STATEMENT OF JOHN D. GRAHAM, PH.D.
OFFICE OF INFORMATION AND REGULATORY AFFAIRS
OFFICE OF MANAGEMENT AND BUDGET
EXECUTIVE OFFICE OF THE PRESIDENT OF THE UNITED STATES
SUBCOMMITTEE ON ENERGY POLICY, NATURAL RESOURCES
AND REGULATORY AFFAIRS
COMMITTEE ON GOVERNMENT REFORM
UNITED STATES HOUSE OF REPRESENTATIVES
April 11, 2003
Good morning, Mr. Chairman, and Members of this Subcommittee. I am John
D. Graham, Ph.D., Administrator, Office of Information and Regulatory Affairs
(OIRA), Office of Management and Budget. Thank you for providing me with
this opportunity to discuss OIRA’s ongoing efforts to improve the
Federal government’s performance in achieving the important goals
and objectives of the Paperwork Reduction Act (PRA). I have enjoyed working
with you and the Subcommittee to improve the manner in which Federal agencies
collect, use, and disseminate information, while reducing the paperwork
burdens that these activities impose on individuals, small businesses, educational
and nonprofit institutions, Federal contractors, State, local and tribal
governments, and other persons.
With the recent submission to Congress of OMB’s Fiscal
Year 2003 Information Collection Budget (ICB) (1.84mb),
I am reporting to this Subcommittee on my first full fiscal year of PRA
oversight as OIRA Administrator. In addition to responding to the questions
that the Subcommittee posed in its invitation, I would like to focus on
two major themes in my testimony:
First, I am pleased to report to this Subcommittee that we have made tremendous
progress during the past 18 months in our “zero tolerance” policy,
which is aimed at ensuring that Federal agencies fully comply with their
statutory obligations under the PRA. In November of 2001, soon after I become
OIRA Administrator, I sent a memorandum to Federal agencies making clear
that the high numbers of PRA violations, associated with agencies allowing
their OMB approvals for ongoing collections of information to expire, were
simply unacceptable and that this situation could not be allowed to continue.
In the subsequent months, OIRA worked with agencies to identify the violations
and eliminate them, and to put into place procedures that would prevent
additional violations from arising. Although we made progress during these
early months in reducing PRA violations, I concluded that I needed to take
further action to spur agency compliance. Accordingly, in June of last year,
I sent a follow-up memorandum to agencies emphasizing once again the importance
of eliminating these PRA violations. In addition, to this end, I personally
met with officials from those agencies with the most violations, and we
discussed their plans for ensuring that these agencies came into full compliance
with the PRA. Subsequently, in November of last year, I wrote again to agencies,
outlining the substantial progress that had been made during the past year,
but also emphasizing that further steps needed to be taken for the Federal
Government to reach our goal of full compliance with the PRA. In the months
since then, OIRA staff and I have worked with the agencies to resolve their
existing violations and to prevent additional ones from arising. I am pleased
to report that, while we have not yet reached our goal of full compliance,
our “zero tolerance” policy has brought us near to reaching
that goal. Moreover, for those “lapse” violations identified
in the FY2003 ICB that have not already been fully resolved, the agency
has taken concrete action in each case to bring the collection into compliance,
by issuing the initial 60-day Federal Register notice seeking public
comment or by taking the next step of submitting the proposed collection
to OIRA for our review.
