EPRESENTATIVES




                                        8.78395



Department   of Commerce




                      OLLER   GENERAL
                        COMPTROLLER      GENERAL     OF      THE      UNITED     STATES
                                       WASHINGTON.    D.C.         2QS48




B-78395

Dear Mr. Chairman:

      In your letter       of March 26, 1971, you advised us of your Subcommit-
tee's recent investigation        of the 1970 decennial census conducted by the             "? 4--
Bureau of the Census and stated that during the investigation                State and
local officials      recommended alternatives>.to,the.current        practice-of    con-
ducting __,_
          a- rz-~.
              census  every   decade.
                ~-?7~%,.Pi-ran-,c
                          :aMey?w~~     Specifically   these  alternatives     were   (1)
the~blishment           of a mid-decade census and (2) the use of special sample
surveys to be taken on a regular basis that would utilize               in-depth and de-
tailed interviews.         You requested that we evaluate which method--a mid-
decade census or the use of special surveys --would yield more fruitful                 re-
sults, taking into consideration         the costs and the final product.

       In accordance with discussions with your office,    we agreed to provide
you with (1) estimates of the costs--in    current dollars--of     four mid-
decade census proposals presented during hearings held by the Subcommit-
tee on Census and Government Statistics    in 1961 and 1962 and (2) whatever
information   we could develop to indicate which method--a mid-decade census
or special surveys --would yield more fruitful    results,   taking into consid-
eration the costs and the final product.

      This letter   transmits the cost estimates of the four mid-decade census
proposals.    We plan to transmit the information  relative  to the second phase
of your request in September 1971.

     At our request the Bureau of the Census developed cost estimates for
each of the four mid-decade census proposals.    The estimates, shown below,
were made available  for our review on June 4, 1971. The Bureau's estimates
show what the four mid-decade census proposals would cost as of January 1,
1971, on the basis of work-load projections   to 1975.

                                                                      Estimated cost
                          Proposal                                       (millions)

                         Level     I                                           $154
                         Level II                                               169
                         Level III                                              170
                         Level   IV                                             228

     A detailed presentation  of these estimates is shown in enclosure I.
A description  of the four proposals and our comments on certain factors
used by the Bureau in developing the cost estimates are presented in sub-
sequent sections of this report.




                               50 TH ANNIVERSARY                   7921-       1971
B-78395



        In view of your urgent need for this report, we did ? very limited
amount of testing and verification     of the estimates and the underlying as-
sumptions made by the Bureau.      (See p. 3.) As evidenced by the comments
presented below regarding certain assumptions made by the Bureau concern-
ing price and work-load increases (see p. 5) and other factors noted rel-
ative to the cost estimates (see p, 6), the Bureau's estimates should not
be considered to be precise.      However, they do appear to fall within rea-
sonable limits.

MID-DECADE CENSUSPROPOSALS

        The following descriptions   of the four mid-decade census proposals      were
presented by the Director,    Bureau of the Census, in his testimony before
your Subcommittee on June 10, 1971.

         The level I proposal provides for (1) a head count of the entire popu-
lation and the accumulation of the basic characteristics       of name, address,
relationship    to head of household, sex, race, and age and (2) a collection
of information    concerning persons of Spanish cultural   heritage.   The Direc-
tor indicated that data collected could be tabulated for every State, every
county and its subdivisions,      and every census tract1 in the metropolitan
areas and for areas as small as enumeration districts.2        Also the data for
enumeration districts     could be arranged to provide data for larger areas,
such as voting districts,      school districts, and other special areas for
which such data are needed. The Bureau's estimated cost for this proposal
is about $154 million.

         The level II proposal would seek answers to all of those questions asked
of 100 percent of the population in the 1970 decennial census. This would
include the same type of information     as the level I proposal plus additional
information   on basic housing characteristics,    such as type of unit, condi-
tion, occupancy, rooms, tenure, vacancy, and plumbing facilities.        The Di-
rector said that this information    could be tabulated in the same degree of
geographic detail as that under the level I proposal and could be tabulated
also by city block for the urbanized areas within the metropolitan       areas.
The Bureau's estimated cost for this proposal is about $169 million.


1Census tracts are small   areas into which large cities   and their   adjacent
 areas have been divided   for statistical purposes.

