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United States Government Accountability Office: 

GAO: 

Testimony: 

Before the Subcommittee on Regulatory Affairs, Committee on Government 
Reform, House of Representatives: 

For Release on Delivery: 

2:00 p.m. EDT Tuesday, July 18, 2006: 

Paperwork Reduction Act: 

Increase in Estimated Burden Hours Highlights Need for New Approach: 

Statement of Linda D. Koontz, Director: 

Information Management: 

GAO-06-974T: 

GAO Highlights: 

Highlights of GAO-06-974T, a testimony before the Subcommittee on 
Regulatory Affairs, Committee on Government Reform, House of 
Representatives 

Why GAO Did This Study: 

Americans spend billions of hours each year providing information to 
federal agencies by filling out information collections (forms, 
surveys, or questionnaires). A major aim of the Paperwork Reduction Act 
(PRA) is to minimize the burden that responding to these collections 
imposes on the public, while maximizing their public benefit. Under the 
act, the Office of Management and Budget (OMB) is to approve all such 
collections and to report annually on the agencies’ estimates of the 
associated burden. In addition, agency chief information officers (CIO) 
are to review information collections before submitting them to OMB for 
approval and certify that the collections meet certain standards set 
forth in the act. 

GAO was asked to testify on OMB’s burden report for 2005 and on a 
previous study of PRA implementation (GAO-05-424), which focused on the 
CIO review and certification processes and described alternative 
processes that two agencies have used to minimize paperwork burden. To 
prepare this testimony, GAO reviewed the current burden report and its 
past work in this area. For its 2005 study, GAO reviewed a 
governmentwide sample of collections, reviewed processes and 
collections at four agencies that account for a large proportion of 
burden, and performed case studies of 12 approved collections at the 
four agencies. 

What GAO Found: 

After 2 years of slight declines, OMB reports that paperwork burden 
grew in fiscal year 2005 and is expected to increase further in fiscal 
year 2006. Estimates in OMB’s annual report to Congress show that the 
total paperwork burden imposed by federal information collections 
increased last year to about 8.4 billion hours—an increase of 5.5 
percent from the previous year’s total of about 8.0 billion hours. 
Nearly all this increase resulted from the implementation of new laws 
(for example, about 224 million hours were due to the implementation of 
voluntary prescription drug coverage under Medicare). The rest of the 
increase came mostly from adjustments to the estimates due to such 
factors as changes in estimation methods and in the numbers of 
respondents. Looking ahead to fiscal year 2006, OMB expects an increase 
of about 250 million hours because of a new model for estimating burden 
being implemented by the Internal Revenue Service (IRS). According to 
OMB, this expected rise does not reflect any real change in the burden 
on taxpayers, but only in how IRS estimates it. 

The PRA requires that CIOs review information collections and certify 
that they meet standards to minimize burden and maximize utility; 
however, these reviews were not always rigorous, reducing assurance 
that these standards were met. In 12 case studies at four agencies, GAO 
determined that CIOs certified collections proposed by program offices 
despite missing or inadequate support. Providing support for 
certifications is a CIO responsibility under the PRA, but agency files 
contained little evidence that CIO reviewers had made efforts to 
improve the support offered by program offices. Numerous factors 
contributed to these problems, including a lack of management attention 
and weaknesses in OMB guidance. Based on its review, GAO recommended 
(among other things) that agencies strengthen the support provided for 
certifications and that OMB update its guidance to clarify and 
emphasize this requirement. Since GAO’s study was issued, the four 
agencies have reported taking steps to strengthen their support for CIO 
certifications, such as providing additional resources and guidance for 
the process, and OMB has updated parts of its guidance. 

In contrast to the CIO review process, which did not lead to reduced 
paperwork burden in GAO’s 12 case studies, IRS and the Environmental 
Protection Agency (EPA) have set up alternative processes specifically 
focused on reducing burden. These agencies, whose missions involve 
numerous information collections, have devoted significant resources to 
targeted burden reduction efforts that involve extensive outreach to 
stakeholders. According to the two agencies, these efforts have led to 
significant reductions in paperwork burden on the public. In light of 
these promising results, the weaknesses in the current CIO review 
process, and the persistent increases in burden, a new approach to 
burden reduction appears warranted. GAO suggested that Congress should 
consider mandating pilot projects to target some collections for 
rigorous analysis along the lines of the IRS and EPA approaches. 

[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-06-974T]. 

To view the full product, including the scope and methodology, click on 
the link above. For more information, contact Linda Koontz at (202) 512-
6240 or koontzl@gao.gov. 

[End of Section] 

Madam Chairman and Members of the Subcommittee: 

I am pleased to be here today to discuss the implementation of the 
Paperwork Reduction Act (PRA).[Footnote 1] As you know, one of the 
goals of the PRA is to help ensure that when the government asks the 
public for information, the burden of providing this information is as 
small as possible and the information itself is used effectively. In 
other words, the goal is to minimize the paperwork burden while 
maximizing the public benefit and utility of the information collected. 
To achieve this goal, the PRA includes provisions that establish 
standards and procedures for effective implementation and oversight of 
information collections. Among these provisions is the requirement that 
agencies not establish information collections without having them 
approved by the Office of Management and Budget (OMB), and that before 
submitting them for approval, agencies' Chief Information Officers 
(CIO) certify that the collection meets 10 specified standards-- 
including that they avoid unnecessary duplication and reduce the 
paperwork burden as much as possible. 

As you requested, I will begin by discussing the estimates of 
government paperwork burden provided in the annual PRA report (known as 
the Information Collection Budget) that OMB recently released, which 
presents federal agencies' estimates of federal paperwork burden as of 
the end of fiscal year 2005. I will also discuss results from a May 
2005 report[Footnote 2] that we issued on PRA processes and compliance, 
concentrating on our findings regarding agencies' processes to certify 
that information collections meet PRA standards and on alternative 
processes that two agencies have used to minimize the paperwork burden. 

In preparing this testimony, we reviewed prior work and analyzed OMB 
and other documents. For our discussion of the Information Collection 
Budget, we examined the current OMB report as well as our reviews of 
previous annual PRA reports.[Footnote 3] For our discussion of the 
certification process, we drew on our May 2005 report, for which we 
performed detailed reviews of paperwork clearance processes and 
collections at four agencies: the Departments of Veterans Affairs (VA), 
Housing and Urban Development (HUD), and Labor and the Internal Revenue 
Service (IRS). Together, these four agencies represent a broad range of 
paperwork burden, and in 2004, they accounted for about 82 percent of 
the almost 8 billion hours of estimated paperwork burden for all 
federal agencies. Of this total, IRS alone accounted for about 80 
percent.[Footnote 4] We also selected 12 approved collections as case 
studies (three at each of the four agencies) to determine how effective 
agency processes were. In addition, we analyzed a random sample (343) 
of all OMB-approved collections governmentwide as of May 2004 (8,211 
collections at 68 agencies) to determine compliance with the act's 
requirements regarding agency certification of the 10 standards and 
consultation with the public. We designed the random sample so that we 
could determine compliance levels at the four agencies and 
governmentwide. Finally, although the Environmental Protection Agency 
(EPA) was not one of the agencies whose processes we reviewed, we 
analyzed documents and interviewed officials concerning the agency's 
efforts to reduce the paperwork burden of its information collections. 
Further details on our scope and methodology are provided in the 
report. All work on which this testimony is based was performed in 
accordance with generally accepted government auditing standards. 

