oversight

2000 Census: Analysis of Fiscal Year 2000 Amended Budget Request

Published by the Government Accountability Office on 1999-09-22.

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

                      United States General Accounting Office

GAO                   Report to the Chairman, Subcommittee
                      on the Census, Committee on
                      Government Reform, House of
                      Representatives

September 1999
                      2000 CENSUS

                      Analysis of Fiscal Year
                      2000 Amended Budget
                      Request




GAO/AIMD/GGD-99-291
Contents



Letter                                                                                  3


Appendixes   Appendix I:    Briefing on the Analysis of the Census Bureau’s
               Fiscal Year 2000 Amended Budget Request                                 20
             Appendix II:   Comments From the Department of Commerce                   65
             Appendix III: GAO Contact and Staff Acknowledgements                      70


Tables       Table 1: Comparison of the Bureau’s Original and Amended
               Budget Request                                                          15


Figures      Figure 1: Census Full-Cycle Cost per Housing Unit—Fiscal Years
               1970 to 2000 (in constant fiscal year 1998 dollars)                      8
             Figure 2: Increase in Housing Units Visited Between the Original
               and Amended Budget Requests                                             11




             Abbreviations

             ACE        Accuracy and Coverage Evaluation
             FTE        full-time equivalent
             ICM        Integrated Coverage Measurement
             LCO        Local Census Office
             MOU        Memorandum of Understanding
             TQA        Telephone Questionnaire Assistance




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Page 2   GAO/AIMD/GGD-99-291 FY 2000 Census Amended Budget Request
United States General Accounting Office                                                        Accounting and Information
Washington, D.C. 20548                                                                              Management Division



                                    B-283148                                                                                Leter




                                    September 22, 1999

                                    The Honorable Dan Miller
                                    Chairman
                                    Subcommittee on the Census
                                    Committee on Government Reform
                                    House of Representatives

                                    Dear Mr. Chairman:

                                    The decennial census is the nation’s most comprehensive and expensive
                                    data-gathering program. The Constitution requires a decennial census of
                                    the population in order to apportion seats in the House of Representatives.
                                    Public and private decisionmakers also use census data on population
                                    counts and social and economic characteristics for a variety of purposes.
                                    Since 1970, the Census Bureau has used essentially the same methodology
                                    to count the vast majority of the population during the decennial census.
                                    The bureau develops an address list of the nation’s households and mails
                                    census forms (questionnaires) to those households asking the occupants to
                                    mail back the completed forms. The bureau hires temporary census takers,
                                    known as enumerators, by the hundreds of thousands to gather the
                                    requested information for each nonresponding household. 1

                                    For the 2000 census, the bureau planned to augment the traditional census
                                    methodology with statistical estimation to develop a unified census count.
                                    In November 1997, in the Department of Commerce and Related Agencies
                                    Appropriations Act for 1998, the Congress questioned the constitutionality
                                    of using statistical sampling and directed the bureau to plan to implement a
                                    census in 2000 without using statistical methods. The Census Bureau
                                    reported to the Congress on possible components in a traditional census
                                    plan in April 1998. However, the bureau did not begin detailed budgeting for
                                    a nonsampling-based census until after the Supreme Court ruled that the
                                    Census Act 2 prohibited the use of statistical sampling for purposes of
                                    determining the population count used to apportion the House of
                                    Representatives.


                                    1
                                        The bureau refers to this activity as “nonresponse follow-up.”
                                    2
                                        13 U.S.C. 195.




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                   As recently as August 1997, the bureau estimated that without sampling,
                   the cost of the 2000 census would increase by $675 million to $800 million
                   and would be less accurate than the 1990 census. Following the Supreme
                   Court’s decision, in June 1999, the bureau requested an increase of over
                   $1.7 billion to its original fiscal year 2000 budget request of nearly
                   $2.8 billion. Your office advised us that the information provided by the
                   bureau did not provide a satisfactory explanation of how this amended
                   budget request was developed and the reasons for the $1.7 billion
                   requested increase.

                   As a result of this greater than expected increase in the bureau’s fiscal year
                   2000 budget and your need for additional information, you requested that
                   we (1) provide an overall analysis of the key changes in assumptions
                   resulting in the $1.7 billion requested increase, (2) provide details on the
                   components of this increase and which changes, according to the bureau,
                   are related and which are not related to the inability to use statistical
                   sampling, and (3) describe the process the bureau used for developing the
                   increase in the original fiscal year 2000 budget request and the amended
                   budget request. This report provides a summary of the information
                   presented at our September 15, 1999, briefing to you and the House and
                   Senate appropriations subcommittees. The briefing slides in appendix I
                   have been updated to incorporate additional information you requested at
                   the briefing as well as information subsequently provided by the bureau.
                   Also at your request, we will shortly be issuing a status report on key
                   census-taking operations and preparation for the 2000 census.



Results in Brief   We found that the net $1.7 billion requested increase in the original fiscal
                   year 2000 budget request of $2.8 billion resulted primarily from changes in
                   assumptions relating to a substantial increase in workload, reduced
                   employee productivity, and increased advertising. Under the nonsampling
                   design, census costs will increase because the bureau expects to follow up
                   on more nonresponding households than for a sampling-based census and
                   plans to use additional programs to improve coverage because it cannot
                   rely on statistical methods to adjust for undercounting and other coverage
                   errors.

                   The bureau assumes an increased workload because the housing units that
                   the bureau expects to visit have increased from an estimated 30 million to
                   46 million. The 16 million increase includes visiting 12 million additional
                   nonresponding housing units and 4 million additional housing units that the
                   Postal Services says are vacant or nonexistent. Also contributing to the



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workload increase are a number of programs that were not in the original
budget. These programs are primarily aimed at improving the accuracy of
the 2000 census through quality control operations, such as reinterviewing
households that had been previously visited by an enumerator. However, it
is unclear whether these additional programs will result in a 2000 census
that is more accurate than the 1990 census. This increased workload, which
increased costs for most bureau program activities, relates primarily to
additional salaries, benefits, travel, data processing, infrastructure, and
supplies.

Another key factor substantially increasing the fiscal year 2000 budget
request is that the bureau reduced the assumed productivity of its
temporary enumerator employees. The bureau reduced the assumed
productivity of its enumerators by 20 percent between the original and
amended budget requests—from 1.28 to 1.03 households per hour. This
reduction relates to all the enumerator employees for nonresponse follow-
up—both those employees to be hired to visit the 30 million nonresponding
housing units in the original budget request as well as those for the 16
million additional housing units. The bureau did not provide any
documented internal or external quantitative analysis or other analysis to
support the initial or revised productivity rates. This reduction was
primarily based on senior management judgments, which the bureau
acknowledges are very conservative, about factors such as the uncertainty
of hiring a sufficient number of quality temporary workers in a tight labor
market.

Because of the assumed increase in workload and reduction in
productivity, the total number of temporary field positions3 increased from
780,000 in the original budget to 1,350,000 in the amended budget request.
The 570,000 new positions include 200,000 (35 percent) for following up on
nonresponding households, 120,000 (21 percent) for enumerator activities
such as counting people at homeless shelters, and 220,000 (38 percent)
related to additional coverage improvement and quality control programs.
(The remaining 6 percent is for various other positions.) This large number
of positions is due in part to the expected substantial temporary employee
turnover.




3
 The number of positions does not equal the number of staff required. Some positions last
only a few weeks, and one person can fill more than one position.




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             The bureau also included nearly $72 million of advertising in the amended
             budget request to increase public awareness and hopefully increase
             response rates for mailed questionnaires. However, the bureau’s amended
             budget request did not assume any cost savings from the increased
             advertising dollars in the form of increased response rate and, accordingly,
             a reduced workload.

             According to the bureau, about $1.6 billion of this increase is related and
             $100 million is not related to the inability to use statistical sampling. As
             discussed above, the additional costs primarily involve increased
             workload, reduced productivity, and increased advertising. The items
             unrelated to the sampling issue include costs not included in the original
             budget and revisions of prior estimates. For example, the bureau did not
             include $52 million for rent and long distance telephone service in the
             original budget request.

             The bureau developed its $4.5 billion amended budget request for fiscal
             year 2000 using a cost model consisting of a series of interrelated software
             spreadsheets. The original and amended budget requests were developed
             using this cost model, with each estimate being developed independently
             using different versions of the cost model. The bureau derived the
             $1.7 billion requested increase by calculating the net difference between
             the original budget request of $2.8 billion and the amended budget request
             of $4.5 billion.



