Paperwork Reduction Act: Increase in Estimated Burden Hours Highlights Need for New Approach
Published: 2006-07-18T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: Americans spend billions of hours each year providing information to federal agencies by filling out information collections (forms, surveys, or questionnaires). A major aim of the Paperwork Reduction Act (PRA) is to minimize the burden that responding to these collections imposes on the public, while maximizing their public benefit. Under the act, the Office of Management and Budget (OMB) is to approve all such collections and to report annually on the agencies' estimates of the associated burden. In addition, agency chief information officers (CIO) are to review information collections before submitting them to OMB for approval and certify that the collections meet certain standards set forth in the act. GAO was asked to testify on OMB's burden report for 2005 and on a previous study of PRA implementation (GAO-05-424), which focused on the CIO review and certification processes and described alternative processes that two agencies have used to minimize paperwork burden. To prepare this testimony, GAO reviewed the current burden report and its past work in this area. For its 2005 study, GAO reviewed a governmentwide sample of collections, reviewed processes and collections at four agencies that account for a large proportion of burden, and performed case studies of 12 approved collections at the four agencies.
section_title: What GAO Found
paragraphs: After 2 years of slight declines, OMB reports that paperwork burden grew in fiscal year 2005 and is expected to increase further in fiscal year 2006. Estimates in OMB's annual report to Congress show that the total paperwork burden imposed by federal information collections increased last year to about 8.4 billion hours--an increase of 5.5 percent from the previous year's total of about 8.0 billion hours. Nearly all this increase resulted from the implementation of new laws (for example, about 224 million hours were due to the implementation of voluntary prescription drug coverage under Medicare). The rest of the increase came mostly from adjustments to the estimates due to such factors as changes in estimation methods and in the numbers of respondents. Looking ahead to fiscal year 2006, OMB expects an increase of about 250 million hours because of a new model for estimating burden being implemented by the Internal Revenue Service (IRS). According to OMB, this expected rise does not reflect any real change in the burden on taxpayers, but only in how IRS estimates it. The PRA requires that CIOs review information collections and certify that they meet standards to minimize burden and maximize utility; however, these reviews were not always rigorous, reducing assurance that these standards were met. In 12 case studies at four agencies, GAO determined that CIOs certified collections proposed by program offices despite missing or inadequate support. Providing support for certifications is a CIO responsibility under the PRA, but agency files contained little evidence that CIO reviewers had made efforts to improve the support offered by program offices. Numerous factors contributed to these problems, including a lack of management attention and weaknesses in OMB guidance. Based on its review, GAO recommended (among other things) that agencies strengthen the support provided for certifications and that OMB update its guidance to clarify and emphasize this requirement. Since GAO's study was issued, the four agencies have reported taking steps to strengthen their support for CIO certifications, such as providing additional resources and guidance for the process, and OMB has updated parts of its guidance. In contrast to the CIO review process, which did not lead to reduced paperwork burden in GAO's 12 case studies, IRS and the Environmental Protection Agency (EPA) have set up alternative processes specifically focused on reducing burden. These agencies, whose missions involve numerous information collections, have devoted significant resources to targeted burden reduction efforts that involve extensive outreach to stakeholders. According to the two agencies, these efforts have led to significant reductions in paperwork burden on the public. In light of these promising results, the weaknesses in the current CIO review process, and the persistent increases in burden, a new approach to burden reduction appears warranted. GAO suggested that Congress should consider mandating pilot projects to target some collections for rigorous analysis along the lines of the IRS and EPA approaches.

section_title: Letter
paragraphs: Americans spend billions of hours  each year providing information to  federal agencies by filling out  information collections (forms,  surveys, or questionnaires). A  major aim of the Paperwork  Reduction Act (PRA) is to minimize  the burden that responding to these  collections imposes on the public,  while maximizing their public  benefit. Under the act, the Office of  Management and Budget (OMB) is  to approve all such collections and  to report annually on the agencies’  estimates of the associated burden.  In addition, agency chief  information officers (CIO) are to  review information collections  before submitting them to OMB for  approval and certify that the  collections meet certain standards  set forth in the act.
After 2 years of slight declines, OMB reports that paperwork burden grew in  fiscal year 2005 and is expected to increase further in fiscal year 2006.  Estimates in OMB’s annual report to Congress show that the total paperwork  burden imposed by federal information collections increased last year to  about 8.4 billion hours—an increase of 5.5 percent from the previous year’s  total of about 8.0 billion hours. Nearly all this increase resulted from the  implementation of new laws (for example, about 224 million hours were due  to the implementation of voluntary prescription drug coverage under  Medicare). The rest of the increase came mostly from adjustments to the  estimates due to such factors as changes in estimation methods and in the  numbers of respondents. Looking ahead to fiscal year 2006, OMB expects an  increase of about 250 million hours because of a new model for estimating  burden being implemented by the Internal Revenue Service (IRS). According  to OMB, this expected rise does not reflect any real change in the burden on  taxpayers, but only in how IRS estimates it.
GAO was asked to testify on OMB’s  burden report for 2005 and on a  previous study of PRA  implementation (GAO-05-424),  which focused on the CIO review  and certification processes and  described alternative processes  that two agencies have used to  minimize paperwork burden. To  prepare this testimony, GAO  reviewed the current burden report  and its past work in this area. For  its 2005 study, GAO reviewed a  governmentwide sample of  collections, reviewed processes  and collections at four agencies  that account for a large proportion  of burden, and performed case  studies of 12 approved collections  at the four agencies.
