The bureau performs large surveys and censuses that provide statistics about the American people and the U.S. economy. The business activities of the bureau can be divided into four categories: decennial and other periodic census programs, demographic programs, economic programs, and reimbursable work programs that are conducted mainly for other federal agencies. During fiscal year 2000, the bureau conducted the actual decennial count of U.S. population and housing as of April 1, 2000, which is its largest and most complex activity. The results of the 2000 decennial census are used to apportion seats in the U.S. House of Representatives, draw congressional and state legislative districts, and form the basis for the distribution of an estimated $200 billion annually of federal program funds over the next decade to state and local governments. Since the 1970 census, the bureau has used essentially the same methodology to count the vast majority of the American population during the decennial census. The bureau develops an address list of the nation's households and mails census forms (questionnaires) to those households asking the occupants to mail back the completed forms. The bureau hires temporary census takers, known as enumerators, by the hundreds of thousands to gather the requested information for each nonresponding household. Over time, because of social and attitudinal changes, the public became less willing to participate in the decennial census. By 1990, these problems escalated to the point where the most expensive census up to that time produced less accurate results than the preceding census. Consequently, the bureau's plan for the 2000 census included the above elements but also included several important innovations to the census process designed to improve census accuracy. For example, prior to the 2000 census, local and tribal government officials were given expanded opportunities to review the bureau's address list and identify missing addresses for inclusion in the census. The bureau also implemented the New Construction Program, which invited local governments to submit addresses for housing units that had been built subsequent to the completion of the address list in January 2000. In addition, the 2000 census questionnaires were available upon request in six languages, and households were given expanded opportunities to respond to the 2000 census by telephone or via the Internet. Also, for the 2000 census, the bureau initiated the largest promotion and outreach effort in its history for a decennial census and conducted the first-ever paid advertising campaign. As indicated in table 1, the increase in decennial census full-cycle costs in recent decades has been dramatic. Expressed in dollars of fiscal year 2000 purchasing power, the full-cycle costs of the decennial census rose from $920 million for the 1970 census to a current estimate of about $6.5 billionfor the 2000 census, for an increase of about 600-percent after adjusting for inflation. The Gross Domestic Product (GDP) price index was used to adjust for inflation for the 1970, 1980, 1990, and 2000 censuses, while projections for years 2001 through 2003 were adjusted using factors from the Congressional Budget Office's Economic and Budget Outlook, January 2001. Since census costs depend primarily on the expense of delivering a mail questionnaire to a housing unit or having an enumerator visit a housing unit, it is more realistic to relate cost growth to the rise in the number of housing units rather to population growth. Even when housing units are vacant and contain no household, there is a cost to ascertaining that fact. Therefore, the number of housing units is the relevant unit to consider for cost analysis. A housing unit may be a house, an apartment, a mobile home, a group of rooms, or a single room that is occupied (or, if vacant, is intended for occupancy) as separate living quarters. Separate living quarters are those in which the occupants live separately from any other individuals in the building and which have direct access from outside the building or through a common hall. For vacant units, the criteria of separateness and direct access are applied to the intended occupants whenever possible. If that information cannot be obtained, the criteria are applied to the previous occupants. Both occupied and vacant housing units are included in the housing unit inventory. Boats, recreational vehicles, vans, tents, and the like are housing units only if they are occupied as someone's usual place of residence. Vacant mobile homes are included provided they are intended for occupancy on the site where they stand. Vacant mobile homes on dealers' lots, at factories, or in storage yards are excluded from the housing inventory. Also excluded from the housing inventory are quarters being used entirely for nonresidential purposes, such as stores or offices, or quarters used for the storage of business supplies or inventory, machinery, or agricultural products. The estimated full-cycle costs of the 2000 census do not take into account all costs of the decennial census. For example, as of September 30, 2000, about $85 million of costs for estimated claims for unemployment for temporary workers are not included in the cost per housing unit figures in this report. Any unemployment claims paid are absorbed by the Federal Employees Compensation Account in the Unemployment Trust Fund, administered by the Department of Labor, without reimbursement by the bureau. As shown in figure 1, the cost per housing unit in constant fiscal year 2000 dollars