Second, I will focus on OIRA’s efforts to reduce paperwork burden
on individuals, small businesses, and other persons. In the ICB, and later
in my testimony, we give a number of examples of collections that have been
improved to reduce paperwork burden. Burden can be reduced in several ways:
one is to eliminate questions from a form; another is to increase reporting
“thresholds” and thereby exempt whole categories of persons
from having to respond to a collection; and another is to use information
technology to make it easier for the public to comply with Federal paperwork
collections. And, in addition to the improvements that have been made in
individual collections, the Executive Branch has been taking action to identify
ways to reduce paperwork burden on a broader, across-the-board basis through
our implementation of the laws that Congress has enacted in recent years
to reduce paperwork burden. These laws include the Small Business Paperwork
Reduction Act, the Government Paperwork Elimination Act, and Federal Financial
Assistance Management Improvement Act. Finally, the importance of paperwork
reduction needs to be understood in the context of larger efforts to reform
the regulatory system and the tax code. Most paperwork burden is rooted
in a statute or implementing regulations, and thus in some cases (the IRS
Code is a notable example) one cannot easily reduce paperwork burden without
reforms being made to the governing statute and program regulations. In
fact, it is even the case that, in some instances, it is necessary to increase
paperwork burden in order to provide greater regulatory relief with respect
to the non-paperwork burdens that is imposed on the public by the tax code
and Federal regulations. For example, a public health or safety goal might
be better achieved, with greater benefits and at a lower overall cost, by
substituting a disclosure or other paperwork requirement for some other
form of non-paperwork regulatory approach.
My testimony will assess the current level of paperwork burden and describe
OMB's efforts to resolve outstanding agency violations of the Paperwork
Reduction Act, and briefly discuss various agency initiatives that improve
the information collection process.
I would first, however, like to address a number of issues that you raised
in your letter of invitation. Specifically, you asked that I discuss (1)
expected resolution dates for each outstanding violation, (2) agency progress
in reviewing non-Internal Revenue Service (IRS) regulations with more than
10 million burden hours, (3) OMB’s response to the July 2002 House
Report (107-575), and (4) agency progress in implementing the Small Business
Paperwork Relief Act of 2002.
Expected Resolution Dates for Outstanding Violations
Before addressing the expected resolution date for each violation of the
Paperwork Reduction Act, I’d like to provide a summary of our progress
in eliminating violations and highlight some of our major efforts to address
this issue. I’d also like to acknowledge the leadership role that
you have played in reducing violations of the PRA. Your Subcommittee has
expressed concern about the number of PRA violations for several years and
we appreciate your interest in this issue.
At last year’s hearing on the Paperwork Reduction Act, the General
Accounting Office noted that the decline in the number of PRA violations
during fiscal year 1999 and 2000 appeared to stop in fiscal year 2001. They
also noted that while “OIRA had taken several actions to address PRA
violations, the OMB and the agencies responsible for the collections could
do more to ensure compliance.” 1 I’m
happy to report that OMB has done more – much more – to address
violations and the results are outstanding. There are only 62 remaining
unresolved violations, a 55% reduction from last year’s total. Even
more impressive, a 60-day Federal Register notice has already been
published (the first step in obtaining authority to collect information
under the PRA) for each of these outstanding collections.
You are aware that OMB has adopted a “zero-tolerance policy”
for violations of the PRA. We have been working diligently with agency staff
and policy officials over the last 18 months to eliminate all existing violations
and put procedures into place to avoid future violations. Since last year’s
hearing, OMB has taken the following actions directed at eliminating violations:
June 6, 2002 memo to agencies: I sent a memo to the CIOs and
GCs of the agencies, asking them for an update on the violations reported
in last year’s ICB, as well as the status of any new violations
that had occurred since October 1, 2001. The memo also asked them to
provide a detailed description of their procedures for avoiding future
with selected agencies:
In August 2002, I met with the CIOs and GCs of USDA, HUD, VA, and HHS.
These four agencies had the greatest number of violations or the highest
burden associated with the collections in violation. In those productive
meetings, we discussed the importance of PRA compliance as well as action
plans for achieving this compliance.
ICB Bulletin: In this year’s ICB bulletin (describing
the agency requirements for submission of ICB documents), OMB asked
agencies to provide a list of violations that occurred in the past fiscal
year, and to update previously reported violations, as was required
in previous ICB bulletins. In addition, OMB required that for each violation,
agencies include in their ICB submission a Federal Register publication
citation and publication date for the initial 60-day Federal Register
notices requesting public comment in their ICB submission. An agency’s
ICB submission was not considered complete until all existing violations
(including those violations that have occurred during FY 2002) have
had a Federal Register notice published. All agencies have published
a Federal Register notice for each outstanding violation.