2An enumeration district    is a small area which is assigned to an enumerator
 and which must be canvassed and reported on separately.      In most cases an
 enumeration district    contains approximately  250 housing units.

                                          2
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       The level IV proposal is a replication     of the 1970 decennial census
and provides for the collection     of the same type of data as the level II
proposal plus data--to be gathered by a 20-percent sample of the popula-
tion--on education, income, employment and unemployment, commuting, migra-
tion, foreign origin,    type of work, method of heating housing units,      fuels
used, age of structure,    and air conditioning.      Bureau officials informed
us that the tabulations    and publications    program for this proposal could
be similar    to that executed for the 1970 decennial census. The Bureau's
estimated cost for this proposal is about $228 million,

      The level III proposal provides for the collection  of the same type of
data as the level IV proposal.    All the data, however, would be collected
from a sample of 25 percent of the population.    Bureau officials informed
us that the data would not be tabulated for any area with a population of
less than 25,000 because of the unreliability    of the sample data collected
in such areas. The Bureau's estimated cost for this proposal is about
$,170 mil.lion.

TESTING REASONABLENESS
                     OF COST ESTIMATES

       The Bureau used the cost of the 1970 decennial census of $218 million--
comprising actual costs of $151 million    for the period 1964 through fiscal
year $970 and budgeted costs of $67 million      for postcensus work to Decem-
ber 31, 1972--as the basis for estimating     the costs for each of the four mid-
decade census proposals.    The estimated cost for the level IV proposal (rep-
lication   of the 1970 census) was determined by adjusting     the total of
$218 million   for (1) annual increases in prices and costs for personnel ser-
vices from fiscal year 1964 to January 1, 1971 (applied against the actual
cost portion of the total costs),    (2) costs of increases in work loads pro-
jected to 1975, (3) costs of nonrecurring activities,       and (4) costs of in-
creased personnel services for anticipated     overtime requirements.    The costs
for the levels I, II, and III proposals were determined by eliminating       from,
or adding to, the estimated cost for the level IV proposal certain costs
applicable   only to such proposals.

       The assumptions as to price increases for updating the costs of the 1970
decennial census to January 1, 1971, are for the most part not well sup-
ported.    The Bureau was handicapped in this regard because of the lack of
readily available historical    information concerning price increases. The
Bureau's assumptions as to work-load requirements for each of the proposals
were based principally   on personal judgment.
     Our tests of the cost estimates included (1) evaluation of the method-
ology used by the Bureau in estimating  the costs of the mid-decade census
proposals, (2) verification of the accuracy of the cost of the 1970 decen-
nial census by tracing the majority of fiscal year 1970 program costs to the
Bureau's cost accounting summary documents, (3) examination of the Bureau's


                                        3
B-78395



working papers supporting the costs attributable     to three program activi-
ties--mailing    preparation, data collection,  and data processing (these ac-
tivities    accounted for about $149 million,  or 68 percent of the total costs
of the 1970 decennial census), and (4) discussions with Bureau employees
regarding the basis for the assumptions used in developing the cost esti-
mates.

     Due to the limited  time available for our review and the fact that many
of the Bureau's assumptions were based on personal judgment, we were unable
to evaluate the reasonableness of the assumptions.

       Our review resulted in several adjustments in the various costs compris-
ing the total estimated cost for each of the mid-decade census proposals.
Because these revisions were generally offsetting,   however, the net effect
on the total estimated cost for each of the mid-decade census proposals was
negligible.

FACTORSWHICH COULDSIGNIFICANTLY
AFFECT VALIDITY OF COST ESTIMATES

      Several significant factors in relation to the Bureau's cost estimates
for the four mid-decade census proposals should be noted by the Subcommit-
tee in its evaluation of the costs of a mid-decade census.

      The cost estimates are based on January 1971 prices and therefore do not
include price increases that have occurred, or can be expected to occur, be-
tween January 1971 and the time that costs would be incurred for a mid-
decade census. For example, the cost estimates do not provide for the in-
crease in the cost of mailing census questionnaires   resulting from postage-
rate increases which occurred in May 1971 or for any Federal pay increases
which may occur after January 1971.

