In 1994, the Congress established NRCS and gave it jurisdiction over programs of the former Soil Conservation Service, as well as other USDA financial or technical assistance programs for natural resource conservation and rural development. With more than 12,000 employees nationwide—about three-fourths located in its state offices and 2,500 field offices—NRCS focuses primarily on private and other nonfederal lands. NRCS staff regularly work in partnership with state, local, and private entities, using the same case files and technical assistance tools. NRCS’s primary partners are state conservation agencies and the approximately 3,000 conservation districts nationwide. These conservation districts are units of local government organized to support local conservation efforts with their own programs and staff. When asked to do so by farmers and others, NRCS staff assess farmers’ needs—a process that generally involves traveling to the site. NRCS staff work with the landowner to develop a conservation plan that describes the strategy to be used, the schedule of activities, and estimated costs. In some instances, plans are revised several times until the landowner selects a final alternative. If the landowner applies to implement the conservation plan under a Farm Bill program and the land meets the eligibility criteria and is accepted, NRCS develops a contract. After a contract is developed and signed, NRCS staff complete paperwork for payments to the landowner. NRCS staff assist with installation of practices, for example, by surveying land, providing practice standards and specifications, and ensuring contractors have carried out the terms of the contract. In addition, NRCS continues to document activities throughout the life of the contract, which may be years or decades. Staff also periodically certify that the participant is complying with the contract terms, depending on the program requirements. In 1998, the Chief of NRCS called for a new agencywide effort to improve NRCS’s accountability by providing better information and analyses on how the agency uses its resources and what it achieves with its funds. As part of these efforts, NRCS has taken steps to estimate its future technical assistance costs and budgets, as described in figure 1. NRCS’s model for estimating the cost of programs consists of an Excel spreadsheet that makes program-by-program calculations using such data as time per task estimates and salary benefits and support costs, as well as assumptions about the average length of a contract and the proportion of work that will be performed during each year of the contract. Figure 2 illustrates the information used in NRCS’s cost of programs model. NRCS state offices have overall responsibility for developing the time per task estimates used in the model. NRCS divided the country into 218 areas and assigned teams of about 7 to 12 NRCS and partner staff to develop time per task estimates for the work to be done in each area. According to NRCS’s process for developing time per task estimates, these teams first define the typical work in their area—that is, the sizes and types of land they work with and the conservation practices they plan for this land. For example, a Texas team determined that one type of typical conservation work in its area was planting grass cover on a 150-acre dairy farm. Using this description, the team discussed and agreed on estimates of time required for each of the 29 tasks associated with performing this work, such as the time it would take them to design a grass-planting plan. Generally, after developing the time per task estimates, the team leader submits them to the state time per task leader to review and input into an NRCS database. The methods of review the state offices use include comparing the areas’ estimates with each other. If the state leader encounters substantial unexplained differences among estimates, he or she generally contacts the team leader for an explanation and to have the estimate changed, if appropriate. The state leader then submits final time per task estimates to NRCS headquarters, which also reviews them. If questions arise, headquarters may ask the state office to perform additional review, and make changes, if warranted. Since the quality of data entered into a model affects the estimates it produces, NRCS has worked to increase the reliability of its time per task estimates by developing new estimates on three separate occasions and asking for staff feedback on the quality of the estimating process. In addition, NRCS plans to update its time per task estimates again because the tasks and the time required to perform them have changed, along with program requirements and policies, over the past 5 years. NRCS’s cost model also includes data on average salary costs, which are based, in part, on data from NRCS’s time and attendance system. NRCS staff enter hours that they work by program, and by the activities associated with those programs, biweekly in the time and attendance system. For example, they might record working 20 hours on CRP and 20 hours on WRP. For the 20 CRP hours, they may record 10 hours to determine land eligibility for multiple landowners and 10 hours working with landowners on conservation plans. These