Status memo to all agencies:
I sent a memo to the agency CIOs detailing their progress toward our
goal of eliminating PRA violations and establishing a goal of zero violations
by April 1, 2003; OMB’s General Counsel also shared that memo
with the agencies’ General Counsels and Solicitors. In addition
to this progress report, a list of collections that had expired in the
past month and those collections that would be expiring in the upcoming
150 days was attached. This report was identical to the report that
agency staff receive monthly to assist them in their PRA review planning.
OMB asked the CIOs to examine each of the expired and expiring collections
and to determine if there were any systemic problems in the agency’s
procedures for PRA compliance. OMB required the agency to publish a
60-day Federal Register notice within a set timeframe for those
collections that were already in violation, and asked agencies to publish
a Federal Register notice at least four months in advance of
the expiration date, and submit the information collection request to
OMB no later than one month prior to the expiration date for currently-approved
collections. This schedule should ensure that no currently approved
information collections are allowed to expire in violation of the PRA.
Letters to HUD and USDA: OMB also sent letters to the Deputy
Secretaries of HUD and USDA that listed the collections that had expired
in FY 2002 and asked them to take action on those that were in violation.
These agencies, which seemed to have the most difficulty maintaining
a process that results in full compliance with the PRA, have now made
substantial progress on their violations. HUD and USDA have gone from
being the agencies with the most PRA compliance problems to being the
agencies that are leading the charge on PRA compliance. USDA has submitted
all of their violations to OMB for approval and has put into place procedures
for avoiding violations in the future. HUD has conducted a review of
all of the information collections that they have conducted for the
past 20 years to determine if any of those expired collections were
still actually in use. HUD is confident that all existing violations
of the PRA are accounted for, and have started the process of remedying
each of those violations. They have also put into place procedures for
avoiding violations in the future.
As you can see, OMB has dedicated considerable time and effort to addressing
this issue. This effort has paid off. As I mentioned, there are only 62
PRA violations that had occurred prior to the end of FY 2002 that have not
yet been resolved as of April 1, 2003. This is a significant reduction in
the number of unresolved violations reported in previous ICBs.
I am pleased to report that all of these violations
are in the process of being remedied. 21 of these collections are currently
under review at OMB, and should be acted upon within the next 60 days. Of
those collections that are not currently at OMB for review, agencies have
reported that each and every collection that is listed as "unresolved"
has at least had the first 60-day Federal Register notice published.
If the agencies submit all of these collections to OMB soon after the 60-day
public comment period closes, we could have all of these PRA violations
resolved within the next 4 months.
We will continue to work with agencies to make sure that they are submitting
these collections that are in violation as soon as possible after their
Federal Register notices have closed, so that we can remedy all
of these violations in a timely fashion. We will also continue to work with
agencies to ensure that they are starting the clearance process well before
collections expire so that we can prevent future violations.
Agency Progress in Reviewing Non-IRS Rules with
10 Million Burden Hours
In your letter of invitation, you requested that I provide a status update
on OMB’s review of the 15 regulations–issued by agencies other
than the Internal Revenue Service (IRS)–that impose more than 10 million
hours of paperwork burden. These are the regulations identified by the Subcommittee
in their report accompanying the FY 2001 Treasury and General Government
Appropriations Act, which requested that OMB review regulatory paperwork
As you know, in OMB’s March 2002 draft Report to Congress on the Costs
and Benefits of Federal Regulations, we asked the public to consider problematic
paperwork and regulatory requirements and suggest candidates for reform.
We did this in response to the requirement in the Regulatory Right to Know
Act that our report include recommendations for regulatory reform. As part
of our ongoing regulatory reform initiative, we included the 15 regulations
that impose over 10 million burden hours.