Background   The President’s fiscal year 2000 budget, which was submitted to the
             Congress on February 1, 1999, included nearly $2.8 billion for the Census
             Bureau to perform the 2000 decennial census. This original budget request
             reflected the bureau’s plan to gather information based in part on using
             statistical estimation for nonresponding households and to adjust for
             undercounting and other coverage errors. However, on January 25, 1999,
             the Supreme Court ruled that the Census Act prohibits the bureau from
             using sampling for purposes of congressional apportionment. According to
             the bureau, it must therefore enumerate an estimated 12 million additional
             nonresponding households and expand programs designed to address
             undercounting and limit other coverage errors. The bureau also plans to
             visit 4 million additional addresses for which the Postal Service has
             returned the questionnaire because it believes that the housing unit is
             vacant or nonexistent.




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In light of the need for the additional enumeration, the bureau requested a
substantial increase to its original budget request for fiscal year 2000—
approximately $1.7 billion—for a total budget of approximately $4.5 billion.
Thus, for purposes of apportionment, the 2000 census will be done
similarly to those for the last several decades in which questionnaires are
mailed to the majority of the nation’s households asking the occupants to
mail back the completed questionnaires.4 In addition, for the 2000 census,
the bureau plans to incorporate statistical estimation for other purposes,
such as providing states with information for redistricting. As part of the
2000 census, the bureau will allow the public to respond in a variety of new
ways, such as through a toll-free telephone number, the Internet, and
unaddressed questionnaires made available at public locations.

When compared to the 1970 census, the projected full-cycle cost per
housing unit of the 2000 census will quadruple (in constant fiscal year 1998
dollars). As shown in figure 1, the cost will nearly double from the previous
census (1990).




4
    Referred to as a traditional census.




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Figure 1: Census Full-Cycle Cost per Housing Unit—Fiscal Years 1970 to 2000 (in
constant fiscal year 1998 dollars)

                   60                                                                        56




                   50




                   40
Cost per housing




                                                                     31
      unit




                   30
                                            24



                   20

                           13


                   10




                    0
                        1970             1980                    1990                 2000 (Est.)


Note: Cost per housing unit is based on the full-cycle cost of performing a decennial census. The 2000
decennial census cycle began the year after the 1990 decennial census and is estimated to end in
2003. Therefore, the cost per housing unit for the 2000 census is based on reported costs incurred for
fiscal years 1991 through 1998, the fiscal year 1999 total enacted appropriations, the fiscal year 2000
amended budget request, and the bureau’s estimate of costs for fiscal years beyond 2000. The 2000
census estimate assumes 119 million total households. The Gross Domestic Product (GDP) price
index was used to adjust for inflation.
Source: GAO analysis of unaudited bureau data.


The accuracy of the 1990 census decreased compared to the 1980 census.
Specifically, the net undercount for the 1990 census was estimated at 1.6
percent of the population (about 4 million persons) compared to 1.2
percent for the 1980 census. The bureau estimated that about 4.4 million
persons were counted twice, and other improper inclusions, in 1990, while
8.4 million were missed. Moreover, the sum of these numbers—
12.8 million—represents a minimum tally of gross errors since it does not
include other errors, such as persons assigned to the wrong locations.




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Scope and     We interviewed bureau officials who provided us with an overview of the
              budget formulation process for developing the $4.5 billion amended budget
Methodology   request. Bureau officials provided us with copies of the cost models used to
              develop the original and amended budget requests. The $1.7 billion
              requested increase represents the difference between the original and
              amended budget requests. Therefore, to ensure that the difference between
              the original and amended budget requests was supported by the two
              models, we reviewed the summarized output and structure of each model
              and verified the mathematical accuracy of the difference. We reconciled
              the output from these models to the budget request amounts to determine
              whether they mathematically agree with the original and amended budget
              requests.

              We then isolated the differences in the models by the bureau’s eight
              program activities or frameworks.5 After isolating the differences, we
              selected for further analysis cost increases/decreases and related changes
              in assumptions that contributed most to each framework’s total net
              increase or otherwise warranted explanation. We focused our analysis on
              the “field data collection and support systems” program activity because
              nearly $1.5 billion of the $1.7 billion requested increase was related to this
              framework.

              We obtained from the bureau documentation supporting or explaining the
              basis for the change in assumptions and how the increase/decrease related
              to the inability to use statistical sampling. The bureau categorized the
              components of the $1.7 billion requested increase into those it considered
              related to the statistical sampling issue and those it considered to be
              unrelated. We did not conclude whether the bureau properly categorized
              the components of the $1.7 billion requested increase as related and
              unrelated. We did not assess the efficiency or effectiveness of the bureau’s
              plans to conduct the 2000 census or validate the bureau’s data and
              assumptions used to develop the budget requests.

              We performed our work in Washington, D.C., and at the bureau’s
              headquarters in Suitland, Maryland, from June through September 1999 in
              accordance with generally accepted government auditing standards.



              5
               The bureau’s budget includes eight program activities, which are also referred to by the
              bureau as “frameworks.”




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Overall Observations       The bureau’s request for an additional $1.7 billion for fiscal year 2000
                           primarily involves changes in assumptions related to increased workload,
on the Fiscal Year 2000    reduced employee productivity, and increased advertising. The following
$1.7 Billion Requested     sections discuss the changes in these key assumptions between the original
                           and amended budget requests.
Increase

Key Assumption—Increased   An assumed increase in workload substantially increased costs in the fiscal
Workload                   year 2000 amended budget request for enumerator and support salaries,
                           benefits, travel, data capture requirements, infrastructure, and supplies.
                           The primary reason for the increase in workload is the bureau’s plan to visit
                           an additional 16 million households using a traditional census approach
                           instead of sampling to estimate these housing units. Also adding to the
                           workload are additional programs intended to improve the coverage and
                           quality of the census.

                           The bureau’s amended budget request assumes that it will enumerate the
                           12 million nonresponding housing units that under the original budget
                           request would have been statistically estimated. The bureau also estimated
                           that the Postal Service would determine that of the 119 million total
                           estimated housing units, about 6 million would be vacant or nonexistent.
                           The purpose of visiting these 6 million housing units is to confirm that the
                           Postal Service was correct in concluding that a housing unit was vacant or
                           nonexistent. In 1990, the bureau found that about 20 to 30 percent of the
                           housing units identified as vacant or nonexistent were actually occupied.
                           As shown in figure 2, under the original budget request, the bureau
                           assumed that it would visit only 2 million of the 6 million housing units and
                           that the remaining 4 million housing units would be accounted for through
                           statistical estimation. Under the amended budget request, the bureau
                           assumes that it will visit all 6 million housing units.




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Figure 2: Increase in Housing Units Visited Between the Original and Amended
Budget Requests
                              50
                                                                                             46

                              45
                                                                                              6
                              40


                              35
                                                 30
Housing units (in millions)




                              30
                                                 2

                              25


                              20
                                                                                              40

                              15
                                                 28

                              10


                               5


                               0
                                               Original                                   Revised


                                                                 Budget
                                   Nonresponding housing units        Questionnaires returned by Postal Service


Source: GAO analysis of unaudited bureau data.


Also contributing to the workload increase are a number of programs
intended to improve the coverage and quality of the census that were not in
the original budget request. According to the bureau, these programs were
added to improve the accuracy of the 2000 census since the bureau would
be using a traditional approach and attempting to obtain information
directly from all 119 million estimated households. In the bureau’s original
budget request, statistical estimation was intended to improve the accuracy
of the 2000 census by adjusting census counts for undercounting and other
coverage errors.

An example of an additional program includes reinterviewing a sample of
housing units for which enumerators had previously completed census



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                         questionnaires. This program, which is budgeted to cost $22.7 million,
                         involves sampling housing units with questionnaires completed by
                         enumerators, reinterviewing to confirm responses, and adjusting the
                         responses to the census questionnaires to correct any errors found.
                         Another program, budgeted at $25.2 million, involves attempting to
                         redeliver certain census questionnaires that are returned by the Postal
                         Service. This program is targeted at housing units that have a change in
                         address or zip code between the fall of 1999, when the bureau delivers its
                         address files to its printing vendors, and March 2000, when questionnaires
                         are to be delivered. According to the bureau, the improved coverage and
                         accuracy resulting from these programs would have been accounted for in
                         the original plan through statistical estimation techniques. Although the
                         programs the bureau added in the amended budget request are intended to
                         improve the accuracy of the 2000 census, it is unclear whether these
                         additional programs will result in a 2000 census that is more accurate than
                         the 1990 census.

