Paperwork Reduction: Information on OMB's and Agencies' Actions

Published by the Government Accountability Office on 1997-06-25.

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

United States
General Accounting Office
Washington, D.C. 20548

General Government Division


June 25, 1997

The Honorable Christopher S. Bond
Chairman, Committee on Small Business
United States Senate

Subject: Panerwork Reduction: Information on OMB’s and
         Agencies’ Actions

Dear Mr. Chairman:

On June 4, 1997, I testified before your Committee on the implementation of the
Paperwork Reduction Act of 1995, as amended.’ Following the hearing, you
asked us to answer a number of questions. In developing our responses, we
(1) used information in the Office of Management and Budget’s (OMB) Bulletin
97-03, “Fiscal Year 1996 Information Streamlining Plan and Information
Collection Budget”; (2) reviewed agencies’ information collection budget and
information streamlining plan submissions pursuant to the Bulletin, (3)
contacted OMB officials; and (4) reviewed key provisions in the act.

Our responses to your specific questions are provided in the enclosure to this
letter. In summary, by setting a goal of 25 percent reduction in paperwork
burden by the end of fiscal year 1998, OMB has taken some steps to achieve the
goals described in the Paperwork Reduction Act. However, because OMB has
not informed Congress of agencies’lack of progress toward those goals, it has
not met the act’s requirement to keep Congress fully and currently informed of
major activities under the act. Also, OMB did not set governmentwide or
agency-specific goals for fiscal year 1996 until more than three-quarters of the
year had passed-too late for agencies to plan and implement measures to
achieve the goals. For fiscal year 1997, OMB again will not set goals until late
in the year. Ultimately, though, possible major fluctuations in the Internal
Revenue Service’s (IRS) burden-hour estimate suggest that governmentwide
figures may not accurately reflect the paperwork burden felt by the public. A

‘Paperwork Reduction: Governmentwide Goals Unlikelv To Be Met (GAO/T-
GGD-97-114, June 4, 1997).
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strong case can be made that it is OMB’s job to ensure that valid and consistent
measures of paperwork are made.

We provided a draft of this letter and the enclosure to the Deputy Administrator
of the Office of Information and Regulatory Affairs at OMB. He said he had no

We hope this information is helpful to you. We will make this letter available to
other interested parties on request. If you have any further questions or wish to
discuss these responses, please contact me on (202) 512-9039or Curtis
Copeland of my staff on (202) 512-8101.

Sincerely yours,

Michael Brostek
Associate Director
Federal Management and
 Workforce Issues


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ENCLOSURE                                                           ENCLOSURE


(1) The goal that OMB laid out in January 1997 simply says agencies
should develop ways to reduce burden by 25 percent by the end of fiscal
year 1998. Is this goal consistent with those set forth in the act?

      Answer:    The goals set by OMB provide agencies with more latitude than
      the goals set forth in the Paperwork Reduction Act of 1995. The act
      requires OMB to set a goal of at least a 10 percent burden reduction
      governmentwide 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” extent. Therefore, agencies could meet OMB’s fiscal year
      1998 goal of reducing burden by 25 percent by following the schedule in
      the act. Agencies could also meet OMB’s goal by making all of their
      burden reductions in fiscal year 1998. However, this approach would not
      achieve any cuts in fiscal years 1996 or 1997 as contemplated by the act.
      As a result, the public would not enjoy the benefits of burden reductions
      in the earlier years. Also, the establishment of a 3-year goal makes it
      more difficult judge whether agencies are making the progress that is
      necessary for agencies to reduce paperwork by 25 percent by the end of
      fiscal year 1998.

(2) Could OMB do a better job in negotiating    with the agencies to set
more aggressive goals--so that the individual agency goals sum to the
governmentwide  goal?