Our Final 2002 Report to Congress on the Costs and Benefits of Federal Regulations,
entitled “Stimulating Smarter Regulation,” described OIRA’s
preliminary review of the public comments that we received. During our review,
we identified 267 rules that were nominated for reform by one or more commenters.
Of the 267 regulations, OIRA referred 126 to agencies for their evaluation.
Included in these 126 nominations were eight regulations that the Subcommittee
identified as imposing at least 10 million hours of paperwork burden:
As part of the interagency consultation process to consider the public reform
nominations, OIRA has met with these agencies to discuss these and other
regulatory reform candidates. Generally, we have asked agencies to identify
candidates for reform, and report on their recent, ongoing, or future activities
concerning the issues raised by public commenters. OIRA also is involving
SBA’s Office of Advocacy to ensure that the interagency review of
the public nominations identifies opportunities to reduce unjustified regulatory
burdens on small businesses.
Labor: Process Safety Management (PSM) of Highly Hazardous Chemicals
Transportation: Inspection, Repair, & Maintenance
HHS: Investigational New Drug (IND) Regulations
EPA: Use or Disposal of Sewage Sludge
Labor: Bloodborne Pathogens Standard
Treasury: Recordkeeping & Reporting of Currency & Foreign Financial
HHS: Medicare & Medicaid for Home Health Agencies
HHS: Clinical Laboratory Improvement Amendments (CLIA)
During our review last year of public reform nominations, OIRA also identified
92 rules that are already under agency consideration or were recently the
subject of agency consideration. These 92 rules included three on the list
of 15 rules identified by the Subcommittee:
Transportation: Hours of Service of Drivers
Labor: OFCCP Recordkeeping & Reporting Requirements
Education: Federal Family Education Loan Program
For these rules, OIRA requested that agencies provide status updates that
describe their recent, ongoing, and/or future activities concerning the
issues raised in the public comments. OMB intends to publish information
on both these updates of agency activity already underway, as well as the
results of agency decisions on the candidates for reform, in our forthcoming
Final 2003 Report on the Costs and Benefits of Regulations.
The remaining four regulations imposing more than 10 million burden hours
were the responsibility of two independent agencies: the Securities and
Exchange Commission and the Federal Trade Commission. In our 2002 Final
Report, OIRA requested that the independent agencies evaluate the nominations
of their regulations, as well. The four regulations are:
SEC: Confirmation of Securities Transactions
SEC: Recordkeeping by Registered Investment Companies
FTC: Truth in Lending Regulation
FTC: Fair Packaging & Labeling Act Regulation
It is OIRA’s intention that the interagency review of nominations
be a merit-based process in which the consideration of nominations is objective,
consistent, and grounded in the regulatory principles codified in Executive
Order 12866 and the statutory authority of the agencies. In conducting this
evaluation, we are recommending that agencies rely on three criteria: efficiency,
fairness, and practicality.
In this regard, I would note that selecting targets based exclusively on
hour burden fails to take into consideration the usefulness, or practical
utility, of the information that agencies need to achieve important programmatic
missions. I can assure you that our review of regulatory paperwork requirements
will have a sound analytic basis, which will allow us to determine that
any paperwork burdens imposed through regulation are justified by their
Moreover, given OIRA’s information collection review responsibilities
under the PRA, we regularly have the opportunity to carefully scrutinize
regulatory monitoring and reporting requirements, both when they are first
issued and when they are subsequently submitted to OMB for renewal of OMB’s
PRA approval. Our review of information collections in regulations focuses
on minimizing paperwork burden while ensuring that agencies obtain the information
they need to ensure compliance with applicable standards.
OMB’s response to the July 2002 House Report
The 2002 House Committee on Appropriations report accompanying the FY 2003
Treasury-Postal Appropriations Act bill contained the following language:
The Office of Management and Budget has reported that paperwork
burdens on Americans have increased in each of the last six years. Since
the Internal Revenue Service imposes over 80 percent of these paperwork
burdens, the Committee believes that OMB should work to identify and review
proposed and existing IRS paperwork.