grew from $13 in 1970 to $56 in 2000, a 330-percent increase. In constant fiscal year 2000 dollars, the estimated full-cycle cost of the 2000 decennial census of about $6.5 billion is nearly double the $3.3 billion cost of the 1990 decennial census. When full-cycle cost is divided by the number of American households of 117.3 million in 2000 and 104.0 million in 1990, the cost per housing unit of the 2000 census of $56 increased 75- percent compared to the 1990 census cost of $32 per housing unit. Table 2 shows the cost increases in eight broad "frameworks" of effort used by the bureau in its financial management reports for the 2000 census. The $24 cost per housing unit increase was primarily the result of increased costs in four of the eight frameworks: (1) $16 for expanded field data collection methods, (2) $3 for the extensive use of technology and contractor support, referred to as automated data processing and telecommunications support, (3) $2 for more enhanced methods for data content and products, and (4) $2 for increases in marketing, communication, and partnership programs. Finally, other areas such as the compilation of a complete and accurate address list and the testing of the census design contributed the remaining $1 of the $24 increase in the 2000 census compared to the 1990 census. Framework 3, Field Data Collection and Support Systems, was the most expensive and the largest component of census costs, contributing about $16 or two-thirds of the $24 increase in per housing unit cost of the 2000 census. Field data collection is labor-intensive and includes operations such as nonresponse follow-up, which entails temporary workers, known as enumerators, visiting millions of households that did not return census questionnaires by mail or otherwise respond. As indicated in table 2, the cost for this framework for the 1990 census was about $1.7 billion, which accounted for half of the total $32 per housing unit cost. However, for the 2000 census, costs for this framework more than doubled to about $3.8 billion or $32 of the total $56 per housing unit cost. The $16 increase for the 2000 census occurred due to (1) expanded data collection operations, (2) lower productivity for enumerators who conducted the nonresponse follow-up operation, and (3) higher logistic support costs. First, according to the bureau, expanded data collection operations contributed about $14 of the $16 increase in field data collection costs. For example, for the 2000 census, the bureau expanded coverage improvement programs, which were designed to improve census coverage and accuracy. For the 2000 census, the coverage improvement program included for the first time the enumeration of addresses from the update/leave operation and new construction follow-up. Also, another example of expanded operations for the 2000 census was the telephone questionnaire assistance center. For the 1990 census, the telephone questionnaire assistance was conducted by bureau staff members, who handled over 2 million calls and worked in six processing centers. For the 2000 census, the telephone questionnaire assistance center was operated by contractors, who handled about 6 million calls and operated from 22 nationwide call centers. We could not analyze each data collection operation and compare the 2000 census to the 1990 census, except for the nonresponse follow-up operation discussed below, due to incomplete or missing cost and performance data for the 1990 census. Second, lower enumerator productivity for the nonresponse follow-up operation in the 2000 census compared to the 1990 census contributed about $1 of the $16 increase in costs in the field data collection area. According to the bureau, enumerator productivity to visit nonresponding households and complete questionnaires in the 1990 census was 1.56 cases per hour but dropped by one-third to 1.04 cases per hour in the 2000 census. Productivity is calculated by dividing the total workload (the number of housing units) by the total number of production hours worked. For the 1990 census, the bureau had a workload of over 39 million nonresponding housing units as compared to a workload of about 42 million nonresponding housing units in the 2000 census for a 7-percent increase. About 25 million production hours for the 1990 census increased to about 40 million production hours for the 2000 census for a 60-percent increase. However, according to the bureau officials, the higher production hours for the 2000 census were due to more quality assurance procedures, such as crew leader edits and enhanced office checks, plus more re-interview checks. Information on enumerator productivity rates by type of local census office, the bureau's methodology for refining the productivity data, and factors that could improve the collection and analysis of productivity data in the future are highlighted in our October report. Third, higher logistical support costs for increases in the number and size of local census offices, increases in equipment, and increases in temporary support office workers in the 2000 census compared to the 1990 census contributed less than $1 of the $16 increase in the field data collection area. For the 1990 census, there were 458 district offices, which were increased by 62 to a total of 520 local census offices for the 2000 census. According to the bureau, the additional 62 local census offices were necessary to support the increase in workload for the 2000 census. This 14-percent increase in the number of offices resulted in cost increases for items such as space rental, utilities, equipment, and