The President’s fiscal year 2000 budget, which was submitted to the Congress on February 1, 1999, included nearly $2.8 billion for the Census Bureau to perform the 2000 decennial census. This original budget request reflected the bureau’s plan to gather information based in part on using statistical estimation for nonresponding households and to adjust for undercounting and other coverage errors. However, on January 25, 1999, the Supreme Court ruled that the Census Act prohibits the bureau from using sampling for purposes of congressional apportionment. According to the bureau, it must therefore enumerate an estimated 12 million additional nonresponding households and expand programs designed to address undercounting and limit other coverage errors. The bureau also plans to visit 4 million additional addresses for which the Postal Service has returned the questionnaire because it believes that the housing unit is vacant or nonexistent. In light of the need for the additional enumeration, the bureau requested a substantial increase to its original budget request for fiscal year 2000— approximately $1.7 billion—for a total budget of approximately $4.5 billion. Thus, for purposes of apportionment, the 2000 census will be done similarly to those for the last several decades in which questionnaires are mailed to the majority of the nation’s households asking the occupants to mail back the completed questionnaires. In addition, for the 2000 census, the bureau plans to incorporate statistical estimation for other purposes, such as providing states with information for redistricting. As part of the 2000 census, the bureau will allow the public to respond in a variety of new ways, such as through a toll-free telephone number, the Internet, and unaddressed questionnaires made available at public locations. When compared to the 1970 census, the projected full-cycle cost per housing unit of the 2000 census will quadruple (in constant fiscal year 1998 dollars). As shown in figure 1, the cost will nearly double from the previous census (1990). The accuracy of the 1990 census decreased compared to the 1980 census. Specifically, the net undercount for the 1990 census was estimated at 1.6 percent of the population (about 4 million persons) compared to 1.2 percent for the 1980 census. The bureau estimated that about 4.4 million persons were counted twice, and other improper inclusions, in 1990, while 8.4 million were missed. Moreover, the sum of these numbers— 12.8 million—represents a minimum tally of gross errors since it does not include other errors, such as persons assigned to the wrong locations. We interviewed bureau officials who provided us with an overview of the budget formulation process for developing the $4.5 billion amended budget request. Bureau officials provided us with copies of the cost models used to develop the original and amended budget requests. The $1.7 billion requested increase represents the difference between the original and amended budget requests. Therefore, to ensure that the difference between the original and amended budget requests was supported by the two models, we reviewed the summarized output and structure of each model and verified the mathematical accuracy of the difference. We reconciled the output from these models to the budget request amounts to determine whether they mathematically agree with the original and amended budget requests. We then isolated the differences in the models by the bureau’s eight program activities or frameworks. After isolating the differences, we selected for further analysis cost increases/decreases and related changes in assumptions that contributed most to each framework’s total net increase or otherwise warranted explanation. We focused our analysis on the “field data collection and support systems” program activity because nearly $1.5 billion of the $1.7 billion requested increase was related to this framework. We obtained from the bureau documentation supporting or explaining the basis for the change in assumptions and how the increase/decrease related to the inability to use statistical sampling. The bureau categorized the components of the $1.7 billion requested increase into those it considered related to the statistical sampling issue and those it considered to be unrelated. We did not conclude whether the bureau properly categorized the components of the $1.7 billion requested increase as related and unrelated. We did not assess the efficiency or effectiveness of the bureau’s plans to conduct the 2000 census or validate the bureau’s data and assumptions used to develop the budget requests. We performed our work in Washington, D.C., and at the bureau’s headquarters in Suitland, Maryland, from June through September 1999 in accordance with generally accepted government auditing standards. The bureau’s request for an additional $1.7 billion for fiscal year 2000 primarily involves changes in assumptions related to increased workload, reduced employee productivity, and increased advertising. The following sections discuss the changes in these key assumptions between the original and amended budget requests. An assumed increase in workload substantially increased costs in the fiscal year 2000 amended budget request for enumerator and support salaries, benefits, travel, data capture requirements, infrastructure, and supplies. The primary reason for the increase in workload is the bureau’s plan to visit an additional 16 million households using a traditional census approach instead of sampling to estimate these housing units. Also adding to the workload are additional