While OIRA realizes that IRS paperwork burden accounts for a disproportionate
share of the government-wide total, we have not interpreted this report
language to mean that OMB should conduct a specific analytical review of
all IRS collections over a specific burden hour threshold. We have reviewed,
and will continue to review, IRS collections to determine if burden is minimized
to the extent possible given the statutory requirements of the Internal
Recognizing the importance of the IRS burden on the public, we have devoted
additional staff resources to the IRS paperwork issue and we have devoted
a chapter in this year’s Information Collection Budget to a discussion
of IRS burden. In it, we discuss the difficulties faced by IRS in implementing
the complex and prescriptive tax code. We do feel that IRS has taken meaningful
steps to implement the Code in the least burdensome way possible, given
the statutory requirements and the Service’s responsibility.
In the ICB, we provide examples of recent statutory programs and how they
have been implemented by the IRS. All of these examples show that the Code
drives the increased burden associated with tax filings. In one of the examples,
we look at the new tax benefit that allows teachers to subtract up to $250
from their taxable income for the purchase of classroom supplies. As is
described in detail in the ICB, in order to implement this tax benefit,
the IRS had to provide significant explanation on the Form 1040 about eligibility
requirements to claim the tax benefit. In order for eligible taxpayers to
compute the amount, up to $250, that could be claimed in this benefit, a
separate worksheet form must be filled out. This burden is required in order
to determine if an individual taxpayer is claiming the benefit correctly.
We have examined the IRS' implementation of this and other Code provisions,
and have reduced the complexity and burden for eligible taxpayers seeking
to claim the tax benefits and requirements set forth in the Code.
In addition to the efforts described above, IRS also plans to or has already
initiated several burden reduction initiatives that I’ve highlighted
Change Reporting Threshold for Schedule B. By changing the reporting
threshold from $400 to $1,500, the number of people filing Schedule
B was reduced from about 34 million to roughly 23 million. Burden was
reduced by approximately 15 million hours.
Redesign Form 941. This project to review and redesign this form will
affect 6.6 million employers. Work is being conducted to identify what
steps can be taken to simplify this form. IRS’s form redesign
group has determined that some existing space on the form is used for
internal processing and can be made available for improved formatting
Redesign Schedule K-1. This project to review and redesign this form
will affect the 23 million K-1s filed each year. IRS will be balancing
the need to simplify the form and make it less burdensome with the need
to insure the integrity of the tax system and the compliance program.
Agency Progress in Implementing the Small Business
Paperwork Relief Act of 2002
Mr. Chairman, your letter of invitation asked about OMB’s progress
in implementing the Small Business Paperwork Relief Act of 2002. The Act
established a multi-agency task force on information collection and dissemination
chaired by OMB. Mitch Daniels, the Director of OMB, appointed myself and
Mark Forman, OMB’s Associate Director for Information Technology and
E-Government, to co-chair the task force. The task force includes representatives
from the following agencies:
Department of Labor (including the Bureau of Labor Statistics and the
Occupational Safety and Health Administration)
Environmental Protection Agency
Department of Transportation
Small Business Administration’s Office of Advocacy
Internal Revenue Service
Department of Health and Human Services
Department of Agriculture
Department of Interior
General Services Administration
Department of Commerce and additional representation from the Small Business
Administration were also chosen to participate.
The group's efforts will support the goal of the Government-to-Business,
E-Government Portfolio: reducing the burden on businesses by adopting processes
that enable collecting data once for multiple uses. In fact, as the managing
partner for the Business Compliance One Stop(one of the cross-agency E-gov
initiatives), SBA has already demonstrated in its prototype savings of one
hour per user in reporting burden. Given IRS estimates that 2.4 million
businesses annually apply for an EIN, this application could save $96 million
per year from streamlining, harmonizing, and automating these processes.