supply costs. Also, according to the bureau, the local census offices in 2000 were larger with more equipment, such as mapping equipment and telecommunications, when compared to those in 1990. In addition, the bureau asserts that the 2000 census had a higher number of temporary office workers in the local census offices that were used to support all activities of the 2000 census, such as address list development. Again, we were unable to independently analyze the bureau assertions due to the lack of or incomplete cost data for the 1990 census. Framework 5, Automated Data Processing and Telecommunications Support, was the second largest category of costs for both the 1990 and the 2000 censuses and contributed about $3 of the $24 per housing unit cost increase for the 2000 census. As indicated in table 2, the cost for this framework for the 1990 census was about $487 million or almost $5 of the total $32 per housing unit cost. However, for the 2000 census, the cost for this framework increased about 80-percent to $877 million or about $8 of the total $56 per housing unit cost. This $3 increase was due to the development and staffing of a new data capture system for the 2000 census using new automatic document scanning technology, which was supported by contractors. This contrasted with the 1990 census, for which bureau personnel developed and conducted data capture technology operations in-house and hand keyed more census questionnaire information. During the 1990 census, the bureau developed and built a data capture system in-house called FACT90. This system consisted of high-speed cameras to film each form, microfilm processors to develop and process the film, and a film optical sensing device to capture check box responses from the forms for computer input. Computer terminals were used to enter all handwritten data from the paper forms. Automation was limited to the multiple-choice questions and the bureau keyed 100-percent of the reported write-in fields. Also, name keying was limited primarily to multi- unit surnames for person number one on the questionnaire. Although the bureau had seven data capture centers in 1990, final data capture processing was not completed until September 1991. For the 2000 decennial census, the bureau relied extensively on contractors to develop a data capture system that used the latest commercial technology, incorporated a number of internal controls to improve the accuracy of data processed, and was more timely in completing census operations. The bureau did not have the expertise to develop the complex new technology in-house. The technology included automated equipment to sort questionnaires by categories and optical character recognition readers to scan approximately 75-percent of handwritten questions without need for further human intervention. In addition, optical mark recognition equipment captured 100-percent of the check box questions on both the long and short form questionnaires. Internal controls included manual review of a small number of data fields that contained multiple responses for accuracy as part of the keying operation before data were transmitted for processing. In addition, response data were verified and a file was returned to check questionnaires using a positive checkout system, and there was 100- percent full name keying of all persons in the household to assist the bureau in a review for duplicate counts. The four data capture centers with the new technology allowed for the processing of census data to be completed by the end of 2000. Framework 2, Data Content and Products, was the third largest category of costs for the 2000 census and contributed over $2 of the $24 per housing unit cost increase for the 2000 census. This area included questionnaire design of long and short forms, a multiple mailing strategy, and printing and postage costs. As indicated in table 2, the cost for this framework for the 1990 census was about $272 million, or less than $3 of the total $32 per housing unit cost. However, for the 2000 census, costs for this framework more than doubled to $579 million, or almost $5 of the total $56 per housing unit cost. The $2 cost increase of the 2000 census was due to the design of a more user-friendly questionnaire, the availability of a census questionnaire in other languages, a multiple mailing strategy with higher printing and postage costs, and the development of a new data retrieval system to disseminate census 2000 data. For the 1990 census, questionnaires were "computer-friendly" to assist the bureau in processing the forms more easily, but some households found them difficult to understand and complete. For the 2000 census, the bureau contracted with commercial designers to produce questionnaires that were simpler and easier to fill out or "respondent-friendly," thus making them more likely to be completed and returned. Questionnaires for the 1990 census were only available in English and Spanish, while for the 2000 census, questionnaires were also available in Chinese, Korean, Vietnamese, and Tagalog. The availability of the additional language forms in 2000 and the redesign of the census questionnaire also increased printing costs over the 1990 census. In addition, for the 1990 census, the bureau mailed the census questionnaires and a postnotice card. For the 2000 census, the bureau developed a multiple mail strategy to inform households about the census. First, a prenotice card was sent out to alert households of the census and its benefits with an offer to send a questionnaire in languages other than English upon