oversight

Paperwork Reduction Act: Burden Increases and Unauthorized Information Collections

Published by the Government Accountability Office on 1999-04-15.

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

                       United States General Accounting Office

GAO                    Testimony
                       Before the Subcommittee on National Economic Growth,
                       Natural Resources and Regulatory Affairs; and the
                       Subcommittee on Government Management, Information,
                       and Technology, Committee on Government Reform
                       House of Representatives
Not to be Released
Before 2:00 p.m. EDT
Thursday
                       PAPERWORK
April 15, 1999
                       REDUCTION ACT

                       Burden Increases and
                       Unauthorized Information
                       Collections
                       Statement of L. Nye Stevens
                       Director, Federal Management and Workforce Issues
                       General Government Division




GAO/T-GGD-99-78
Summary

Paperwork Reduction Act: Burden Increases
and Unauthorized Information Collections

              The Paperwork Reduction Act of 1995 (PRA) required the Office of
              Management and Budget (OMB) to establish goals to reduce the federal
              government’s paperwork burden by 25 percent by the end of fiscal year
              1998. However, the governmentwide burden-hour estimate in OMB’s
              Information Collection Budget (ICB) declined by less than one-half of 1
              percent during this period, remaining at nearly 7 billion burden hours. The
              Internal Revenue Service (IRS) accounts for about 80 percent of the
              governmentwide burden, and an increase in IRS’ estimated burden
              between 1995 and 1998 offset the decreases in other agencies’ estimates.
              IRS said the increase in its burden estimate was primarily because of
              increased economic activity and new statutory requirements to collect
              information. For example, the Taxpayer Relief Act of 1997 reportedly
              increased IRS’ paperwork burden by more than 92 million hours. Both IRS
              and non-IRS agencies expect their paperwork burden to increase during
              the next 2 years, with the largest increases expected to occur at IRS.

              OMB’s Office of Information and Regulatory Affairs (OIRA) has not fully
              satisfied all of the requirements that the PRA assigns to that Office. For
              example, OIRA established governmentwide burden-reduction goals late in
              each of the past 3 fiscal years, and the Office sees no necessary connection
              between the agencies’ goals and the governmentwide goal.

              OMB data provided to the Subcommittee on expired paperwork
              authorizations indicate a troubling disregard by agencies for the PRA
              requirement that they obtain OMB approval before collecting information
              from the public. OMB indicated that 17 information collections were being
              carried out after OMB’s approval had expired, and 11 other collections had
              been continued for a period of time in violation of the PRA. These
              collections imposed more than 111 million hours of estimated burden in
              recent years, with an estimated cost to the public of about $3 billion.
              OMB’s ICB for fiscal year 1999 indicates that there were many other PRA
              violations in addition to those provided to the Subcommittee. Also, the
              ICB reflects the burden hours associated with these expired authorizations
              at the end of the fiscal year as burden reductions. Therefore, some of the
              burden reductions claimed in the ICB did not really occur. OMB can do
              more to encourage agencies to comply with the PRA, including notifying
              the President’s Management Council and the “budget side” of OMB of
              agencies’ PRA violations.




              Page 1                                                      GAO/T-GGD-99-78
Statement

Paperwork Reduction Act: Burden Increases
and Unauthorized Information Collections

              I am pleased to be here today to discuss the implementation of the
              Paperwork Reduction Act of 1995 (PRA). As you requested, I will
                                                                       1
              summarize our recent reports and testimonies on the PRA and provide our
              analysis of data on expired paperwork authorizations that were recently
              submitted to the Subcommittee by the Office of Management and Budget
              (OMB).

              In brief, our reports and testimonies all indicate that federal paperwork
              burden estimates have increased dramatically since the PRA was first
              enacted in 1980, although some of that increase is due to changes in
              measurement techniques. Agencies’ burden estimates have continued to
              increase since 1995 despite congressional expectations for reductions in
              federal paperwork burden. The increase in the governmentwide
              paperwork estimate appears largely attributable to continued increases in
              the Internal Revenue Service’s (IRS) estimates. However, IRS said these
              increases are due to increased economic activity and new statutory
              requirements—factors it does not control. In addition,we believe that
              OMB’s Office of Information and Regulatory Affairs (OIRA) has not fully
              satisfied all of the responsibilities that the PRA assigns to that Office.

