Agencies implement specific elements of laws through regulations. One of the main purposes of guidance is to explain and help regulated parties comply with agency regulations. As shown in figure 1, agencies use guidance documents to explain how they plan to interpret regulations. Agencies also use guidance for circumstances they could not have anticipated when issuing a regulation and when additional clarifications are needed. Similarly, our past work has recommended that agencies issue guidance to clarify policies when we found confusion among grantees or others about a component’s policy or practices. How Does OMB Define Guidance? OMB defines the term “guidance document” as an agency statement of general applicability and future effect, other than a regulatory action, that sets forth a policy on a statutory, regulatory, or technical issue or an interpretation of a statutory or regulatory issue. Guidance documents often come in a variety of formats and names, including interpretive memoranda, policy statements, guidances, manuals, circulars, memoranda, bulletins, advisories, and the like. Guidance documents include, but are not limited to, agency interpretations or policies that relate to: the design, production, manufacturing, control, remediation, testing, analysis or assessment of products and substances, and the processing, content, and evaluation/approval of submissions or applications, as well as compliance guides. Guidance documents do not include solely scientific research. publish the final regulation.creating binding legal obligations. Regulations are generally subject to judicial review by the courts if, for example, a party believes that an agency did not follow required rulemaking procedures or went beyond its statutory authority. Regulations affect regulated entities by To balance the need for public input with competing societal interests favoring the efficient and expeditious conduct of certain government affairs, the APA exempts certain types of rules from the notice and comment process. These include “interpretative rules” and “general statements of policy” that can be made effective immediately upon publication in the Federal Register. and general statements of policy, agencies use guidance documents that may not be published in the Federal Register. In addition, agencies may use the preambles of their regulations to further interpret the regulations. An agency may use any of these documents to provide more explanation on how the agency plans to interpret a regulation. Defining guidance can also be difficult. To illustrate that difficulty, several of the components in our scope told us that they do not consider many of the communication documents they issue to the public to be guidance. 5 U.S.C. §§ 552(a), 553(b), 553(d). There is general agreement that the public interest is served by prompt dissemination of the guidance contained in agency interpretations and policy statements. Jeffrey S. Lubbers, A Guide to Federal Agency Rulemaking, 5th Edition (Chicago, Illinois; American Bar Association, 2012) p. 64. Agency guidance documents are not legally binding. Agencies sometimes include disclaimers in their guidance to note that the documents have no legally binding effect on regulated parties or the agencies. Even though not legally binding, guidance documents can have a significant effect on regulated entities and the public, both because of agencies’ reliance on large volumes of guidance documents and the fact that the guidance can prompt changes in the behavior of regulated parties and the general public. Due to the potential for these effects, agencies’ use of guidance has been the subject of scrutiny from policymakers and the public. Despite the general distinctions between regulations and guidance documents, legal scholars and federal courts have at times noted that it is not always easy to determine whether an agency action should be issued as a regulation subject to the APA’s notice and comment requirements or is guidance or a policy statement, and therefore exempt from these requirements. Among the reasons agency guidance may be legally challenged are procedural concerns that the agency inappropriately used guidance rather than the rulemaking process or concerns that the agency has issued guidance that goes beyond its authority. Other concerns raised about agency use of guidance include consistency of the information being provided, currency of guidance, and whether the documents are effectively communicated to those affected. Although the APA does not generally prescribe processes for review of agency guidance, the OMB Bulletin establishes policies and procedures for the development, issuance, and use of “significant” guidance documents. The Bulletin defines “significant guidance document” as a guidance document disseminated to regulated entities or the general public that may reasonably be anticipated to (1) lead to an annual effect on the economy of $100 million or more or adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or state, local, or tribal governments or communities; (2) create a serious inconsistency or otherwise interfere with an action taken or planned by another agency; (3) materially alter the budgetary impact of entitlements, grants, user fees, or loan programs or the rights and obligations of recipients thereof; or (4) raise novel legal or policy issues arising out of legal mandates, the President’s priorities, or the principles set forth in Executive Order 12866, as further amended. Pursuant to a memo