oversight

Paperwork Reduction: Governmentwide Goals Unlikely to Be Met

Published by the Government Accountability Office on 1997-06-04.

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

                          United States General Accounting Office

GAO                       Testimony
                          Before the Committee on Small Business
                          U.S. Senate




For Release on Delivery
Expected at
9:30 a.m. EDT
                          PAPERWORK REDUCTION
Wednesday
June 4, 1997

                          Governmentwide Goals
                          Unlikely To Be Met
                          Michael Brostek
                          Associate Director, Federal Management and Workforce
                          Issues
                          General Government Division




GAO/T-GGD-97-114
Summary

Paperwork Reduction: Governmentwide
Goals Unlikely to Be Met

             The paperwork burden that the federal government imposes on the public,
             commonly measured in terms of “burden hours,” was estimated to total
             6.7 billion hours in fiscal year 1996, down slightly from the 6.9 billion-hour
             estimate for 1995. Some paperwork, of course, is necessary and can serve
             a useful purpose. Nevertheless, agencies have a responsibility to keep the
             amount of paperwork as low as possible consistent with carrying out their
             missions.

             Congress enacted the Paperwork Reduction Act of 1995 to impose
             discipline on the management of paperwork requirements. Among other
             things, the act requires the Office of Management and Budget’s (OMB)
             Office of Information and Regulatory Affairs to set a goal of at least a
             10-percent reduction in governmentwide paperwork burden for fiscal
             years 1996 and 1997, a 5-percent reduction goal for each of the next 4
             fiscal years, and annual agency goals that reduce burden to the “maximum
             practicable opportunity.”

             In assessing progress toward achieving these goals, it is appropriate to
             recognize that the basic data used to measure paperwork burden has
             important limitations. For instance, considerable uncertainty exists about
             whether the Internal Revenue Service’s (IRS) paperwork burden-hour
             estimate—which has recently accounted for about 75 percent of the
             government’s estimated total paperwork burden—is overstated. These
             limitations need to be borne in mind when gauging burden and progress in
             reducing it.

             On January 13, 1997, OMB instructed agencies to establish goals and
             timetables to achieve, by the end of fiscal year 1998, a cumulative burden
             reduction of 25 percent. This goal does not require the annual reductions
             contemplated by the act, but, if accomplished, could result in a similar
             reduction by the end of fiscal year 1998.

             However, primarily because IRS expects its paperwork burden-hour
             estimate to decline a total of about 2 percent over the fiscal year 1996-1997
             period, it appears unlikely that the federal government as a whole will
             meet the cumulative 25-percent reduction contemplated by the act by the
             end of fiscal year 1998. In addition to IRS, GAO looked specifically into two
             other agencies’ progress. Environmental Protection Agency (EPA) officials
             said they will not achieve a 25 percent net reduction by the end of fiscal
             year 1998, while Occupational Safety and Health Administration (OSHA)
             officials said they expect to meet this reduction goal.




             Page 1                                                       GAO/T-GGD-97-114
Summary
Paperwork Reduction: Governmentwide
Goals Unlikely to Be Met




All three agencies—IRS, EPA, and OSHA—indicated that the statutory
framework that underlies their regulations and/or continued actions by
Congress requiring the agencies to produce regulations were major
impediments to eliminating paperwork burden.




Page 2                                                    GAO/T-GGD-97-114
Statement

Paperwork Reduction: Governmentwide
Goals Unlikely to Be Met

             Mr. Chairman and Members of the Committee:

             I am pleased to be here today to update our testimony before the
             Committee last year regarding the implementation of the Paperwork
             Reduction Act of 1995, as amended.1 As you requested, I will focus today
             on three issues: (1) the Office of Management and Budget’s (OMB) efforts
             to fulfill its responsibilities under the act, particularly its responsibility for
             establishing and overseeing governmentwide and agency-specific
             paperwork reduction goals; (2) the likelihood of the government and
             particular agencies meeting those goals; and (3) any impediments the
             government faces in reaching the goals. At your request, we addressed
             these issues by reviewing selected aspects of the act’s implementation at
             OMB and three agencies—the Internal Revenue Service (IRS), the
             Environmental Protection Agency (EPA), and the Occupational Safety and
             Health Administration (OSHA). Participants at the 1995 White House
             Conference on Small Business said these three agencies imposed the most
             significant paperwork burdens on small businesses.