                         It is important to note that another key assumption—the average mail
                         response rate for all questionnaire types—remained constant between the
                         original and amended budget requests at 61 percent. Given an estimated
                         119 million households in the census population, a 1-percent change in the
                         response rate increases or decreases the number of households that must
                         be enumerated by about 1.2 million. The mail response rate has decreased
                         substantially in recent years, dropping from 78 percent in 1970 to 65
                         percent in 1990. If the response rate is substantially different from the 61
                         percent that the bureau projects, assuming that all other assumptions
                         prove to be accurate, the bureau’s fiscal year 2000 amended budget request
                         could differ substantially from the bureau’s needs.


Key Assumption—Reduced   A significant factor increasing the bureau’s budget request is a 20-percent
Productivity             reduction in the assumed productivity rate for temporary employee
                         enumerators following up on nonresponding housing units. In the original
                         budget request, the bureau used an average productivity rate of about 1.28
                         households per hour, which was reduced in the amended budget request to
                         about 1.03. This revised productivity rate was applied to all temporary
                         enumerator employees for nonresponse follow-up—both those to be hired
                         to visit the 30 million housing units under the original budget request as
                         well as those for the additional 16 million housing units added after the use
                         of sampling for nonresponse follow-up was prohibited by the Census Act.




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                         The bureau provided several explanations for reducing the assumed
                         enumerator productivity rate from 1.28 in the original budget request to
                         1.03 in the amended budget request. For example, the bureau believes that
                         given the low unemployment rate in the United States, hiring temporary
                         employees to fill hundreds of thousands of new positions is expected to
                         result in the hiring of less productive workers. In addition, the bureau
                         believes enumerators will work slower in order to avoid mistakes knowing
                         that they are being reviewed in a more thorough and formal manner as part
                         of the additional quality control programs. Also, the bureau assumed an
                         increase in rework resulting from added quality control programs.

                         The bureau did not provide any documented internal or external
                         quantitative analysis or other analysis that supported the original or the
                         revised productivity rate. Consequently, the 20-percent reduction in
                         productivity is based on senior management judgments, which the bureau
                         acknowledges are very conservative.

                         Because of the increased workload and reduced productivity, the bureau
                         increased the total number of temporary field positions from the 780,000
                         estimated in the original budget to 1,350,000. This increase in positions
                         does not necessarily mean that the bureau is hiring 570,000 additional
                         people. Many positions exist for only a few weeks; thus some individuals
                         can be, and are, hired for more than one position. Of the 570,000 increase,
                         about 200,000 positions (35 percent) are for nonresponse follow-up and
                         120,000 (21 percent) are for enumeration-related activities such as counting
                         people at homeless shelters; 220,000 positions (38 percent) are for added
                         coverage improvement and quality control programs. (The remaining 6
                         percent includes various other positions.)


Key Assumption—          The bureau included nearly $72 million for advertising intended to increase
Additional Advertising   questionnaire responses, including advertising that will be targeted at hard-
                         to-enumerate communities. This additional advertising was primarily
                         intended to educate the public on the 2000 census and to increase the mail
                         response rate for questionnaires and thus reduce the bureau’s workload.

                         The bureau’s original budget request included about $56 million for a paid
                         advertising program in fiscal year 2000. The bureau intends to use the
                         additional $72 million for motivational programs intended to increase the
                         mail-in response rate and for an expanded “Census in the Schools”
                         program. An example of how the bureau plans to spend this money
                         includes a planned educational message, delivered several weeks before



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                          the data collection period, reminding residents in the hard-to-enumerate
                          communities about the benefits of participating in the census process.
                          Also, advertising is to be targeted to run concurrent with the follow-up
                          visits to nonresponding households so that enumerators have a better
                          chance of successfully gaining access to households and completing
                          census forms.

                          The bureau has no data available to support how much, if any, the
                          increased advertising will increase the response rate. As a result, the
                          bureau’s assumed average questionnaire response rate of 61 percent in the
                          original budget request did not increase in the amended budget request.
                          Thus, the bureau has assumed no cost savings in the form of increased
                          response rate and resultant reduced workload from the increased
                          advertising dollars.



Components of the         According to the bureau, about $1.6 billion of the $1.7 billion requested
                          increase is related to the inability to use statistical sampling, and the
$1.7 Billion Increase     remaining $104 million is not related. Unrelated items include costs not
Related and Unrelated     included in the original budget request and revisions of prior estimates.
                          Examples of items unrelated to the decision include the following:
to the Sampling Issue
                          • $29 million for leasing of common space,
                          • $23 million for long-distance telephone service,
                          • $16 million for improving address lists and delivering questionnaires,
                            and
                          • $10 million for copier paper and map supplies.

                          We did not conclude whether the bureau properly categorized components
                          of the $1.7 billion requested increase as related and unrelated. The briefing
                          slides in appendix I provide a detailed discussion by program activity (or
                          framework) of the components of the $1.7 billion requested increase.



Process Used to           To develop the amended fiscal year 2000 budget request, the bureau used a
                          model that consisted of an extensive set of interrelated software
Develop the Fiscal Year   spreadsheets. Both the original and amended budget requests were
2000 Amended Budget       developed with this cost model, with each estimate being developed
                          independently using different versions of the cost model. The process the
Request                   bureau used to develop the amended budget request involved (1) revising
                          key assumptions in the cost model supporting the original budget request



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that were based on the statistical estimation approach for nonresponse
follow-up to improve accuracy and (2) incorporating new assumptions
based on a traditional census approach. As shown in table 1, the bureau
derived the $1.7 billion requested increase by calculating the net difference
between the original budget request of $2.8 billion and the amended budget
request of $4.5 billion. The output from the bureau’s models mathematically
agrees with the original and amended budget requests.



Table 1: Comparison of the Bureau’s Original and Amended Budget Request

Dollars in millions
                                                    Original   Amended
                                                     budget      budget Requested
Program activity (or framework)                     request     request   increase
1. Program development and management                   $28         $31         $3
2. Data content and products                            195         195          0
3. Field data collection and support systems          2,023       3,474       1,451
4. Address list development                              34          44         10
5. Automated data processing and
   telecommunications support                           341         477        136
6. Testing, evaluation, and dress rehearsal              21          21          0
7. Puerto Rico, Virgin Islands, and Pacific Areas        37          71         34
8. Marketing, communications, and partnerships          111         200         89
Total requested amount                               $2,790      $4,513     $1,723


Source: GAO analysis of unaudited bureau data.


The bureau’s budget estimation model is a set of 16 spreadsheets with
thousands of separate formulas that generate estimates for specific census
program activities. The formulas generate outputs for items such as
salaries and benefits, travel, and advertising based on hundreds of different
assumptions. The model serves as a collection point for field costs as well
as headquarters and other costs estimated outside the model. Of the
$4.5 billion amended budget request, about $1.05 billion (23 percent) was
calculated outside the model. This $1.05 billion includes costs for
headquarters activities and contracts. The assumptions are developed by
program managers and are generally based on either third party evidence,
such as independent studies, or senior management’s judgment.




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Agency Comments and   We provided a draft of this report to the Department of Commerce for
                      comment. As requested, the Director of the Bureau of the Census provided
Our Evaluation        written comments on behalf of the department in 2 days. (See appendix II.)
                      We appreciate the bureau’s rapid response to the draft and its overall
                      cooperation and timely responses to our data requests. In commenting on a
                      draft of this report, the bureau concurred with the facts as presented in the
                      report and provided its perspective on four matters, which we address
                      below.

                      First, the bureau stated that in addition to serving primarily as the provider
                      of apportionment counts, the 2000 census has three other major
                      components of unique usefulness to the American public−providing data to
                      be used for legislative redistricting, federal housing surveys, and
                      distribution of federal funds. We agree with the bureau that these other
                      components of the 2000 census are important. However, the purpose of our
                      report was to analyze the bureau’s overall amended budget request with a
                      focus on the $1.7 billion requested increase. Given that objective, our
                      report focused on activities that resulted in the substantial increase in the
                      bureau’s original fiscal year 2000 budget request. As our analysis shows, the
                      net $1.7 billion requested increase was primarily related to the bureau’s
                      assumptions of increased workload, reduced employee productivity, and
                      increased advertising. We did not see any substantial cost increases related
                      to redistricting, federal housing surveys, and distribution of federal funds.