issued by the Director of OMB in March 2009, OMB’s Office of Information and Regulatory Affairs (OIRA) reviews some significant guidance documents prior to issuance. All significant guidance documents, whether reviewed by OIRA or not, are subject to the OMB Bulletin. “Economically significant guidance documents” (those guidance documents under the first item in the definition above) are also published in the Federal Register to invite public comment. The OMB Bulletin directs each agency to develop written procedures for the approval of significant guidance, establishes standard elements that must be included in significant guidance documents, and requires agencies to maintain a website to assist the public in locating significant guidance documents. Non-significant guidance is not subject to the OMB Bulletin, and guidance procedures are left to agency discretion. How can guidance be significant? Guidance documents are considered “significant” when they have a broad and substantial impact on regulated entities, on the public or on other federal agencies. Guidance can have coercive effects or can lead parties to alter their conduct. For example, under a statute or regulation that would allow a range of actions to be eligible for a permit or other desired agency action, a guidance document might specify fast track treatment for a particular narrow form of behavior, but subject other behavior to a burdensome application process with an uncertain likelihood of success. Even if not legally binding, such guidance could affect behavior in a way that might lead to an economically significant impact. Similarly, an agency might make a pronouncement about the conditions under which it believes a particular substance or product is unsafe. While not legally binding, such a statement could reasonably be anticipated to lead to changes in behavior by the private sector or governmental authorities such that it would lead to a significant economic effect. For example, the following guidance documents issued by our audited agencies were considered significant: In response to questions from state officials, DOL’s Employment and Training Administration issued guidance in 2005 clarifying that distance learning can be considered approvable classroom training under the Trade Adjustment Assistance program. In response to requests for technical assistance, Education’s Office for Civil Rights determined that elementary and secondary schools and postsecondary institutions could benefit from additional guidance concerning Title IX obligations to address sexual violence. In 2014, the office issued guidance that included questions and answers to further clarify legal requirements, and discussed the interplay between applicable laws and proactive efforts schools can take to prevent sexual violence. Certain provisions of the OMB Bulletin were informed by written agency practices established by the Food and Drug Administration (FDA) for the initiation, development, issuance, and use of its guidance documents. In 1997, Congress established certain aspects of FDA’s guidance processes as law and directed the agency to evaluate the effectiveness of its practices and develop and issue regulations specifying its procedures.FDA’s Good Guidance regulations define the subset of guidance that must be published in the Federal Register.internal policies and practices to ensure appropriate adherence to their good guidance practices, including a written process to document decisions about the appropriate level of review for each guidance document. FDA officials told us that by default, guidance will receive a higher level of review unless a justification is presented to warrant lesser review. FDA officials told us that they use tools, such as “guidance initiation forms” or “concept papers” to, among other things, ensure they avoid duplicative or overlapping guidance and to prioritize proposed guidance. Component officials used guidance for multiple purposes, including interpreting regulations, disseminating suggested practices, and providing grant administration information. Interpret new regulations. Component officials told us they used guidance to summarize regulations or explain ways to meet regulatory requirements. For example, Education officials told us that they often follow their regulations with guidance issued to restate the regulation in plainer language, to summarize requirements, to suggest ways to comply with the new regulation, or to offer best practices. Occupational Safety and Health Administration (OSHA) officials told us that they issue guidance to help employers and workers understand their legal rights and responsibilities. Distribute information on suggested practices. Officials told us that they used guidance to distribute information on program suggestions sometimes called best practices. In particular, component officials who administered formula grants in which wide discretion is given to grantees, such as states, told us that they often used guidance to encourage certain leading practices. For example, the Administration for Children and Families (ACF) Office of Child Care issued Information Memorandums encouraging partnerships between state child care and child welfare agencies. Provide guidance on grant administration. Components that administered grants also issued procedural guidance related to grant administration. For example, the Bureau of Labor Statistics (BLS) issued routine administrative memoranda to remind state partners of federal grant reporting requirements.