The PRA requires that CIOs review information collections and certify that  they meet standards to minimize burden and maximize utility; however,  these reviews were not always rigorous, reducing assurance that these  standards were met. In 12 case studies at four agencies, GAO determined  that CIOs certified collections proposed by program offices despite missing  or inadequate support. Providing support for certifications is a CIO  responsibility under the PRA, but agency files contained little evidence that  CIO reviewers had made efforts to improve the support offered by program  offices. Numerous factors contributed to these problems, including a lack of  management attention and weaknesses in OMB guidance. Based on its  review, GAO recommended (among other things) that agencies strengthen  the support provided for certifications and that OMB update its guidance to  clarify and emphasize this requirement. Since GAO’s study was issued, the  four agencies have reported taking steps to strengthen their support for CIO  certifications, such as providing additional resources and guidance for the  process, and OMB has updated parts of its guidance. www.gao.gov/cgi-bin/getrpt?GAO-06-974T.
To view the full product, including the scope  and methodology, click on the link above.  For more information, contact Linda Koontz at  (202) 512-6240 or koontzl@gao.gov.
In contrast to the CIO review process, which did not lead to reduced  paperwork burden in GAO’s 12 case studies, IRS and the Environmental  Protection Agency (EPA) have set up alternative processes specifically  focused on reducing burden. These agencies, whose missions involve  numerous information collections, have devoted significant resources to  targeted burden reduction efforts that involve extensive outreach to  stakeholders. According to the two agencies, these efforts have led to  significant reductions in paperwork burden on the public. In light of these  promising results, the weaknesses in the current CIO review process, and  the persistent increases in burden, a new approach to burden reduction  appears warranted. GAO suggested that Congress should consider  mandating pilot projects to target some collections for rigorous analysis  along the lines of the IRS and EPA approaches.
Madam Chairman and Members of the Subcommittee:  I am pleased to be here today to discuss the implementation of the  Paperwork Reduction Act (PRA). As you know, one of the goals of  the PRA is to help ensure that when the government asks the public  for information, the burden of providing this information is as small  as possible and the information itself is used effectively. In other  words, the goal is to minimize the paperwork burden while  maximizing the public benefit and utility of the information  collected. To achieve this goal, the PRA includes provisions that  establish standards and procedures for effective implementation  and oversight of information collections. Among these provisions is  the requirement that agencies not establish information collections  without having them approved by the Office of Management and  Budget (OMB), and that before submitting them for approval,  agencies’ Chief Information Officers (CIO) certify that the collection  meets 10 specified standards—including that they avoid  unnecessary duplication and reduce the paperwork burden as much  as possible.
As you requested, I will begin by discussing the estimates of  government paperwork burden provided in the annual PRA report  (known as the Information Collection Budget) that OMB recently  released, which presents federal agencies’ estimates of federal  paperwork burden as of the end of fiscal year 2005. I will also  discuss results from a May 2005 report that we issued on PRA  processes and compliance, concentrating on our findings regarding  agencies’ processes to certify that information collections meet PRA  standards and on alternative processes that two agencies have used  to minimize the paperwork burden.
In preparing this testimony, we reviewed prior work and analyzed  OMB and other documents. For our discussion of the Information  Collection Budget, we examined the current OMB report as well as  our reviews of previous annual PRA reports.  For our discussion of  the certification process, we drew on our May 2005 report, for which  we performed detailed reviews of paperwork clearance processes  and collections at four agencies: the Departments of Veterans  Affairs (VA), Housing and Urban Development (HUD), and Labor  and the Internal Revenue Service (IRS). Together, these four  agencies represent a broad range of paperwork burden, and in 2004,  they accounted for about 82 percent of the almost 8 billion hours of  estimated paperwork burden for all federal agencies. Of this total,  IRS alone accounted for about 80 percent. We also selected 12  approved collections as case studies (three at each of the four  agencies) to determine how effective agency processes were. In  addition, we analyzed a random sample (343) of all OMB-approved  collections governmentwide as of May 2004 (8,211 collections at 68  agencies) to determine compliance with the act’s requirements  regarding agency certification of the 10 standards and consultation  with the public. We designed the random sample so that we could  determine compliance levels at the four agencies and  governmentwide. Finally, although the Environmental Protection  Agency (EPA) was not one of the agencies whose processes we  reviewed, we analyzed documents and interviewed officials  concerning the agency’s efforts to reduce the paperwork burden of  its information collections. Further details on our scope and  methodology are provided in the report. All work on which this  testimony is based was performed in accordance with generally  accepted government auditing standards.
subsections: section_title: Background
paragraphs: Collecting information is one way that federal agencies carry out  their missions. For example, IRS needs to collect information from  taxpayers and their employers to know the correct amount of taxes  owed. The U.S. Census Bureau collects information used to  apportion congressional representation and for many other  purposes. When new circumstances or needs arise, agencies may  need to collect new information. We recognize, therefore, that a  large portion of federal paperwork is necessary and often serves a  useful purpose.
Nonetheless, besides ensuring that information collections have  public benefit and utility, federal agencies are required by the PRA  to minimize the paperwork burden that the collection of information  imposes. Among the provisions of the act aimed at this purpose are  requirements for the review of information collections by OMB and  by agency CIOs.