                      Second, the bureau noted that the current plan for the 2000 census contains
                      components of both a traditional and a sampling methodology. In addition,
                      the bureau noted that beginning in November 1997, it devoted a substantial
                      effort in planning (on a dual track basis) for a census based entirely on a
                      traditional methodology. Based on our review of the bureau’s fiscal year
                      2000 amended budget request, we agree that the 2000 census includes
                      components of both traditional and sampling methodologies. However, the
                      increase in the estimated cost of the 2000 census is driven primarily by
                      factors relating to a traditional census. The $1.7 billion requested increase
                      in the bureau’s fiscal year 2000 budget is net of a decrease of over
                      $200 million related to the Accuracy and Coverage Evaluation (ACE)
                      program. The purpose of ACE in the amended budget request is primarily
                      to estimate the population for purposes such as redistricting by sampling
                      households from an address list developed independently from the list used
                      to perform the census. Under the bureau’s original budget request, the
                      results of ACE (formerly Integrated Coverage Measurement) were to have
                      been statistically combined with the results of enumeration to provide a




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single, integrated set of population counts. Evaluating the bureau’s
planning for a “dual track” census was beyond the scope of our work.

Third, the bureau provided its perspective on the reasons why the full-cycle
cost per housing unit of the 2000 census is projected to nearly double when
compared to the 1990 census. The bureau pointed to such factors as normal
inflationary increases, infrastructure, federal wage increases, declining
response rate, paid advertising, postage, and information technology. It is
important to note that our analysis eliminates the impact of general
inflation and the growth in housing units over the last 4 decades. Thus, our
comparison of full-cycle cost per housing unit is an “apples to apples”
comparison. The purpose of showing this comparison is to provide a
historical perspective on the real increase in the full-cycle cost per housing
unit of the decennial census. Providing an analysis of the reasons for the
substantial increase of the projected cost of the 2000 census was beyond
the scope of our review. We agree with the bureau that factors such as a
declining mail response rate would increase the relative costs of the
census. However, it is important to point out that the bureau was unable to
demonstrate whether the benefits of certain activities, such as increased
advertising and additional programs, justify their cost. In addition, the
bureau could not say whether a 2000 census costing an estimated $56 per
housing unit (in constant 1998 dollars) will result in a census that is more
accurate than 1990.

Finally, the bureau stated that it believes it is prudent to assume a
temporary enumerator employee productivity rate of 1.03 housing units per
hour. The bureau cited the immovable calendar and the need to hire a large
temporary labor force, the size of which is a direct result of assumed lower
productivity. The bureau believes our use of “very conservative” leaves an
unwarranted impression of management choices made at one end of a
spectrum, which could be shifted to the other end of the spectrum without
risk. Based on our analysis, we continue to conclude that the bureau’s
productivity assumption of 1.03 is based on senior management’s “very
conservative” judgment as was represented to us by bureau staff during our
review. What we mean by “very conservative” is that the bureau is planning
for a worst case scenario. As we reported, the bureau did not provide any
documented internal or external quantitative analysis or other analysis to
support the initial or revised productivity rates. As such, our only possible
conclusion is that the 1.03 was developed based on management’s
judgment, which is what bureau staff represented to us during our review.
Because the reported productivity rate from the 1990 census was 1.56 and
the assumption used in the original budget was 1.28, we conclude that the



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B-283148




1.03 assumption used in the amended budget request, which covers not
only the additional 16 million housing units now planned to be enumerated
but also the 30 million housing units to be enumerated in the original
budget, is very conservative—or a “worst case scenario.” Should the
bureau’s productivity assumption prove to be more or less than 1.03
housing units per hour, the bureau’s fiscal year 2000 amended budget
request could differ substantially from the bureau’s needs.

We are sending copies of this report to Senator Fred Thompson, Senator
Joseph Lieberman, Senator Judd Gregg, Senator Ernest Hollings,
Representative Carolyn Maloney, Representative Dan Burton,
Representative Henry Waxman, Representative Harold Rogers, and
Representative José Serrano in their capacities as Chairs or Ranking
Minority Members of Senate and House Committees and Subcommittees.
We are also sending copies to the Honorable William M. Daley, Secretary of
Commerce; the Honorable Kenneth Prewitt, Director of the Bureau of the
Census; the Honorable Jacob J. Lew, Director of the Office of Management
and Budget; and other interested parties. Copies will also be made available
to others upon request.

If you have any questions on matters discussed in this letter, please contact
me at (202) 512-3406. Other contacts and key contributors to this report are
listed in appendix III.

Sincerely yours,




Gregory D. Kutz
Associate Director
Governmentwide Accounting and Financial
Management Issues




Page 18              GAO/AIMD/GGD-99-291 FY 2000 Census Amended Budget Request
Page 19   GAO/AIMD/GGD-99-291 FY 2000 Census Amended Budget Request
Appendix I

Briefing on the Analysis of the Census
Bureau’s Fiscal Year 2000 Amended Budget
Request                                                                                    Appendx
                                                                                                 Ii




             Accounting and Information Management
             Division




              Analysis of the Census Bureau’s
              Fiscal Year 2000 Amended Budget Request

              September 15, 1999




        1




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                             Appendix I
                             Briefing on the Analysis of the Census
                             Bureau’s Fiscal Year 2000 Amended Budget
                             Request




              Overview



    • Background

    • Objectives, Scope, and Methodology

    • Overall Observations

    • Components of the $1.7 Billion Requested Increase

    • Process Used to Develop Fiscal Year 2000 Budget




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                          Appendix I
                          Briefing on the Analysis of the Census
                          Bureau’s Fiscal Year 2000 Amended Budget
                          Request




            Background



• The Constitution requires a decennial census of the population in order to
  apportion seats in the House of Representatives.

• The decennial census is the nation’s most expensive data gathering program.

• Public and private decisionmakers also use census data on population counts and
  social and economic characteristics for a variety of purposes.

• The bureau typically performs a “dress rehearsal” several years before the actual
  census to help in its planning efforts.




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                            Request




             Background (cont’d)



• The President’s fiscal year 2000 budget request, submitted to the Congress on
  February 1, 1999, included nearly $2.8 billion for the decennial census.
• The bureau’s original request reflected its plan to gather information based in part on
  using statistical estimation for nonresponding households and to adjust for
  undercounting and other coverage errors.
• On January 25, 1999, the Supreme Court ruled that the Census Act prohibits the bureau
  from using statistical sampling to calculate the population used to apportion the House
  of Representatives.
• Following this ruling, in June 1999, the bureau submitted an amended budget request
  substantially increasing its original fiscal year 2000 budget request.




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                            Briefing on the Analysis of the Census
                            Bureau’s Fiscal Year 2000 Amended Budget
                            Request




             Background (cont’d)



• In November 1997 in the Department of Commerce and Related Agencies Appropriations
  Act for 1998, the Congress directed the bureau to begin planning for a census in 2000
  without using statistical methods. However, the bureau did not begin detailed budgeting
  for a nonsampling census until after the Supreme Court’s decision in January 1999.

• The 2000 census will be done in a manner similar to those for the last several decades, in
  which questionnaires are delivered to identified households asking the occupants to mail
  back the completed questionnaires.

• In addition, for the 2000 census the bureau plans to incorporate statistical estimation for
  other purposes, such as providing states with information for redistricting.

• The public will have the option of responding via a toll-free telephone number, the
  Internet, and unaddressed questionnaires placed in public locations.




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                                                                        Appendix I
                                                                        Briefing on the Analysis of the Census
                                                                        Bureau’s Fiscal Year 2000 Amended Budget
                                                                        Request




                                                 Background (cont’d)


                                    60                                                                  56        • Compared to the 1970 census, the
                                                                                                                    projected full-cycle cost per housing unit
                                    50                                                                              of the 2000 census will quadruple (in
    (in constant FY 1998 dollars)




                                                                                                                    constant fiscal year 1998 dollars).
        Cost per housing unit




                                    40
                                                                                   31                             • Compared to the 1990 census, the
                                    30                                                                              projected full-cycle cost per housing unit
                                                                24
                                                                                                                    will nearly double.
                                    20
                                            13

                                    10


                                     0
                                         1970                1980                1990               2000
                                                                                                    (Est.)