request. The census questionnaire then was mailed noting that "responses were required by law." Finally, a postnotice card was sent to households thanking those who participated and reminding others to complete the forms if they had not already done so. For the 1990 census, about 180 million items were printed using third-class postage on all mailings at a cost of about $17 million. For the 2000 census, printing volume almost doubled to about 340 million items, including additional language forms, and all mailings used first-class postage at a cost of about $117 million. Also, according to the bureau, for the 1990 census, data was disseminated using CD-ROM and printed copy. For the 2000 census, the bureau expanded its efforts through a new data retrieval system called the American FactFinder to disseminate census data. This system is available to the widest possible array of users through the Internet, Intranets, and all available intermediaries, including the nearly 1,800 State Data Centers and affiliates; the 1,400 Federal Depository libraries; and other libraries, universities, and private organizations. Framework 8, Marketing, Communication, and Partnerships, was the fourth largest category of increased cost for the 2000 census, and this area contributed about $2 of the $24 per housing unit cost increase for the 2000 census. This area included costs for advertising and promotion and partnerships with state, local, and tribal governments, as well as community groups. As indicated in table 2, the cost for this framework for the 1990 census was about $91 million, or less than $1 of the total $32 per housing unit cost. However, for the 2000 census, costs for this framework quadrupled to $374 million, or over $3 of the total $56 per housing unit cost. The $2 cost increase for the 2000 census was the result of expanded efforts to promote a higher level of responsiveness, particularly for those segments of the population traditionally most difficult to enumerate. These efforts included a paid advertising campaign and the involvement of community partnerships. For the 1990 census, the bureau marketing effort was limited and it was considerably expanded for the 2000 census. This included a multifaceted effort to remind the general population about the census, educate members of the public who did not understand the purpose of the census and its significance to their communities, and motivate Americans to complete their census questionnaires. The main components of the bureau's Partnership and Marketing Program for the 2000 census were the following. The bureau used its first-ever paid advertising campaign to generate awareness about the 2000 census via print, broadcast, and out-of-home advertising. For the 1990 census, an advertising campaign was conducted with free advertising of the Ad Council, a nonprofit organization responsible for administering public service advertising campaigns. Since the advertising was free to fill available air space, the bureau had no control over the time of day that its advertising was broadcast, which included many early morning hours to very small viewing audiences. For the 2000 decennial census, the bureau expanded its marketing program to a national audience during prime viewing times and hired a contractor to design and conduct a professional advertising campaign at a cost of about $1 per housing unit. The bureau established partnerships with businesses, nongovernmental organizations, and government entities to help deliver the census message and obtain a more complete and accurate population count. This activity was considered important because local organizations knew their conditions and circumstances better than the bureau. This effort resulted in bureau partnerships with about 140,000 state, local, and tribal governments and community groups that added about $1 to the per housing unit cost to the 2000 census. A recent GAO report contains further information and best practices on the bureau's partnership program. The remaining frameworks 1, 4, 6, and 7 contributed the remaining $1 of the $24 per housing unit cost increase for the 2000 census when compared to the 1990 census. As indicated in table 2, the costs for these four frameworks for the 1990 census totaled about $745 million or about $7 of the total $32 per housing unit cost. For the 2000 census, costs for these four frameworks increased about 23-percent to about $920 million or about $8 of the total $56 per housing unit cost. The $1 cost increase for the 2000 census was due to increased bureau efforts to compile a complete and accurate address list and to plan, evaluate, and test aspects of the census design, including dress rehearsals. In commenting on a draft of this report, the Department of Commerce, U.S. Census Bureau, concurred with the underlying data as presented in this report and provided its perspective on four matters, which we address below. First, the bureau stated repeatedly that Census 2000 was enormously successful and it was disappointed we made no effort to assess the costs of the 2000 census with respect to the high quality of the data produced in the face of significant challenges. In this regard, the objectives of this review did not include assessing the quality of the 2000 census. Our objectives were to (1) update full-cycle costs to reflect the most current information and (2) analyze bureau data to determine the causes of the significant increase in cost per housing unit for the 2000 census when compared to the cost for the 1990 census. Further, the bureau is still assessing the quality of the 2000 