Paperwork Reduction Act:

Agencies Could Better Leverage Review Processes and Public Outreach to Improve Burden Estimates

GAO-18-381: Published: Jul 11, 2018. Publicly Released: Aug 10, 2018.

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Kris Nguyen
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NguyenTT@gao.gov

 

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Each year, nearly every adult and business provides some form of information to a federal agency, whether via tax forms or benefits applications. Agencies estimate the time and resources it takes to provide this information to help manage the paperwork burden placed on the public. How do they ensure their estimates are accurate?

The law requires agencies to solicit public input on information collections to validate their estimates. While agencies often consulted the public via stakeholder and board meetings, they often did not explicitly ask for input on estimates. We recommended that they better leverage public outreach to improve estimates.

(This figure was updated to include a source line.)

This is a photo of IRS tax forms.

This is a photo of IRS tax forms.

Additional Materials:

Contact:

Kris Nguyen
(202) 512-2660
NguyenTT@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

What GAO Found

Agencies GAO reviewed—the Departments of Agriculture (USDA), Health and Human Services (HHS), and Transportation (DOT), and the Internal Revenue Service (IRS)—generally used existing data, such as historical data, to estimate the time, or “burden hours,” it takes for the public to complete an information collection request (ICR). IRS reported gathering original data on public burden through surveys of taxpayers to help estimate the burden for its two largest ICRs. When data were unavailable for one or more elements of the burden calculation (e.g., average time per response), agencies relied on professional judgment, informed in some instances by internal consultation with issue area experts.

GAO found two limitations with the agencies' current approaches for estimating burden. First, 76 of 200 ICRs that GAO reviewed, including the 2 largest ICRs at IRS and DOT, did not translate burden hours into dollars, or estimated “respondent time costs.” Although the Office of Management and Budget (OMB) requires agencies to include these costs, it reviewed and approved all 76 ICRs. ICRs that included respondent time costs did not consistently include fringe benefits, such as insurance contributions, in part because of a lack of clear guidance from OMB. Inconsistencies in estimating respondent time costs could lead to inconsistent implementation of new requirements under Executive Order 13771 that agencies offset the incremental costs of new regulations with reductions in regulatory burden, including paperwork burden, elsewhere.

Second, while all agencies and OMB reported having independent review processes in place, as required by the Paperwork Reduction Act (PRA), GAO found instances where 3 of the 4 selected agencies—USDA, HHS, and DOT—did not detect math errors through these review processes or inconsistencies among estimates provided on Reginfo.gov, and in the more detailed ICR supporting statements. For example, GAO found that one ICR underestimated burden by as much as $270 million, and another overestimated burden time by more than 12 million hours. Agencies acknowledged they followed their review processes but not detect the errors and inconsistencies. OMB also did not detect the errors and inconsistencies in its review of the ICRs. Until agencies ensure that their review processes detect errors or inconsistencies, the public may have less confidence in agencies' ability to effectively manage and minimize burden.

While the agencies solicited public comments through the Federal Register , as required by the PRA, IRS and DOT did not always provide the level of information in the notices (e.g., the frequency of the collection) needed to allow the public to evaluate the burden estimates. Also, agencies did not always consult with the public beyond these notices, as required under the PRA. Of the 200 ICRs GAO reviewed, 113 contained information in their supporting statements indicating public consultation beyond the Federal Register notices. Only 6 of these 113 indicated that public outreach was related to the burden hour estimates. OMB could help ensure that agencies consistently obtain public input by directing agencies to consult with the public beyond the Federal Register notices on each ICR, as required in the PRA. However, OMB continues to believe that additional consulting should occur only for ICRs where important information may be missed by the public notice and comment period. Congressional action to clarify the PRA requirement may be needed.

Why GAO Did This Study

Federal agencies collect a wide variety of information to ensure the public is kept safe from harm, receives benefits to which they are entitled, and fulfill their missions. Such collections can also impose significant burdens on the public. The goal of the PRA is to minimize the burden of these collections and maximize their utility. To help accomplish this, the PRA requires agencies to estimate the burden, and consult with the public on these estimates.

This report examines (1) how agencies estimate burden hours and costs of their collections, and any limitations of agencies' approaches; and (2) the extent to which agencies consult with the public on estimated burden. To address these objectives, GAO selected four agencies with the largest burden hour estimates, reviewed the 50 ICRs with the largest burden hour estimates at each agency, with a focus on the 2 largest ICRs at each as case studies, and interviewed agency officials and OMB staff.

