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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Fast Facts

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.

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Highlights

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.

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Recommendations

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.

Matter for Congressional Consideration

Matter Status Comments
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)
Open
As of July 2021, no relevant legislation has been enacted. We will continue to monitor legislation to see if it addresses our matter for congressional consideration.

Recommendations for Executive Action

Agency Affected Recommendation Status
Office of Management and Budget 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)
Closed – Implemented
In August 2022, OMB reported that it has worked with agencies to promote appropriate and consistent calculation of information collection request costs, including costs attributable to fringe benefits. Specifically, it worked with the General Services Administration to develop an online Paperwork Reduction Act Guide: https://pra.digital.gov/. This Guide specifies that all wages used in the calculation of respondent time costs need to be fully-loaded, meaning they reflect the full cost of labor, including fringe benefits. According to OMB, staff utilize the website as a resource when answering questions from other agencies. These actions will help promote a clearer understanding of the requirements and help ensure consistency across information collection requests.
Office of Management and Budget 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)
Closed – Implemented
In response to our recommendation, OMB reported that it considered ways to use information technology to modernize and improve how agencies interact with OMB policies. Specifically, based on feedback from agency PRA staff that indicated a lack of clarity and understanding on certain parts of the PRA process, OMB worked with the General Services Administration GSA to develop an online Paperwork Reduction Act (PRA) Guide: https://pra.digital.gov/. According to OMB, the items explained on pra.digital.gov represent some of the top issues highlighted by agency PRA staff that they had expressed a desire for more or better information on. OMB staff utilize the website as a resource when answering questions from their agencies. Further, the website launched a generic PRA inbox, PRA@omb.eop.gov, which is actively monitored by OMB. By answering inquires sent to this inbox and directing agency staff to their PRA personnel quickly, OMB hopes to resolve potential PRA problems before they arise. These actions will help ensure that the Paperwork Reduction Act process is operating effectively.
Department of Agriculture 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)
Closed – Implemented
To ensure that its Paperwork Reduction Act (PRA) review process is operating effectively, USDA reviewed and updated its internal guidance on preparing information collection requests. Specifically, in January 2022 USDA published a departmental regulation clarifying the roles and responsibilities for agency officials at each of the various levels when reviewing the contents of information collection requests to ensure that all PRA requirements are met. According to USDA, the updated guidance is intended to provide: (1) streamlined instructions to help clarify the information collection request review process; and (2) directions to review instructions prior to the final submission to OMB and release to the public. This is in addition to previous updates to its guidance on preparing information collection request supporting statements, such as updated instructions for estimating burden, as well as a new PRA consultation checklist that directs agency officials to seek input from individuals outside of USDA when estimating burden.
Department of Agriculture 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)
Closed – Implemented
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.
Department of Health and Human Services 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)
Open
In March 2022, HHS said that it plans to perform a data call to review the policies, procedures, and related control activities to ensure that the agency's Paperwork Reduction Act review process is operating effectively. HHS is drafting a Paperwork Reduction Act (PRA) policy and procedures to provide a roadmap for day-to-day operations of the review process. This policy is intended to ensure compliance with PRA laws and regulations, provide guidance for decision-making, and streamline the internal review process. According to HHS, this policy will be effective before the end of the fiscal year 2022. In addition, according to HHS, the Department Reports Clearance Officer plans to start meeting monthly with Operating Divisions' PRA officers to better communicate PRA best practices. We will continue to monitor HHS's progress toward addressing our recommendation.
Department of Health and Human Services 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)
Open
According to HHS, the department plans to perform a data call in April 2022 with the operating divisions to explore how to improve consultations with stakeholders and the public. Additionally, HHS is in the process of issuing a Paperwork Reduction Act (PRA) policy, which will include guidance for operating divisions on ways to explicitly obtain input from stakeholders and the public on the estimated burden imposed by information collections. According to HHS, this policy will be effective before the end of fiscal year 2022. We will continue to monitor HHS's efforts to address our recommendation.
Department of Transportation 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)
Closed – Implemented
After a review of its policies and procedures, DOT issued a new Order (1351.29A) on April 1, 2022. This order entitled, Managing Information Collections Under the Paperwork Reduction Act, updated the existing PRA requirements and included enhancements to the agency's PRA process. Among the enhancements are: detailed guidance on the requirements of information collections under the PRA; additional information on issuing emergency collections; definitions of key terms for reference among the PRA community; and, expanded roles and responsibilities including the role of the Chief Information Officer. According to DOT, the Office of the CIO has processes to review all relevant policies on an ongoing basis as part of its operations.
Department of Transportation 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)
Open – Partially Addressed
On April 1, 2022, DOT published an updated policy Order (1351.29A, Managing Information Collections Under the Paperwork Reduction Act). According to a DOT official, DOT also plans to issue an internal best practices guide to include items such as adding discussion of PRA estimates to meeting agendas with stakeholders. This guide is expected to be published by the end of fiscal year 2022. We will continue to monitor DOT's progress toward addressing this recommendation.
Department of Transportation 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)
Closed – Implemented
In October 2018, DOT updated its templates for both the 30-day and 60-day Federal Register notices for information collections to include the number of respondents, the frequency of response, and the average burden time per response. As a result, future DOT information collection requests will contain enough information to allow the public to meaningfully comment on their burden estimates.
Internal Revenue Service 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)
Closed – Implemented
According to IRS, agency officials have begun to seek input on the burden experience of external stakeholder organizations and the communities they represent through their regularly scheduled meetings. For example, in August 2020, IRS provided documentation showing that discussion of issues related to the PRA was added to monthly agenda meetings with representatives from the Information Reporting Program Advisory Committee (IRPAC). Similarly, the July 2020 agenda for one of the IRPAC subgroups--the Internal Revenue Service Advisory Council--also included a panel to discuss issues related to the PRA.
Internal Revenue Service 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)
Closed – Implemented
In August 2020, IRS officials reported that a training workshop was developed for all front line employees with responsibility for Paperwork Reduction Act (PRA) compliance . The training workshop was delivered on June 11, 2019. The workshop provided information on the number of respondents, frequency of response, and average burden time per response in the Federal Register Notices (FRN), which allows the public to determine the elements for each collection activity. IRS also reported that the PRA review process has been standardized to ensure the number of respondents, the average burden time per response and, the total annual burden hours are included on the FRN. In July 2019, IRS finalized a desk guide to ensure all required elements are included in the FRNs. IRS also developed an FRN checklist that provides the steps to complete an FRN and an example of an FRN with required elements.

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