             Before discussing the results of our review, I believe some background
Background   information would provide useful context. The Paperwork Reduction Act
             of 1995 amended and recodified the Paperwork Reduction Act of 1980, as
             amended. The 1995 act reaffirmed the principles of the original act and
             gave new responsibilities to OMB and executive branch agencies. Like the
             original statute, the 1995 act requires agencies to justify any collection of
             information from the public by establishing the need for and ability to use
             the information, estimating the burden that the collection will impose on
             the respondents, and showing that the collection is the least burdensome
             way to gather the information.

             The act also reauthorized the Office of Information and Regulatory Affairs
             (OIRA) within OMB. Under the act, OIRA has overall responsibility for
             determining whether agencies’ proposals for collecting information
             comply with the act.2 Agencies must receive OMB approval for each
             information collection request before it is implemented. OIRA also is
             required to keep Congress “fully and currently informed” of the major

             1
              Paperwork Reduction: Burden Reduction Goal Unlikely To Be Met (GAO/T-GGD/RCED-96-186,
             June 5, 1996).
             2
              The act requires the Director of OMB to delegate the authority to administer all functions under the
             act to the Administrator of OIRA but does not relieve the OMB Director of responsibility for the
             administration of those functions. Approvals are made on behalf of the OMB Director. In this
             testimony, we generally refer to OIRA or the OIRA Administrator wherever the act assigns
             responsibilities to OMB or the Director.



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                             Statement
                             Paperwork Reduction: Governmentwide
                             Goals Unlikely to Be Met




                             activities under the act and must report to Congress on agencies’ progress
                             in reducing paperwork. To do so, OIRA develops an Information
                             Collection Budget (ICB) by gathering data from executive branch agencies
                             on the total number of “burden hours” OMB approved for collections of
                             information for the agency at the end of the fiscal year and agency
                             estimates of the burden for the coming fiscal year.3

                             Finally, the 1995 act made several changes in federal paperwork reduction
                             requirements. For example, it requires OIRA to set a goal of at least a
                             10 percent burden reduction governmentwide for each of fiscal years 1996
                             and 1997, a 5 percent governmentwide burden reduction goal in each of
                             the next 4 fiscal years, and annual agency goals that reduce burden to “the
                             maximum practicable opportunity.”4


Some Paperwork Is            I also believe it is important to point out that some paperwork is necessary
Necessary                    and can serve a useful purpose. Information collection is one method by
                             which regulatory agencies carry out their missions to, for example, collect
                             taxes, keep workplaces safe, and clean the environment. Without some
                             such information, IRS would not know the amount of tax owed by the
                             taxpayer, and EPA and OSHA would not know whether the intent of
                             statutes such as the Clean Air Act and the Occupational Safety and Health
                             Act is being achieved. However, under the act, agencies do have a
                             responsibility to keep the amount of paperwork as low as possible.


                             During the past year, OIRA published what its officials said were
OMB and Agencies             governmentwide and agency-specific burden reduction goals.
Set Burden Reduction         Subsequently, OMB established multiyear governmentwide and
Goals                        agency-specific burden reduction goals that could, if implemented,
                             accomplish the burden reductions that the Paperwork Reduction Act of
                             1995 envisioned would occur by the end of fiscal year 1998.


Goal-Setting Is Useful but   Before discussing the specifics of OMB and agencies’ goal-setting efforts,
Caution Needed Due to        it is appropriate to recognize that the basic data used to gauge paperwork
Imprecise Data               burden have important limitations. Although the paperwork reduction
                             concepts in the Paperwork Reduction Act of 1995 are a useful framework

                             3
                              Although OIRA consults with agencies in the preparation of their ICB submissions and refers to this
                             data collection process as a “budget,” OIRA’s information collection budget does not limit the number
                             of burden hours an agency is permitted to impose in the way that a financial budget limits
                             expenditures.
                             4
                              The original act contained burden reduction goals, but they had expired.



                             Page 4                                                                          GAO/T-GGD-97-114
                        Statement
                        Paperwork Reduction: Governmentwide
                        Goals Unlikely to Be Met




                        for imposing discipline on the government’s management of paperwork
                        requirements affecting the public, users of paperwork burden-hour
                        estimates should proceed with caution. Estimating the amount of time it
                        will take for an individual to collect and provide information or how many
                        individuals an information collection will affect is not a simple matter.
                        Therefore, the degree to which agency burden-hour estimates reflect real
                        burden and the factors that cause changes to the estimates are often
                        unclear. For example, as I will discuss in more detail later, considerable
                        uncertainty exists about the accuracy of IRS’ paperwork burden-hour
                        estimate—which has recently accounted for about 75 percent of the
                        government’s estimated total paperwork burden. IRS’ estimates may be off
                        by as much as billions of burden hours and to the extent that the estimates
                        are off, the estimates used to gauge progress in meeting the goals of the
                        Paperwork Reduction Act would also be significantly flawed.
                        Nevertheless, these are the best indicators of paperwork burden available,
                        and we believe that they can be useful as long as their limitations are
                        borne in mind.