Under PRA, federal agencies may not conduct or sponsor the  collection of information unless approved by OMB; information  collections for which OMB approval is expired or missing are  considered violations of the PRA. Before approving collections,  OMB is required to determine that the agency’s collection of  information is necessary for the proper performance of the  functions of the agency, including whether the information will have  practical utility. Consistent with the act’s requirements, OMB has  established a process to review all proposals by executive branch  agencies (including independent regulatory agencies) to collect  information from 10 or more persons, whether the collections are  voluntary or mandatory.
In addition, the act as amended in 1995 requires every agency to  establish a process under the official responsible for the act’s  implementation (now the agency’s CIO) to review program offices’  proposed collections. This official is to be sufficiently independent  of program responsibility to evaluate fairly whether information  collections should be approved. Under the law, the CIO is to review  each collection of information before submission to OMB, including  reviewing the program office’s evaluation of the need for the  collection and its plan for the efficient and effective management  and use of the information to be collected, including necessary  resources. As part of that review, the agency CIO must ensure that  each information collection instrument (form, survey, or  questionnaire) complies with the act, certify that the collection  meets 10 standards (see table 1), and provide support for these  certifications.
In addition, the original PRA of 1980 (section 3514(a)) requires OMB  to keep Congress “fully and currently informed” of the major  activities under the act and to submit a report to Congress at least  annually on those activities. Under the 1995 amendments, this report  must include, among other things, a list of any increases in burden.  To satisfy this requirement, OMB prepares the annual PRA report,  which reports on agency actions during the previous fiscal year,  including changes in agencies’ burden-hour estimates as well as  violations of the PRA.
The 1995 PRA amendments also required OMB to set specific goals  for reducing burden from the level it had reached in 1995: 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 burden to the “maximum practicable  opportunity.” At the end of fiscal year 1995, federal agencies  estimated that their information collections imposed about 7 billion  burden hours on the public. Thus, for these reduction goals to be  met, the burden-hour estimate would have had to decrease by about  35 percent, to about 4.6 billion hours, by September 30, 2001. In fact,  on that date, the federal paperwork estimate had increased by about  9 percent, to 7.6 billion burden hours.
Over the years, we have reported on the implementation of PRA  many times. In a succession of reports and testimonies, we noted  that federal paperwork burden estimates generally continued to  increase, rather than decrease as envisioned by the burden  reduction goals in PRA. Further, we reported that some burden  reduction claims were overstated. For example, although some  reported paperwork reductions reflected substantive program  changes, others were revisions to agencies’ previous burden  estimates and, therefore, would have no effect on the paperwork  burden felt by the public. In our previous work, we also repeatedly  pointed out ways that OMB and agencies could do more to ensure  compliance with PRA. In particular, we have often recommended  that OMB and agencies take actions to improve the paperwork  clearance process.
section_title: Estimated Paperwork Burden Increased in 2005
paragraphs: After 2 years of slight declines, OMB reports that burden hours  increased in fiscal year 2005 and are expected to increase again in  fiscal year 2006. According to OMB’s most recent PRA report to  Congress, the estimated total burden hours imposed by government  information collections in fiscal year 2005 was 8.4 billion hours; this  is an increase of 441 million burden hours (5.5 percent) from the  previous year’s total of 8.0 billion hours. It is also almost a billion  and a half hours larger than it was in 1995 and 3.8 billion larger than  the PRA target for the end of fiscal year 2001 (4.6 billion burden  hours). OMB’s report also states that burden will increase in fiscal  year 2006 by an estimated 303 million hours to about 8.7 billion  hours; however, according to OMB, most of this projected increase  (250 million hours or 83 percent) is attributable to a new method of  estimating burden that is being implemented by IRS, rather than to  any increase in the actual burden. Finally, according to OMB, fewer  violations of the act were reported than in previous years.
subsections: section_title: Changes in Paperwork Burden Estimates Can Be Attributed to Various Causes
paragraphs: Changes in paperwork burden estimates result from several causes,  which OMB assigns to two main categories. OMB classifies all  changes—either increases or decreases—in agencies’ burden-hour  estimates as either program changes or adjustments.  ●  Program changes are the result of deliberate federal government  action (e.g., the addition or deletion of questions on a form); these  can occur as a result of   ●  agency-initiated actions, or   ●  the expiration or reinstatement of OMB-approved collections.  ●  Adjustments do not result from federal activities but from external  factors. For example:  ●  an agency may reestimate the burden associated with a  collection of information, or   ●  the population responding to a requirement may change—such as  if the economy declines and more people complete applications  for food stamps; the resulting increase in the Department of  Agriculture’s paperwork estimate is considered an adjustment  because it is not the result of deliberate federal action.
As shown above, within the category of program changes, OMB  distinguishes between changes due to new statutes and changes due  to agency action, which it also refers to as agency discretionary  actions. However, this term should not imply that agencies have no  discretion in how they implement new statutes. A major goal of the  PRA is to ensure that agencies consider how to make the burden of  information collections, whether old or newly established, as small  as possible. In the second part of my statement, I will address one of  the ways set forth in the PRA to help achieve this goal.
Table 2 shows the changes in reported burden totals from fiscal year  2004 to fiscal year 2005.