Results in Brief: 

After 2 years of slight declines, the total paperwork burden imposed by 
federal information collections increased in fiscal year 2005 and is 
projected to increase again in fiscal year 2006, according to estimates 
provided in OMB's July 2006 annual PRA report to Congress. The 
estimated total burden for fiscal year 2005 was 8.4 billion hours, 
which is an increase of 5.5 percent (441 million burden hours) from the 
previous year's total of 8.0 billion hours. Nearly all this increase is 
the result of the implementation of new statutes. For example, there 
was an increase of about 224 million hours from the implementation of 
voluntary prescription drug coverage under Medicare. In addition, 
adjustments to the estimates (from such factors as changes in 
estimation methods and the population of respondents) accounted for a 
net increase in the burden of about 19 million hours, and agency 
discretionary program changes led to a net increase of 180,000 hours. 
With regard to PRA violations (information collections that did not 
have OMB approval or for which that approval had expired), OMB reports 
that fewer occurred in fiscal year 2005 than previously, for a total of 
97 violations. OMB also stated in this year's report that IRS began 
using a new statistical model in fiscal year 2006 that will improve the 
accuracy and transparency of future taxpayer burden estimates. Using 
this new model is expected to result in an increase of 250 million 
hours in the burden estimate that IRS will report for next year. 
However, according to OMB, this expected rise does not reflect any real 
change in the burden on taxpayers, but only in how IRS estimates the 
paperwork burden. 

The PRA requires that CIOs review information collections and certify 
that they meet standards to minimize burden and maximize utility; 
however, these reviews were not always rigorous. As we reported in 
2005, agency CIOs generally reviewed information collections before 
they were submitted to OMB and certified that the required standards in 
the act were met. However, our review of 12 case studies showed that 
CIOs provided these certifications despite missing or inadequate 
support from the program offices sponsoring the collections. Further, 
although the law requires CIOs to provide support for certifications, 
agency files contained little evidence that CIO reviewers had made 
efforts to improve the support offered by program offices. Numerous 
factors have contributed to these problems, including a lack of 
management support and weaknesses in OMB guidance. Because these 
reviews were not rigorous, OMB, the agency, and the public have reduced 
assurance that the standards in the act--such as avoiding duplication 
and minimizing burden--were consistently met. 

In contrast, our May 2005 report discussed how IRS and EPA have used 
additional evaluative processes that focus specifically on reducing 
burden. These processes are targeted, resource-intensive efforts that 
involve extensive outreach to stakeholders. According to these 
agencies, their processes led to significant reductions in burden on 
the public while maximizing the utility of the information collections. 
For example, in this year's PRA report, OMB cites a decrease of about 
19 million hours from streamlining IRS's Form 1041 to make it easier 
and faster to understand and file. 

In our report, we recommended that OMB and agencies take steps to 
improve review processes and compliance with the act. We also suggested 
that Congress should consider mandating pilot projects to target some 
collections for rigorous analysis along the lines of the approaches 
used by IRS and EPA. OMB and the agencies agreed with most of the 
recommendations. Since our study was issued, the four agencies have 
reported taking steps to strengthen their support for CIO 
certifications, such as providing additional resources and guidance for 
the process, and OMB has updated parts of its guidance to agencies. 
However, the updated guidance is not aimed at all information 
collections, but rather at conducting surveys that are used for general-
purpose statistics or as part of program evaluations or research 
studies.[Footnote 5] In addition, it does not provide clear guidance on 
one of the topics mentioned in our recommendation: determining whether 
small entities are affected by a collection and reducing reporting 
burden on these entities. 

Background: 

Collecting information is one way that federal agencies carry out their 
missions. For example, IRS needs to collect information from taxpayers 
and their employers to know the correct amount of taxes owed. The U.S. 
Census Bureau collects information used to apportion congressional 
representation and for many other purposes. When new circumstances or 
needs arise, agencies may need to collect new information. We 
recognize, therefore, that a large portion of federal paperwork is 
necessary and often serves a useful purpose. 

Nonetheless, besides ensuring that information collections have public 
benefit and utility, federal agencies are required by the PRA to 
minimize the paperwork burden that the collection of information 
imposes. Among the provisions of the act aimed at this purpose are 
requirements for the review of information collections by OMB and by 
agency CIOs. 

Under PRA, federal agencies may not conduct or sponsor the collection 
of information unless approved by OMB; information collections for 
which OMB approval is expired or missing are considered violations of 
the PRA. Before approving collections, OMB is required to determine 
that the agency's collection of information is necessary for the proper 
performance of the functions of the agency, including whether the 
information will have practical utility.[Footnote 6] Consistent with 
the act's requirements, OMB has established a process to review all 
proposals by executive branch agencies (including independent 
regulatory agencies) to collect information from 10 or more persons, 
whether the collections are voluntary or mandatory. 

In addition, the act as amended in 1995 requires every agency to 
establish a process under the official responsible for the act's 
implementation (now the agency's CIO[Footnote 7]) to review program 
offices' proposed collections. This official is to be sufficiently 
independent of program responsibility to evaluate fairly whether 
information collections should be approved. Under the law, the CIO is 
to review each collection of information before submission to OMB, 
including reviewing the program office's evaluation of the need for the 
collection and its plan for the efficient and effective management and 
use of the information to be collected, including necessary 
resources.[Footnote 8] As part of that review, the agency CIO must 
ensure that each information collection instrument (form, survey, or 
questionnaire) complies with the act, certify that the collection meets 
10 standards (see table 1), and provide support for these 
certifications. 

Table 1: Standards for Information Collections Set by the Paperwork 
Reduction Act: 

Standards: The collection is necessary for the proper performance of 
agency functions. 

Standards: The collection avoids unnecessary duplication. 

Standards: The collection reduces burden on the public, including small 
entities, to the extent practicable and appropriate. 

Standards: The collection uses plain, coherent, and unambiguous 
language that is understandable to respondents. 

Standards: The collection will be consistent and compatible with 
respondents' current reporting and recordkeeping practices to the 
maximum extent practicable. 

Standards: The collection indicates the retention period for any 
recordkeeping requirements for respondents. 

Standards: The collection informs respondents of the information they 
need to exercise scrutiny of agency collections information (the 
reasons the information is collected; the way it is used; an estimate 
of the burden; whether responses are voluntary, required to obtain a 
benefit, or mandatory; and a statement that no person is required to 
respond unless a valid OMB control number is displayed). 

Standards: The collection was developed by an office that has planned 
and allocated resources for the efficient and effective management and 
use of the information to be collected. 

Standards: The collection uses effective and efficient statistical 
survey methodology (if applicable). 

Standards: The collection uses information technology to the maximum 
extent practicable to reduce burden and improve data quality, agency 
efficiency, and responsiveness to the public.  

Source: Paperwork Reduction Act, Pub. L. 104-13, 109 Stat. 173-4, sec. 
3506(c)(3). 

[End of table]

In addition, the original PRA of 1980 (section 3514(a)) requires OMB to 
keep Congress "fully and currently informed" of the major activities 
under the act and to submit a report to Congress at least annually on 
those activities. Under the 1995 amendments, this report must include, 
among other things, a list of any increases in burden. To satisfy this 
requirement, OMB prepares the annual PRA report, which reports on 
agency actions during the previous fiscal year, including changes in 
agencies' burden-hour estimates as well as violations of the PRA. 

The 1995 PRA amendments also required OMB to set specific goals for 
reducing burden from the level it had reached in 1995: at least a 10 
percent reduction in the governmentwide burden-hour estimate for each 
of fiscal years 1996 and 1997, a 5 percent governmentwide burden 
reduction goal in each of the next 4 fiscal years, and annual agency 
goals that reduce burden to the "maximum practicable opportunity." At 
the end of fiscal year 1995, federal agencies estimated that their 
information collections imposed about 7 billion burden hours on the 
public. Thus, for these reduction goals to be met, the burden-hour 
estimate would have had to decrease by about 35 percent, to about 4.6 
billion hours, by September 30, 2001. In fact, on that date, the 
federal paperwork estimate had increased by about 9 percent, to 7.6 
billion burden hours. 