OIRA Published ICB      Last year I testified that as of the end of May 1996, OIRA had not set any
Containing Agencies’    burden reduction goals. However, OIRA staff told us at that time that OIRA
Burden-Hour Estimates   would establish a governmentwide burden reduction goal of 10 percent for
                        fiscal year 1996 in a then soon-to-be-published ICB. They also said that
                        agency goals would reflect the end of fiscal year 1996 burden-hour
                        estimates that the agencies would provide in their ICB submissions, unless
                        changed as a result of OIRA review.

                        OIRA published the ICB for fiscal year 1995 in August 1996. The ICB stated
                        that the act “set an annual government-wide goal for the reduction of total
                        information collection burden of 10 percent during each of fiscal years
                        1996 and 1997 and 5 percent during each of fiscal years 1998, 1999, 2000,
                        and 2001.” OIRA officials told us that they believe this statement satisfied
                        the act’s requirement that OIRA establish governmentwide burden
                        reduction goals.

                        In the August 1996 ICB, federal departments and agencies estimated that
                        their burden-hour totals at the end of fiscal year 1996 (less than 2 months
                        later) would average less than 1 percent below the end of fiscal year 1995
                        totals.5 OIRA does not believe there is a contradiction between the

                        5
                         The agencies estimated that the total number of burden hours would decline from 6.90 billion hours
                        on September 30, 1995, to 6.85 billion hours on September 30, 1996. Data from the Regulatory
                        Information Service Center as of May 1997 indicates the agencies ended fiscal year 1996 with
                        6.75 billion burden hours.



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                           Statement
                           Paperwork Reduction: Governmentwide
                           Goals Unlikely to Be Met




                           governmentwide burden-hour reduction goal of 10 percent for fiscal year
                           1996 and the fact that the agency-specific goals for that year averaged less
                           than 1 percent. OIRA officials believe this apparent contradiction can
                           occur because the act specifies that individual agencies’ goals should
                           reduce information collection burdens to the “maximum practicable
                           opportunity.” The sum of these maximum practicable agency goals may
                           not total to 10 percent governmentwide. Nevertheless, we believe that it is
                           logical to assume that agency-specific goals would be the means by which
                           the governmentwide goal would be achieved. We also believe that the 1995
                           act’s legislative history indicates that Congress contemplated a connection
                           between the governmentwide and agency-specific goals.6


OMB Has Set a 25 Percent   On January 13, 1997, OMB issued Bulletin 97-03, which instructed
Burden Reduction Goal      executive departments and agencies to prepare and implement an ICB for
                           fiscal year 1996 and an Information Streamlining Plan (ISP). The bulletin
                           said each agency’s ISP should include “goals and timetables to achieve, by
                           the end of (fiscal year) 1998, a cumulative burden reduction of 25 percent
                           from its (fiscal year) 1995 year-end level, consistent with the
                           governmentwide burden reduction goals in the Paperwork Reduction Act
                           of 1995.” The bulletin also said that each agency should identify in its ISP
                           submission specific administrative changes, program restructures,
                           regulatory reinventions, and legislative proposals that would reduce its
                           total paperwork burden on the public and streamline the paperwork it
                           imposes.

                           OIRA staff said that progress toward the 25-percent goal will be measured
                           against agency burden-hour estimates as of September 30, 1995, and that
                           agency and governmentwide reductions would have to take into account
                           any burden-hour additions that occurred while the reductions were taking
                           place. For example, if an agency was able to reduce its September 30,
                           1995, paperwork burden by 25 percent, but new regulations that the
                           agency issued during that period added the equivalent of an additional
                           10 percent, the agency would get credit for having accomplished only a
                           15 percent reduction in burden hours.