      Answer:     OMB still believes that the Paperwork Reduction Act does not
      require that individual agency goals must sum to the governmentwide
      goal. However, in January 1997, OMB initiated a new process for agency
      goal setting that, in some ways, supersedes that position. OMB Bulletin
      97-03 directs each covered agency to prepare and implement an
      Information Streamlining Plan (ISP) that includes goals and timetables to
      achieve, by the end of fiscal year 1998, a cumulative burden reduction of
      25 percent from its fiscal year 1995 year-end level. In the ISP, each
      agency is to identify specific administrative changes, program
      restructures, regulatory reinventions, and legislative proposals that will
      reduce its total paperwork burden on the public. OMB also announced
      that it intends to conduct hearings with agency heads and other senior-
      level agency officials on the content of the agency plan and to determine
      compliance with burden reduction goals. Additionally, agencies are to
      report on the status of their activities at least every 6 months.

      Although these steps appear to be in the right direction, it is too soon to
      tell what impact they will ultimately have on agencies’burden reduction
      goals because OMB is just beginning hearings with the agencies.
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ENCLOSURE                                                           ENCLOSURE
     However, IRS and the Environmental Protection Agency (EPA) ISPs
     indicate that those agencies are not identifying actions that will enable
     them to reduce paperwork burden significantly. IRS said in its ISP that it
     could not reach the 25 percent burden reduction goal because its
     information collections “request information that is mandated by the
     Internal Revenue Code....” EPA said its burden-hour total was likely to
     increase, not decrease, because of new and expanded statutory

(3) Has the President or Vice President encouraged         agencies to set goals
that would help achieve the governmentwide  goals?

      Answer:     According to OMB officials, apart from comments made at the
      time the Paperwork Reduction Act was signed in 1995, neither the
      President nor the Vice President has directly addressed the
      governmentwide or agency-specific paperwork reduction goals envisioned
      by the act. However, these officials said that reducing paperwork burden
      has been a key objective of the administration’s regulatory reinvention
      initiative, and that both the President and the Vice President have
      encouraged agencies to set aggressive goals for reducing “red tape.”

(4) Could OMB be more zealous in its review of information   collection
requests submitted by agencies for approval as a means to reduce
paperwork burdens?

      Answer:     We did not examine OMB’s review of agencies’information
      collection requests. Therefore, we are not able to comment on the rigor
      of its reviews. However, OMB’s review of information collections can be
      an important vehicle for keeping agencies from imposing unnecessary
      paperwork burden. Rigorous review of new information collection
      requests can help ensure that paperwork burden is kept to the minimum
      needed to accomplish agencies’missions. The required periodic review
      of existing information collections as they are submitted for renewal can
      contribute to reducing agencies’actual burden-hour totals.

(5) When OMB waits until midway through a fiscal year before it sets
burden reduction goals as required by the Paperwork Act, how valuable
do you believe these goals are for the agencies?

      Answer:    Establishing a “goal” for a period of time that has almost
      elapsed does not allow an agency the time that is needed to plan and
      implement measures necessary to achieve the goal. In that sense,
      establishing goals late in a fiscal year is not very valuable. Agency-
      specific goals reflect the end-of-fiscal-year data that the agencies provide
      in their Information Collection Budget (ICB) submissions (unless
      changed by OMB). Last year, OMB did not set the governmentwide or
      agency-specific goals for fiscal year 1996until it published the ICB for
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ENCLOSURE                                                         ENCLOSURE

      fiscal year 1995 in August 1996. By that time, more than three-quarters
      of fiscal year 1996 had already passed. Although OMB has set a 3-year
      goal of reducing paperwork burden by 25 percent, OMB will not formally
      set the governmentwide goal or agency-specific goals for fiscal year 1997
      until it publishes the ICB for fiscal year 1996. OMB officials said the
      agency will publish that ICB by the end of June 1997. By that time,
      however, about three-quarters of the fiscal year will again have elapsed.

(6) Last year, you advised the Committee that you did not believe that
OMB’s Office of Information  and Regulatory Affairs (OIRA) had met the
act’s requirement  to keep Congress and its committees “fully and
currently informed” about the act’s major activities. Do you believe that
they have done so this year?

      Answer:    An OIRA official said that the agency’s ICBs are the vehicle by
      which it satisfies the act’s informational requirements. The August 1996
      ICB indicated that the federal government as a whole was not likely to
      meet the lo-percent burden-reduction goal envisioned in the act for fiscal
      year 1996. However, that information was not conveyed until more than
      three-quarters of the fiscal year had elapsed, several months after OMB
      received the information from the agencies. Also, OIRA has not informed
      Congress or its committees that accomplishment of the lo-percent goal
      for fiscal 1997 is unlikely. Therefore, we still do not believe that OIRA
      has met the requirement to keep Congress “fully and currently informed”
      about the act’s major activities.