census in its postenumeration review through fiscal year 2003. As stated in the introduction to this report, this product is one of several we will be issuing in the coming months on lessons learned from the 2000 census. As was done after the 1990 census, we are currently reviewing key operations of the 2000 census. Second, the bureau stated that we reported the cost increases without providing appropriate explanation for them. We disagree. Throughout this review, we repeatedly asked the bureau for explanations and supporting documentation for the reasons for the cost increases. To the extent data and explanations were provided for the cost increases, we discussed them in this report. However, in many instances, particularly with respect to the 1990 census, the bureau was unable to provide us explanations or documentation at the activity and project level. Our report clearly states that cost information provided by the bureau for the 1990 census was limited. Third, the bureau pointed out that any analysis of cost increases must take into account the fact that the bureau was asked to develop, and to begin to implement, two different operational designs. Our September 1999 reportprovided information on the Supreme Court decision that prohibited the bureau from carrying out its plans to use statistical methods. As mentioned in that report, the bureau did not begin detailed budgeting for a nonsampling-based census until after the Supreme Court ruling in January 1999. Our work associated with this review showed that the majority of the cost increases for the 2000 census were not in the planning of two operational designs but in the execution of the traditional census. Specifically, we found no evidence that the bureau's planning for a "dual- track" census was a significant driver of cost increases of the 2000 census compared to the 1990 census. Finally, the bureau noted that it was not appropriate to discuss the cost increases without acknowledging the substantial achievement in developing and implementing extensive new census operations. As stated previously, the objectives of this review did not include evaluating the quality of new programs implemented as part of Census 2000. Throughout the report, we mentioned several important innovations to the census process and related costs, including expanded partnership agreements, the New Construction program, the availability of the census questionnaire in multiple languages, and expanded mass media efforts including the first- ever paid advertising campaign. Also, we have a separate effort under way to analyze variances from the bureau's fiscal year 2000 budget and the reasons that certain obligations and expenditures were different than planned. The complete text of the response to our draft report from the Department of Commerce, U.S. Census Bureau, is presented in appendix II. We are sending copies of this report to the Chairman and Ranking Minority Member, Senate Committee on Governmental Affairs, and the Chairman and Ranking Minority Member, House Committee on Government Reform and Oversight. We are also sending copies to the Acting Director of the U.S. Census Bureau, the Secretary of Commerce, the Director of the Office of Management and Budget, the Secretary of the Treasury, and other interested parties. This report will also be available on GAO's home page at http://www.gao.gov. If you or your staffs have any questions on this report, please contact me at (202) 512-9095 or by e-mail at kutzg@gao.gov or Roger R. Stoltz, Assistant Director, at (202) 512-9408 or by e-mail at stoltzr@gao.gov. Key contributors to this report were Cindy Brown Barnes and Linda Brigham. The objectives of this report were to (1) update full-cycle costs and (2) analyze bureau data to determine the causes of the significant increase in cost per housing unit for the 2000 census when compared to the cost for the 1990 census. We did not assess the quality of the 2000 census in this report. To fulfill these objectives, we obtained and analyzed financial data from the U.S. Census Bureau to develop full-cycle costs of the 1970, 1980, 1990, and 2000 decennial censuses and converted all amounts to constant fiscal year 2000 dollars in order to eliminate the effects of inflation over time. We then identified components of full-cycle costs to the extent the bureau was able to provide the data and calculated cost per housing unit. For the 2000 census, we obtained cost and full-time equivalent employment information for budget and actual data from unaudited bureau financial management reports. This information was available in eight broad "frameworks" of effort that the bureau further divided into 23 activities and, within these activities, further divided into 119 projects. However, the 1990 census information was originally presented in 13 frameworks. We requested and the bureau provided reclassified cost data on the 1990 census in these eight frameworks to help facilitate comparisons between the 1990 and 2000 censuses. For the 1990 census, the bureau provided very limited cost data by activity and project, so we decided not to attempt detailed cost comparisons at that level of detail. We therefore focused on identifying activities or projects for the 2000 census that, according to the bureau, either did not exist or had very low costs in the 1990 census. We also used other bureau information, such as pay rates, employment statistics, and the number of temporary offices, to supplement our analysis as needed. We conducted interviews with senior bureau officials and others who provided us with oral and