As the table shows, the change due to new statutes was by far the  largest factor in the increase for fiscal year 2005. OMB reports that  the statute having the largest impact on burden was the statute  establishing voluntary prescription drug coverage under Medicare;  implementing the program mandated by this statute required the  collection of significant amounts of information, leading to an  increase in burden of 224 million hours. An additional significant  increase—about 116 million hours—resulted from the  implementation by the Federal Communications Commission (FCC)  of the CAN-SPAM Act, which requires disclosure of certain  information contained in unsolicited commercial e-mails.
In contrast to changes due to new statutes, changes due to agency  action did not contribute significantly to the overall change in  burden this year, adding 180,000 hours out of the total rise of 441  million. Although the overall result was a slight increase, agencies  did take many actions that decreased burden; without these actions,  the governmentwide increase would have been greater. The annual  report does not list all these actions, but it does highlight actions  that led to significant paperwork reductions and increases. (These  include increases and decreases in burden from statutory  requirements and miscellaneous agency actions, as well as burden  reductions from changing regulations, cutting redundancy, changing  forms, and using information technology.) From both an individual  agency perspective and a governmentwide perspective, the  relatively small increase due to agency action is the result of large  increases and decreases that mostly offset each other:   ●  From an individual agency perspective, the net change in an  agency’s burden estimate is generally the result of disparate actions,  some of which reduce burden and some of which increase it. An  example is the IRS, which as an agency was responsible for a net  decrease of about 3 million hours. Among the burden reductions  that the annual report highlights are two IRS actions to change  forms, both of which reduced burden by simplification and  streamlining, for a reduction of about 19 million hours. The ICB  also reports that in January 2006 IRS completed an initiative to  simplify the process of applying for an extension to file an income  tax return, which is associated with a burden reduction of 8 million  hours. Elsewhere, on the other hand, five IRS actions are highlighted  that together resulted in an increase of about 24 million hours.  Examples of reasons IRS took these actions included increasing  accuracy and improving the agency’s ability to monitor compliance  with the law.   ●  Similarly, from a governmentwide perspective, the overall change is  the result of some agencies whose actions produced a net decrease  and others whose produced a net decrease. In fiscal year 2005,  agencies with net decreases produced a reduction of about 14.02  million hours. This reduction was offset, however, by agencies with  net increases, which totaled about 14.20 million hours.
Compared to program changes as a whole, adjustments to the  estimates were a relatively small factor (as table 2 also shows),  accounting for a net increase in the burden of about 19 million  hours. In previous years, adjustments have had a much greater  impact and have tended to decrease overall burden estimates, thus  masking the effect of increases from program changes. In fiscal  years 2003 and 2004, the impact of adjustments was large enough to  lead to overall burden estimates that were lower than for the year  before. In fiscal year 2004, OMB reported a decrease of about 156  million hours in adjustments versus an increase of about 29 million  hours in program changes; the result was a lower overall burden  estimate than for the previous year. Similarly, overall burden in  fiscal year 2003 was slightly less than in fiscal year 2002, also as a  result of a decrease in adjustments (about 182 million hours) that  more than offset an increase in program changes (about 72 million  hours).
Besides these large decreases due to adjustments, another reason  for the slight decrease in total burden in fiscal years 2004 and 2003  was that increases due to program changes were relatively small, as  shown in table 3. This year, both program changes and adjustments  went up, so adjustments did not have the effect of masking  increases in program changes. As the table also shows, fiscal year  2005 saw the largest net increase from program changes since 1998.
section_title: IRS Continues to Account for Largest Portion of Estimated Governmentwide Burden
paragraphs: In fiscal year 2005, IRS accounted for about 76 percent of the  governmentwide paperwork burden: about 6.4 billion hours. As  shown in figure 1, no other agency’s estimate approaches this level.  Six agencies had burden-hour estimates of 100 million hours or  more (the Departments of Health and Human Services, Labor, and  Transportation; EPA; FCC; and the Securities and Exchange  Commission). Thus, as we have previously reported, changes in  paperwork burden experienced by the federal government have  been largely attributable to changes associated with IRS.
OMB reports that starting in fiscal year 2006, IRS began using a new  methodology based on a statistical model—the Individual Taxpayer  Burden Model—to estimate the reporting burden imposed on  individual taxpayers. Among other things, this new model, which  was developed to improve the accuracy and transparency of  taxpayer burden estimates, reflects the major changes over the past  two decades in the way that taxpayers prepare and file their returns,  including the use of electronic preparation methods. According to  OMB, rather than estimating burden on a form-by-form basis, the  new methodology takes into account broader and more  comprehensive taxpayer characteristics and activities, considering  how the taxpayer prepares the return (e.g., with or without software  or a paid preparer) as well as the taxpayer’s activities, such as  gathering tax materials, completing forms, recordkeeping, and tax  planning. In contrast, the previous methodology primarily focused  on the length and complexity of each tax form. OMB states that this  new model will make it possible to estimate the burden implications  of new legislative and administrative tax proposals.
OMB projects that these changes will create a one-time increase of  about 250 million hours in the estimate of IRS burden levels in fiscal  year 2006. This increase represents most (83 percent) of the total  projected governmentwide increase for fiscal year 2006 of 303  million hours. However, according to OMB, this increase does not  reflect any change in the actual burden experienced by taxpayers,  but rather a change in the way the burden is measured.
In the past, we reported that IRS’s previous estimation model  ignored important components of burden and had limited  capabilities for analyzing the determinants of burden. The new  model is the result of work that IRS has performed over the past  several years to improve its model and address these and other  limitations. At this time, we have not analyzed IRS’s new model to  determine the extent to which it improves the accuracy of burden  estimates, and we have not assessed the accuracy of the new  model’s estimates. However, IRS’s efforts to increase the accuracy  of its model appear to be an important step towards addressing the  previous model’s shortcomings.