              Regarding the data that OMB provided to the Subcommittee, we believe it
              indicates a troubling disregard by agencies for the requirement that they
              obtain OMB approval before collecting information from the public. Using
              OMB’s measure of the costs associated with federal paperwork, we
              estimate that agencies have imposed at least $3 billion in unauthorized
              burden in recent years. OMB can do more to encourage agencies that are
              not complying with the PRA to come into compliance, and we offer some
              options in that regard.

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


              1
               Paperwork Reduction: Burden Reduction Goal Unlikely To Be Met (GAO/T-GGD/RCED-96-186, June
              5, 1996; Paperwork Reduction: Governmentwide Goals Unlikely To Be Met (GAO/T-GGD-97-114, June
              4, 1997); Regulatory Management: Implementation of Selected OMB Responsibilities Under the
              Paperwork Reduction Act (GAO/GGD-98-120, July 9, 1998); and Paperwork Reduction Act:
              Implementation at IRS (GAO/GGD-99-4, Nov. 16, 1998).




              Page 2                                                                     GAO/T-GGD-99-78
                      Statement
                      Paperwork Reduction Act: Burden Increases and Unauthorized Information Collections




                      However, federal agencies have an obligation under the PRA to keep the
                      paperwork burden they impose as low as possible. The original PRA of
                      1980 established OIRA within OMB to provide central agency leadership
                      and oversight of governmentwide efforts to reduce unnecessary
                      paperwork and improve the management of information resources. Under
                      the act, OIRA has overall responsibility for determining whether agencies’
                                                                                  2
                      proposals for collecting information comply with the act. Agencies must
                      receive OIRA approval for each information collection request before it is
                      implemented. OIRA is also required to keep Congress “fully and currently
                      informed” of the major activities under the act and must report to
                      Congress on agencies’ progress toward reducing paperwork. To do so,
                      OIRA develops an Information Collection Budget (ICB) by gathering data
                      from executive branch agencies on the total number of “burden hours”
                      OIRA approved for collections of information at the end of the fiscal year
                      and agency estimates of the burden for the coming fiscal year. The PRA of
                      1995 defines the term “collection of information” as “obtaining, causing to
                      be obtained, soliciting, or requiring the disclosure to third parties or the
                      public, of facts or opinions by or for an agency, regardless of form or
                      format.”

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

                      Although referred to as a “budget,” the ICB does not limit the number of
Federal Paperwork     burden hours an agency is permitted to impose. As figure 1 shows, federal
Burden Estimate Has   agencies’ annual paperwork burden-hour estimate rose from about 1.5
Increased             billion hours in 1980 to about 7.0 billion hours by the end of fiscal year
                      1995—just before the PRA of 1995 took effect. The figure also shows the
                      degree to which IRS’ paperwork estimate drives the governmentwide
                      estimate.

                      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 to collect information 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.




                      Page 3                                                                             GAO/T-GGD-99-78
                                      Statement
                                      Paperwork Reduction Act: Burden Increases and Unauthorized Information Collections




Figure 1: Changes in IRS and
Governmentwide Burden-Hour
Estimates Between Fiscal Years 1980            Burden hours (in billions)
and 1995                                       8




                                               6




                                               4




                                               2




                                               0
                                                   '8 0       '8 2           '8 4          '8 6              '8 8      '9 0   '9 2   '9 4   '9 5

                                                                                                  F is c a l y e a r


                                                          T o ta l g o v e r n m e n tw id e
                                                          IRS




                                      Note: Data are estimated as of September 30 of each year.
                                      Sources: OMB and the Department of the Treasury.




                                      As you can see, a large part of the increase in the governmentwide burden-
                                      hour estimate during this period occurred in 1989, when IRS changed the
                                      way it calculated its estimates. That reestimate increased the agency’s
                                      paperwork estimate by 3.4 billion hours and nearly tripled the
                                      governmentwide burden-hour estimate. However, it is important to
                                      remember that the amount of paperwork actually imposed on the public
                                                                                                              3
                                      did not change, only IRS’ estimate of the burden that was already there. In
                                      every year since 1989, IRS has accounted for nearly 80 percent of the
                                      governmentwide burden estimate.

                                      The PRA of 1995 made several changes in federal paperwork reduction
                                      requirements. For example, it required OIRA to set a goal of at least a 10-
                                      percent reduction in the governmentwide burden-hour estimate for each of
                                      fiscal years 1996 and 1997, a 5-percent governmentwide burden reduction
                                      goal in each of the next 4 fiscal years, and annual agency goals that reduce

                                      3
                                       Paperwork Reduction: Burden Hour Increases Reflect New Estimates, Not Actual Changes
                                      (GAO/PEMD-94-3, Dec. 6, 1993).