Over the years, we have reported on the implementation of PRA many 
times.[Footnote 9] In a succession of reports and testimonies, we noted 
that federal paperwork burden estimates generally continued to 
increase, rather than decrease as envisioned by the burden reduction 
goals in PRA. Further, we reported that some burden reduction claims 
were overstated. For example, although some reported paperwork 
reductions reflected substantive program changes, others were revisions 
to agencies' previous burden estimates and, therefore, would have no 
effect on the paperwork burden felt by the public. In our previous 
work, we also repeatedly pointed out ways that OMB and agencies could 
do more to ensure compliance with PRA. In particular, we have often 
recommended that OMB and agencies take actions to improve the paperwork 
clearance process. 

Estimated Paperwork Burden Increased in 2005: 

After 2 years of slight declines, OMB reports that burden hours 
increased in fiscal year 2005 and are expected to increase again in 
fiscal year 2006. According to OMB's most recent PRA report to 
Congress, the estimated total burden hours imposed by government 
information collections in fiscal year 2005 was 8.4 billion hours; this 
is an increase of 441 million burden hours (5.5 percent) from the 
previous year's total of 8.0 billion hours. It is also almost a billion 
and a half hours larger than it was in 1995 and 3.8 billion larger than 
the PRA target for the end of fiscal year 2001 (4.6 billion burden 
hours). OMB's report also states that burden will increase in fiscal 
year 2006 by an estimated 303 million hours to about 8.7 billion hours; 
however, according to OMB, most of this projected increase (250 million 
hours or 83 percent) is attributable to a new method of estimating 
burden that is being implemented by IRS, rather than to any increase in 
the actual burden. Finally, according to OMB, fewer violations of the 
act were reported than in previous years. 

Changes in Paperwork Burden Estimates Can Be Attributed to Various 
Causes: 

Changes in paperwork burden estimates result from several causes, which 
OMB assigns to two main categories. OMB classifies all changes--either 
increases or decreases--in agencies' burden-hour estimates as either 
program changes or adjustments. 

* Program changes are the result of deliberate federal government 
action (e.g., the addition or deletion of questions on a form); these 
can occur as a result of: 

* new statutes, 

* agency-initiated actions, or: 

* the expiration or reinstatement of OMB-approved collections.[Footnote 
10] 

* Adjustments do not result from federal activities but from external 
factors. For example: 

* an agency may reestimate the burden associated with a collection of 
information, or: 

* the population responding to a requirement may change--such as if the 
economy declines and more people complete applications for food stamps; 
the resulting increase in the Department of Agriculture's paperwork 
estimate is considered an adjustment because it is not the result of 
deliberate federal action. 

As shown above, within the category of program changes, OMB 
distinguishes between changes due to new statutes and changes due to 
agency action, which it also refers to as agency discretionary actions. 
However, this term should not imply that agencies have no discretion in 
how they implement new statutes. A major goal of the PRA is to ensure 
that agencies consider how to make the burden of information 
collections, whether old or newly established, as small as possible. In 
the second part of my statement, I will address one of the ways set 
forth in the PRA to help achieve this goal. 

Table 2 shows the changes in reported burden totals from fiscal year 
2004 to fiscal year 2005. 

Table 2: Changes in Governmentwide Reported Burden Totals by Category: 

In millions: 

Category of change: Baseline: fiscal year 2004 total; 
Change from fiscal year 2004 PRA report: [Empty]; 
Change from fiscal year 2004 PRA report: Hours: 7971.18; 
Change from fiscal year 2004 PRA report: Percent: [Empty]. 

Category of change: Fiscal year 2005 program changes; 
Change from fiscal year 2004 PRA report: [Empty]; 
Change from fiscal year 2004 PRA report: Hours: 0; 
Change from fiscal year 2004 PRA report: Percent: [Empty]. 

Category of change: Fiscal year 2005 program changes: Changes due to 
agency action; 
Change from fiscal year 2004 PRA report: 0.18; 
Change from fiscal year 2004 PRA report: Hours: 0; 
Change from fiscal year 2004 PRA report: Percent: 0.00. 

Category of change: Fiscal year 2005 program changes: Changes due to 
new statutes; 
Change from fiscal year 2004 PRA report: 418.89; 
Change from fiscal year 2004 PRA report: Hours: 0; 
Change from fiscal year 2004 PRA report: Percent: +5.26. 

Category of change: Fiscal year 2005 program changes: Changes due to 
lapses in OMB approval; 
Change from fiscal year 2004 PRA report: 2.80; 
Change from fiscal year 2004 PRA report: Hours: 0; 
Change from fiscal year 2004 PRA report: Percent: +0.04. 

Category of change: Fiscal year 2005 program changes: Total program 
changes; 
Change from fiscal year 2004 PRA report: [Empty]; 
Change from fiscal year 2004 PRA report: Hours: 422.00; 
Change from fiscal year 2004 PRA report: Percent: +5.29. 

Category of change: Fiscal year 2005 adjustments; 
Change from fiscal year 2004 PRA report: [Empty]; 
Change from fiscal year 2004 PRA report: Hours: 19.14; 
Change from fiscal year 2004 PRA report: Percent: +0.24. 

Category of change: Fiscal year 2005 total; 
Change from fiscal year 2004 PRA report: [Empty]; 
Change from fiscal year 2004 PRA report: Hours: 8412.27; 
Change from fiscal year 2004 PRA report: Percent: +5.53. 

Source: OMB annual PRA report. 

Note: Numbers do not add exactly because of rounding. 

[End of table] 

As the table shows, the change due to new statutes was by far the 
largest factor in the increase for fiscal year 2005. OMB reports that 
the statute having the largest impact on burden was the statute 
establishing voluntary prescription drug coverage under 
Medicare;[Footnote 11] implementing the program mandated by this 
statute required the collection of significant amounts of information, 
leading to an increase in burden of 224 million hours.[Footnote 12] An 
additional significant increase--about 116 million hours--resulted from 
the implementation by the Federal Communications Commission (FCC) of 
the CAN-SPAM Act, which requires disclosure of certain information 
contained in unsolicited commercial e-mails. 

In contrast to changes due to new statutes, changes due to agency 
action did not contribute significantly to the overall change in burden 
this year, adding 180,000 hours out of the total rise of 441 million. 
Although the overall result was a slight increase, agencies did take 
many actions that decreased burden; without these actions, the 
governmentwide increase would have been greater. The annual report does 
not list all these actions, but it does highlight actions that led to 
significant paperwork reductions and increases. (These include 
increases and decreases in burden from statutory requirements and 
miscellaneous agency actions, as well as burden reductions from 
changing regulations, cutting redundancy, changing forms, and using 
information technology.) From both an individual agency perspective and 
a governmentwide perspective, the relatively small increase due to 
agency action is the result of large increases and decreases that 
mostly offset each other: 

* From an individual agency perspective, the net change in an agency's 
burden estimate is generally the result of disparate actions, some of 
which reduce burden and some of which increase it. An example is the 
IRS, which as an agency was responsible for a net decrease of about 3 
million hours. Among the burden reductions that the annual report 
highlights are two IRS actions to change forms, both of which reduced 
burden by simplification and streamlining, for a reduction of about 19 
million hours.[Footnote 13] The ICB also reports that in January 2006 
IRS completed an initiative to simplify the process of applying for an 
extension to file an income tax return, which is associated with a 
burden reduction of 8 million hours. Elsewhere, on the other hand, five 
IRS actions are highlighted that together resulted in an increase of 
about 24 million hours.[Footnote 14] Examples of reasons IRS took these 
actions included increasing accuracy and improving the agency's ability 
to monitor compliance with the law. 

* Similarly, from a governmentwide perspective, the overall change is 
the result of some agencies whose actions produced a net decrease and 
others whose produced a net decrease. In fiscal year 2005, agencies 
with net decreases produced a reduction of about 14.02 million hours. 
This reduction was offset, however, by agencies with net increases, 
which totaled about 14.20 million hours. 