programs intended to improve the coverage and quality of the census. The bureau’s amended budget request assumes that it will enumerate the 12 million nonresponding housing units that under the original budget request would have been statistically estimated. The bureau also estimated that the Postal Service would determine that of the 119 million total estimated housing units, about 6 million would be vacant or nonexistent. The purpose of visiting these 6 million housing units is to confirm that the Postal Service was correct in concluding that a housing unit was vacant or nonexistent. In 1990, the bureau found that about 20 to 30 percent of the housing units identified as vacant or nonexistent were actually occupied. As shown in figure 2, under the original budget request, the bureau assumed that it would visit only 2 million of the 6 million housing units and that the remaining 4 million housing units would be accounted for through statistical estimation. Under the amended budget request, the bureau assumes that it will visit all 6 million housing units. Also contributing to the workload increase are a number of programs intended to improve the coverage and quality of the census that were not in the original budget request. According to the bureau, these programs were added to improve the accuracy of the 2000 census since the bureau would be using a traditional approach and attempting to obtain information directly from all 119 million estimated households. In the bureau’s original budget request, statistical estimation was intended to improve the accuracy of the 2000 census by adjusting census counts for undercounting and other coverage errors. An example of an additional program includes reinterviewing a sample of housing units for which enumerators had previously completed census questionnaires. This program, which is budgeted to cost $22.7 million, involves sampling housing units with questionnaires completed by enumerators, reinterviewing to confirm responses, and adjusting the responses to the census questionnaires to correct any errors found. Another program, budgeted at $25.2 million, involves attempting to redeliver certain census questionnaires that are returned by the Postal Service. This program is targeted at housing units that have a change in address or zip code between the fall of 1999, when the bureau delivers its address files to its printing vendors, and March 2000, when questionnaires are to be delivered. According to the bureau, the improved coverage and accuracy resulting from these programs would have been accounted for in the original plan through statistical estimation techniques. Although the programs the bureau added in the amended budget request are intended to improve the accuracy of the 2000 census, it is unclear whether these additional programs will result in a 2000 census that is more accurate than the 1990 census. It is important to note that another key assumption—the average mail response rate for all questionnaire types—remained constant between the original and amended budget requests at 61 percent. Given an estimated 119 million households in the census population, a 1-percent change in the response rate increases or decreases the number of households that must be enumerated by about 1.2 million. The mail response rate has decreased substantially in recent years, dropping from 78 percent in 1970 to 65 percent in 1990. If the response rate is substantially different from the 61 percent that the bureau projects, assuming that all other assumptions prove to be accurate, the bureau’s fiscal year 2000 amended budget request could differ substantially from the bureau’s needs. A significant factor increasing the bureau’s budget request is a 20-percent reduction in the assumed productivity rate for temporary employee enumerators following up on nonresponding housing units. In the original budget request, the bureau used an average productivity rate of about 1.28 households per hour, which was reduced in the amended budget request to about 1.03. This revised productivity rate was applied to all temporary enumerator employees for nonresponse follow-up—both those to be hired to visit the 30 million housing units under the original budget request as well as those for the additional 16 million housing units added after the use of sampling for nonresponse follow-up was prohibited by the Census Act. The bureau provided several explanations for reducing the assumed enumerator productivity rate from 1.28 in the original budget request to 1.03 in the amended budget request. For example, the bureau believes that given the low unemployment rate in the United States, hiring temporary employees to fill hundreds of thousands of new positions is expected to result in the hiring of less productive workers. In addition, the bureau believes enumerators will work slower in order to avoid mistakes knowing that they are being reviewed in a more thorough and formal manner as part of the additional quality control programs. Also, the bureau assumed an increase in rework resulting from added quality control programs. The bureau did not provide any documented internal or external quantitative analysis or other analysis that supported the original or the revised productivity rate. Consequently, the 20-percent reduction in productivity is based on senior management judgments, which the bureau acknowledges are very conservative. Because of the increased workload and reduced productivity, the bureau increased the total number of temporary field positions from the 780,000 estimated in the original budget to 1,350,000.