                           OMB’s goal of reducing the number of burden hours by 25 percent by the
                           end of fiscal year 1998 could, if accomplished, achieve a similar reduction
                           to what the act contemplated through its requirement that OIRA set goals

                           6
                            The act’s conference report states that “individual agency goals negotiated with OIRA may differ
                           depending on the agency’s potential to reduce the paperwork burden such agency imposes on the
                           public. Goals negotiated with some agencies may substantially exceed the Government-wide goal,
                           while those negotiated with other agencies may be substantially less.”



                           Page 6                                                                          GAO/T-GGD-97-114
                     Statement
                     Paperwork Reduction: Governmentwide
                     Goals Unlikely to Be Met




                     of 10 percent for fiscal years 1996 and 1997 and 5 percent for 1998. OIRA
                     officials told us that the 3-year goal was established because paperwork
                     reductions typically take several years to implement, and therefore a
                     multiyear goal was more workable.

                     OIRA officials said that as of the end of May 1997, most of the agencies
                     had submitted their ISPs and that OIRA staff were reviewing their
                     submissions. They also said they were scheduling hearings to review the
                     ISPs with top officials in each agency and anticipated that the hearings
                     would be completed by the end of June 1997.


Measuring Progress   In previous years, OIRA used ICB information to assess agencies’ progress
Toward the Goal      in reducing paperwork burden. Changes in burden-hour estimates from
                     year to year were classified as caused by either “program changes” or
                     “adjustments.” Program changes were defined as additions or reductions
                     to existing paperwork requirements imposed either through new statutory
                     requirements or an agency’s own initiative. Adjustments were changes in
                     burden estimates that were caused by factors other than changes in the
                     actual paperwork requirements, such as changes in the population
                     responding to a requirement or agency reestimates of the burden
                     associated with a collection of information. OIRA counted both program
                     changes and adjustments when calculating an agency’s burden-hour
                     baseline at the end of each fiscal year. OIRA did not count changes due to
                     adjustments in determining whether an agency had achieved its burden
                     reduction goal.

                     OIRA officials told us that they will continue to use information from the
                     ICBs in judging agencies’ progress toward the goal of reducing burden by
                     25 percent by the end of fiscal year 1998. The ICB for fiscal year 1996 is
                     currently scheduled to be published in June 1997. OIRA officials also told
                     us that they will measure and report on both program changes and
                     adjustments, but they have not decided whether to count adjustments
                     when judging agencies’ accomplishments. If OIRA decides to count
                     adjustments, agencies could meet their 25 percent burden reduction goals
                     by reestimating the burden of their existing information collections.




                     Page 7                                                     GAO/T-GGD-97-114
                     Statement
                     Paperwork Reduction: Governmentwide
                     Goals Unlikely to Be Met




                     OMB’s January 13, 1997, bulletin stated that “agencies have made
Recent Changes in    substantial progress in reducing paperwork burden” since the original
Paperwork Burden     Paperwork Reduction Act was enacted in 1980. However, the
Suggest Burden       governmentwide burden-hour estimate actually rose substantially during
                     that period. Figure 1 shows changes in reported burden-hour estimates
Reduction Goals      governmentwide and at IRS between September 30, 1980, and
Unlikely to Be Met   September 30, 1996. The figure also shows IRS’s estimate of its
                     burden-hour total at the end of fiscal year 1997 that was presented in its
                     ICB submission for fiscal year 1996.




                     Page 8                                                      GAO/T-GGD-97-114
                                                       Statement
                                                       Paperwork Reduction: Governmentwide
                                                       Goals Unlikely to Be Met




Figure 1:


GAO             Trends in Estimated Paperwork Burden
                Governmentwide and for IRS
 Burden hours (in billions)
 8


 7


 6


 5


 4


 3


 2


 1


 0
     80            82             84              86              88             90            92            94     95      96     97

             Total government (no projection for FY 1997)
             IRS
             IRS projection for FY 1997




                                                       Note: Data are as of September 30 each year.

                                                       Source: Regulatory Information Service Center and Department of the Treasury.




                                                       As you can see, the governmentwide burden-hour estimate rose from
                                                       about 1.5 billion hours in 1980 to more than 6.7 billion hours in 1996.
                                                       However, the near tripling of the governmentwide burden-hour estimate
                                                       during fiscal year 1989 was primarily because IRS adopted a new
                                                       methodology for computing burden, which increased its paperwork



                                                       Page 9                                                                          GAO/T-GGD-97-114
Statement
Paperwork Reduction: Governmentwide
Goals Unlikely to Be Met




estimate by about 3.4 billion hours. In each year since fiscal year 1989, IRS’
estimated paperwork burden has accounted for more than three-quarters
of the governmentwide total. Because the current estimate of IRS’
paperwork burden is such a large portion of the governmentwide estimate,
increases or decreases in IRS’ estimated number of burden hours have
had—and may in the future have—a dramatic effect on the
governmentwide estimate.