                                      Page 4                                                                                                 GAO/T-GGD-99-78
                                  Statement
                                  Paperwork Reduction Act: Burden Increases and Unauthorized Information Collections




                                  burden to the “maximum practicable opportunity.” Therefore, if federal
                                  agencies had been able to accomplish the reduction in burden
                                  contemplated by the PRA for the 3-year period ending on September 30,
                                  1998, the 7.0 billion burden-hour estimate would have fallen 25 percent, or
                                  to less than 5.3 billion hours.

                                  However, as figure 2 shows, the anticipated 25-percent reduction in burden
                                  during this 3-year period did not happen. In fact, the recently developed
                                  ICB for fiscal year 1999 shows that the governmentwide burden-hour
                                  estimate actually declined by less than one-half of 1 percent during this
                                  period.

Figure 2: Changes in Estimated
Governmentwide Burden-Reduction
Goals

                                           Burden hours (in billions)

                                            8

                                            7

                                            6
                                                                            10% reduction
                                            5
                                                                                                           10% reduction
                                            4                                                                               5% reduction

                                            3

                                            2

                                            1

                                            0
                                                         '9 5                           '9 6                         '9 7        '9 8
                                                                                                F is c a l y e a r

                                                      A g e nc ie s ' b urd e n e s tim ate s

                                                      B urd e n-re d uc tio n g o als




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




IRS Paperwork Burden              A variety of factors appear relevant in explaining why federal paperwork
                                  burden has not been reduced. However, the primary reason seems to be
Estimates Have Increased          IRS’ inability to reduce its estimated burden. As I previously noted, IRS
                                  accounts for nearly 80 percent of the governmentwide burden-hour



                                  Page 5                                                                                           GAO/T-GGD-99-78
                                      Statement
                                      Paperwork Reduction Act: Burden Increases and Unauthorized Information Collections




                                      estimate. Therefore, as illustrated in figure 1, changes in IRS’ estimate can
                                      have a highly significant—and even determinative—effect on the
                                      governmentwide total. As figure 3 shows, non-IRS departments and
                                      agencies estimated that, in the aggregate, they had reduced their
                                      paperwork burden by more than 23 percent between fiscal years 1995 and
                                      1998—close to the 25-percent burden-reduction goal envisioned in the
                                      PRA. However, IRS’ burden-hour estimate increased by 6.9 percent during
                                      this period. That increase offset the estimated reductions in the other
                                      agencies and was largely responsible for the relatively minor decline in the
                                      governmentwide paperwork burden-hour estimate. Also, as I will discuss
                                      later, the estimate for the non-IRS agencies’ reductions was overstated.

Figure 3: Percentage Change in IRS,
Non-IRS, and Governmentwide Burden-
Hour Estimates Between Fiscal Years
1995 and 1998
                                               Change in burden hours (percentage)

                                                  15


                                                  10
                                                          6.9

                                                   5


                                                   0
                                                                                                   (0 .4)

                                                  (5)


                                                 (10)

                                                 (15)


                                                 (20)


                                                 (25)                     (2 3.3 )


                                                 (30)                       IRS
                                                                            No n -IRS
                                                                            G o v e r n m e n tw id e




                                      Note: The governmentwide burden-reduction goal for this 3-year period was 25 percent.
                                      Sources: OMB and Department of the Treasury.




                                      As figure 4 shows, the ICB for fiscal year 1999 indicates that federal
                                      agencies expect their paperwork burden to increase between the end of
                                      fiscal years 1998 and 2000 by nearly 7 percent (about 468 million hours)
                                      raising the governmentwide burden-hour estimate to more than 7.4 billion
                                      hours. Unlike the previous 3-year period in which the non-IRS agencies
                                      significantly reduced their burden-hour estimates, these agencies expect



                                      Page 6                                                                        GAO/T-GGD-99-78
                                        Statement
                                        Paperwork Reduction Act: Burden Increases and Unauthorized Information Collections




                                        their aggregate burden to increase by more than 4 percent between fiscal
                                        years 1998 and 2000. However, IRS will again lead the way, accounting for
                                        more than 85 percent of the governmentwide increase in estimated burden
                                        during this period.