See GAO, EPA Paperwork: Burden Estimate Increasing Despite Reduction Claims,  GAO/GGD-00-59 (Washington, D.C.: Mar. 16, 2000), for how one agency estimates  paperwork burden. understood, these estimates can be useful as the best indicators of  paperwork burden available.
section_title: Fewer Violations Reported in Fiscal Year 2005
paragraphs: OMB reports reductions in PRA violations for fiscal year 2005  compared to previous years. The PRA prohibits an agency from  conducting or sponsoring the collection of information unless  (1) the agency has submitted the proposed collection to OMB,  (2) OMB has approved the proposed collection, and (3) the agency  displays an OMB control number on the collection. According to  OMB’s annual report, agencies have made great progress in recent  years in reducing the number of violations of these conditions and in  resolving them more promptly. OMB attributed this reduction to  several initiatives it had taken, including meeting with agency  officials to discuss ways to reduce violations and adding reporting  requirements.
According to OMB, during fiscal year 2005, agencies reported a total  of 97 violations: 60 information collections that expired during the  year, and another 37 that had expired before October 1, 2004, and  were not reinstated until fiscal year 2005. Of the 27 agencies  included in the annual report, the three agencies with the greatest  number of violations were the Departments of the Treasury and  Homeland Security and the Small Business Administration. In  addition, OMB reported no unresolved violations at the end of fiscal  year 2005 and only 6 violations during the first 8 months of fiscal  year 2006. The 97 violations reported in fiscal year 2005 is much less  than the 164 violations in fiscal year 2004 and the 223 violations in  fiscal year 2003.
Although the reduction in violations is a positive trend, we should  note that the violations reported may not be comprehensive; they  include only those that agencies identified and reported to OMB. As  a result, the statistics would omit violations of which agencies were  unaware. In our May 2005 review, we examined forms posted on  Web sites for four agencies (VA, HUD, Labor, and IRS). We found  examples of violations among these forms of which the agencies  were generally unaware. Based on our examination, we projected  that the four agencies overall had an estimated 69 violations: 61  collections in use without OMB approval and 8 expired collections.  For example, we estimated 16 violations at VA; at that time, OMB’s  report reflected VA’s belief that it had no violations. Based on these  results, we recommended that the four agencies periodically review  their Web sites to ensure that all forms comply with PRA  requirements; we also recommended that OMB alter its guidance so  that all federal agencies would be required to periodically review  Web sites in this way. Since then, VA has reported to us that it  removed forms from its Web site that were in violation of PRA.  However, OMB has not yet issued governmentwide guidance  directing these types of reviews, so it is possible that some PRA  violations remain undetected.
section_title: Agency Processes for Reviewing Information Collections Were Not Effective
paragraphs: Among the PRA provisions intended to help achieve the goals of  minimizing burden while maximizing utility are the requirements for  CIO review and certification of information collections. The 1995  amendments required agencies to establish centralized processes  for reviewing proposed information collections within the CIO’s  office. Among other things, the CIO’s office is to certify, for each  collection, that the 10 standards in the act have been met, and the  CIO is to provide a record supporting these certifications.
The four agencies that we reviewed for our May 2005 report all had  written directives that implemented the review requirements in the  act, including the requirement for CIOs to certify that the 10  standards in the act were met. However, in the 12 case studies that  we reviewed, this CIO certification occurred despite a lack of  rigorous support that all standards were met. Specifically, the  support for certification was missing or partial on 65 percent (66 of  101) of the certifications. Table 4 shows the result of our analysis  of the case studies.
We have attempted to eliminate duplication within the agency wherever possible.
This assertion provides no information on what efforts were made  to identify duplication or perspective on why similar information, if  any, could not be used. Further, the files contained no evidence that  the CIO reviewers challenged the adequacy of this support or  provided support of their own to justify their certification.
A second standard mandated by the act is that each information  collection should reduce burden on the public, including small  entities, to the extent practicable and appropriate. OMB guidance  emphasizes that agencies are to demonstrate that they have taken  every reasonable step to ensure that a given collection of  information is the least burdensome necessary for the proper  performance of agency functions. In addition, OMB instructions and  guidance direct agencies to provide specific information and  justifications: (1) estimates of the hour and cost burden of the  collections and (2) justifications for any collection that requires  respondents to report more often than quarterly, respond in fewer  than 30 days, or provide more than an original and two copies of  documentation.
With regard to small entities, OMB guidance states that the standard  emphasizes such entities because these often have limited resources  to comply with information collections. The act and OMB guidance  give various techniques for reducing burden on these small entities.
Our review of the case examples found that for the certification on  reducing burden on the public, the files generally contained the  specific information and justifications called for in the guidance.  However, none of the case examples contained support that  addressed how the agency ensured that the collection was the least  burdensome necessary. According to agency CIO officials, the  primary cause for this absence of support is that OMB instructions  and guidance do not direct agencies to provide this information  explicitly as part of the approval package.
In addition, four of our case studies did not provide complete  information that would support certification that the collection  specifically addressed reducing burden for small entities.  Specifically, 7 of the 12 case studies involved collections that were  reported to impact businesses or other for-profit entities, but the  files for 4 of these 7 did not explain either  ●  why small businesses were not affected, or  ●  even though such businesses were affected, that burden could or  could not be reduced.