      Another factor is the Postal Service charge for checking and updating        Wy.:
mailing addresses.   For the 1970 decennial census, the Post Office Depart-         .
ment, under a negotiated contract,  charged the Bureau $2.9 million on the
basis of 8 cents for every address checked and updated.   The Bureau esti-
mated that these costs for a future Postal Service contract would amount to
$3.9 million.

     The Postal Service is required by legislation  to become self-sustaining
by January 1, 1978. Bureau employees informed us that postal officials       had
not been contacted to obtain their views concerning what the costs may be
for such work for a mid-decade census.
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      An additional  factor is the variance in the method of data collection
between the level IV proposal and the levels I, II, and III proposals.       The
costs for the level IV proposal were based on the assumption that 60 per-
cent of the questionnaires   would be returned by mail and that the remaining
40 percent would be collected by enumerators.    This ratio was used in the
1970 decennial census. Costs for the other three proposals, however, were
based on the assumption that 90 percent of the questionnaires    would be re-
turned by mail and that the remaining 10 percent would be collected    by enu-
merators.   The estimates for the levels I, II, and III proposals are there-
fore not comparable to the estimate of the level IV proposal because of
cost variances associated with the different   mail-back ratios.

     Bureau officials   informed us that the cost estimates for the four mid-
decade census proposals had originally     been determined on the basis of the
90 to 10 mail-back ratio.     Because of some concern over the indicated higher
costs associated with the 90 to 10 mail-back ratio,      the cost of the level IV
proposal was recomputed on the basis of the 60 to 40 ratio--the       same as that
used in the 1970 decennial census. Bureau officials       informed us further that
because of time constraints    they considered it impracticable    to recompute the
other proposals on this same basis.

      As indicated earlier   the Bureau made a number of necessary assumptions
in revising the costs of the 1970 decennial census to arrive at the esti-
mate of the cost for each of the mid-decade census proposals.     The recom-
puted cost estimates for projected work-load increases amounted to about
$19 million   and for the price increases amounted to about $16 million.    Fol-
lowing are some of the principal    assumptions made by the Bureau.

     --The number of housing units in 1975 would be 12.2 percent higher
        than in 1970 based on the estimated housing-unit starts and losses
        for the 1970-75 period.

     --The cost of personnel compensation for both permanent and temporary
        employees for the 1970 decennial census would be increased at the
        rate of increase in Federal pay for the June 1964 through January
        1971 period.

     --The cost of personnel benefits was based on the application   of sev-
        eral estimated percentages to the 1970 decennial census costs for
        personnel services as adjusted for salary increases.   The estimated
        percentages were based on (1) increases in Federal Insurance Contri-
        butions Act taxes paid by temporary employees and (2) the ratio of
        permanent and temporary employees in the various census program
        areas.
,   .


        B-78395



                  --The cost of travel and transportation    of persons was increased by the
                     rates of increases in Government reimbursements for the use of pri-
                     vately owned automobiles during the 1964-71 period.    Other cost ele-
                     ments, such as travel by common carrier and per diem, were not con-
                     sidered.  The costs incurred for reimbursements for use of privately
                     owned automobiles accounted for the major part of the costs in
                     travel and transportation   of persons for the 1970 decennial census.

                  --The costs of printing  and reproduction    and of other services were as-
                     sumed to be higher than the actual costs of the 1970 decennial census
                     by 25 percent and 75 percent, respectively,    of the rates of Federal
                     pay raises during the 1964-71 period.     Bureau officials  could provide
                     us with no firm bases for these assumptions.

                  --The costs of rents, communications, utilities,      supplies and mate-
                     rials, equipment, and the transportation    of things were all in-
                     creased over the actual costs of the 1970 census by 2 percent a year.
                     A Bureau official  informed us that this percentage had been arrived
                     at by considering the yearly increases indicated by the consumer
                     price index and the wholesale price index.

        IMPROVEMENTSRECOMMENDEDBY THE
        SUBCOMMITTEEON CENSUSAND STATISTICS

                The Bureau's cost estimates for the four mid-decade census proposals
        could be significantly    understated should the Bureau implement, in a mid-
        decade census, the improvements recommended by the Subcommittee on Census
        and Statistics    in a "Report on Accuracy of the 1970 Census Enumeration,"
        dated December 17, 1970.