Figure 4: Percentage Change in IRS,
Non-IRS, and Governmentwide Burden-
Hour Estimates Between Fiscal Years
1998 and 2000

                                                 Change in burden hours (percentage)
                                                   8

                                                           7. 2

                                                                                                                  6. 7



                                                   6



                                                                                4. 6



                                                   4




                                                   2




                                                   0
                                                                                       IR S
                                                                                       N o n -IR S
                                                                                       G o v e rn m e n tw id e




                                        Note: The governmentwide burden-reduction goal for this 2-year period was 10 percent.
                                        Sources: OMB and Department of the Treasury.




IRS Burden-Reduction Efforts            The 1998 and 1999 ICBs indicate that IRS has tried to eliminate
                                        unnecessary burden and has had some successes. For example, the
                                        reports stated that IRS had

                                      • reduced the burden associated with IRS Form 1040EZ by 3.7 million hours
                                        for tax year 1996 by encouraging taxpayers to use the 1040 TeleFile, which
                                        is IRS’ telephone-based filing system;
                                      • allowed employers to report payments to employees subject to federal
                                        income, Social Security, and Medicare taxes through the 941 Telefile
                                        program, thereby reducing the paper form’s burden by nearly 14 million
                                        hours during fiscal year 1998;




                                        Page 7                                                                           GAO/T-GGD-99-78
                               Statement
                               Paperwork Reduction Act: Burden Increases and Unauthorized Information Collections




                             • raised the threshold for which businesses had to maintain receipts to
                               substantiate expenses for travel, entertainment, gifts, and listed property,
                               thereby reducing burden by an estimated 12.5 million hours during fiscal
                               year 1997; and
                             • required those who file 250 or more of IRS Form 1042-S (used by
                               withholding agents to report income and tax withheld from payees) to do
                               so on magnetic media, thereby producing an estimated burden reduction
                               of 21.1 million hours during fiscal year 1997.

                               As a result of these and other actions, IRS and other parts of the
                               Department of the Treasury said they had eliminated more than 100 million
                               hours of paperwork burden between fiscal years 1995 and 1998. However,
                               despite these efforts, IRS’ overall burden estimate increased by about 400
                               million hours during this period. The ICBs that OIRA developed during
                               this period indicated that this net increase was because of increased
                               economic activity and new legislation that required IRS to establish new
                               information collections. For example, the ICB for fiscal year 1999 said the
                               Taxpayer Relief Act of 1997 (P.L. 105-34) significantly increased IRS’
                               paperwork burden, much of which was caused by new provisions for the
                               calculation and reporting of taxes owed on capital gains. Overall, the ICB
                               indicated that the Taxpayer Relief Act had increased burden by more than
                               92 million hours as of December 1998. IRS officials told us that these
                               factors are outside of the agency’s control and have caused the recent
                               increases in its burden-hour estimates. They also said the agency would
                               not be able to reduce its paperwork burden if new statutes requiring
                               information collections continue to be enacted and unless changes are
                               made to the substantive requirements in the current tax code.

OIRA Actions Fall Short of     Our July 1998 report examined the way in which OIRA has carried out
                                                                          4
                               some of its responsibilities under the PRA. Although OIRA pointed to a
PRA Requirements               number of actions it had taken in each area of its responsibilities that we
                               examined, those actions often appeared to fall short of the act’s
                               requirements.

                               For example, as required by the PRA of 1995, OIRA has set both the
                               governmentwide and agency-specific burden-reduction goals. However,
                               OIRA did not set the governmentwide goal until January 1997—15 months
                               after the PRA took effect. Also, OIRA established the agencies’ goals for
                               fiscal years 1996, 1997, and 1998 near the end of each of those fiscal
                               years—too late to serve as real “goals.” The PRA says OIRA should
                               establish agency burden-reduction goals that represent the “maximum
                               4
                                   GAO/GGD-98-120.




                               Page 8                                                               GAO/T-GGD-99-78
Statement
Paperwork Reduction Act: Burden Increases and Unauthorized Information Collections




practicable opportunity” in each agency. The act’s legislative history
suggests a relationship between the agency goals and the governmentwide
goals, and it is logical to assume that the agency-specific goals would be
the means by which the governmentwide goals would be achieved.
However, OIRA says that the agency-specific goals may not total to the
governmentwide goal because of the agencies’ statutory and program
responsibilities.

The PRA of 1995 also required OIRA to conduct pilot projects to reduce
federal paperwork burden. However, as of last July, OIRA had not
formally designated any such pilot projects. OIRA officials told us that
other burden-reduction efforts are under way, and that pilot projects used
to satisfy another statute meet the PRA’s requirements. However, in most
cases, those other pilots predated the act and did not appear to have been
initiated in response to the act’s requirements.