Instead, the files included statements such as “not applicable,”  which do not inform the reviewer whether or not there was an effort  made to reduce burden on small entities. When we asked agencies  about these four cases, they indicated that the collections did, in  fact, affect small business.
OMB’s instructions to agencies on minimizing burden on small  entities require agencies to describe any methods used to reduce  burden only if the collection of information has a “significant  economic impact on a substantial number of small entities.” This  does not appropriately reflect the act’s requirements concerning  small business: the act requires that the CIO certify that the  information collection reduces burden on small entities in general,  to the extent practical and appropriate, and provides no thresholds  for the level of economic impact or the number of small entities  affected. OMB officials acknowledged that their instruction is an  “artifact” from a previous form and more properly focuses on  rulemaking rather than on the information collection process.
The lack of support for the 10 certifications required by the act  appeared to be influenced by a variety of factors. In some cases, as  described above, OMB guidance and instructions were not  comprehensive or entirely accurate. In the case of the duplication  standard specifically, IRS officials said that the agency did not need  to further justify that its collections are not duplicative because  (1) tax data are not collected by other agencies, so there is no need  for the agency to contact them about proposed collections, and  (2) IRS has an effective internal process for coordinating proposed  forms among the agency’s various organizations that may have  similar information. Nonetheless, the law and instructions require  support for these assertions, which was not provided.
Further, agency reviewers told us that management assigns a  relatively low priority and few resources to reviewing information  collections. Further, program offices have little knowledge of and  appreciation for the requirements of the PRA. As a result of these  conditions and a lack of detailed program knowledge, reviewers  often have insufficient leverage with program offices to encourage  them to improve their justifications.
When support for the PRA certifications is missing or inadequate,  OMB, the agency, and the public have reduced assurance that the  standards in the act, such as those on avoiding duplication and  minimizing burden, have been consistently met.
subsections: section_title: Two Agencies Have Developed Processes to Reduce Burden Associated with Information Collections
paragraphs: IRS and EPA have supplemented the standard PRA review process  with additional processes aimed at reducing the burden while  maximizing the public benefit and utility of the information  collected. These agencies’ missions require them both to deal  extensively with information collections, and their management has  made reduction of burden a priority.
In January 2002, the IRS Commissioner established an Office of  Taxpayer Burden Reduction, which includes both permanently  assigned staff and staff temporarily detailed from program offices  that are responsible for particular information collections. This  office chooses a few forms each year that are judged to have the  greatest potential for burden reduction (these forms have already  been reviewed and approved through the CIO process). The office  evaluates and prioritizes burden reduction initiatives by  ●  determining the number of taxpayers impacted;  ●  quantifying the total time and out-of-pocket savings for taxpayers;  ●  evaluating any adverse impact on IRS’s voluntary compliance  ●  assessing the feasibility of the initiative, given IRS resource  limitations; and  ●  tying the initiative into IRS objectives.
Once the forms are chosen, the office performs highly detailed, in- depth analyses, including extensive outreach to the public affected,  users of the information within and outside the agency, and other  stakeholders. This analysis includes an examination of the need for  each data element requested. In addition, the office thoroughly  reviews form design.
The office’s director heads a Taxpayer Burden Reduction Council,  which serves as a forum for achieving taxpayer burden reduction  throughout IRS. IRS reports that as many as 100 staff across IRS and  other agencies can be involved in burden reduction initiatives,  including other federal agencies, state agencies, tax practitioner  groups, taxpayer advocacy panels, and groups representing the  small business community.
The council directs its efforts in five major areas:  ●  simplifying forms and publications;  ●  streamlining internal policies, processes, and procedures;  ●  promoting consideration of burden reductions in rulings,  regulations, and laws;  ●  assisting in the development of burden reduction measurement  ●  partnering with internal and external stakeholders to identify areas  of potential burden reduction.
According to IRS, this targeted, resource-intensive process has  achieved significant reductions in burden. For example, it reported  that about 95 million hours of taxpayer burden were reduced  through increases in the income reporting threshold on various IRS  schedules. Another example, mentioned earlier, was given in  OMB’s latest annual PRA report: in January 2006 IRS completed an  initiative to simplify the process of applying for an extension to file  an income tax return, which is associated with a burden reduction  of 8 million hours. Another example from the annual PRA report is  a reduction of about 19 million hours from a redesign of IRS form  1041 to streamline the requirements and make it easier to read and  file.
Similarly, EPA officials stated that they have established processes  for reviewing information collections that supplement the standard  PRA review process. These processes are highly detailed and  evaluative, with a focus on burden reduction, avoiding duplication,  and ensuring compliance with PRA. According to EPA officials, the  impetus for establishing these processes was the high visibility of  the agency’s information collections and the recognition, among  other things, that the success of EPA’s enforcement mission  depended on information collections being properly justified and  approved: in the words of one official, information collections are  the “life blood” of the agency.
According to these officials, the CIO staff are not generally closely  involved in burden reduction initiatives, because they do not have  sufficient technical program expertise and cannot devote the  extensive time required. Instead, these officials said that the CIO  staff’s focus is on fostering high awareness within the agency of the  requirements associated with information collections, educating and  training the program office staff on the need to minimize burden and  the impact on respondents, providing an agencywide perspective on  information collections to help avoid duplication, managing the  clearance process for agency information collections, and acting as  liaison between program offices and OMB during the clearance  process. To help program offices consider PRA requirements such  as burden reduction and avoiding duplication as they are developing  new information collections or working on reauthorizing existing  collections, the CIO staff also developed a handbook to help  program staff understand what they need to do to comply with PRA  and gain OMB approval.