written evidence. This included an overview of 2000 census operations with comparisons to 1990 census operations, reasons for the increase in the cost per housing unit, and cost studies and analyses from the bureau and other independent organizations. We reviewed and analyzed this information as well as our past reports on decennial census operations. We performed our work in Washington, D.C., and at bureau headquarters in Suitland, Maryland. Our work was performed from June through August 2001 in accordance with U.S. generally accepted government auditing standards, except that we did not audit and therefore give no assurance as to the reliability of cost information provided by the bureau. On November 7, 2001, we received comments from the Department of Commerce, U.S. Census Bureau, on a draft of this report. The bureau's comments are discussed in the "Agency Comments and Our Evaluation" section and are reprinted in appendix II. The following are GAO's comments on the letter dated November 7, 2001, from the Department of Commerce, U.S. Census Bureau. 1. See the "Agency Comments and Our Evaluation" section of this report. 2. The full-cycle cost of the 2000 census was nearly double the full-cycle cost of the 1990 census. On a cost-per-housing-unit basis, the increase was 75 percent, which is accurately stated in the text of our report. We have modified the heading referred to in the bureau's comments to reflect that the 75-percent increase was significant. Also, we disagree with the bureau's assertion that the increased cost per housing unit observed in the 2000 census must be discussed in the context of the bureau's ability to reverse a decades-long trend in declining response rates, which reflects an increase in cooperation from the public. We have modified the report to reflect that preliminary data on the postcensus mail return rate, a more precise indicator of public cooperation than the initial mail response rate, declined from 74 percent for the 1990 census to 72 percent for the 2000 census. 3. The changes in field operation staffing described by the bureau in its comments on field data collection activities for the 2000 census, as well as other changes, may have had a significant impact on the quality of the 2000 census results. However, as stated in our report, we did not assess the quality of the 2000 census. Also, we did not have sufficient information to adjust the cost per housing unit in the 2000 census for such changes in quality. In addition, as stated in footnote 3, we adjusted all costs in the report to constant fiscal year 2000 dollars using the Gross Domestic Product price index. This index reflects changes in the compensation paid to all federal workers, which increased from 1990 to 2000 at about the same rate as the wages paid for field operation staff. Thus, these wage increases cannot be viewed as a major reason for the increase in the cost per housing unit for the 2000 census. 4. Our report does not imply that much of the increased costs attributed to the bureau's technological innovations occurred because of increased reliance on private contractors. Further, the scope of our work did not include determining whether the use of contractors was appropriate for these activities. We reiterate that this report responds to our congressional clients' request for information on the costs of the 2000 census and does not and was not intended to provide qualitative information on the results of the census. We are not suggesting that the bureau refrain from using external contractors to assist in exploring the possibility of expanding software development activities to in- house operations, particularly as these activities become more complex. The concern discussed in our October 2000 report was the lack of effective and mature software and system development processes, not whether such activities were done by contractors or in- house. 5. This report provided information on the significant cost drivers for the 2000 census as compared to the 1990 census, in accordance with our requesters' needs. As stated in the "Agency Comments and Our Evaluation" section of this report, we are conducting a review of key operations of the 2000 census. Thus, the scope of this report did not include an assessment of the effect of the redesign of the questionnaire and the availability of questionnaires and language assistance guides in many languages. Likewise, while the report refers to the increased cost of marketing, communication, and partnership programs, the link between response rates and these programs was not within the scope of our review. 6. We agree that estimates for worker's compensation claims and litigation are included in the $6.5 billion of full-cycle cost to the extent that these costs are reflected in the fiscal year 2002 and 2003 budgets and have modified the report accordingly.

Summary:
The estimated $6.5 billion full-cycle cost of the 2000 decennial census is nearly double that of the 1990 census. When the full-cycle cost is divided by the number of American households, the cost per housing unit of the 2000 census was $56 compared to $32 per housing unit for the 1990 census. The primary reasons for the cost increases include the following: (1) in the 1990 census, field data collection cost was $16 per housing unit, while in the 2000 census it was $32 per housing unit; (2) in the 1990 census, technology costs were $5 per housing unit compared to $8 per housing unit for the 2000 census; and (3) the data content and products activity cost $3 per housing unit in 1990 and $5 per housing unit in 2000.