The PRA also required OIRA to develop and maintain a governmentwide
strategic plan for information resources management (IRM), which was
defined in the act as the process of managing those resources to
accomplish agency missions and improve agency performance. OIRA
officials said that information contained in their annual reports to
Congress under the PRA, the budget, and other documents satisfy this
requirement. However, those documents do not appear to contain all of
the elements that the PRA requires in a govermentwide IRM strategic plan.

Similarly, the PRA requires OIRA to periodically review selected agencies’
IRM activities, and OIRA officials and staff said they do so through their
reviews of agencies’ information collection requests, OMB’s budget
formulation and execution process, and other means. However, none of
the mechanisms that they mentioned would allow OIRA to address all of
the elements that the PRA requires in the reviews.

OIRA’s lack of action in some of these areas may be a function of its
resource and staffing limitations. As we reported last July, OIRA has taken
between 3,000 and 5,000 actions on agencies’ information collection
requests in each year since the PRA of 1995 was enacted. At the same
time, the 20 to 25 OIRA staff members assigned to this task were
responsible for reviewing the substance of about 500 significant rules each
year and carrying out other responsibilities as well. Although the number
of PRA-related actions that OIRA has taken each year has been relatively
constant since 1980, the number of OIRA desk officers responsible for
those reviews has declined by more than 35 percent between 1989 and
1997.



Page 9                                                               GAO/T-GGD-99-78
                       Statement
                       Paperwork Reduction Act: Burden Increases and Unauthorized Information Collections




                       The second general issue you asked us to address involves data that OIRA
Agencies Continue to   recently sent to the Subcommittee concerning expired authorizations to
Use Expired OIRA       collect information. The PRA prohibits an agency from conducting or
Authorizations         sponsoring a collection of information unless (1) the agency has submitted
                       the proposed collection and other documents to OIRA, (2) OIRA has
                       approved the proposed collection, and (3) the agency displays an OMB
                       control number on the collection. The act also requires agencies to
                       establish a process to ensure that each information collection is in
                       compliance with these clearance requirements. Finally, the PRA says no
                       one can be penalized for failing to comply with a collection of information
                       subject to the act if the collection does not display a valid OMB control
                       number. OMB may not approve a collection of information for more than
                       3 years.

                       In his March 3, 1999, letter to you, Chairman McIntosh, the Acting OIRA
                       Administrator described the results of OIRA staff’s review of 91 paperwork
                       clearance dockets that it conducted at your instigation. In one part of the
                       letter, the Acting Administrator described the status of 52 information
                       collections for which OIRA approval had expired. He indicated that 17 of
                       these collections were still being carried out by the agencies after OIRA’s
                       approval had expired, which was in violation of the PRA’s requirements. A
                       table enclosed with the Acting Administrator’s letter provided the details
                       for each of these collections, including the date that OMB’s authorization
                       expired and the annual burden-hour estimate for each collection. The
                       table indicated that some of these information collections had continued
                       to be administered for more than 2 years after OIRA’s approval had
                       expired, and one had been out of compliance for more than 3 years. The
                       table also indicated that at least one of these collections had been
                       disapproved by OIRA, but the agency (the Department of Agriculture)
                       went ahead with the information collection anyway.

                       Using the information in the Acting Administrator’s letter, we prepared
                       table 1, which shows, by agency and information collection, the total
                       number of burden hours that have been imposed in violation of the PRA
                       since OMB’s authorizations expired or were disapproved. The table also
                       shows that, for all 17 collections, the agencies have continued to impose
                       nearly 64 million burden hours of unauthorized paperwork even though
                       OMB’s approval had expired.




                       Page 10                                                              GAO/T-GGD-99-78
                                        Statement
                                        Paperwork Reduction Act: Burden Increases and Unauthorized Information Collections




