Early in the 2000 Census cycle, the U.S. Census Bureau was researching coverage measurement options for the 2000 Census, including the Post Enumeration Survey (PES) methods used in past decennial censuses. The bureau explored a number of design options aimed at improving data accuracy while controlling costs. In 1993, the bureau was also evaluating the feasibility of conducting a one-number census, which combines the features of both the traditional head count and statistical methods to produce a single count before the mandated deadlines. In May 1995, the bureau announced that it would conduct a sample survey of 750,000 housing units, called Integrated Coverage Measurement (ICM), to estimate how many housing units and people it would miss or count more than once in the 2000 Census. In this initial design for the 2000 Census, the bureau planned to use statistical methods to integrate the results of this survey with the traditional census enumeration to provide a one-number census by December 31, 2000. The U.S. Supreme Court ruled in January 1999 that 13 U.S.C. 195 prohibited the use of statistical sampling to generate population data for reapportioning the U.S. House of Representatives. However, the court’s ruling did not prohibit the use of statistical sampling for other purposes, such as adjusting formulas to distribute billions of dollars of federal funding to state and local governments. Following the Supreme Court ruling, the bureau abandoned certain statistical aspects of the ICM program, and announced the A.C.E. program to assess the quality of the population data collected in the 2000 Census, using a smaller sample of 300,000 housing units. The bureau conducted A.C.E., which corresponded to the PES in past censuses and the ICM in the original 2000 Census Plan, to measure and correct the overall and differential coverage of the U.S. resident population in the 2000 Census. Although A.C.E. was generally implemented as planned, the bureau found that A.C.E. overstated the census net undercount. This was due, in part, to errors introduced during matching operations and from other remaining uncertainties. The bureau has reported that additional review and analysis would be necessary before any potential uses of A.C.E. data could be considered. Due to uncertainties or errors in the A.C.E. survey results, the acting director of the bureau decided in separate decisions in March 2001 and October 2001 that the 2000 Census tabulations would not be adjusted for any purpose, including distribution of billions of dollars in federal funding. These decisions were consistent with those for the 1990 Census, which was not adjusted due to other problems. According to senior bureau officials, the bureau is continuing to evaluate issues related to A.C.E. and the census, and the results of its evaluation are expected to influence the bureau’s planning for the 2010 Census. The bureau receives two appropriations from the Congress: (1) salaries and expenses and (2) periodic censuses and programs. The salaries and expenses appropriation provides 1-year funding for a broad range of economic, demographic, and social statistical programs. The periodic censuses and programs appropriation includes primarily no-year funding to plan, conduct, and analyze the decennial censuses every decade and for other authorized periodic activities. Since fiscal year 1996, the bureau has prepared its annual budget request for the 2000 Census in eight broad frameworks of effort that were submitted to the Office of Management and Budget (OMB) and the Congress. For management, program, financial, staffing, and performance purposes, frameworks are further divided by the bureau into activities and then projects within these activities. The bureau accounts for the costs of conducting the ICM/A.C.E. programs in its Commerce Administrative Management System (CAMS), which became operational in fiscal year 1997. Bureau financial management reports generated by CAMS have provided appropriated amounts, expended and obligated amounts, and variances to a project level from fiscal year 1997 to the current period. The ICM/A.C.E. programs are an activity comprised of eight projects contained within three frameworks. Fiscal year 1996 was the first year the bureau set up a specific project code to identify ICM program costs through fiscal year 1999. However, it was difficult to identify the change to the A.C.E. program beginning in fiscal year 2000 because the bureau did not change many of the project descriptions in CAMS from the ICM program. As discussed in our December 2001 report, we identified specific control weaknesses for fiscal year 2000 related to the lack of controls over financial reporting and financial management systems. To meet the objective of responding to seven questions concerning ICM/A.C.E. program life cycle costs, we reviewed and analyzed budget and program data for all coverage measurement programs that existed during the 2000 Census (for fiscal years 1991 to 2003), which included the ICM and A.C.E. programs. We did not audit budget and other financial data provided by the bureau. We also reviewed planning and methodology documents and other available information in order to determine the history of the programs. Also, we identified ICM and A.C.E. project accounts and analyzed amounts by fiscal year using the financial management reports generated by CAMS. We discussed the results of our analysis with senior bureau officials and interviewed bureau officials to obtain their views and observations regarding the ICM and A.C.E. programs. It was not our objective to assess the efficiency of expenditures and obligations against planned budget appropriations. We encountered several limitations in the scope of our work on this assignment as follows. We were unable to determine the complete life cycle costs of the ICM/A.C.E. programs because the bureau considered any ICM/A.C.E. related costs from fiscal years 1991 through 1995 as part of its general research and development programs and thus did not separately track these costs. Although some costs were tracked in fiscal year 1996, the bureau still considered these costs as research and development and did not include these costs as ICM/A.C.E. program costs. We were further unable to identify ICM/A.C.E. portions of costs, such as evaluations and data processing, which the bureau included with other 2000 Census programs. Our work was performed in Washington, D.C. and at U.S. Census Bureau headquarters in Suitland, Maryland, from February 2002 through July 2002. Our work was done in accordance with U.S. generally accepted government auditing standards. On November 17, 2002, the Department of Commerce provided written comments on a draft of this report and we have reprinted the comments in appendix II. Technical comments were also provided by the department and incorporated into the report where appropriate, but have not been reprinted. Although the bureau tracked some costs of conducting the ICM/A.C.E. programs, we found that the bureau did not identify the complete life cycle costs of the programs due to the following three factors. First, the bureau only tracked the costs of conducting the ICM/A.C.E. programs, which covers the period from fiscal year 1997 through 2003. Although life cycle costs for the 2000 Census cover a 13-year period from fiscal years 1991 through 2003, senior bureau officials said that the ICM/A.C.E. program was not viable for implementation until fiscal year 1997. Therefore, the bureau considered costs from earlier years as part of its general research and development programs and the bureau did not assign unique project codes to identify ICM/A.C.E. programs and related costs in its financial management system. Second, although $3.6 million of fiscal year 1996 obligated costs were identifiable in the bureau’s financial management system as an ICM special test, the bureau did not consider these costs as part of the ICM/A.C.E. programs. Instead, these costs were considered general research and development. However, because the bureau separately identified these costs as ICM program costs, we have included the $3.6 million as part of the ICM/A.C.E. program costs we could identify in this report. Finally, we were unable to identify the ICM/A.C.E. portions of costs, such as evaluations and data processing, which the bureau included with other 2000 Census programs. For example, in late fiscal year 2000 and after, the bureau did not separate A.C.E. evaluations from its other 2000 Census evaluations in its financial management system. Bureau officials stated that the contracts for evaluations included overall 2000 Census and A.C.E. evaluations, and did not have a separate code identifying A.C.E. costs. Similarly, the bureau did not capture all costs for items such as data processing by programs like ICM/A.C.E. These type of operations were conducted for the 2000 Census overall, were budgeted by framework, were not separated by program in the bureau’s financial management system, and were not allocated back to individual projects. Therefore, we were unable to identify these types of costs for the ICM/A.C.E. programs. Due to the limitations in the bureau’s data, our responses to the seven specific questions identified in your request do not include all ICM/A.C.E. life cycle costs and are limited to available cost information covering fiscal years 1996 through 2003, except where indicated, and exclude such costs as A.C.E. evaluations and some data processing. The following sections include our responses to the seven questions on ICM/A.C.E. program life cycle costs. 1. What were the original estimated life cycle costs for the ICM/A.C.E. programs?