The governmentwide 6.7 billion burden-hour estimate for 1996 is down
from just over 6.9 billion hours in 1995. Notably, this decline occurred
despite the fact that IRS’s burden-hour estimate rose slightly between 1995
and 1996 (from 5.28 billion hours to 5.30 billion hours).7 In general,
however, reducing the burden imposed by IRS will be an important
component of any governmentwide effort to reduce paperwork burden.

Figure 2 shows the month-by-month changes in the estimated
governmentwide paperwork burden between September 30, 1995, (the day
before the 1995 act’s effective date) and April 30, 1997 (the most recent
date for which data were available). The figure also shows what the
burden-hour totals would have been if the agencies had achieved the
10 percent reductions contemplated in the act for fiscal years 1996 and
1997 and the required additional 5 percent reduction for fiscal year 1998.




7
 OIRA officials noted that except for IRS, the paperwork estimate for the rest of the government
declined by more than 10 percent during the act’s first year of implementation.



Page 10                                                                          GAO/T-GGD-97-114
                                                             Statement
                                                             Paperwork Reduction: Governmentwide
                                                             Goals Unlikely to Be Met




Figure 2:


GAO                 Changes in Estimated Governmentwide
                    Burden and Burden Reduction Goals
 Burden hours (in billions)
 8


 7


 6


 5


 4


 3


 2


 1


 0
     9/95                      3/96                   9/96               3/97                     9/97          3/98             9/98


                                                                                                                            ion
                                                                                             ion
                                                     ion




                                                                                                                            ct
                                                                                             ct
                                                     ct




                                                                                                                          du
                                                                                           du
                                                   du




                                                                                                                        re
                                                                                         re
                                                 re




                                                                                                                       5%
                                                                                         %
                                                 %




                                                                                       10
                                               10




             Month by month estimated burden
             Reduction goals




                                                             Note: Data are as of the end of each month.

                                                             Source: Regulatory Information Service Center and GAO.




                                                             The figure shows that as currently measured, the federal government had
                                                             not achieved the 10-percent reduction in burden hours contemplated by
                                                             the act by the end of fiscal year 1996. Also, because IRS expects to achieve
                                                             only a 1-percent reduction in its burden total by the end of fiscal year 1997,
                                                             and because IRS officials told us that they anticipated achieving another



                                                             Page 11                                                                    GAO/T-GGD-97-114
                         Statement
                         Paperwork Reduction: Governmentwide
                         Goals Unlikely to Be Met




                         1-percent reduction by the end of fiscal year 1998, it appears unlikely that
                         the federal government as a whole will meet the 25-percent reduction
                         contemplated by the act by the end of fiscal year 1998. If IRS cannot
                         reduce its burden-hour total by more than 2 percent between fiscal years
                         1995 and 1998, achieving a 25-percent reduction in the governmentwide
                         burden-hour total during that period would require that all other federal
                         departments and agencies virtually eliminate their information collections.


                         We examined the ICB and ISP submissions for IRS, EPA, and OSHA to
Specific Burden          determine what actions they said they have taken to reduce their
Reduction Actions at     estimated paperwork burden and whether the agencies believe they will
IRS, EPA, and OSHA       meet the 25 percent burden reduction goal by the end of fiscal year 1998.
                         Although all three agencies indicated they had undertaken numerous
and Likelihood of        burden reduction efforts, the agencies differed in the degree to which they
Agencies Reaching        expected those efforts to reduce their burden-hour estimates.
Their Goals
IRS Said It Has Taken    IRS’s draft ISP submission describes a number of actions the agency said it
Actions but Cannot       has taken to reduce its information collection burden. For example, IRS
Achieve the 25 Percent   said it produced a set of streamlined instructions for its Form 1040,
                         switched over 400,000 filers from Schedule C to Schedule C-EZ, and
Burden Reduction Goal    deleted 20 entries from Form 1040 and its instructions that resulted in a
                         reduction of nearly 60 million burden hours. In another change, IRS said
                         that it was raising the threshold for which a receipt is required for
                         substantiation of a business expense for travel from $25 to $75, reducing
                         the burden on taxpayers by an estimated 12.4 million hours.