Compared to program changes as a whole, adjustments to the estimates 
were a relatively small factor (as table 2 also shows), accounting for 
a net increase in the burden of about 19 million hours. In previous 
years, adjustments have had a much greater impact and have tended to 
decrease overall burden estimates, thus masking the effect of increases 
from program changes. In fiscal years 2003 and 2004, the impact of 
adjustments was large enough to lead to overall burden estimates that 
were lower than for the year before. In fiscal year 2004, OMB reported 
a decrease of about 156 million hours in adjustments versus an increase 
of about 29 million hours in program changes; the result was a lower 
overall burden estimate than for the previous year. Similarly, overall 
burden in fiscal year 2003 was slightly less than in fiscal year 2002, 
also as a result of a decrease in adjustments (about 182 million hours) 
that more than offset an increase in program changes (about 72 million 
hours). 

Besides these large decreases due to adjustments, another reason for 
the slight decrease in total burden in fiscal years 2004 and 2003 was 
that increases due to program changes were relatively small, as shown 
in table 3. This year, both program changes and adjustments went up, so 
adjustments did not have the effect of masking increases in program 
changes. As the table also shows, fiscal year 2005 saw the largest net 
increase from program changes since 1998. 

Table 3: Increases in Burden Hours Due to Program Changes between 
Fiscal Years 1998 and 2005: 

In millions: 

Fiscal year: 2005; 
Total governmentwide burden-hour estimate: 8,412.3; 
Net increase in burden hours due to program changes: 422.0. 

Fiscal year: 2004; 
Total governmentwide burden-hour estimate: 7,971.2; 
Net increase in burden hours due to program changes: 28.5. 

Fiscal year: 2003; 
Total governmentwide burden-hour estimate: 8,105.4; 
Net increase in burden hours due to program changes: 72.1. 

Fiscal year: 2002; 
Total governmentwide burden-hour estimate: 8,223.2;
Net increase in burden hours due to program changes: 294.1. 

Fiscal year: 2001; 
Total governmentwide burden-hour estimate: 7,651.4; 
Net increase in burden hours due to program changes: 158.7. 

Fiscal year: 2000; 
Total governmentwide burden-hour estimate: 7,361.0; 
Net increase in burden hours due to program changes: 188.0. 

Fiscal year: 1999; 
Total governmentwide burden-hour estimate: 7,183.9; 
Net increase in burden hours due to program changes: 189.0. 

Fiscal year: 1998; 
Total governmentwide burden-hour estimate: 6,951.1; 
Net increase in burden hours due to program changes: 41.1. 

Source: OMB. 

[End of table] 

IRS Continues to Account for Largest Portion of Estimated 
Governmentwide Burden: 

In fiscal year 2005, IRS accounted for about 76 percent of the 
governmentwide paperwork burden: about 6.4 billion hours. As shown in 
figure 1, no other agency's estimate approaches this level. Six 
agencies had burden-hour estimates of 100 million hours or more (the 
Departments of Health and Human Services, Labor, and Transportation; 
EPA; FCC; and the Securities and Exchange Commission). Thus, as we have 
previously reported, changes in paperwork burden experienced by the 
federal government have been largely attributable to changes associated 
with IRS.[Footnote 15] 

Figure 1: Distribution of Paperwork Burden among Agencies, Fiscal Year 
2005: 

[See PDF for image] 

Source: Annual PRA report, OMB. 

[End of figure] 

OMB reports that starting in fiscal year 2006, IRS began using a new 
methodology based on a statistical model- the Individual Taxpayer 
Burden Model- estimate the reporting burden imposed on individual 
taxpayers. Among other things, this new model, which was developed to 
improve the accuracy and transparency of taxpayer burden estimates, 
reflects the major changes over the past two decades in the way that 
taxpayers prepare and file their returns, including the use of 
electronic preparation methods. According to OMB, rather than 
estimating burden on a form-by-form basis, the new methodology takes 
into account broader and more comprehensive taxpayer characteristics 
and activities, considering how the taxpayer prepares the return (e.g., 
with or without software or a paid preparer) as well as the taxpayer's 
activities, such as gathering tax materials, completing forms, 
recordkeeping, and tax planning. In contrast, the previous methodology 
primarily focused on the length and complexity of each tax form. OMB 
states that this new model will make it possible to estimate the burden 
implications of new legislative and administrative tax proposals. 

OMB projects that these changes will create a one-time increase of 
about 250 million hours in the estimate of IRS burden levels in fiscal 
year 2006. This increase represents most (83 percent) of the total 
projected governmentwide increase for fiscal year 2006 of 303 million 
hours. However, according to OMB, this increase does not reflect any 
change in the actual burden experienced by taxpayers, but rather a 
change in the way the burden is measured. 

In the past, we reported that IRS's previous estimation model ignored 
important components of burden and had limited capabilities for 
analyzing the determinants of burden.[Footnote 16] The new model is the 
result of work that IRS has performed over the past several years to 
improve its model and address these and other limitations. At this 
time, we have not analyzed IRS's new model to determine the extent to 
which it improves the accuracy of burden estimates, and we have not 
assessed the accuracy of the new model's estimates. However, IRS's 
efforts to increase the accuracy of its model appear to be an important 
step towards addressing the previous model's shortcomings. 

These changes in IRS's estimation methodology highlight the importance, 
when trying to interpret the annual burden estimates, of bearing in 
mind their limitations. For more than 50 years, the "burden hour" has 
been the principal unit of paperwork burden and has been accepted by 
agencies and the public because it is a clear, easy-to-understand 
concept. But as IRS's efforts show, burden-hour estimates are not a 
simple matter. The degree to which agency burden-hour estimates reflect 
real burden is unclear. It is challenging to estimate the amount of 
time it will take for a respondent to collect and provide information 
or to estimate how many individuals an information collection will 
affect.[Footnote 17] In addition, like all estimates, paperwork burden 
estimates are not precise; changes from year to year, particularly 
small ones, may not be meaningful. However, as long as the limitations 
are clearly understood, these estimates can be useful as the best 
indicators of paperwork burden available. 

Fewer Violations Reported in Fiscal Year 2005: 

OMB reports reductions in PRA violations for fiscal year 2005 compared 
to previous years. The PRA prohibits an agency from conducting or 
sponsoring the collection of information unless (1) the agency has 
submitted the proposed collection to OMB, (2) OMB has approved the 
proposed collection, and (3) the agency displays an OMB control number 
on the collection. According to OMB's annual report, agencies have made 
great progress in recent years in reducing the number of violations of 
these conditions and in resolving them more promptly. OMB attributed 
this reduction to several initiatives it had taken, including meeting 
with agency officials to discuss ways to reduce violations and adding 
reporting requirements. 

According to OMB, during fiscal year 2005, agencies reported a total of 
97 violations: 60 information collections that expired during the year, 
and another 37 that had expired before October 1, 2004, and were not 
reinstated until fiscal year 2005. Of the 27 agencies included in the 
annual report, the three agencies with the greatest number of 
violations were the Departments of the Treasury and Homeland Security 
and the Small Business Administration. In addition, OMB reported no 
unresolved violations at the end of fiscal year 2005 and only 6 
violations during the first 8 months of fiscal year 2006. The 97 
violations reported in fiscal year 2005 is much less than the 164 
violations in fiscal year 2004 and the 223 violations in fiscal year 
2003. 

Although the reduction in violations is a positive trend, we should 
note that the violations reported may not be comprehensive; they 
include only those that agencies identified and reported to OMB. As a 
result, the statistics would omit violations of which agencies were 
unaware. In our May 2005 review, we examined forms posted on Web sites 
for four agencies (VA, HUD, Labor, and IRS). We found examples of 
violations among these forms of which the agencies were generally 
unaware.[Footnote 18] Based on our examination, we projected that the 
four agencies overall had an estimated 69 violations: 61 collections in 
use without OMB approval and 8 expired collections. For example, we 
estimated 16 violations at VA; at that time, OMB's report reflected 
VA's belief that it had no violations. Based on these results, we 
recommended that the four agencies periodically review their Web sites 
to ensure that all forms comply with PRA requirements; we also 
recommended that OMB alter its guidance so that all federal agencies 
would be required to periodically review Web sites in this way. Since 
then, VA has reported to us that it removed forms from its Web site 
that were in violation of PRA. However, OMB has not yet issued 
governmentwide guidance directing these types of reviews, so it is 
possible that some PRA violations remain undetected. 