What GAO Recommends

Congress should consider more explicitly requiring agencies to consult with the public beyond the Federal Register notices. GAO is also making 11 recommendations: 1 to OMB on ensuring consistent application of the requirement for estimating respondent time costs; 4 on reexamining processes for reviewing ICRs to OMB, USDA, HHS, and DOT; 2 on improving public notices to IRS and DOT; and 4 on better leveraging existing public consultation to USDA, HHS, DOT, and IRS. USDA, HHS, DOT, and IRS agreed with the recommendations. OMB staff did not agree or disagree.

For more information, contact Kris Nguyen, (202) 512-2660 or NguyenTT@gao.gov.

Matter for Congressional Consideration

  1. Status: Open

    Comments: As of July 2019, no relevant legislation has been enacted. We will continue to monitor legislation to see if it addresses our matter for congressional consideration.

    Matter: Congress may wish to consider amending the Paperwork Reduction Act to more explicitly require federal agencies to consult with potential respondents on each information collection beyond the publication of Federal Register notices using efficient and effective consultation methods. (Matter for Consideration 1)

Recommendations for Executive Action

  1. Status: Open

    Comments: In April 2019, we requested information from OMB on the agency's implementation of our recommendation but as of May 2019 have not received any status updates. We will continue to monitor OMB's efforts to address our recommendation.

    Recommendation: The Director of OMB should ensure the consistent application of the requirement for respondent time costs, including clarifying instructions for when and how to include fringe benefits. (Recommendation 1)

    Agency Affected: Executive Office of the President: Office of Management and Budget

  2. Status: Open

    Comments: In April 2019, we requested information from OMB on the agency's implementation of our recommendation but as of May 2019 have not received any status updates. We will continue to monitor OMB's efforts to address our recommendation.

    Recommendation: The Director of OMB should review the policies, procedures, and related control activities to ensure that the agency's Paperwork Reduction Act review process is operating effectively. (Recommendation 2)

    Agency Affected: Executive Office of the President: Office of Management and Budget

  3. Status: Open

    Comments: In June 2019, USDA provided an update on efforts to review its Paperwork Reduction Act (PRA) policies and procedures. To ensure that its PRA process is operating effectively, USDA reviewed and updated its internal guidance on preparing information collection request supporting statements, including sections regarding the calculation of respondent burden hour and cost estimates. This updated guidance encourages consultation with potential respondents to help develop these burden estimates. A new PRA consultation checklist directs agency officials to seek input from individuals outside of USDA regarding the agency's burden estimates for an information collection request, including the validity of the methodology and assumptions used in the estimate calculations. The updated guidance specifies that fringe benefits, such as paid leave, insurance, and retirement contributions, should be included in the wage rates used for respondent burden cost estimates. It also clarifies when roundtrip travel time and costs should be included in burden estimates. According to USDA officials, the agency meets with PRA Coordinators to ensure compliance with the updated guidance. These are positive steps toward improving USDA's burden calculation process. However, USDA has not yet provided evidence of a review or revision of its information collection request review process. A review or revision of this process could help USDA better identify errors in burden estimate calculations prior to the final information collection request being sent to OMB and released to the public.

    Recommendation: The Secretary of Agriculture should review the policies, procedures, and related control activities to ensure that the agency's Paperwork Reduction Act review process is operating effectively. (Recommendation 3)

    Agency Affected: Department of Agriculture

  4. Status: Closed - Implemented

    Comments: USDA has developed a Paperwork Reduction Act (PRA) consultation checklist and revised its guidance on preparing information collection request supporting statements to include new information about how to engage with the public about respondent burden estimates. The new checklist requires USDA officials to seek input from individuals outside of the agency regarding the burden estimates and frequency of collection for an information collection request, including the validity of the methodology and assumptions used in the estimate calculations. The updated guidance also directs USDA officials to consult with different individuals about these issues each time an information collection request is submitted for renewal. To ensure that this requirement is consistently met, Departmental Clearance Officers have met with PRA Coordinators to emphasize that the requirement is mandatory, according to USDA officials. These steps will help USDA more effectively consult with the public to improve the quality of the agency's respondent burden estimates.

    Recommendation: The Secretary of Agriculture should leverage existing consultation with stakeholders and the public to explicitly seek input on the burden imposed by information collections. (Recommendation 4)

    Agency Affected: Department of Agriculture

  5. Status: Open

    Comments: In October 2018, HHS provided a statement of actions it had taken to address this recommendation. HHS stated that it had added reporting tools to its Common Data Element Repository (CDER) Library that could help improve tracking of information related to HHS's Information Collection Requests. HHS also stated that it had launched daily emails to Paperwork Reduction Act (PRA) staff to inform them of Office of Management and Budget (OMB) Notices of Action related to Information Collection Requests. Additionally, HHS released an information collection burden calculator tool in the CDER Library to give PRA staff the ability to create burden tables for consistent use across multiple platforms for a single Information Collection Request. According to HHS officials, this tool incorporates both wages and employee benefits in the burden calculations. As of August 2019, HHS's burden calculator tool has been included as a resource on PRA.Digital.gov, a new OMB website that serves as a PRA knowledge base for federal staff. While these are important steps, we are awaiting additional details on how these changes have affected HHS's PRA review process. We will continue to monitor HHS's progress toward addressing our recommendation.