                         However, after reviewing its 15 largest information collections as of
                         September 30, 1995, IRS said it was unable to identify burden reductions
                         that would allow it to achieve a 25-percent reduction in its baseline of
                         5.3 billion hours. As I mentioned earlier, the agency estimated that its total
                         information collection burden by September 30, 1997, will decline by
                         about 1 percent from the previous year. However, IRS estimated its
                         information collection total would still stand at nearly 5.25 billion hours.
                         IRS officials told us that the agency would probably be able to accomplish
                         another 1-percent reduction in its burden-hour totals by September 30,
                         1998.

                         In its draft ISP, IRS said it could not reach the 25 percent burden reduction
                         goal because its major information collections




                         Page 12                                                       GAO/T-GGD-97-114
                         Statement
                         Paperwork Reduction: Governmentwide
                         Goals Unlikely to Be Met




                         “request information that is mandated by the Internal Revenue Code and which IRS needs
                         to collect the required amount of individual and corporate income tax revenue. Reducing
                         the paperwork burden of these items would make it more difficult, if not impossible, to
                         administer the Internal Revenue Code. We will continue to search for new opportunities to
                         reduce burden, but the only way to achieve major burden reduction is to simplify the tax
                         laws.”


                         However, in considering such simplifications, Congress must weigh
                         several, sometimes competing, issues. These include the revenue
                         implications of any change, the goal to promote equity and fairness, and
                         the desire to achieve certain social and economic goals. Achieving a
                         balance among these issues while making it easier for taxpayers to comply
                         presents a significant challenge to Congress.8

                         IRS officials also told us that many of the burden reduction efforts the
                         agency has made are not reflected in the burden-hour estimates because
                         they are not counted. For example, they said that 32 notices and letters
                         that were previously sent out 22 million times a year were eliminated this
                         year, reducing taxpayer burden and saving IRS over $17 million. They said
                         that this burden reduction was not reflected in IRS’s burden-hour
                         estimates because the notices and letters that were eliminated were not
                         subject to the Paperwork Reduction Act. They also said that some
                         taxpayers are not taking full advantage of IRS initiatives to reduce burden,
                         such as TeleFile and electronic submission of tax information. As noted
                         later in my testimony, IRS is working on a new methodology to measure
                         taxpayer burden.



EPA Says It Has Taken    EPA has had its own effort to reduce paperwork that began before the
Actions but Will Not     Paperwork Reduction Act of 1995 took effect.9 However, despite this effort
Achieve the 25 Percent   and actions designed to meet the burden reduction goals contemplated in
                         the act, EPA said it will not achieve a 25 percent net reduction of its fiscal
Burden Reduction Goal    year 1995 information collection burden by the end of fiscal year 1998.

                         According to its draft ISP, a primary focus of EPA’s burden reduction
                         efforts has been on the agency’s 21 information collections with the
                         greatest estimated burdens. Of these, EPA said 16 will have their burdens
                         reduced significantly by the end of fiscal year 1998, and 2 others will be


                         8
                         Tax System Burden: Tax Compliance Burden Faced by Business Taxpayers (GAO/T-GGD-95-42,
                         Dec. 9, 1994).
                         9
                         Environmental Protection: Assessing EPA’s Progress in Paperwork Reduction (GAO/T-RCED-96-107,
                         Mar. 21, 1996).



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Statement
Paperwork Reduction: Governmentwide
Goals Unlikely to Be Met




reduced by the end of the decade. For example, EPA said the burden
associated with its Discharge Monitoring Reports would be reduced by
nearly 4.7 million hours. EPA said that the information collections
associated with its September 30, 1995, total estimated paperwork burden
of 104.1 million hours would be reduced by 21.8 million hours by the end
of fiscal year 1998—a 21-percent reduction. EPA also said that it would
reduce 4.1 million hours from new additions to the baseline, so its total
projected reduction was 25.9 million hours.

However, EPA’s draft ISP also said that these reductions would be more
than offset by 30.3 million burden hours added during this period. EPA
estimated in its draft ICB that its burden as of September 30, 1997, would
be more than 115 million hours. (See fig. 3.) EPA’s draft ISP estimated that
its total paperwork burden by September 30, 1998, would be 108.5 million
hours—a decrease from the 1997 estimate but an increase of about
4 percent from the fiscal year 1995 baseline. However, EPA noted that this
estimate did not include “a potentially large increase related to the Safe
Drinking Water Consumer Confidence Report.”