The initiative will use three strategies to accomplish this, including:
reducing the information required from businesses through analyzing if information
is needed; assessing whether definitions in different forms and forms in
different agencies can be harmonized to reduce overlap; and increasing the
effectiveness of data collections processes by collecting once and sharing
data among programs and agencies. This initiative also represents the first
Web service that fulfills both a state and a federal regulatory requirement
at the same time. In addition, the BCOS team has developed a proof of concept
for harmonizing coal miner reporting, where information is collected once
and used several times, which is estimated to cut the reporting burden by
50 percent, from 50,000 hours annually to 25,000 hours.
Another related e-government example that reduces burden on businesses is
the Expanding Electronic Tax Products for Businesses (EETPB) initiative.
The objective of the EETPB is to reduce the tax-reporting burden on businesses
while improving the efficiency and effectiveness of government operations.
The initiative is comprised of seven projects that will deliver benefits
by reducing the number of tax-related forms that businesses must file, providing
timely and accurate tax information to businesses, increasing the availability
of electronic tax filing, and modeling simplified Federal and state tax
employment laws. These projects include Form 94x Series, Form 1120/1120S,
Form 8850, Internet Employer Identification Number (EIN), and the Standardized
Further, the task force seeks to propose recommendations that will reduce
the paperwork burden on small businesses and make it easier to find, understand
and comply with government collections of information. Specifically, SBPRA
charges the task force with examining five ideas:
Examine the feasibility and desirability of consolidating information
collection requirements within and across Federal agencies and programs,
and identify ways of doing so.
Examine the feasibility and benefits to small businesses of having OMB
publish a list of information collections organized in a manner by which
they can more easily identify requirements with which they are expected
Examine the savings and develop recommendations for implementing electronic
submissions of information to the Federal government with immediate
feedback to the submitter.
Make recommendations to improve the electronic dissemination of information
collected under Federal requirements.
Recommend a plan to develop an interactive Government-wide Internet
program to identify applicable collections and facilitate compliance.
The task force began its work with a meeting of the full membership to develop
a common understanding of the law, project goals, scope, roles and responsibilities,
resource requirements, strategy, timeline, and deliverables. A professionally
facilitated brainstorming session followed, during which members began looking
at the first three tasks for the 2003 report. After the initial meeting,
the task force divided into three subcommittees to examine the three tasks
in greater detail. The task force met again on April 4, 2003 to discuss
the subcommittee findings and recommendations.
A report of findings and recommendations will be published for the first
three ideas by June 2003, and the remaining two ideas by June 2004. The
draft for this year's report is now under development in preparation for
a public comment period during May 2003. SBA’s Office of Advocacy
already held a public meeting on March 4, 2003 to solicit views of interested
persons regarding the SBPRA.
Federal Government’s Paperwork Burden
As you might remember, the General Accounting Office (GAO) advised OMB to
be more transparent in reporting the causes of agency burden changes. Specifically,
GAO requested that OMB’s Fiscal Year 2003 report’s summary burden
hour table identify in separate columns the program changes2 that are attributable
to new statutes3, agency actions4, and violations5. We appreciate GAO’s
and your interest in understanding the root cause of burden. Largely because
of your interest and leadership, we asked agencies to report the cause of
each burden change.
At first glance, it might appear that the Federal government is not performing
well with respect to information collection burden. After all, burden hours
increased by almost eight percent during FY 2002. However, most of these
increases are due to resolving violations or factors outside the agencies’
control. For those deliberate actions that affected burden within an agency’s
discretion, I am pleased to report that the Federal agencies reduced burden.