data are reviewed first by supervisors and then at the state office level. NRCS tested cost estimates from its model for fiscal years 2002 and 2003 by comparing them with the agency’s actual costs. Our analysis of these comparisons shows that program-by-program estimates from NRCS’s model vary considerably from the agency’s actual costs as shown in table 1. These results do not meet the agency’s goal of achieving a difference of no more than 10 percent between estimates and reported costs. For fiscal year 2002, the CRP estimate was closest to the actual costs—it was 5 percent lower than the actual costs reported. Of the remaining program estimates for 2002, three were higher than the actual cost data by 48 percent to 302 percent, and four were lower by 19 percent to 36 percent. Altogether, NRCS estimated that its technical assistance costs for eight of the Farm Bill conservation programs would be about $254 million, 19 percent higher than its actual costs of about $213 million. NRCS did not estimate costs for two programs that had not yet been implemented. For fiscal year 2003, the estimate for the Agricultural Management Assistance Program, a program that provides financial assistance to producers in 15 states to, among other things, construct or improve irrigation structures and plant trees, was closest to the reported costs— it was 9 percent greater than the actual costs. Of the remaining program estimates for 2003, six were higher than the actual cost data by 17 percent to 50 percent, and three were lower by 16 percent to 60 percent. Altogether, NRCS estimated its technical assistance costs for 10 Farm Bill conservation programs would be about $295 million, about 15 percent higher than its actual costs of about $257 million. This estimate was 4 percent closer to total actual costs than in fiscal year 2002. For the three largest programs—the Environmental Quality Incentives Program, CRP, and WRP—the estimates varied from the actual cost data somewhat less in fiscal year 2003 than 2002. In fiscal year 2002, the estimates had a spread of 70 percent—from a 22 percent underestimate to a 48 percent overestimate. In fiscal year 2003, the estimates had a spread of 38 percent—from a 16 percent underestimate to a 22 percent overestimate. We identified several reasons for the differences between NRCS’s estimated and actual costs. First, for fiscal years 2002 and 2003, the model estimated costs based on the assumption that programs would be fully funded in the beginning of the fiscal year. This did not happen, however, because the 2002 Farm Bill was enacted later than expected and because USDA operated under a continuing resolution for a good portion of fiscal year 2003. According to NRCS officials, as a result, less technical assistance work was performed than the estimates reflected. Second, NRCS’s model includes costs for work performed by partners’ staff and paid for by the partner organizations, while the actual cost data generally contains only the costs for the work of NRCS’s staff. Third, NRCS’s model uses some data that are based on inaccurate assumptions. This is likely to have contributed to differences between estimates and actual costs reported by NRCS. In several instances, NRCS performed technical assistance work at different times than NRCS originally assumed it would when estimating technical assistance costs. First, NRCS estimates have assumed that full funding would be available for new contracts at the start of the fiscal year, but in practice, this has not occurred. For example, in 2002, the Farm Bill was enacted in May, later than NRCS expected, and OMB apportioned funds to USDA for implementing the Farm Bill programs in July—about three quarters of the way through the fiscal year. Since only 2-1/2 months of the fiscal year remained, different work—and in some cases, less work— was performed under the Farm Bill than NRCS had anticipated, according to NRCS officials. The general 2002 sign-up period for CRP contracts did not start until August 2002, limiting the amount of work performed on new CRP contracts. Moreover, in fiscal year 2003, USDA operated under a continuing resolution until receiving fiscal year 2003 appropriations in February and an OMB apportionment in March—about half way through the fiscal year. While NRCS can adjust its assumptions, it is not possible to eliminate uncertainties and variances related to the timing of funding approvals that cause differences between the estimated and actual program costs. NRCS officials said that they have been studying the model’s estimates and modifying some assumptions about workloads to improve the estimates. Because NRCS’s partners’ efforts are a relatively important part of overall technical assistance efforts, NRCS has included its partners’ costs in its model so that it is in a position to estimate total technical assistance costs to carry out the programs. For example, according to 1999 NRCS staff estimates, the most recent available, NRCS’s partners were responsible for about 17 percent of total CRP costs and 15 percent of total WRP costs that year. Using those percentages, we calculated that NRCS’s partners might have added about $15 million to these two programs’ fiscal year 2002 technical assistance costs.