Page 14                                                     GAO/T-GGD-97-114
                                                  Statement
                                                  Paperwork Reduction: Governmentwide
                                                  Goals Unlikely to Be Met




Figure 3:


GAO               Changes in EPA's Estimated Burden
                  Hour Total Since 1980
  Burden hours (in millions)
  140


  120


  100


   80


   60


   40


   20


    0
        80            82                    84   86            88             90            92             94   95   96   97



               EPA
               EPA projection for FY 1997




                                                  Note: Data are as of the end of each month.

                                                  Source: Regulatory Information Service Center and EPA.




                                                  EPA’s draft ISP said the increases in its estimated burden hours between
                                                  fiscal years 1995 through 1998 were driven by four factors: (1) 5.5 million
                                                  burden hours associated with the Toxic Release Inventory’s Form R that




                                                  Page 15                                                                 GAO/T-GGD-97-114
                             Statement
                             Paperwork Reduction: Governmentwide
                             Goals Unlikely to Be Met




                             had not been counted in the past;10 (2) recalculations of burdens for
                             existing information collections (e.g., a 2.4 million hour increase for the
                             Hazardous Waste Manifest); (3) nearly 14 million hours added in support
                             of expanded community-right-to-know efforts;11 and (4) new regulations
                             under the Clean Air Act Amendments and other rules.


OSHA Says Its Actions Will   In contrast to IRS and EPA, OSHA said it has already made substantial
Achieve the 25 Percent       progress toward achieving a 25-percent reduction in its fiscal year 1995
Burden Reduction Goal        paperwork burden estimate. As figure 4 shows, OSHA’s paperwork burden
                             estimate increased dramatically just prior to the 1995 act’s effective date.
                             This increase occurred because OSHA and other agencies were trying to
                             get proposed information collections approved before the new act took
                             effect on October 1, 1995. However, the Department of Labor’s ICB
                             submission indicated that OSHA had reduced its September 30, 1995,
                             baseline of 207.6 million hours by 25.1 million hours (12 percent) as of
                             September 30, 1996, and estimated that OSHA would be able to reduce its
                             total by another 17.3 million hours by September 30, 1997. If so, OSHA will
                             have reduced its total paperwork burden by more than 42 million hours—a
                             20-percent decrease from its fiscal year 1995 baseline. OSHA officials told
                             us that they expect the agency to achieve the 25 percent burden reduction
                             goal by the end of fiscal year 1998.




                             10
                               The 1993 appropriations bill for EPA (P. L. 102-389) effectively provided an exemption from the
                             Paperwork Reduction Act for EPA’s Form R until such time as revisions to the form are made in
                             accordance with law. OMB subsequently dropped this information collection from its ICB tracking
                             system when its information collection clearance expired. The recent revision of Form R and the
                             reinstatement of OMB clearance for this collection will add 5.5 million hours to EPA’s burden-hour
                             total but will not impose any additional burden on the public because the form was used continuously
                             throughout this period.
                             11
                              Right-to-know requirements involve the disclosure of health and environmental information to the
                             public and are contained in such statutes as the Safe Drinking Water Act, the Emergency Planning and
                             Community Right-to-Know Act, and the Residential Lead-based Paint Hazard Disclosure Act.


                             Page 16                                                                        GAO/T-GGD-97-114
                                                    Statement
                                                    Paperwork Reduction: Governmentwide
                                                    Goals Unlikely to Be Met




Figure 4:


GAO                  Changes in OSHA's Estimated Burden
                     Hour Totals Since 1980
       Burden hours (in millions)
       250




       200




       150




       100




        50




            0
                80         82                84        86            88           90              92         94    95     96     97



                      OSHA
                      OSHA projection for FY 1997




                                                    Note: Data are as of the end of each month.

                                                    Source: Regulatory Information Service Center and the Department of Labor.




                                                    The Department of Labor’s draft ICB and ISP identified a number of
                                                    specific actions that it said caused the sharp decline in burden hours. For
                                                    example, the documents indicated that OSHA had achieved an estimated
                                                    18 million-hour reduction in its paperwork burden as a result of changes to
                                                    its Process Safety Management standard. They also indicated that OSHA



                                                    Page 17                                                                      GAO/T-GGD-97-114
                  Statement
                  Paperwork Reduction: Governmentwide
                  Goals Unlikely to Be Met




                  had reduced the burden associated with its Hazardous Waste Operations
                  and Emergency Response standard from 18.7 million hours to about
                  2.2 million hours.