                                    Source: GAO analysis of unaudited bureau data

                                    Note: Cost per housing unit is based on the full-cycle cost of performing a decennial census. The 2000 decennial census cycle
                                    began the year after the 1990 decennial census and is estimated to end in 2003. Therefore, the cost per housing unit for the 2000
                                    census is based on reported costs incurred for fiscal years 1991-1998, the fiscal year 1999 total enacted appropriations, the fiscal
                                    year 2000 amended budget request, and the bureau’s estimate of costs for fiscal years beyond 2000. The 2000 census estimate
                                    assumes 119 million total households. The GDP price index was used to adjust for inflation.



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                            Appendix I
                            Briefing on the Analysis of the Census
                            Bureau’s Fiscal Year 2000 Amended Budget
                            Request




              Objectives



• Provide an overall analysis of the key changes in assumptions resulting in the $1.7 billion
  requested increase.

• Provide details on the components of the $1.7 billion requested increase and which
  changes, according to the bureau, are related and which are not related to the inability to
  use statistical sampling.

• Describe the process used to develop the increase in the original fiscal year 2000 budget
  request and the overall amended budget request.




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                            Briefing on the Analysis of the Census
                            Bureau’s Fiscal Year 2000 Amended Budget
                            Request




              Scope and Methodology



    • Interviewed bureau officials, who provided us with an overview of the budget
      formulation process.

    • Reviewed copies of the cost models used to develop the original and amended
      budget requests.

    • Reviewed the summarized output and structure of each model and verified the
      mathematical accuracy of the difference.

    • Reconciled the output from the models to determine whether they mathematically
      supported the original and amended budget requests.




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                           Appendix I
                           Briefing on the Analysis of the Census
                           Bureau’s Fiscal Year 2000 Amended Budget
                           Request




             Scope and Methodology (cont’d)



• Obtained documentation from the bureau supporting or explaining the basis for the
  changes in assumptions.

• Had the bureau categorize components of the $1.7 billion requested increase into those
  related and unrelated to the inability to use statistical sampling.

• Did not conclude whether the bureau properly categorized components of the $1.7
  billion requested increase as related and unrelated.

• Selected for further analysis cost increases/decreases and related changes in
  assumptions that contributed most to a framework’s total net increase or otherwise
  warranted explanation.




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                             Briefing on the Analysis of the Census
                             Bureau’s Fiscal Year 2000 Amended Budget
                             Request




              Scope and Methodology (cont’d)



     • Did not assess the efficiency or effectiveness of conducting the planned 2000
       census or validate the bureau’s data and assumptions used to develop the original
       and amended budget requests.
     • Performed our work in Washington, D.C., and at the bureau’s headquarters in
       Suitland, Maryland, between June 1999 and September 1999 in accordance with
       generally accepted government auditing standards.




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                           Appendix I
                           Briefing on the Analysis of the Census
                           Bureau’s Fiscal Year 2000 Amended Budget
                           Request




           Overall Observations



     The net $1.7 billion requested increase in the bureau’s original fiscal year 2000
     budget request resulted primarily from changes in assumptions relating to
     • increased workload,
     • reduced employee productivity, and
     • increased advertising.




11




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                            Appendix I
                            Briefing on the Analysis of the Census
                            Bureau’s Fiscal Year 2000 Amended Budget
                            Request




            Overall Observations
            Increased workload: Housing units




• The workload change was primarily because planned housing unit visits increased
  from 30 million to 46 million when sampling for nonresponse follow-up was
  eliminated.
• Of the 16 million additional visits
     • 12 million are for following up on nonresponding households, and
     • 4 million are for housing units the bureau plans to visit because the Postal
       Service believes they are vacant or nonexistent.
        • In 1990, the bureau found that 20-30% of the housing units identified as vacant
          or nonexistent were occupied.




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                           Appendix I
                           Briefing on the Analysis of the Census
                           Bureau’s Fiscal Year 2000 Amended Budget
                           Request




            Overall Observations
             Increased workload: Additional programs




• The bureau has added programs to improve the accuracy of the census through
  coverage and quality control operations that were not in the original budget
  request.

• These programs are designed to address coverage errors that statistical estimation
  was intended to address.

• It is unclear whether these additional programs will result in a 2000 census that is
  more accurate than the 1990 census.




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                            Appendix I
                            Briefing on the Analysis of the Census
                            Bureau’s Fiscal Year 2000 Amended Budget
                            Request




            Overall Observations
             Workload: Average mail response rate




• The average mail response rate for all questionnaire types is a key assumption.
• The bureau used a 61% assumed response rate in the original and amended budget
  requests.
• The mail response rate dropped from 78% in 1970 to 65% in 1990.
• A 1 percent change in the response rate increases/decreases the number of
  households that must be enumerated by 1.2 million.
• If the actual response rate is different from 61%, the bureau’s needs could differ
  substantially from the amended budget request.




14




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                            Appendix I
                            Briefing on the Analysis of the Census
                            Bureau’s Fiscal Year 2000 Amended Budget
                            Request




              Overall Observations
              Reduced productivity




• The assumed productivity rate for all temporary enumerator employees hired to follow
  up on the estimated 46 million nonresponding households decreased approximately 20%,
  from 1.28 to 1.03 households per hour.
• According to bureau officials, this decrease is because
   • of the uncertainty of hiring a sufficient number of quality temporary workers in a tight
     labor market,
   • the bureau assumes that enumerators will be more careful to avoid mistakes,
     knowing that they are being reviewed in a more thorough and formal manner as part
     of the added quality control programs, and
   • there will be an increase in rework resulting from added quality control programs.
• The bureau did not provide us any documented internal or external quantitative analysis
  or other analysis to support the initial or the revised productivity rates.
• Consequently, the 20% reduction in productivity is based on bureau management’s
  judgment, which they acknowledge is very conservative.




15




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                                                 Appendix I
                                                 Briefing on the Analysis of the Census
                                                 Bureau’s Fiscal Year 2000 Amended Budget
                                                 Request




                       Overall Observations
                       Net increase of 570,000 positions



                    Types of Positions                         • Based on the increased workload and reduced productivity, the
                                                                 number of temporary field positions is expected to increase
                          6%                                     from 780,000 to 1,350,000. The term position does not equate to
                                                                 a person. One staff member may work in several positions
                                                                 since all enumeration operations do not completely overlap
                                                 35%             one another.

                                                               • 200,000 positions (35%) are for nonresponse follow-up
        38%
                                                                 operations and 120,000 positions (21%) are for other
                                                                 enumeration activities such as counting people at homeless
                                                                 shelters.

                                                               • 220,000 positions (38%) are for added coverage improvement
                                     21%
                                                                 and quality control programs.

     Nonresponse follow-up
     Special places (e.g., shelter, T-night, group quarters)
     Additional coverage improvement and quality control
     Other, net




Source: GAO analysis of unaudited bureau data.



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                          Appendix I
                          Briefing on the Analysis of the Census
                          Bureau’s Fiscal Year 2000 Amended Budget
                          Request




             Overall Observations
             Increased advertising costs




• The bureau increased advertising by $71.9 million.
• According to the bureau, this advertising is intended to increase public awareness
  of the census and hopefully increase the mail response rate.
• The bureau has no data to show whether this advertising will increase the
  response rate.
• The bureau assumed no cost savings in the form of increased response rate and,
  accordingly, a reduced workload for these increased advertising dollars.




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                                                    Appendix I
                                                    Briefing on the Analysis of the Census
                                                    Bureau’s Fiscal Year 2000 Amended Budget
                                                    Request




                         Components of the $1.7 Billion Requested
                         Increase

The table below shows the components of the $1.723 billion increase by the eight program activities
(frameworks). The table below represents the bureau’s representation of changes related and unrelated
to the inability to use statistical sampling. We did not conclude whether the bureau properly categorized
components as related and unrelated. The following slides (see page references) provide information on
key components of these changes. Note that only selected portions of each change were analyzed.

                                                                                                        Bureau breakout
                                                                                                         (dollars in millions)

  Program activity (or frameworks 1-8)
                                                                                            Related   Pages         Unrelated       Pages


 1. Program development and management                                                        $3.2       19                 $0.0     N/A

 2. Data content and products                                                                  6.3     20-21                (6.3)    40

 3. Field data collection and support systems                                              1,353.1     22-34                98.2    41-42

 4. Address list development                                                                  10.5       35                 (0.8)    N/A

 5. Automated data processing and telecommunications support                                 136.4      N/A                  0.0     N/A

 6. Testing, evaluation, and dress rehearsal                                                   0.0      N/A                  0.0     N/A
 7. Puerto Rico, Virgin Islands and Pacific Areas                                             20.7     36-37                13.3      43

 8. Marketing, communications, and partnerships                                              88.4      38-39                 0.0     N/A

                                                                                         $1,618.6                      $104.4
                    Total requested increase


N/A - Our analysis did not reveal any significant matters related to this framework.