Table 1: Information Collections That
Were Being Implemented Without OMB                                                      OMB approval Burden      Estimated
Approval as of March 1999                                                               expiration   hours since costs in
                                                                                                               a             b
                                        Department       Title                          date         expiration millions ($)
                                        Agriculture      Food Stamp Program
                                                         IDs                            04/30/97             2,846,386               $75.4
                                                         Annual Certs, Power of
                                                         Attorney, Acreage
                                                         Report                         06/30/97             4,767,366              $126.3
                                                         Civil Rights Compliance        08/31/97               799,146               $21.2
                                                         CCC Conservation
                                                         Contract Addendum              10/31/97               687,477               $18.2
                                                         Noninsured Crop
                                                         Disaster Assistance
                                                         Program                        05/31/98             6,081,641              $161.2
                                        Health and       Medical Institutional
                                        Human Services Provider Bill                    10/31/95            11,956,425              $316.8
                                                         Medicare Secondary
                                                         Payer Information              03/31/96             1,932,643               $51.2
                                                         Mentally Retarded ICFs
                                                         Participation Condit.          10/31/96            15,936,904              $422.3
                                                         Medical Review of
                                                         Outpatient Therapy             12/31/97               639,990               $17.0
                                        Housing and      Nondiscrimination
                                        Urban            Handicap Assisted
                                        Development      Housing                        03/31/97             1,356,931               $36.0
                                                         RESPA 1991 Act
                                                         Amendments                     04/30/97               966,286               $25.6
                                                         RESPA Model
                                                         Disclosure                     11/30/97             7,674,900              $203.4
                                                         Compliance Inspection
                                                         Mortgagee’s Assurance          07/31/98               527,728               $14.0
                                        Justice          Arrival and Departure
                                                         Record                         11/30/97             1,567,500               $41.5
                                                         Supplement to Form             01/31/98             1,210,720               $32.1
                                                         Employment
                                                         Authorization                  04/30/98             2,835,280               $75.1
                                        Veterans Affairs VA Acquisition
                                                         Regulation                     11/30/96             2,208,251               $58.5
                                        Totals                                                              63,995,574            $1,695.8

                                        a
                                          The number of burden hours since expiration was calculated by multiplying the burden hour
                                        requirement by a date multiplier (number of months elapsed since approval expiration and March 1,
                                        1999, divided by 12).
                                        b
                                          The estimated cost is calculated by multiplying the burden hours since expiration by the OMB
                                        established value of $26.50 per burden hour for tax paperwork.
                                        Sources: OMB and GAO analysis.




                                        Another way to view paperwork burden is in monetary terms. In the ICB
                                        for fiscal year 1999, OMB noted that converting burden hours into dollar
                                        costs requires agencies to estimate a wage rate that would be applicable to



                                        Page 11                                                                          GAO/T-GGD-99-78
Statement
Paperwork Reduction Act: Burden Increases and Unauthorized Information Collections




the burden hours associated with the collection, and that wage rate should
be “loaded” to include overhead and fringe benefit costs. OMB also noted
that the hourly cost of a technical employee might well exceed $40. In its
                                                                           5
1997 report to Congress on the costs and benefits of federal regulations,
OMB estimated the “opportunity cost” associated with filling out tax forms
at $26.50 per hour. Therefore, multiplying IRS’ 5.3 billion burden-hour
estimate times $26.50 yielded a $140 billion cost of tax compliance
paperwork. As table 1 shows, multiplying the nearly 64 million burden
hours of paperwork imposed in violation of the PRA times this estimate of
opportunity cost yields a dollar value of nearly $1.7 billion of unauthorized
paperwork burden from these 17 information collections.

The Acting Administrator’s March 3 letter also indicated that OMB’s
authorization for another 11 collections had expired and were later
reinstated, but not before they were used to collect information in
violation of the PRA’s requirements. The table enclosed in the letter
provided the annual burden-hour estimate and the period that elapsed
without OMB authorization. Although the authorizations for most of these
collections had lapsed for about 6 months or less, one collection was
unauthorized for nearly 2 years. Using this information, we prepared table
2, which shows, by agency and information collection, the total number of
burden hours that were imposed in violation of the PRA between the date
that OMB’s authorizations expired and the date the authorizations were
reinstated. For all 11 collections, the agencies imposed more than 47
million hours of unauthorized burden. Using the same $26.50 per hour
“opportunity cost” multiplier, these agencies imposed nearly $1.3 billion in
paperwork burden in violation of the PRA.




5
Report to Congress on the Costs and Benefits of Federal Regulations, Office of Management and
Budget, Office of Information and Regulatory Affairs, September 30, 1997.