Agency Processes for Reviewing Information Collections Were Not 
Effective: 

Among the PRA provisions intended to help achieve the goals of 
minimizing burden while maximizing utility are the requirements for CIO 
review and certification of information collections. The 1995 
amendments required agencies to establish centralized processes for 
reviewing proposed information collections within the CIO's office. 
Among other things, the CIO's office is to certify, for each 
collection, that the 10 standards in the act have been met, and the CIO 
is to provide a record supporting these certifications. 

The four agencies that we reviewed for our May 2005 report all had 
written directives that implemented the review requirements in the act, 
including the requirement for CIOs to certify that the 10 standards in 
the act were met. However, in the 12 case studies that we reviewed, 
this CIO certification occurred despite a lack of rigorous support that 
all standards were met. Specifically, the support for certification was 
missing or partial on 65 percent (66 of 101) of the 
certifications.[Footnote 19] Table 4 shows the result of our analysis 
of the case studies. 

Table 4: Support Provided by Agencies for Paperwork Reduction Act 
Standards in 12 Case Studies: 

Standards: The collection is necessary for the proper performance of 
agency functions; 
Total[A]: 12;
 Support provided: Yes: 6; 
Support provided: Partial: 6; 
Support provided: No: 0. 

Standards: The collection avoids unnecessary duplication; 
Total[A]: 11; 
Support provided: Yes: 2; 
Support provided: Partial: 2; 
Support provided: No: 7. 

Standards: The collection reduces burden on the public, including small 
entities, to the extent practicable and appropriate; 
Total[A]: 12; 
Support provided: Yes: 5; 
Support provided: Partial: 7; 
Support provided: No: 0. 

Standards: The collection uses plain, coherent, and unambiguous 
language that is understandable to respondents; 
Total[A]: 12; 
Support provided: Yes: 1; 
Support provided: Partial: 0; 
Support provided: No: 11. 

Standards: The collection will be consistent and compatible with 
respondents' current reporting and recordkeeping practices to the 
maximum extent practicable; 
Total[A]: 12; 
Support provided: Yes: 3; 
Support provided: Partial: 0; 
Support provided: No: 9. 

Standards: The collection indicates the retention period for any 
recordkeeping requirements for respondents.[B]; 
Total[A]: 6; 
Support provided: Yes: 3; 
Support provided: Partial: 3; 
Support provided: No: 0. 

Standards: The collection informs respondents of the information they 
need to exercise scrutiny of agency collections (i.e., the reasons the 
information is collected; the way it is used; an estimate of the 
burden; whether responses are voluntary, required to obtain a benefit, 
or mandatory; and a statement that no person is required to respond 
unless a valid OMB control number is displayed).[B]; 
Total[A]: 12; 
Support provided: Yes: 4; 
Support provided: Partial: 8; 
Support provided: No: 0. 

Standards: The collection was developed by an office that has planned 
and allocated resources for the efficient and effective management and 
use of the information to be collected; 
Total[A]: 11; 
Support provided: Yes: 2; 
Support provided: Partial: 0; 
Support provided: No: 9. 

Standards: The collection uses effective and efficient statistical 
survey methodology (if applicable); 
Total[A]: 1; 
Support provided: Yes: 1; 
Support provided: Partial: 0; 
Support provided: No: 0. 

Standards: The collection uses information technology to the maximum 
extent practicable to reduce burden and improve data quality, agency 
efficiency, and responsiveness to the public; 
Total[A]: 12; 
Support provided: Yes: 8; 
Support provided: Partial: 4; 
Support provided: No: 0. 

Standards: Totals; 
Total[A]: 101; 
Support provided: Yes: 35; 
Support provided: Partial: 30; 
Support provided: No: 36. 

Sources: Paperwork Reduction Act. GAO. 

[A] The total number of certifications is not always 12 because not all 
certifications applied to all collections. 

[B] For these two standards, the presence on the forms of the 
information indicated was categorized as support, the absence of some 
elements was categorized as partial support, and the absence of all 
elements was categorized as no support. 

[End of table] 

Under one of the standards mandated by the act, CIOs are required to 
certify that each information collection is not unnecessarily 
duplicative. According to OMB instructions, agencies are to (1) 
describe efforts to identify duplication and (2) show specifically why 
any similar information already available cannot be used or modified 
for the purpose described. In 2 of 11 cases, agencies provided the 
description requested, and in an additional 2 cases, partial support 
was provided.[Footnote 20] In 7 cases, support for these certifications 
was missing. An example of missing support is the following statement, 
used on all three IRS collections: 

We have attempted to eliminate duplication within the agency wherever 
possible. 

This assertion provides no information on what efforts were made to 
identify duplication or perspective on why similar information, if any, 
could not be used. Further, the files contained no evidence that the 
CIO reviewers challenged the adequacy of this support or provided 
support of their own to justify their certification. 

A second standard mandated by the act is that each information 
collection should reduce burden on the public, including small 
entities,[Footnote 21] to the extent practicable and appropriate. OMB 
guidance emphasizes that agencies are to demonstrate that they have 
taken every reasonable step to ensure that a given collection of 
information is the least burdensome necessary for the proper 
performance of agency functions. In addition, OMB instructions and 
guidance direct agencies to provide specific information and 
justifications: (1) estimates of the hour and cost burden of the 
collections and (2) justifications for any collection that requires 
respondents to report more often than quarterly, respond in fewer than 
30 days, or provide more than an original and two copies of 
documentation. 

With regard to small entities, OMB guidance states that the standard 
emphasizes such entities because these often have limited resources to 
comply with information collections.[Footnote 22] The act and OMB 
guidance give various techniques for reducing burden on these small 
entities.[Footnote 23] 

Our review of the case examples found that for the certification on 
reducing burden on the public, the files generally contained the 
specific information and justifications called for in the guidance. 
However, none of the case examples contained support that addressed how 
the agency ensured that the collection was the least burdensome 
necessary. According to agency CIO officials, the primary cause for 
this absence of support is that OMB instructions and guidance do not 
direct agencies to provide this information explicitly as part of the 
approval package. 

In addition, four of our case studies did not provide complete 
information that would support certification that the collection 
specifically addressed reducing burden for small entities.[Footnote 24] 
Specifically, 7 of the 12 case studies involved collections that were 
reported to impact businesses or other for-profit entities, but the 
files for 4 of these 7 did not explain either: 

* why small businesses were not affected, or: 

* even though such businesses were affected, that burden could or could 
not be reduced. 

Instead, the files included statements such as "not applicable," which 
do not inform the reviewer whether or not there was an effort made to 
reduce burden on small entities. When we asked agencies about these 
four cases, they indicated that the collections did, in fact, affect 
small business. 

OMB's instructions to agencies on minimizing burden on small entities 
require agencies to describe any methods used to reduce burden only if 
the collection of information has a "significant economic impact on a 
substantial number of small entities." This does not appropriately 
reflect the act's requirements concerning small business: the act 
requires that the CIO certify that the information collection reduces 
burden on small entities in general, to the extent practical and 
appropriate, and provides no thresholds for the level of economic 
impact or the number of small entities affected. OMB officials 
acknowledged that their instruction is an "artifact" from a previous 
form and more properly focuses on rulemaking rather than on the 
information collection process. 