As described in much greater detail in Chapter 1 of the ICB, Federal agencies
reported a net decrease in burden hours of a little more than two million
This is particularly notable because OMB has always stated that changes
due to deliberate agency action within their discretion should be considered
the most accurate measure of agency performance, rather than changes due
to violations or statute. Changes due to a lapse in OMB approval are not
a measurement of an actual change in burden on the public, but are simply
a product of accounting. And, while the actual public burden is affected
by changes due to statute, the agency often has little or no discretion
over these changes. Therefore, to most accurately assess how agencies have
performed, changes due to actual, deliberate action within an agency’s
discretion should be evaluated. By this measure, agencies performed well
during FY 2002. In particular, the Treasury Department, Department of Education,
and HHS have each performed extremely well, reducing burden by nine million
hours, three million hours, and two million hours, respectively.
Specific Burden Reductions
In your letter of invitation, you asked about specific reductions in reporting
and recordkeeping of at least 250,000 hours accomplished since last year’s
April 11, 2002 hearing, and specific reductions of at least 250,000 hours
expected in the next 12-month period. As we describe in the FY 2003 ICB,
agencies have and are undertaking serious efforts to improve the quality
of Federal information collection and to reduce burden when it is possible
and makes sense to do so. Below are a number of specific burden reductions
of at least 250,000 hours that I offer for illustrative purposes. A complete
listing of significant burden changes is provided in the FY 2003 ICB. Please
note that the following examples are organized by fiscal year. As you know,
our data collection efforts have always been organized by fiscal year, beginning
October 1 and ending September 30.
Department of Education: Federal Direct Stafford/Ford Loan and Federal
Direct Unsubsidized Stafford/Ford Loan and Master Promissory Note.
This promissory note is the means by which a Federal Direct Stafford
Program Loan borrower promises to repay his or her loan. By consolidating
the collection and eliminating the requirement for a student to sign
a promissory note on an annual basis, burden has been reduced. Now,
a student is permitted to sign one promissory note and it is good for
10 years. Change in burden: -1,325,360 hours
Department of Transportation: Capital Program and Urbanized Area Formula
Primarily through these programs, FTA provides financial assistance
to State and local governments, and public transportation authorities.
The information submitted for this information collection ensures timely
expenditure of Federal funds by grant recipients. Burden has been reduced
as an increasing number of grantees submit their grant requirements
electronically. Change in burden: -319,134 hours
of the Treasury: Annual Return/Report of Employee Benefit Plan, Return/Report
of Employee Benefit Plan and Associated Schedules (Forms 5500 and 5500-C/R).
Forms 5500 and 5500-C/R are annual information returns filed by Employee
Benefit Plans. IRS uses the information to determine if the plan appears
to be operating properly as required under law. This form was replaced
by a new and streamlined version that is generally filed electronically.
This older form is only required for delinquent filers for those years
when it was in general use. Other filers use the new form. Previously,
this form was used by over 900,000 filers; now it is used by approximately
25,000. Change in burden: -26,928,784
Department of the Treasury:
2001 Form 1040 and Schedules, U.S. Individual Income Tax Return.
This form is used by individual taxpayers to report their taxable income
and calculate their correct tax liability. Form 1040 (Schedule D) was
revised and simplified to make it easier for the taxpayer to compute
their capital gains and losses. Change in burden: -2,925,214 hours
Department of Veterans Affairs: Health Benefits Application and Renewal
(Forms 10-10EZ and 10-10EZR).
These forms are used to enroll individuals for health care benefits,
establish basic eligibility, identify third-party health insurance coverage,
identify prescription co-payment, and to update yearly finances. VA
developed a new form (10-EZR) for updated information that eliminates
much of the redundancy involved with using both forms. Change in burden:
Department of Defense: Department of Defense Acquisition Process
(Solicitation Requirements). This information collection requirement
specifies the information an offeror must submit in response to the
Department of Defense solicitations. The Department reevaluated its
information requirements to require the minimum information consistent
with best business practices, including electronic submission of information.
Change in burden: -14,115,462 hours
Department of the Treasury: Form 1120S and Schedules, U.S.
Income Tax Return for an S Corporation. This information
required to be filed with the Service permits verification of compliance
with securities law requirements and assures the public availability
and dissemination of such information. Due to the Commissioner’s
Burden Reduction Initiative, corporations with total receipts and assets
of less that $250,000 are not required to complete Schedules L and M-1.