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                           Appendix I
                           Briefing on the Analysis of the Census
                           Bureau’s Fiscal Year 2000 Amended Budget
                           Request




             Components of Changes
             Framework 1 - Program development and management




     Requested increase: $3.2 million
• The requested increase includes $1.8 million in related travel and training for 25
  additional full-time equivalent (FTE) project management staff and $1.4 million in
  overhead and other costs. The bureau stated that this additional staff is needed to
  support the additional activities and complexities involved in managing a traditional
  census.
• The bureau’s amended budget request states that these funds will also enable revisions to
  related management information systems.
• Added positions include program analysts, decennial specialists, and communication
  positions. According to the bureau, some of these positions would be used to define the
  changes needed to the Cost and Progress System.




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                           Appendix I
                           Briefing on the Analysis of the Census
                           Bureau’s Fiscal Year 2000 Amended Budget
                           Request




             Components of Changes
             Framework 2 - Data content and products




     Requested increase: $6.3 million
• The bureau’s amended budget request shows no net change for this framework.
  However, the $6.3 million increase shown here is offset by $6.3 million in decreases
  shown on slide 40.
• The contract for the American FactFinder system increased by $3.5 million. This
  system is used to tabulate and disseminate census results electronically.
• According to the bureau, this increase is related because the bureau plans to
  tabulate and release two sets of data, the traditional census results and the results of
  its Accuracy and Coverage Evaluation program, and provide the Internet interface
  to do so.




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                           Appendix I
                           Briefing on the Analysis of the Census
                           Bureau’s Fiscal Year 2000 Amended Budget
                           Request




            Components of Changes
            Framework 2 - Data content and products (cont’d)




• This framework’s increase also includes $2.8 million for 195 FTEs for processing
  requests for foreign language questionnaires.

• The bureau stated that increased promotional efforts by its partners (local
  governments and community-based organizations) and publicizing the availability of in-
  language questionnaires in the bureau’s paid advertising will increase the request for
  and use of these in-language questionnaires.

• The bureau’s original and amended cost models show no change in the assumed
  number of additional non-English questionnaires that will be requested. The bureau had
  not provided us evidence of the increased workload or how it was used to estimate this
  cost increase by the end of our fieldwork.




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                                                    Appendix I
                                                    Briefing on the Analysis of the Census
                                                    Bureau’s Fiscal Year 2000 Amended Budget
                                                    Request




                        Components of Changes
                        Framework 3 - Field data collection and support systems


For this framework, we analyzed selected activities within the categories listed in the table below. The
following slides (see page references) provide our analysis of the key assumptions and data that
changed between the original and amended budget requests.

                                                                                                Related change
  Activity category                                                                           (dollars in millions)    Pages


 Field infrastructure                                                                                $168.9            23-24

 Preparation of enumerator materials                                                                   (6.9)            N/A

 Regional oversight                                                                                    41.2             N/A

 Field enumeration                                                                                    998.9            25-32

 Local census office staff                                                                            349.4             N/A

 Accuracy and Coverage Evaluation (ACE)                                                              (208.8)           33-34

 Telephone questionnaire assistance                                                                    10.4             N/A

                                                                                                   $1,353.1
                Total requested increase



N/A - Our analysis did not reveal any significant matters related to this activity.


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                           Appendix I
                           Briefing on the Analysis of the Census
                           Bureau’s Fiscal Year 2000 Amended Budget
                           Request




              Components of Changes
              Framework 3 - Field infrastructure




     Requested increase: $168.9 million
• This increase is for additional office space and related supplies and services to
  support the additional workload.
• To support the increase in workload, the bureau has increased the number of Local
  Census Offices (LCOs) from 476 to 520.
• The bureau has assumed the need for 1,500 additional square feet per LCO to
  support the expanded operations.
• The amended budget request assumes an increase in average cost per square foot
  of about $7 for office space rental. The bureau stated that the increase was due to
  its need for increased space for a larger number of offices in a short time frame
  and to avoid having to split an LCO between two different buildings.




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                              Appendix I
                              Briefing on the Analysis of the Census
                              Bureau’s Fiscal Year 2000 Amended Budget
                              Request




               Components of Changes
               Framework 3 - Field infrastructure (cont’d)




• $39.5 million is included for additional equipment, faxes, copier paper, furniture rental,
  and other supplies for the LCOs.
• About $53.8 million is for field staff telephones, “Be-Counted” supplies, and other support
  costs for local census offices, none of which were included in the original budget request.
     • This total includes $22.6 million for telephone and other employee reimbursements for
       which there was not a specifically identifiable amount in the original budget request.
     • This total also includes $28.3 million to perform evaluations of the traditional census
       programs. However, the bureau indicated that it has not finalized these evaluations
       and did not provide us with evidence as to how this amount was estimated.

• $18.5 million is for FTS 2000 long-distance telephone costs.




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                                                  Appendix I
                                                  Briefing on the Analysis of the Census
                                                  Bureau’s Fiscal Year 2000 Amended Budget
                                                  Request




                       Components of Changes
                       Framework 3 - Field enumeration



Requested increase: $998.9 million                                         • Field enumeration primarily involves the use
                                                                           of temporary census employees who directly
                                                                           contact the public to complete census
                 Field Enumeration Programs
                                                                           questionnaires. Most of this increase relates to
                       $92.6                                               visiting households that did not mail back a
                                                                           census questionnaire. These visits are referred
                                                                           to as “nonresponse follow-up.”
        $221.3
                                                                           • The following slides discuss these follow-up
                                                                           operations and the additional coverage
                                                                           improvement and quality control programs.

                                                      $685.0



                               $998.9 million

       Nonresponse follow-up
       Additional coverage improvement and quality control programs
       Other (update/leave, list/enumerate, special places)




 Source: GAO analysis of unaudited bureau data.

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                          Appendix I
                          Briefing on the Analysis of the Census
                          Bureau’s Fiscal Year 2000 Amended Budget
                          Request




           Components of Changes
           Framework 3 - Field enumeration: nonresponse follow-up




 • The $685 million increase in the cost of following up on nonresponding
   households is primarily due to the following two factors:
    • increase in workload for housing units visited and
    • decrease in enumerator productivity.

 • This increase is not due to any substantial change in assumptions for
    • mail response rate (61%),
    • turnover of enumerators (150%),
    • enumerator production hours per day (5), or
    • enumerator hourly wage rates ($10.25 - $15.25).




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                                                                              Briefing on the Analysis of the Census
                                                                              Bureau’s Fiscal Year 2000 Amended Budget
                                                                              Request




                                               Components of Changes
                                                Framework 3 - Field enumeration: nonresponse follow-up (cont’d)




                               50
                                                                                46                 • The workload change was primarily due to an
                               45
                                                                                 6                 increase from 30 million to 46 million planned visits to
                               40
                                                                                                   housing units when sampling was eliminated.
 Housing units (in millions)




                               35
                                                 30
                               30                 2                                                • The 16 million increase in the housing units includes:
                               25                                                                      • 12 million nonresponding households that would
                               20                28                             40                     have been statistically estimated under the
                               15                                                                      bureau’s original approach and
                               10                                                                      • 4 million addresses for questionnaires returned
                               5                                                                       by the Postal Service as vacant or nonexistent
                               0                                                                       housing units.
                                               Original                       Revised
                                                              Budget

                                                Questionnaires returned by Postal Service

                                                Nonresponding housing units




                                    Source: GAO analysis of unaudited bureau data.




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                                                 Appendix I
                                                 Briefing on the Analysis of the Census
                                                 Bureau’s Fiscal Year 2000 Amended Budget
                                                 Request




                   Components of Changes
                   Framework 3 - Field enumeration: nonresponse follow-up (cont’d)




                        Types of Costs
                     Nonresponse Follow-up                                    Because of the 16 million increase in
                                                                              visits to nonresponding housing units,
                   $62.0
                                                                              the bureau assumed increased wage
                                                                              and benefit costs for an additional
      $113.5                                                                  200,000 enumerators, crew leaders,
                                                                Wages         and assistants to spend over 33
                                                                Benefits
                                                                              million hours collecting information
                                                                Travel
                                                                Other
                                                                              for this operation.
     $36.2



                                                       $473.3




                            $685 million



Source: GAO analysis of unaudited bureau data.