In addition, program offices at EPA have taken on burden reduction  initiatives that are highly detailed and lengthy (sometimes lasting  years) and that involve extensive consultation with stakeholders  (including entities that supply the information, citizens groups,  information users and technical experts in the agency and  elsewhere, and state and local governments). For example, EPA  reported that it amended its regulations to reduce the paperwork  burden imposed under the Resource Conservation and Recovery  Act. One burden reduction method EPA used was to establish higher  thresholds for small businesses to report information required under  the act. EPA estimated that the initiative will reduce burden by  350,000 hours and save $22 million annually. Another example is an  ongoing EPA initiative reported in this year’s PRA report, the  Central Data Exchange; this is an e-government initiative that is  designed to enable fast, efficient, and more accurate environmental  data submissions and exchange from state and local governments,  industry, and tribes through the use of electronic reporting  procedures. The estimated reduction for this initiative, which is  expected to be complete in 2008, is 166,000 hours.
Overall, EPA and IRS reported that they have produced significant  reductions in paperwork burden by making a commitment to this  goal and dedicating resources to it. In contrast, for the 12  information collections we examined, the CIO review process  resulted in no reduction in burden. Further, the Department of  Labor reported that its PRA reviews of 175 proposed collections  over nearly 2 years did not reduce burden. Similarly, both IRS and  EPA addressed information collections that had undergone CIO  review and received OMB approval and nonetheless found  significant opportunities to reduce the paperwork burden.
section_title: Agencies Could Strengthen PRA Review and Try Alternative Approaches to Reducing Burden
paragraphs: In our 2005 report, we concluded that the CIO review process was  not working as Congress intended: It did not result in a rigorous  examination of the burden imposed by information collections, and  it did not lead to reductions in burden. In light of these findings, we  suggested options that Congress might want to consider when it  next reauthorizes the act, including mandating pilot projects to test  and review alternative approaches to achieving PRA goals. Such  pilot projects could build on the lessons learned at IRS and EPA,  which have used a variety of approaches to reducing burden,  sharing information (for example, by facilitating cross-agency  information exchanges), standardizing data for multiple uses, and  integrating data to avoid duplication; and re-engineering work flows.  Pilot projects would be most appropriate for agencies for which  information collections are a significant aspect of the mission.
In addition, we recommended (among other things) that agencies  strengthen the support provided for CIO certifications and that OMB  update its guidance to clarify and emphasize this requirement  (including that agencies provide support showing that they have  taken steps to reduce burden, determined whether small entities are  affected and reduced reporting burden on them, and established a  plan to manage and use the information to be collected, including  the identification of necessary resources). OMB and the agencies  agreed with most of the recommendations, although they disagreed  with aspects of GAO’s characterization of agencies’ compliance with  the act’s requirements.
Since our report was issued, the four agencies have reported taking  steps to strengthen their support for CIO certifications:   ●  According to the HUD CIO, the department established a senior- level PRA compliance officer in each major program office, and it  revised its certification process to require that before collections are  submitted for review, they be approved at a higher management  level within program offices.  ●  The Treasury CIO established an Information Management Sub- Council under the Treasury CIO Council and added resources to the  review process.   ●  According to the VA’s 2007 budget submission, the department  obtained additional resources to help review and analyze its  information collection requests.   ●  According to the Office of the CIO at the Department of Labor, the  department intends to provide guidance to components regarding  the need to provide strong support for clearance requests and has  met with component staff to discuss these issues.
OMB has updated parts of its guidance and plans to incorporate  other guidance into an automated system to be used by agencies  submitting information collections for clearance. In January 2006,  OMB revised its guidance to agencies on surveys and statistical  information collections. This guidance, among other things, is  aimed at strengthening the support that agencies must provide for  certifying collections, as we recommended. For example, the  guidance requires agencies submitting requests for approval to  include context and detail that will allow OMB to evaluate the  practical utility of the information to be collected. However, this  guidance does not apply to all information collections. Rather, it  applies only to surveys that are used for general-purpose statistics  or as part of program evaluations or research studies. In addition, it  does not provide clear guidance on one of the topics mentioned in  our recommendation: determining whether small entities are  affected by the collection and reducing reporting burden on these  entities.
OMB also reported that its guidance to agencies will be updated  through a planned automated system that is to begin operating this  month. According to the former acting head of OMB’s Office of  Information and Regulatory Affairs, the new system will permit  agencies to submit clearance requests electronically, and the  instructions will provide clear guidance on the requirements for  these submissions, including the support required. This official  stated that OMB has worked with agency representatives with direct  knowledge of the PRA clearance process in order to ensure that the  system and its instructions clearly reflect the requirements of the  process. If this system is implemented as described and OMB  withholds clearance from submissions that lack adequate support, it  could lead agencies to strengthen the support provided for their  certifications.