The lack of support for the 10 certifications required by the act 
appeared to be influenced by a variety of factors. In some cases, as 
described above, OMB guidance and instructions were not comprehensive 
or entirely accurate. In the case of the duplication standard 
specifically, IRS officials said that the agency did not need to 
further justify that its collections are not duplicative because (1) 
tax data are not collected by other agencies, so there is no need for 
the agency to contact them about proposed collections, and (2) IRS has 
an effective internal process for coordinating proposed forms among the 
agency's various organizations that may have similar information. 
Nonetheless, the law and instructions require support for these 
assertions, which was not provided. 

Further, agency reviewers told us that management assigns a relatively 
low priority and few resources to reviewing information collections. 
Further, program offices have little knowledge of and appreciation for 
the requirements of the PRA. As a result of these conditions and a lack 
of detailed program knowledge, reviewers often have insufficient 
leverage with program offices to encourage them to improve their 
justifications. 

When support for the PRA certifications is missing or inadequate, OMB, 
the agency, and the public have reduced assurance that the standards in 
the act, such as those on avoiding duplication and minimizing burden, 
have been consistently met. 

Two Agencies Have Developed Processes to Reduce Burden Associated with 
Information Collections: 

IRS and EPA have supplemented the standard PRA review process with 
additional processes aimed at reducing the burden while maximizing the 
public benefit and utility of the information collected. These 
agencies' missions require them both to deal extensively with 
information collections, and their management has made reduction of 
burden a priority.[Footnote 25] 

In January 2002, the IRS Commissioner established an Office of Taxpayer 
Burden Reduction, which includes both permanently assigned staff and 
staff temporarily detailed from program offices that are responsible 
for particular information collections. This office chooses a few forms 
each year that are judged to have the greatest potential for burden 
reduction (these forms have already been reviewed and approved through 
the CIO process). The office evaluates and prioritizes burden reduction 
initiatives by: 

* determining the number of taxpayers impacted; 

* quantifying the total time and out-of-pocket savings for taxpayers; 

* evaluating any adverse impact on IRS's voluntary compliance efforts; 

* assessing the feasibility of the initiative, given IRS resource 
limitations; and: 

* tying the initiative into IRS objectives. 

Once the forms are chosen, the office performs highly detailed, in- 
depth analyses, including extensive outreach to the public affected, 
users of the information within and outside the agency, and other 
stakeholders. This analysis includes an examination of the need for 
each data element requested. In addition, the office thoroughly reviews 
form design.[Footnote 26] 

The office's director[Footnote 27] heads a Taxpayer Burden Reduction 
Council, which serves as a forum for achieving taxpayer burden 
reduction throughout IRS. IRS reports that as many as 100 staff across 
IRS and other agencies can be involved in burden reduction initiatives, 
including other federal agencies, state agencies, tax practitioner 
groups, taxpayer advocacy panels, and groups representing the small 
business community. 

The council directs its efforts in five major areas: 

* simplifying forms and publications; 

* streamlining internal policies, processes, and procedures; 

* promoting consideration of burden reductions in rulings, regulations, 
and laws; 

* assisting in the development of burden reduction measurement 
methodology; and: 

* partnering with internal and external stakeholders to identify areas 
of potential burden reduction. 

According to IRS, this targeted, resource-intensive process has 
achieved significant reductions in burden. For example, it reported 
that about 95 million hours of taxpayer burden were reduced through 
increases in the income reporting threshold on various IRS 
schedules.[Footnote 28] Another example, mentioned earlier, was given 
in OMB's latest annual PRA report: in January 2006 IRS completed an 
initiative to simplify the process of applying for an extension to file 
an income tax return, which is associated with a burden reduction of 8 
million hours.[Footnote 29] Another example from the annual PRA report 
is a reduction of about 19 million hours from a redesign of IRS form 
1041 to streamline the requirements and make it easier to read and 
file. 

Similarly, EPA officials stated that they have established processes 
for reviewing information collections that supplement the standard PRA 
review process. These processes are highly detailed and evaluative, 
with a focus on burden reduction, avoiding duplication, and ensuring 
compliance with PRA. According to EPA officials, the impetus for 
establishing these processes was the high visibility of the agency's 
information collections and the recognition, among other things, that 
the success of EPA's enforcement mission depended on information 
collections being properly justified and approved: in the words of one 
official, information collections are the "life blood" of the agency. 

According to these officials, the CIO staff are not generally closely 
involved in burden reduction initiatives, because they do not have 
sufficient technical program expertise and cannot devote the extensive 
time required.[Footnote 30] Instead, these officials said that the CIO 
staff's focus is on fostering high awareness within the agency of the 
requirements associated with information collections, educating and 
training the program office staff on the need to minimize burden and 
the impact on respondents, providing an agencywide perspective on 
information collections to help avoid duplication, managing the 
clearance process for agency information collections, and acting as 
liaison between program offices and OMB during the clearance process. 
To help program offices consider PRA requirements such as burden 
reduction and avoiding duplication as they are developing new 
information collections or working on reauthorizing existing 
collections, the CIO staff also developed a handbook[Footnote 31] to 
help program staff understand what they need to do to comply with PRA 
and gain OMB approval. 

In addition, program offices at EPA have taken on burden reduction 
initiatives that are highly detailed and lengthy (sometimes lasting 
years) and that involve extensive consultation with stakeholders 
(including entities that supply the information, citizens groups, 
information users and technical experts in the agency and elsewhere, 
and state and local governments). For example, EPA reported that it 
amended its regulations to reduce the paperwork burden imposed under 
the Resource Conservation and Recovery Act. One burden reduction method 
EPA used was to establish higher thresholds for small businesses to 
report information required under the act. EPA estimated that the 
initiative will reduce burden by 350,000 hours and save $22 million 
annually. Another example is an ongoing EPA initiative reported in this 
year's PRA report, the Central Data Exchange; this is an e-government 
initiative that is designed to enable fast, efficient, and more 
accurate environmental data submissions and exchange from state and 
local governments, industry, and tribes through the use of electronic 
reporting procedures. The estimated reduction for this initiative, 
which is expected to be complete in 2008, is 166,000 hours. 

Overall, EPA and IRS reported that they have produced significant 
reductions in paperwork burden by making a commitment to this goal and 
dedicating resources to it. In contrast, for the 12 information 
collections we examined, the CIO review process resulted in no 
reduction in burden. Further, the Department of Labor reported that its 
PRA reviews of 175 proposed collections over nearly 2 years did not 
reduce burden.[Footnote 32] Similarly, both IRS and EPA addressed 
information collections that had undergone CIO review and received OMB 
approval and nonetheless found significant opportunities to reduce the 
paperwork burden. 

Agencies Could Strengthen PRA Review and Try Alternative Approaches to 
Reducing Burden: 

In our 2005 report, we concluded that the CIO review process was not 
working as Congress intended: It did not result in a rigorous 
examination of the burden imposed by information collections, and it 
did not lead to reductions in burden. In light of these findings, we 
suggested options that Congress might want to consider when it next 
reauthorizes the act, including mandating pilot projects to test and 
review alternative approaches to achieving PRA goals. Such pilot 
projects could build on the lessons learned at IRS and EPA, which have 
used a variety of approaches to reducing burden, sharing information 
(for example, by facilitating cross-agency information exchanges), 
standardizing data for multiple uses, and integrating data to avoid 
duplication; and re-engineering work flows. Pilot projects would be 
most appropriate for agencies for which information collections are a 
significant aspect of the mission. 

In addition, we recommended (among other things) that agencies 
strengthen the support provided for CIO certifications and that OMB 
update its guidance to clarify and emphasize this requirement 
(including that agencies provide support showing that they have taken 
steps to reduce burden, determined whether small entities are affected 
and reduced reporting burden on them, and established a plan to manage 
and use the information to be collected, including the identification 
of necessary resources). OMB and the agencies agreed with most of the 
recommendations, although they disagreed with aspects of GAO's 
characterization of agencies' compliance with the act's 
requirements.[Footnote 33] 

Since our report was issued, the four agencies have reported taking 
steps to strengthen their support for CIO certifications: 

* According to the HUD CIO, the department established a senior-level 
PRA compliance officer in each major program office, and it revised its 
certification process to require that before collections are submitted 
for review, they be approved at a higher management level within 
program offices. 