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                                               Appendix I
                                               Briefing on the Analysis of the Census
                                               Bureau’s Fiscal Year 2000 Amended Budget
                                               Request




                   Components of Changes
                   Framework 3 - Field enumeration: nonresponse follow-up (cont’d)




                      Actual/Assumed Enumerator Productivity Rates
                                                                                   • The 18% decrease in productivity
     Cases per hour
     1.6               1.56                                                        rates, from 1.56 to 1.28, resulted
                                                                                   from the bureau’s observation of a
     1.4                                                                           downward trend in the public’s
                                                  1.28                             willingness to cooperate with
     1.2                                                                           enumerators.
                                                                   1.03
     1.0
                                                                                   • The bureau’s decision to reduce
     0.8
                                                                                   the assumed enumerator
                                                                                   productivity rates by another 20%
     0.6                                                                           between the original and amended
                                                                                   budget requests was based on
     0.4                                                                           senior management judgment,
                                                                                   which the bureau acknowledged
     0.2                                                                           was very conservative.
     0.0


                 1990 Census                2000 Census       2000 Census
               Actual (Traditional)         Original $2.8     Amended $4.5
                                            billion request   billion request

      Source: GAO analysis of unaudited bureau data.


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                            Appendix I
                            Briefing on the Analysis of the Census
                            Bureau’s Fiscal Year 2000 Amended Budget
                            Request




           Components of Changes
           Framework 3 - Field enumeration: nonresponse follow-up (cont’d)




• Bureau officials acknowledged that their judgment about the decrease from 1.28 to 1.03
  for all 46 million housing units also reflects their desire to be very conservative to
  compensate for the possibility that they may be unable to hire enough enumerators at the
  current hourly wage rates or they may experience turnover higher than assumed.

• Since the bureau did not assign a value to each of the factors that contributed to the 20%
  decline in enumerator productivity from the original budget request, we were unable to
  determine how much of the decrease in productivity was related to the bureau’s being
  very conservative.

• However, reducing the productivity of the enumerators in the amended budget request
  increased direct payroll costs alone by $235 million.




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                            Page 49                 GAO/AIMD/GGD-99-291 FY 2000 Census Amended Budget Request
                              Appendix I
                              Briefing on the Analysis of the Census
                              Bureau’s Fiscal Year 2000 Amended Budget
                              Request




              Components of Changes
              Framework 3 - Field enumeration: additional programs




  Requested increase: $221.3 million


• This increase is for additional programs to improve census coverage and quality assurance
  procedures and thus improve the accuracy of the census. These additional programs,
  which increase workload and were not included in the sampling census approach, involve,
  among other things:
   • $145.7 million to improve census coverage through efforts such as revisiting housing
     units where an enumerator reported the housing unit to be vacant or nonexistent but
     where the Postal Service was able to deliver a census questionnaire,
   • $25.2 million to redeliver census questionnaires to housing units where the Postal
     Service returns questionnaires as undeliverable potentially because of changes in
     addresses and zip codes that occur between the fall of 1999, when the bureau’s
     questionnaire address file is delivered to its printing vendors, and March 2000, when
     questionnaires are delivered, and



 31




                              Page 50                 GAO/AIMD/GGD-99-291 FY 2000 Census Amended Budget Request
                             Appendix I
                             Briefing on the Analysis of the Census
                             Bureau’s Fiscal Year 2000 Amended Budget
                             Request




               Components of Changes
               Framework 3 - Field enumeration: additional programs (cont’d)




     • $22.7 million to reinterview the occupants of a sample of nonresponding housing
       units where census questionnaires were completed by enumerators.


• It is unclear whether these additional programs will result in a 2000 census that is
  more accurate than the 1990 census.




32




                             Page 51                 GAO/AIMD/GGD-99-291 FY 2000 Census Amended Budget Request
                         Appendix I
                         Briefing on the Analysis of the Census
                         Bureau’s Fiscal Year 2000 Amended Budget
                         Request




          Components of Changes
          Framework 3 - Accuracy and Coverage Evaluation (ACE)




Requested decrease: $(208.8) million

• This decrease results from reduced staffing and related costs for ACE.

• The purpose of ACE is to estimate the population for purposes such as redistricting,
  by sampling households from an address list developed independently from the list
  used to perform the census.

• Under the bureau’s original plans, the results of ACE (formerly Integrated Coverage
  Measurement (ICM)) were to have been statistically combined with results of the
  enumeration to provide a single, integrated set of population counts.




33




                         Page 52                 GAO/AIMD/GGD-99-291 FY 2000 Census Amended Budget Request
                           Appendix I
                           Briefing on the Analysis of the Census
                           Bureau’s Fiscal Year 2000 Amended Budget
                           Request




           Components of Changes
           Framework 3 - Accuracy and Coverage Evaluation (ACE) (cont’d)




• The original workload was based on a sample size of 750,000 housing units. As a
  result of not using statistical estimation for apportionment, the bureau revised its
  sample size to 300,000 housing units and decreased enumerator and supervisory
  staff from 50,000 to 20,000.

• The 60-percent reduction in sample size proportionally reduced the cost by
  $208.8 million.




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                           Page 53                 GAO/AIMD/GGD-99-291 FY 2000 Census Amended Budget Request
                            Appendix I
                            Briefing on the Analysis of the Census
                            Bureau’s Fiscal Year 2000 Amended Budget
                            Request




              Components of Changes
              Framework 4 - Address list development




     Requested increase: $10.5 million
• This framework’s net increase includes a $10.5 million increase for 370 FTEs to
  determine the correct location of addresses from an expected increase in Be Counted
  and Telephone Questionnaire Assistance (TQA) responses.
• The bureau stated that this increase is related because, while the bureau’s methodology
  for determining the correct geographic location of addresses is the same as that planned
  under the sampling census design, the bureau expects to handle a larger workload.
• However, the assumed workload for Be Counted and TQA returns, according to the
  bureau’s original and amended cost models, remains unchanged at 1 million and 2
  million, respectively. The bureau had not provided us evidence of the increased
  workload or how it was used to estimate this cost increase by the end of our fieldwork.




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                            Page 54                 GAO/AIMD/GGD-99-291 FY 2000 Census Amended Budget Request
                            Appendix I
                            Briefing on the Analysis of the Census
                            Bureau’s Fiscal Year 2000 Amended Budget
                            Request




            Components of Changes
            Framework 7 - Puerto Rico, Virgin Islands, and Pacific Areas




     Requested increase: $20.7 million
• This requested increase includes $12.7 million for increased payroll and travel costs.
  These additional costs are due to an increasing workload, net of a decrease in hourly
  wage rates. However, 60% of the workload increase is due to the bureau’s lowering the
  assumed average initial mail response rate from 65% to 50%.

• Since Puerto Rico’s representation in the House of Representatives is not based on
  population, Puerto Rico would not be subject to the Supreme Court’s decision. However,
  according to bureau officials, once sampling could not be used for the U.S., the census
  method was also changed for Puerto Rico for consistency and timing purposes and thus
  the bureau considers these cost increases to be related.




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                            Page 55                 GAO/AIMD/GGD-99-291 FY 2000 Census Amended Budget Request
                            Appendix I
                            Briefing on the Analysis of the Census
                            Bureau’s Fiscal Year 2000 Amended Budget
                            Request




            Components of Changes
            Framework 7 - Puerto Rico, Virgin Islands, and Pacific Areas (cont’d)




• The requested increase also includes $6.0 million for data collection and support
  activities of an expanded nationwide program to assess the accuracy of the new and
  enhanced operations that contributed to the census counts.

• However, the bureau acknowledges that it did not have time to formulate a complete
  evaluation program when the amended budget request was prepared. The bureau is in the
  process of identifying components for each evaluation. Therefore, the $6.0 million figure
  is an estimate that could change when the bureau completes designing and costing its
  evaluation programs.

• The requested increase also includes $2 million for promotion activities similar to those
  activities in the field data collection and support systems (framework 3).