In conclusion, Madam Chairman, the PRA puts in place mechanisms  to focus agency attention on the need to minimize the burden that  information collections impose—while maximizing the public  benefit and utility of government information collections—but these  mechanisms have not succeeded in achieving the ambitious  reduction goals set forth in the 1995 amendments. Achieving real  reductions in the paperwork burden is an elusive goal, as attested by  years of OMB’s annual PRA reports, including the latest. That report  shows the largest rise in estimated burden for the last several years,  mostly due to new statutory requirements and how they have been  implemented. As we have seen, the tendency is for burden to rise  unless agencies take active steps to reduce it. Agencies have taken  such actions—by cutting redundancy, changing forms, and using  information technology, among other things—but these have not  been enough to make up for the increases.
Besides demonstrating once again how challenging it is for the  government to achieve true burden reduction, this year’s results  highlight the need to look for new ways to achieve this and the other  goals of the PRA. Among the mechanisms already in place is the CIO  review and certification process. However, as it was implemented at  the time of our review, this process had limited effect on the quality  of support provided for information collections, and it appeared to  have no appreciable impact on burden.
The targeted approaches to burden reduction used by IRS and EPA  appear promising, but the experience of these agencies suggests  that success requires top-level executive commitment, extensive  involvement of program office staff with appropriate expertise, and  aggressive outreach to stakeholders. However, such an approach  would probably also be more resource-intensive than the CIO  certification process, and thus it may not be warranted at agencies  where paperwork issues do not rise to the level of those at IRS and  similar agencies. Consequently, it is critical that efforts to expand  the use of the IRS and EPA models take these factors into  consideration.
Madam Chairman, this completes my prepared statement. I would  be pleased to answer any questions.
section_title: Contacts and Acknowledgments
paragraphs: For future information regarding this testimony, please contact  Linda Koontz, Director, Information Management, at (202) 512-6420,  or koontzl@gao.gov. Other individuals who made key contributions  to this testimony were Barbara Collier, Nancy Glover, and Alan  Stapleton.
section_title: Attachment 1. Related GAO Products
paragraphs: Paperwork Reduction Act: New Approaches Can Strengthen  Information Collection and Reduce Burden. GAO-06-477T.  Washington, D.C.: March 8, 2006.
Paperwork Reduction Act: Subcommittee Questions Concerning  the Act’s Information Collection Provisions. GAO-05-909R.  Washington, D.C.: July 19, 2005.
Paperwork Reduction Act: Burden Reduction May Require a New  Approach. GAO-05-778T. Washington, D.C.: June 14, 2005.
Paperwork Reduction Act: New Approach May Be Needed to  Reduce Government Burden on Public. GAO-05-424. Washington,  D.C.: May 20, 2005.
Paperwork Reduction Act: Agencies’ Paperwork Burden Estimates  Due to Federal Actions Continue to Increase. GAO-04-676T.  Washington, D.C.: April 20, 2004.
Paperwork Reduction Act: Record Increase in Agencies’ Burden  Estimates. GAO-03-619T. Washington, D.C.: April 11, 2003.
Paperwork Reduction Act: Changes Needed to Annual Report. GAO- 02-651R. Washington, D.C.: April 29, 2002.
Paperwork Reduction Act: Burden Increases and Violations  Persist. GAO-02-598T. Washington, D.C.: April 11, 2002.
Information Resources Management: Comprehensive Strategic  Plan Needed to Address Mounting Challenges. GAO-02-292.  Washington, D.C.: February 22, 2002.
Paperwork Reduction Act: Burden Estimates Continue to Increase.  GAO-01-648T. Washington, D.C.: April 24, 2001.
Electronic Government: Government Paperwork Elimination Act  Presents Challenges for Agencies. GAO/AIMD-00-282. Washington,  D.C.: September 15, 2000.
Tax Administration: IRS Is Working to Improve Its Estimates of  Compliance Burden. GAO/GGD-00-11. Washington, D.C.: May 22,  2000.
Paperwork Reduction Act: Burden Increases at IRS and Other  Agencies. GAO/T-GGD-00-114. Washington, D.C.: April 12, 2000.
EPA Paperwork: Burden Estimate Increasing Despite Reduction  Claims. GAO/GGD-00-59. Washington, D.C.: March 16, 2000.
Federal Paperwork: General Purpose Statistics and Research  Surveys of Businesses. GAO/GGD-99-169. Washington, D.C.:  September 20, 1999.
Paperwork Reduction Act: Burden Increases and Unauthorized  Information Collections. GAO/T-GGD-99-78. Washington, D.C.: April  15, 1999.
Paperwork Reduction Act: Implementation at IRS. GAO/GGD-99-4.  Washington, D.C.: November 16, 1998.
Regulatory Management: Implementation of Selected OMB  Responsibilities Under the Paperwork Reduction Act. GAO/GGD- 98-120. Washington, D.C.: July 9, 1998.
Paperwork Reduction: Information on OMB’s and Agencies’  Actions. GAO/GGD-97-143R. Washington, D.C.: June 25, 1997.
Paperwork Reduction: Governmentwide Goals Unlikely to Be Met.  GAO/T-GGD-97-114. Washington, D.C.: June 4, 1997.
Paperwork Reduction: Burden Reduction Goal Unlikely to Be Met.  GAO/T-GGD/RCED-96-186. Washington, D.C.: June 5, 1996.
Environmental Protection: Assessing EPA’s Progress in  Paperwork Reduction. GAO/T-RCED-96-107. Washington, D.C.:  March 21, 1996.
Paperwork Reduction: Burden Hour Increases Reflect New  Estimates, Not Actual Changes. GAO/PEMD-94-3. Washington, D.C.:  December 6, 1993.
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