    Recommendation: The Secretary of Health and Human Services should review the policies, procedures, and related control activities to ensure that the agency's Paperwork Reduction Act review process is operating effectively. (Recommendation 5)

    Agency Affected: Department of Health and Human Services

  6. Status: Open

    Comments: In October 2018, HHS stated that it continues to leverage consultation mechanisms for input on the burdens imposed by information collections. According to the agency, it plans to increase the use of the eRulemaking program's Federal Docket Management System for all information collections, including non-rule Information Collection Requests. HHS also stated it plans to contact stakeholders to discuss potential information collections and receive burden estimates. As of August 9, 2019, we have not received an update about HHS's actions or plans. We will continue to monitor HHS's efforts to address our recommendation.

    Recommendation: The Secretary of Health and Human Services should leverage existing consultation with stakeholders and the public to explicitly seek input on the estimated burden imposed by information collections. (Recommendation 6)

    Agency Affected: Department of Health and Human Services

  7. Status: Open

    Comments: In its September 2018 recommendation implementation update, Department of Transportation (DOT) stated that the department began an internal review of the Paperwork Reduction Act program operations, policy, and guidance. Officials reported that they anticipate issuing an updated policy by September 30, 2019. We will continue to monitor DOT's efforts to address our recommendation.

    Recommendation: The Secretary of Transportation should review the policies, procedures, and related control activities to ensure that the agency's Paperwork Reduction Act review process is operating effectively. (Recommendation 7)

    Agency Affected: Department of Transportation

  8. Status: Open

    Comments: In its September 2018 recommendation implementation update, Department of Transportation (DOT) stated that the department began an internal review of the Paperwork Reduction Act program operations, policy, and guidance. Officials reported that they anticipate issuing an updated policy by September 30, 2019. We will continue to monitor DOT's efforts to address our recommendation.

    Recommendation: The Secretary of Transportation should leverage existing consultation with stakeholders and the public to explicitly seek input on the estimated burden imposed by information collections. (Recommendation 8)

    Agency Affected: Department of Transportation

  9. Status: Open

    Comments: In its September 2018 recommendation implementation update, Department of Transportation (DOT) stated that the departmental Paperwork Reduction Act (PRA) Officer has reviewed the Notice templates and checklist with DOT component PRA Officers during monthly PRA meetings and has applied additional scrutiny in the review process. DOT officials stated that the department began an internal review of the Paperwork Reduction Act program operations, policy, and guidance that will include additional aids to support Notice development. Officials reported that they anticipate issuing an updated policy by September 30, 2019. We will continue to monitor DOT's efforts to address our recommendation.

    Recommendation: The Secretary of Transportation should include enough information in Federal Register notices to allow the public to reasonably calculate or determine the number of respondents, the frequency of response, and the average burden time per response for each information collection activity. (Recommendation 9)

    Agency Affected: Department of Transportation

  10. Status: Open

    Comments: According to IRS, agency officials met with representatives of external stakeholder organizations on the Information Reporting Program Advisory Committee (IRPAC) to seek input on the burden experience of their participants and the communities they represent. As a result of these discussions, the IRPAC has added the burden experience as defined by the PRA as a monthly agenda topic for the 2019 session. As of September 2019, IRS officials reported that the IRPAC has not yet met in 2019. Once we receive documentation confirming this action, we will update the status of the recommendation accordingly.

    Recommendation: The Commissioner of Internal Revenue should leverage existing consultation with stakeholders and the public to explicitly seek input on the estimated burden imposed by information collections. (Recommendation 10)

    Agency Affected: Department of the Treasury: Internal Revenue Service

  11. Status: Open

    Comments: In October 2018, Internal Revenue Service (IRS) reported that it continues to standardize the review process by developing a checklist that ensures all required elements are included in the Federal Register notice. Agency officials stated that the agency will complete the development and delivery of training for employees with responsibility for PRA compliance in fiscal year 2019. We will continue to monitor IRS's progress toward completing these actions.

    Recommendation: The Commissioner of Internal Revenue should include enough information in Federal Register notices to allow the public to reasonably calculate or determine the number of respondents, the frequency of response, and the average burden time per response for each information collection activity. (Recommendation 11)

    Agency Affected: Department of the Treasury: Internal Revenue Service

 

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