                  Nevertheless, the draft ISP also indicated that burden reductions for a
                  number of its standards would not be possible without statutory change.
                  For example, the ISP said that OSHA’s review of one of its standards “did
                  not identify any method of reducing paperwork that does not
                  simultaneously increase significant risk. OSHA is precluded from taking
                  any regulatory action that will increase such risk.” The ISP also noted that
                  OSHA’s Lead in Construction and Hazardous Waste Operations and
                  Emergency Response rules were congressionally mandated and “would
                  require the consent of Congress to revise.”


                  Although each of their burden reduction experiences differed, IRS, EPA,
Impediments to    and OSHA all indicated in their ICB or ISP submissions that the statutory
Reaching Burden   framework that underlies their regulations and/or continued actions by
Reduction Goals   Congress requiring the agencies to produce regulations were major
                  impediments to eliminating paperwork burden. As I mentioned earlier, IRS
                  said that it cannot reach the 25 percent burden reduction goal of
                  eliminating more than 1 billion burden hours of paperwork under the
                  current statutory framework and still carry out its mission. The agency
                  said paperwork reductions of that scale are possible only through a major
                  simplification of the tax laws. EPA said that its burden reduction efforts
                  have allowed the agency’s baseline to remain relatively constant “despite
                  the passage of new legislation and the increasing call by the public for
                  additional information.” The Department of Labor said “reductions in
                  information collection requirements which are statutorily mandated can
                  only be achieved through legislative changes” and subsequently identified
                  several such instances in OSHA regulations.

                  As I mentioned earlier, information collection is one method by which
                  agencies carry out their missions, and those missions are established by
                  Congress through legislation. If agencies’ paperwork requirements are
                  truly statutorily mandated, then burden-hour reductions of the magnitude
                  envisioned by the act may not be achievable without changes in the
                  legislation underlying those requirements. However, we have not assessed
                  the extent to which the paperwork burden that agencies impose is directly
                  attributable to statutory requirements and, therefore, is out of the
                  agencies’ control. Even though a statute may require an agency to take
                  certain actions, the agency may have discretion regarding whether



                  Page 18                                                     GAO/T-GGD-97-114
           Statement
           Paperwork Reduction: Governmentwide
           Goals Unlikely to Be Met




           paperwork requirements need to be imposed and, if so, the manner or
           frequency with which the information is collected. For example, although
           several statutes require employers to provide training to employees, OSHA
           may have discretion to determine whether employers need to generate
           paperwork to demonstrate their compliance with these provisions.

           Another factor that we believe affects agencies’ ability to meaningfully
           reduce paperwork burden is the difficulty agencies have experienced in
           measuring that burden. The paperwork metric agencies currently use is
           “burden hours,” which is supposed to reflect how long it takes
           respondents to complete agencies’ information collections. However, the
           frequency with which agencies reestimate their burden-hour totals and the
           magnitude of those adjustments indicate that those measurements are far
           from precise.

           For example, the huge increase in the governmentwide burden-hour total
           in 1989 was a consequence of IRS reestimating the burden associated with
           its information collections. However, a recent analysis of the methodology
           that formed the basis of the 1989 reestimate concluded that IRS may now
           be significantly overstating businesses’ paperwork burden.12 IRS recently
           drafted a statement of work for a new study of IRS tax compliance burden,
           but the results of that study will probably not be available for several
           years. If the study confirms that IRS’s current burden-hour estimates are,
           in fact, significantly overstated, the agency’s and the governmentwide
           burden-hour totals could fall back to their pre-1989 levels—far below the
           burden reduction goals contemplated in the act. However, because only
           the measurement system would have been altered, the actual paperwork
           burden felt by the public would remain unchanged.


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




           12
            In the early 1980s, IRS commissioned Arthur D. Little, Inc., to develop a methodology to estimate the
           burden each tax form imposed on taxpayers. In a paper prepared for a 1996 Brookings Institute forum,
           Professor Joel Slemrod concluded that the Little methodology overstated business taxpayer
           paperwork burden by a factor of five. IRS officials said that after working with analysts in the Office of
           Tax Analysis in the Department of the Treasury, Professor Slemrod now believes the appropriate
           adjustment factor for business taxpayer paperwork burden is about 3.8.



(410127)   Page 19                                                                             GAO/T-GGD-97-114
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