* The Treasury CIO established an Information Management Sub-Council 
under the Treasury CIO Council and added resources to the review 
process. 

* According to the VA's 2007 budget submission, the department obtained 
additional resources to help review and analyze its information 
collection requests. 

* According to the Office of the CIO at the Department of Labor, the 
department intends to provide guidance to components regarding the need 
to provide strong support for clearance requests and has met with 
component staff to discuss these issues. 

OMB has updated parts of its guidance and plans to incorporate other 
guidance into an automated system to be used by agencies submitting 
information collections for clearance. In January 2006, OMB revised its 
guidance to agencies on surveys and statistical information 
collections.[Footnote 34] This guidance, among other things, is aimed 
at strengthening the support that agencies must provide for certifying 
collections, as we recommended. For example, the guidance requires 
agencies submitting requests for approval to include context and detail 
that will allow OMB to evaluate the practical utility of the 
information to be collected. However, this guidance does not apply to 
all information collections. Rather, it applies only to surveys that 
are used for general-purpose statistics or as part of program 
evaluations or research studies. In addition, it does not provide clear 
guidance on one of the topics mentioned in our recommendation: 
determining whether small entities are affected by the collection and 
reducing reporting burden on these entities. 

OMB also reported that its guidance to agencies will be updated through 
a planned automated system that is to begin operating this 
month.[Footnote 35] According to the former acting head of OMB's Office 
of Information and Regulatory Affairs, the new system will permit 
agencies to submit clearance requests electronically, and the 
instructions will provide clear guidance on the requirements for these 
submissions, including the support required. This official stated that 
OMB has worked with agency representatives with direct knowledge of the 
PRA clearance process in order to ensure that the system and its 
instructions clearly reflect the requirements of the process. If this 
system is implemented as described and OMB withholds clearance from 
submissions that lack adequate support, it could lead agencies to 
strengthen the support provided for their certifications. 

In conclusion, Madam Chairman, the PRA puts in place mechanisms to 
focus agency attention on the need to minimize the burden that 
information collections impose--while maximizing the public benefit and 
utility of government information collections--but these mechanisms 
have not succeeded in achieving the ambitious reduction goals set forth 
in the 1995 amendments. Achieving real reductions in the paperwork 
burden is an elusive goal, as attested by years of OMB's annual PRA 
reports, including the latest. That report shows the largest rise in 
estimated burden for the last several years, mostly due to new 
statutory requirements and how they have been implemented. As we have 
seen, the tendency is for burden to rise unless agencies take active 
steps to reduce it. Agencies have taken such actions--by cutting 
redundancy, changing forms, and using information technology, among 
other things--but these have not been enough to make up for the 
increases. 

Besides demonstrating once again how challenging it is for the 
government to achieve true burden reduction, this year's results 
highlight the need to look for new ways to achieve this and the other 
goals of the PRA. Among the mechanisms already in place is the CIO 
review and certification process. However, as it was implemented at the 
time of our review, this process had limited effect on the quality of 
support provided for information collections, and it appeared to have 
no appreciable impact on burden. 

The targeted approaches to burden reduction used by IRS and EPA appear 
promising, but the experience of these agencies suggests that success 
requires top-level executive commitment, extensive involvement of 
program office staff with appropriate expertise, and aggressive 
outreach to stakeholders. However, such an approach would probably also 
be more resource-intensive than the CIO certification process, and thus 
it may not be warranted at agencies where paperwork issues do not rise 
to the level of those at IRS and similar agencies. Consequently, it is 
critical that efforts to expand the use of the IRS and EPA models take 
these factors into consideration. 

Madam Chairman, this completes my prepared statement. I would be 
pleased to answer any questions. 

Contacts and Acknowledgments: 

For future information regarding this testimony, please contact Linda 
Koontz, Director, Information Management, at (202) 512-6420, or 
koontzl@gao.gov. Other individuals who made key contributions to this 
testimony were Barbara Collier, Nancy Glover, and Alan Stapleton. 

Attachment 1. Related GAO Products: 

Paperwork Reduction Act: New Approaches Can Strengthen Information 
Collection and Reduce Burden. GAO-06-477T. Washington, D.C.: March 8, 
2006. 

Paperwork Reduction Act: Subcommittee Questions Concerning the Act's 
Information Collection Provisions. GAO-05-909R. Washington, D.C.: July 
19, 2005. 

Paperwork Reduction Act: Burden Reduction May Require a New Approach. 
GAO-05-778T. Washington, D.C.: June 14, 2005. 

Paperwork Reduction Act: New Approach May Be Needed to Reduce 
Government Burden on Public. GAO-05-424. Washington, D.C.: May 20, 
2005. 

Paperwork Reduction Act: Agencies' Paperwork Burden Estimates Due to 
Federal Actions Continue to Increase. GAO-04-676T. Washington, D.C.: 
April 20, 2004. 

Paperwork Reduction Act: Record Increase in Agencies' Burden Estimates. 
GAO-03-619T. Washington, D.C.: April 11, 2003. 

Paperwork Reduction Act: Changes Needed to Annual Report. GAO-02-651R. 
Washington, D.C.: April 29, 2002. 

Paperwork Reduction Act: Burden Increases and Violations Persist. GAO- 
02-598T. Washington, D.C.: April 11, 2002. 

Information Resources Management: Comprehensive Strategic Plan Needed 
to Address Mounting Challenges. GAO-02-292. Washington, D.C.: February 
22, 2002. 

Paperwork Reduction Act: Burden Estimates Continue to Increase. GAO-01- 
648T. Washington, D.C.: April 24, 2001. 

Electronic Government: Government Paperwork Elimination Act Presents 
Challenges for Agencies. GAO/AIMD-00-282. Washington, D.C.: September 
15, 2000. 

Tax Administration: IRS Is Working to Improve Its Estimates of 
Compliance Burden. GAO/GGD-00-11. Washington, D.C.: May 22, 2000. 

Paperwork Reduction Act: Burden Increases at IRS and Other Agencies. 
GAO/T-GGD-00-114. Washington, D.C.: April 12, 2000. 

EPA Paperwork: Burden Estimate Increasing Despite Reduction Claims. 
GAO/GGD-00-59. Washington, D.C.: March 16, 2000. 

Federal Paperwork: General Purpose Statistics and Research Surveys of 
Businesses. GAO/GGD-99-169. Washington, D.C.: September 20, 1999. 

Paperwork Reduction Act: Burden Increases and Unauthorized Information 
Collections. GAO/T-GGD-99-78. Washington, D.C.: April 15, 1999. 

Paperwork Reduction Act: Implementation at IRS. GAO/GGD-99-4. 
Washington, D.C.: November 16, 1998. 

Regulatory Management: Implementation of Selected OMB Responsibilities 
Under the Paperwork Reduction Act. GAO/GGD-98-120. Washington, D.C.: 
July 9, 1998. 

Paperwork Reduction: Information on OMB's and Agencies' Actions. GAO/ 
GGD-97-143R. Washington, D.C.: June 25, 1997. 

Paperwork Reduction: Governmentwide Goals Unlikely to Be Met. GAO/T- 
GGD-97-114. Washington, D.C.: June 4, 1997. 

Paperwork Reduction: Burden Reduction Goal Unlikely to Be Met. GAO/T- 
GGD/RCED-96-186. Washington, D.C.: June 5, 1996. 

Environmental Protection: Assessing EPA's Progress in Paperwork 
Reduction. GAO/T-RCED-96-107. Washington, D.C.: March 21, 1996. 

Paperwork Reduction: Burden Hour Increases Reflect New Estimates, Not 
Actual Changes. GAO/PEMD-94-3. Washington, D.C.: December 6, 1993. 