Page 12                                                                        GAO/T-GGD-99-78
                                        Statement
                                        Paperwork Reduction Act: Burden Increases and Unauthorized Information Collections




Table 2: Information Collections That
Were Implemented Between Expiration                                                                       Burden
of OMB Approval and Reapproval                                                                            hours
                                                                            OMB                           between
                                                                            approval                      expiration       Estimated
                                                                            expiration Reapproval         and              costs in
                                                                                                                     a                  b
                                        Department     Title                date       date               reapproval       millions ($)
                                        Defense        CHAMPUS
                                                       claim form             06/30/96       10/28/96            268,125               $7.1
                                        Health and     Medicare/
                                        Human          Medicaid Claim         12/31/96       02/20/97            908,204              $24.1
                                        Services       Premarket
                                                       Approval of
                                                       Medical
                                                       Devices                02/28/97       12/30/97            451,022              $12.0
                                                       Home Health
                                                       Agencies Info
                                                       for Medicare           05/31/97       11/18/97          3,474,925              $92.1
                                        Housing and Good Faith
                                        Urban          Estimate and
                                        Development Special
                                                       Information            05/31/97       10/14/97            216,875               $5.7
                                                       Employment
                                                       for Low and
                                                       Very Low
                                                       Income                 07/31/97       04/06/98            357,828               $9.5
                                        Justice        Employment
                                                       Eligibility
                                                       Verification           12/31/97       07/09/98          8,300,000             $220.0
                                        Transportation Inspection
                                                       Repair and
                                                       Maintenance            07/31/96       06/25/98         31,935,243             $846.3
                                        Veterans       Eligibility
                                        Affairs        Verification
                                                       Report                 11/30/95       09/06/96            575,100              $15.2
                                                       Customer
                                                       Survey for EO
                                                       12862                  01/31/97       04/15/97            244,660               $6.5
                                                       Application for
                                                       Medical,
                                                       Funeral, etc.          07/31/98       10/23/98            691,685             $18.3
                                        Totals                                                                47,423,667          $1,256.7
                                        a
                                          The number of burden hours between expiration and reapproval was calculated by multiplying the
                                        annual burden hour requirement by an elapsed-time multiplier (number of months elapsed since
                                        approval expiration and reapproval, divided by 12).
                                        b
                                          The estimated cost was calculated by multiplying the number of burden hours since expiration by the
                                        OMB established value of $26.50 per burden hour for tax paperwork. The sum of the figures does not
                                        equal the total because of rounding.
                                        Sources: OMB and GAO analysis.




                                        Combining the results of tables 1 and 2, the information in the Acting
                                        Administrator’s letter indicates that these federal agencies have imposed
                                        more than 111 million burden hours in estimated paperwork burden in



                                        Page 13                                                                          GAO/T-GGD-99-78
                      Statement
                      Paperwork Reduction Act: Burden Increases and Unauthorized Information Collections




                      violation of the PRA. In dollar terms, that amounts to nearly $3 billion in
                      unauthorized burden.

                      However, this is clearly not the full extent of unauthorized information
                      collections that have taken place. The ICB that OIRA recently developed
                      identifies 800 violations of the PRA in fiscal year 1998. These violations
                      included both other collections with expired OMB authorizations (some of
                      which were subsequently reauthorized) and information collections that
                      were never authorized in the first place. Some agencies (the Departments
                      of Agriculture, Health and Human Services, and Veterans Affairs) had
                      more than 100 PRA violations.

Expired OMB           As disconcerting as these violations are, even more troubling is that
                      OIRA’s ICB reflects the hours associated with unauthorized information
Authorizations Were   collections ongoing at the end of the fiscal year as burden reductions.
Counted As Burden     However, the public has seen no real reduction in paperwork burden
Reductions            associated with these information collections; although the agencies are
                      still requiring the paperwork, OMB is no longer counting the burden
                      because its authorization had expired. As a result, OMB credits agencies
                      for burden-reduction accomplishments that have not been achieved, when
                      in reality the agencies are actually violating the PRA.

                      When OMB’s approval for an information collection expires, OMB
                      subtracts the estimated annual number of burden hours associated with
                      the collection from the agency’s total. For example, when OMB’s approval
                      for the Department of Agriculture’s (USDA) Noninsured Crop Disaster
                      Assistance Program’s information collection expired on May 31, 1998, the
                      estimated 8.1 million burden hours imposed by this collection each year
                      was subtracted from OMB’s database. However, USDA continued to
                      collect this information without OMB’s approval. Because this violation
                      was ongoing as of September 30, 1998, the estimate of USDA’s paperwork
                      burden at the end of fiscal year 1998 in the ICB for fiscal year 1999 was
                      inappropriately recorded as being reduced by 8.1 million hours.