(7) How can IRS say that its burden figure may fluctuate by a factor        of
five? This would appear to indicate that the governmentwide  figures
may not be very reliable.

      Answer: In a paper prepared for a 1996 Brookings Institution forum,
      Professor Joel Slemrod, one of the leading academic authorities on
      taxpayer burden, concluded that the methodology IRS currently uses
      overstates business taxpayer paperwork burden by a factor of five. IRS
      officials said that after working with analysts in the Office of Tax
      Analysis in the Department of the Treasury, Professor Slemrod now
      believes that the appropriate adjustment factor for business taxpayer
      paperwork burden is about 3.8. IRS recently drafted a statement of work
      for a new study of IRS tax compliance burden.

      Because IRS paperwork burden has recently accounted for more than 75
      percent of the governmentwide burden, major fluctuations in IRS’
      burden-hour totals can indeed have a significant effect on
      governmentwide totals. Adjustments in burden-hour totals of the
      magnitude su,,baested by the Slemrod study indicate that governmentwide
      figures may not accurately reflect the paperwork burden felt by the
      public. As we said in our testimony, the difficulty agencies have

5                                            GAOIGGD-97-143RPaperwork Reduction
ENCLOSURE                                                         ENCLOSURE
      experienced in measuring paperwork burden is one of the factors that
      affects agencies’ability to meaningfully reduce that burden.

(8)   What are the implications of fluctuating baselines for Congress?
      Can OMB ensure that valid and consistent measures of paperwork
      are made?

      Answer:   Variability in the baselines from which paperwork burden
      reductions are measured make it difficult for Congress to determine
      whether progress is being made to reduce paperwork and, if so, by how
      much. It is also important to recognize what reductions from burden-
      hour baselines include and do not include. For example, EPA said in its
      current ISP submission that it had made substantial progress in reducing
      the burden associated with information collections active as of January 1,
      1995-the start of its own effort to reduce paperwork that began before
      the Paperwork Reduction Act of 1995 took effect. However, EPA also
      noted that these reductions were more than offset by burden hours
      added during this period. Therefore, assessments of agencies’burden
      reduction efforts should consider both reductions from the burden in the
      original baseline and agencies’net burden-hour figures.

      A strong case can be made that it is OMB’s job to ensure that valid and
      consistent measures of paperwork are made. The Paperwork Reduction
      Act of 1995 says that OMB “shall establish and oversee standards and
      guidelines by which agencies are to estimate the burden to comply with a
      proposed collection of information.” OMB officials said that OMB has
      established some broad guidelines for measuring paperwork burden, and
      that assessment of agencies’progress toward the goal of reducing burden
      by 25 percent by the end of fiscal year 1998 will be based on the
      agencies’net burden (including any increases during that period) from a
      standard baseline of September 30, 1995. However, agencies are allowed
      to develop their own means of burden calculation.

(9) Are you aware of any work the agencies have done to identify what
portion of the burden is attributable to the underlying statutes? Could
GAO conduct a study to assess whether the statutes actually preclude
such reductions?

      Answer:   As part of its effort to reestimate its burden, IRS said that
      proposed contractors are to try and determine what portion of IRS’
      burden-hour total is statutorily required versus unilaterally imposed by
      IRS. However, IRS officials told us that they are not very hopeful that
      any contractor will be able to make that determination.

       Any study we could do to try and determine the extent to which
       statutory requirements limit the opportunities for burden reduction would
       have to be done on a statute-by-statute, regulation-by-regulation basis.
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ENCLOSURE                                                         ENCLOSURE
      Such an effort would be very time-consuming and would require making
      difficult judgments regarding statutory interpretation. Furthermore, such
      a study would be of limited value in making any generalizations beyond
      the specific statutes and regulations we reviewed.


7                                           GAO/GGD-97-143RPaperwork Reduction
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