FOOTNOTES 

[1] The Paperwork Reduction Act was originally enacted into law in 1980 
(Pub. L. 96-511, Dec. 11, 1980). It was reauthorized with minor 
amendments in 1986 (Pub. L. 99-591, Oct. 30, 1986) and was reauthorized 
a second time with more significant amendments in 1995 (Pub. L. 104-13, 
May 22, 1995). 

[2] GAO, Paperwork Reduction Act: New Approach May Be Needed to Reduce 
Government Burden on Public, GAO-05-424 (Washington, D.C.: May 20, 
2005). 

[3] For our most recent testimony on this subject, see GAO, Paperwork 
Reduction Act: New Approaches Can Strengthen Information Collection and 
Reduce Burden, GAO-06-477T (Washington, D.C.: Mar. 8, 2006). 

[4] Although IRS accounted for about 80 percent of the burden, it did 
not account for 80 percent of collections: it accounted for 808 out of 
the total 8,211 collections governmentwide as of May 2004. 

[5] The updated guidance is focused on surveys and statistical 
information collections, but it includes some general PRA requirements 
applicable to any information collection, namely, general information 
on submissions to OMB and the scope of the definition of information 
collection (explaining, for example, that focus groups are included). 

[6] 44 U.S.C. 3508. 

[7] The 1995 amendments used the 1980 act's reference to the agency 
"senior official" responsible for implementation of the act. A year 
later, Congress gave that official the title of agency Chief 
Information Officer (the Information Technology Management Reform Act, 
Pub. L. 104-106, Feb. 10, 1996, which was subsequently renamed the 
Clinger-Cohen Act, Pub. L. 104-208, Sept. 30, 1996). 

[8] 44 U.S.C. 3506(c)(1)(A). 

[9] We have included a list of related GAO products at the end of this 
statement. 

[10] When an agency allows OMB approval of a collection to lapse but 
continues to collect the information, this is a violation of the PRA. 
However, the expired collection is accounted for as a decrease in 
burden. When the approval is reinstated, the reinstatement is accounted 
for as an increase in burden in OMB's accounting system. The lapse and 
reinstatement thus generally cancel each other out, unless the 
reinstatement involves changed burden estimates based on new analysis. 

[11] The Medicare Prescription Drug, Improvement, and Modernization Act 
of 2003 (Pub. L. 108-173). 

[12] The prescription drug program, which began on January 1, 2006, is 
also projected to result in an increase of about 5 million hours in 
fiscal year 2006. 

[13] The two forms are Form 1041, U.S. Income Tax Return for Estates 
and Trusts and Form 8879, IRS e-file Signature Authorization. 

[14] These actions were associated with Form 1120, U.S. Corporation 
Income Tax Return; Form 1023, Application for Recognition of Exemption; 
Form 4070, Employee's Report of Tips to Employer; Form 941, Employer's 
Quarterly Federal Tax Return; and Form 8858, Information Return of U.S. 
Persons With Respect to Foreign Disregarded Entities. 

[15] GAO, Paperwork Reduction Act: Agencies' Paperwork Burden Estimates 
Due to Federal Actions Continue to Increase, GAO-04-76T (Washington, 
D.C.: Apr. 20, 2004). 

[16] GAO, Tax Administration: IRS Is Working to Improve Its Estimates 
of Compliance Burden, GAO/GGD-00-11 (Washington, D.C.: May 22, 2000). 

[17] [1] See GAO, EPA Paperwork: Burden Estimate Increasing Despite 
Reduction Claims, GAO/GGD-00-59 (Washington, D.C.: Mar. 16, 2000), for 
how one agency estimates paperwork burden. 

[18] We examined all the forms that we could locate on the VA and Labor 
Web sites and examined a stratified random probability sample of forms 
on the IRS and HUD Web sites. We randomly selected 119 forms from the 
492 on the IRS Web site and selected a stratified random sample of 253 
forms from the 423 on the HUD Web site. With these probability samples, 
each form in the population had a known and nonzero probability of 
being selected. Each sampled form was subsequently weighted in the 
analysis to account statistically for all the members of the 
population, including those that were not selected. 

[19] The total number of certifications does not total 120 (12 cases 
times 10 standards) because some standards did not apply to some cases. 

[20] The following is an example of support that we judged to be 
partial: for one collection, the agency described how it attempted to 
identify duplicative sources, but it did not discuss why information 
from other sources could not be used, at least in part, to satisfy the 
needs of the collection. 

[21] OMB's instructions to agencies state that a small entity may be 
(1) a small business, which is deemed to be one that is independently 
owned and operated and that is not dominant in its field of operation; 
(2) a small organization, which is any not-for-profit enterprise that 
is independently owned and operated and is not dominant in its field; 
or (3) a small government jurisdiction, which is a government of a 
city, county, town, township, school district, or special district with 
a population of less than 50,000. 

[22] "Particularly for small businesses, paperwork burdens can force 
the redirection of resources away from business activities that might 
otherwise lead to new and better products and services, and to more and 
better jobs. Accordingly, the Federal Government owes the public an 
ongoing commitment to scrutinize its information requirements to ensure 
the imposition of only those necessary for the proper performance of an 
agency's functions." H. Report 104-37 (Feb. 15, 1995) p. 23. 

[23] Techniques give in the act include (a) establishing different 
compliance or reporting requirements or timetables for respondents with 
fewer available resources; (b) clarifying, consolidating, or 
simplifying compliance and reporting requirements; and (c) exempting 
certain respondents from coverage of all or part of the collection. OMB 
guidance gives techniques that might be used to simplify requirements 
for small entities, such as asking fewer questions, taking smaller 
samples than for larger entities, and requiring small entities to 
provide information less frequently. 

[24] In our governmentwide sample, some agencies did cite activities 
that are consistent with this standard, such as exempting certain small 
businesses and providing assistance to small businesses and other small 
entities. 

[25] "IRS is committed to reducing taxpayer burden and established the 
Office of Taxpayer Burden Reduction in January 2002 to lead its 
efforts." Congressional testimony by the IRS Commissioner, April 20, 
2004, before the Subcommittee on Energy Policy, Natural Resources, and 
Regulatory Affairs, House Committee on Government Reform. 

[26] In congressional testimony, the IRS Commissioner stated that OMB 
had referred another agency to IRS's Office of Taxpayer Burden 
Reduction as an example of a "best practice" in burden reduction in 
government. 

[27] The director reports to the IRS Commissioner for the Small 
Business and Self-Employed Division. 

[28] In addition, the office reports that IRS staff positions could be 
freed up through its efforts to raise the reporting threshold on 
various tax forms and schedules. Fewer IRS positions are needed when 
there are fewer tax forms and schedules to be reviewed. 

[29] We did not verify the accuracy of IRS's reported burden-hour 
savings. As discussed earlier, IRS's revision to the methodology that 
it uses to compute burden is expected to result in different estimates 
of burden hours and burden-hour savings. 

[30] These officials added that in exceptional circumstances the CIO 
office has had staff available to perform such projects, but generally 
in collaboration with program offices. 

[31] EPA Office of Environmental Information, Collection Strategies 
Division, ICR Handbook: EPA's Guide to Writing Information Collection 
Requests Under the Paperwork Reduction Act of 1995, draft (revised 
March 2005). 

[32] These reviews did result in a 1.3 percent reduction in calculated 
burden by correcting mathematical errors in program offices' 
submissions. 

[33] For example, OMB, the Treasury, and HUD disagreed with our finding 
that certain forms have been improperly treated as certifications and 
elections that are not subject to the PRA. Our view was and is that the 
forms in question did not properly fall into this category, because 
they entailed significant burden. 

[34] OMB, Guidance to Agencies on Surveys and Statistical Information 
Collections, (Washington, D.C.: Jan. 20, 2006). 

[35] The new system, ROCIS (the RISC/OIRA Consolidated Information 
System), is operated for OMB's Office of Information and Regulatory 
Affairs by the Regulatory Information Service Center of the General 
Services Administration. 

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