                 At the time of our review, the Bureau had developed estimates for the
        costs of some of these improvements for each of the four mid-decade census
        proposals.    The cost of the improvements, however, were not included in the
        cost estimates presented on page 1. The recommended improvements and the
        Bureau's estimated cost for some of the improvements are shown in enclo-
        sure II.

                  We did not verify the accuracy of the estimates shown in enclosure II.
        Bureau officials     advised us that the estimate of $20 million   for additional
        publicity    was suggested by the Subcommittee as the minimum amount required
        to achieve an adequate public awareness. The Bureau had not developed any
        information     concerning the composition of such a publicity   program.

                The Subcommittee recommended that the Bureau's temporary district  of-
        fices remain open for a longer period of time after completion of the enu-
        meration, to enable local community officials  who complain of an undercount


                                                   6
    B- 78395



    to deal directly with the Bureau official  having responsibility  for carry-
    ing out the census locally.  The cost estimates developed by the Bureau for
    this improvement were based on keeping the district   offices open 1 addi-
    tional month.

          We plan to make no further distribution    of this report unless copies
    are specifically    requested, and then we shall make distribution   only after
    your agreement has been obtained or public announcement has been made by
    you concerning the contents of the report.      Members of my staff will be
    available   to discuss these matters with you further if you desire.

                                             Sincerely   yours,




                                             Comptrolier'General
                                             of the United States

    The Honorable Charles H. Wilson, Chairman
    Subcommittee on Census and Statistics
C   Committee on Post Office and Civil    Service
    House of Representatives
         .                                                                          ENCLOSUREI

                                       BUREAUOF THE CENSUS

                                       COST ESTIMATES FOR

                                 MID-DECADE CENSUSPROPOSALS

    .
.
                                         Level I     Level II        Level III          Level IV
        Program activities              proposal     proposal        proposal           proposal

                                                            (000 omitted)

        Program planning, direction,
           and review                   $    4,431   $     4,802      $     7,439       $    7,439
        Pretests and dress
          rehearsals                           720            800          1,100           1,100
        Geographic work                     13,077        13,077          13,077          13,077
        Mailing preparation                 14,706        16,139          14,090          13,882
        Data collection                     98,587       107,996          80,001         129,899
        Data processing                      7,272         8,920          32,844          34,116
        Publications                           554           869           2,033           3,730
        Sampling, statistical
          studies, and evaluations           2,100         2,100            4,678           4,478
        Outlying areas                       1,603         1,972            1,306           2,866
        Publicity                              521           521              521             521
        History                                172           172              172             172
        Improvements of data
          usability                            310           402            1,458            1,548
        Office space, Bureau general
          expenses, etc.                     8,049         8,717            8,840           11,604
        Capital outlay                       2,215         2,461            2,506            3,413

             Total                      $154.317     $168,948         $170.065          $227,845
                                                                                                      ENCLOSUREII


                                              BUREAUOF THE CENSUS

                                               COST ESTIMATES FOR

                                     CERTAIN IMPROVEMENTS
                                                        RECOMMENDED
                                                                  BY

                                  THE SUBCOXMITTEEON CENSUSAND STATISTICS




                                                    Level I        Level II               Level III        Level IV
                   Improvements                    proposal        proposal               proposal         proposal


                                                                            (000 omitted)

      Additional   publicity
        (note a)                                   $20,000         $20,000                $20,000          $20,000
      Keep temporary district
        offices open for 1
        additional   month after
        completion of the
        enumeration (note b)                         3,507           3,750                  4,296            4,850
      Expand precanvas survey                        1,250           1,250                  1,250            11250

               Total

      a
          Amount  suggested by the Subcommittee on Census and Statistics                            as the minimum
          .:mount required to achieve an adequate public awareness.

      b
          Includes     release    of preliminary      population    and housing counts.

      Note:        The Bureau had not developed cost estimates                  for the following         recommenda-
t -                tions by the Subcommittee.

 -                 1. Increase     of two or three regional         field      offices.

                   2. Eliminate     unused census questionnaires.

                   3. Extend postenumeration          check.

                   4. Improve postenumeration           check.

                   5. Improve coordination between Census Bureau's and Post Office
                      Department's population growth estimate program.

                   6. Arrange for Executive order making better coordination   possible
                      between the Census Bureau and other Government agencies.