                      Although the precise effect of not counting any of the unauthorized
                      information collections on the overall accuracy of the ICB is unclear, it is
                      clear that the governmentwide and some of the agency-specific burden
                      estimates in the ICB are less than they should be. For example, counting
                      just the five USDA ongoing information collections that were not being
                      counted at the end of fiscal year 1998 would have added more than 15
                      million hours to USDA’s 72 million burden-hour estimate. In addition,
                      OMB’s recent ICB indicated that USDA had 57 other information
                      collections that were also being administered in violation of the PRA with



                      Page 14                                                              GAO/T-GGD-99-78
                              Statement
                              Paperwork Reduction Act: Burden Increases and Unauthorized Information Collections




                              an additional 3 million hours of estimated burden. Adding these 3 million
                              hours and the 15 million hours from the five collections listed in the Acting
                              Administrator’s letter to the 72 million hours reported in the ICB indicates
                              that USDA’s burden estimate should have been about 90 million hours.
                              Although the ICB indicated that USDA had reduced its estimated burden
                              by 59 million hours (45 percent) by the end of fiscal year 1998, the actual
                              reduction appears to have been about 41 million hours (31 percent).
                              Similar adjustments appear to be needed in other agencies’ estimates as
                              well.

OIRA Has Taken Little         In his March 3 letter, the Acting Administrator said OIRA believed that
                              compliance with the PRA is important, and that OIRA desk officers have
Action to Address Agencies’   worked closely with agency staff to stress the importance of full and
PRA Violations                timely compliance with the act. He also said that OIRA learns of agency
                              violations from public comment and through direct monitoring of
                              reporting from the agencies. The Acting Administrator said that OIRA’s
                              database tracks and records OIRA activities in reviewing agency
                              submissions for clearance under the PRA. However, he said the database
                              is not designed or able to identify what he termed “bootleg” information
                              collections that did not obtain OMB approval, or for which its approval had
                              expired.

                              Last November, Chairman McIntosh, you suggested that OIRA prepare and
                              submit a monthly report listing expirations of OMB PRA approval. In
                              response, the Acting Administrator said OIRA would add information
                              about expired approvals to OMB’s Internet home page. As a result, he said
                              potential respondents would be able to inform the collecting agency, OMB,
                              and Congress of the need for the agency to either obtain reinstatement of
                              OMB approval or discontinue the collection.

                              Although we believe that notifying the public about unauthorized
                              information collections is a step in the right direction, OIRA’s approach
                              places the burden of responsibility to detect unauthorized collections on
                              the public. It is OIRA, not the public, that has the responsibility to review
                              and approve agencies’ collections of information and identify all PRA
                              violations. Therefore, we believe that OIRA should not simply rely on the
                              public to identify these violations. Although the Acting Administrator
                              indicated that OIRA could not use its database to identify “bootleg”
                              information collections, OIRA’s actions indicate otherwise. Just as they
                              did in response to your letter, OIRA desk officers could use the database to
                              identify information collections for which OMB authorizations had
                              expired, contact the collecting agency, and determine whether the agency
                              is continuing to collect the information. The desk officers could also use



                              Page 15                                                              GAO/T-GGD-99-78
  Statement
  Paperwork Reduction Act: Burden Increases and Unauthorized Information Collections




  the database to identify information collections whose authorizations are
  about to expire, and therefore perhaps prevent violations of the act.

  The PRA of 1995 requires that OIRA’s annual report to Congress include a
  list of all violations of the act. OIRA reported 39 pages of violations in the
  ICB for fiscal year 1998, broken down into collections for which
  authorizations had expired and collections for which authorizations were
  never initially provided. The ICB for fiscal year 1999 contains 59 pages of
  these violations. However, OIRA officials and staff told us that they have
  no authority to do much more than publish the list of violations and inform
  the agencies directly that they are out of compliance with the act.

  We do not agree that OIRA is as powerless as this explanation would
  suggest. If an agency does not respond to an OIRA notice that one of its
  information collections is out of compliance with the PRA, the Acting
  Administrator could take any number of actions to encourage compliance,
  including any or all of the following:

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


  OIRA could also notify agencies that the PRA requires them to establish a
  process to ensure that each information collection is in compliance with
  the act’s clearance requirements. Agencies that repeatedly collect
  information without OMB approval or after OMB approval has expired are
  clearly not complying with this requirement.

  Although OIRA’s current workload is clearly substantial, we do not believe
  these kinds of actions would require significant additional resources.




  Page 16                                                              GAO/T-GGD-99-78
Statement
Paperwork Reduction Act: Burden Increases and Unauthorized Information Collections




Primarily, the actions require a commitment to improve the operation of
the current paperwork clearance process.

This completes my prepared statement. I would be pleased to answer any
questions.




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