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                            Page 56                 GAO/AIMD/GGD-99-291 FY 2000 Census Amended Budget Request
                            Appendix I
                            Briefing on the Analysis of the Census
                            Bureau’s Fiscal Year 2000 Amended Budget
                            Request




            Components of Changes
            Framework 8 - Marketing, communications, and partnerships




     Requested increase: $88.4 million
• The requested increase relates primarily to expanded advertising and outreach efforts.
• The amended budget request includes $71.9 million intended to increase questionnaire
  responses, including advertising targeted at hard-to-enumerate communities.
• As mentioned earlier, the bureau used a 61% assumed response rate in the original and
  amended budget requests.
• Consequently, the bureau did not include any cost savings from the additional advertising
  in its amended budget request.




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                            Page 57                 GAO/AIMD/GGD-99-291 FY 2000 Census Amended Budget Request
                           Appendix I
                           Briefing on the Analysis of the Census
                           Bureau’s Fiscal Year 2000 Amended Budget
                           Request




            Components of Changes
            Framework 8 - Marketing, communications, and partnerships (cont’d)




• This framework’s increase also includes $5.4 million for support materials, such as
  posters and flyers; $3.9 million in payroll and travel costs for 46 additional
  community, media, and government partnership specialists; and $7.2 million for
  expanded evaluation of this program’s activities.

• The bureau stated that the $7.2 million figure is only an estimate and will remain so
  until the bureau identifies the evaluations it wants to perform and prepares study
  plans. The purpose of these evaluations is similar to the $28.3 million and $6.0
  million budgeted for in frameworks 3 and 7, respectively.




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                           Page 58                 GAO/AIMD/GGD-99-291 FY 2000 Census Amended Budget Request
                             Appendix I
                             Briefing on the Analysis of the Census
                             Bureau’s Fiscal Year 2000 Amended Budget
                             Request




               Components of Changes
               Framework 2 - Data content and products




Requested decrease: $(6.3) million
• The bureau’s amended budget request shows no net change for this framework.
  However, the $6.3 million decrease shown here is offset by related increases of $6.3
  million, shown on slide 20.

• This net decrease includes $5.3 million in reduced headquarters payroll, travel, overhead,
  and other costs. The bureau stated that it decided to cut positions originally budgeted for
  to pay for other increases in this framework.

• This net decrease also includes $1 million in reduced postage costs resulting from a 1.6
  million decrease in expected number of questionnaires to be mailed back due to a
  reduction in the expected mail response rate for Puerto Rico.




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                             Page 59                 GAO/AIMD/GGD-99-291 FY 2000 Census Amended Budget Request
                              Appendix I
                              Briefing on the Analysis of the Census
                              Bureau’s Fiscal Year 2000 Amended Budget
                              Request




                Components of Changes
                Framework 3 - Field data collection and support




Requested increase: $98.2 million
• According to the bureau, some of the unrelated costs involving items not included in the
  original budget request or revisions of prior estimates are as follows:
     • $29 million for rental of common areas not included in the original budget request.

     • $23 million for FTS 2000 long distance service costs revised from the estimates in the
       original budget request.
     • $16 million attributable to an increase in the number of housing units that will have
       questionnaires delivered by enumerators as part of the Update/Leave Program.
       According to the bureau, the addition of 5 million housing units to the 19 million used
       in the original budget request was based on the results of the address listing operation
       that ended in January 1999.




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                              Page 60                 GAO/AIMD/GGD-99-291 FY 2000 Census Amended Budget Request
                                Appendix I
                                Briefing on the Analysis of the Census
                                Bureau’s Fiscal Year 2000 Amended Budget
                                Request




              Components of Changes
              Framework 3 - Field data collection and support (cont’d)




• $10 million for map supplies and copier paper costs revised from the estimates in the
  original budget request.

• $10 million for staff visits to special place facilities in January and February 2000 not
     included in the original budget request.

• $4 million for field follow-up of newly identified addresses as part of the New
     Construction Program not included in the original budget request.

• $3 million for printing and mailing weekly earnings statements not included in the
     original budget request.

• $3 million for costs associated with the unique travel and logistical requirements to
     conduct enumeration in Alaska not included in the original budget request.




42




                                Page 61                 GAO/AIMD/GGD-99-291 FY 2000 Census Amended Budget Request
                            Appendix I
                            Briefing on the Analysis of the Census
                            Bureau’s Fiscal Year 2000 Amended Budget
                            Request




            Components of Changes
            Framework 7 - Puerto Rico, Virgin Islands, and Pacific Areas




Requested increase: $13.3 million
• The requested increase for this framework includes an additional $13.3 million for Island
  Area Memorandums of Understanding (MOU) above the $5.3 million in the original
  budget request. These MOUs represent agreements between the bureau and the Island
  Areas (excluding Puerto Rico) on the responsibilities each party has for conducting the
  census of the Islands’ population, as well as the budget for these activities.

• This increase represents revisions of prior cost estimates based on more recent
  information for such things as space, telecommunications, shipping, wage rates, and
  travel allowances. The increase also includes updated information on the enumeration
  workload provided by the Island Area governments and the addition of an office
  operation to the work originally planned.




43




                            Page 62                 GAO/AIMD/GGD-99-291 FY 2000 Census Amended Budget Request
                                   Appendix I
                                   Briefing on the Analysis of the Census
                                   Bureau’s Fiscal Year 2000 Amended Budget
                                   Request




             Process Used to Develop FY 2000 Budget
             Comparison of original and amended budget requests



The bureau derived the $1.7 billion requested increase by calculating the net difference
between the original budget request of $2.8 billion and the amended budget request of $4.5
billion.



                                                                            Original    Amended
                                                                             budget      budget          Requested
                                                                            request     request           increase
                Program activity                                                (dollars in millions)

                Program development and management                             $27.8       $31.0            $3.2
                Data content and products                                      194.6       194.6             0.0
                Field data collection and support systems                    2,023.2     3,474.5         1,451.3
                Address list development                                        33.9        43.6             9.7
                Automated data processing and telecommunications support       341.0       477.4           136.4
                Testing, evaluation, and dress rehearsal                        20.5        20.5             0.0
                Puerto Rico, Virgin Islands and Pacific Areas                   37.4        71.4            34.0
                Marketing, communications and partnerships                     111.1       199.5            88.4
                          Total requested amount                           $2,789.5    $4,512.5         $1,723.0




44




                                   Page 63                      GAO/AIMD/GGD-99-291 FY 2000 Census Amended Budget Request
                            Appendix I
                            Briefing on the Analysis of the Census
                            Bureau’s Fiscal Year 2000 Amended Budget
                            Request




             Process Used to Develop FY 2000 Budget
              Cost model details




• Consists of 16 interrelated software spreadsheets and numerous formulas and
  assumptions.

• Serves as a central collection point for field costs, as well as headquarters and other
  costs estimated outside the model.

• Of the $4.5 billion amended budget request, about $1.05 billion (23%) was calculated
  outside the model. The amounts calculated are for headquarters activities and contract
  costs (e.g., advertising).

• The output from the bureau’s models mathematically agrees with the original and
  amended budget estimates.

• These budget estimates are based in part and in varying degrees on the judgment of
  bureau management.




45




                            Page 64                 GAO/AIMD/GGD-99-291 FY 2000 Census Amended Budget Request
Appendix II

Comments From the Department of
Commerce                                                                        Appendx
                                                                                      Ii




              Page 65   GAO/AIMD/GGD-99-291 FY 2000 Census Amended Budget Request
Appendix II
Comments From the Department of
Commerce




Page 66               GAO/AIMD/GGD-99-291 FY 2000 Census Amended Budget Request
Appendix II
Comments From the Department of
Commerce




Page 67               GAO/AIMD/GGD-99-291 FY 2000 Census Amended Budget Request
Appendix II
Comments From the Department of
Commerce




Page 68               GAO/AIMD/GGD-99-291 FY 2000 Census Amended Budget Request
Appendix II
Comments From the Department of
Commerce




Page 69               GAO/AIMD/GGD-99-291 FY 2000 Census Amended Budget Request
Appendix III

GAO Contact and Staff Acknowledgements                                                             AppendxIi




GAO Contact            Scott McNulty, (202) 512-9184




Acknowledgements       In addition to the contact named above, the following individuals made key
                       contributions to this report: Cindy Brown-Barnes, Joan Hawkins, Theresa
                       Patrizio, Mike Vu, and Sophia Harrison.




(901793)       Leter   Page 70             GAO/AIMD/GGD-99-291 FY 2000 Census Amended Budget Request
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