Change in burden: -61,969 hours
Department of the Treasury: 2002 Form 1040 and Schedules, U.S.
Individual Income Tax Return.
This form is used by individual taxpayers to report their taxable income
and calculate their correct liability. As part of the Burden Reduction
Initiative, Treasury decided to increase the threshold for filing Schedule
B (Form 1040) from $400 to $1,500. As a result of this change, the number
of people filing Schedule B was reduced from 33,861,904 to 23,092,147.
Change in Burden: -15,616,147 hours
Agency Initiatives to Improve Agency Performance
and Reduce Burden
The significant burden reductions that agencies reported
in the FY2003 ICB reflect ongoing efforts by the Government to alleviate
paperwork whenever possible. For example, the Administration is committed
to successfully implementing the Government Paperwork Elimination Act
(GPEA), which along with the E-Government Act, is the legislative basis
for e-government. By October 21, 2003, agencies are to provide the option
for electronic filing and electronic signature capabilities for the full
range of government activities and services unless it is not practicable
to do so. However, implementing an electronic process does not automatically
reduce the burden of the information collection. We have encouraged agencies
to implement those projects with a positive return on investment for the
agency and the public. Optimal burden reduction occurs when agencies reengineer
and streamline the business process using available technology. You do
not meet the requirements of GPEA by “slapping up” an e-form
that automates an inefficient paper process.
To build on these efforts and make burden reduction an
even higher priority, OMB also asked each agency to provide a summary
progress report on initiatives identified in last year’s ICB. For
agencies not included in last year’s ICB, OMB asked them to identify
at least two initiatives that improve program performance by enhancing
the efficiency of information collections; significantly reduce the burden
per response on the public; or lead to a comprehensive review of an entire
program, including regulations and procedures.
In response to these requests, agencies noted dozens of
initiatives that have made or have the potential to make meaningful improvements
for the public. In general, the identified initiatives can be placed into
three categories: reducing burden, expanding electronic reporting, and
improving program effectiveness. Here are a few of these initiatives:
Medicare/Medicaid Electronic Collection/Signatures. In 2002, the
Centers for Medicare and Medicaid Services (CMS) identified 10 collections,
reform of which will significantly reduce burden and improve program performance
if electronic collection/signatures could be obtained. Since the FY02 ICB,
CMS has identified ways to streamline, eliminate, and/or provide alternative
reporting methods for five of the referenced collection activities. As a
result of this effort, several regulatory requirements necessitating the
submission of multiple hard copy forms will be eliminated, electronic reporting
will be achieved, and reporting burden will be reduced for approximately
5,740,000 responses. For the remaining five collection activities, totaling
125,500 annual responses, the measurable objectives and proposed timetable
remain the same as last year.
RCRA Burden Reduction Initiative. The Environmental
Protection Agency, through rulemaking, will significantly reduce the paperwork
burden imposed by regulations under the Resource Conservation and Recovery
Act (RCRA). EPA is undertaking this initiative to ensure that only the
information actually needed to run the RCRA program is collected. EPA
estimates that the initiative will reduce burden by 929,000 hours and
save $120 million annually. A proposed rule was published in FY02.
Expanding Electronic Reporting
Forest Service Permit Program. The USDA Forest
Service is implementing a web-enabled electronic government system to
fully process permits for use of U.S. forest system lands and facilities.
The agency will be able to readily analyze and measure improved program
delivery in an electronic customer-centered environment. Burden is also
reduced because the initiative will provide an expected decrease in customer
data entry time (25%), internal processing time (33%), and customer search
Automated Export System (AES). AES is a Commerce
Department initiative that is part of the government-wide trade streamlining
initiative. AES allows for electronic filing of Shipper’s Export
Declarations (SEDs), resulting in a significant reduction in the number
of paper SEDs. Prior to the 1995 establishment of AES, the average number
of paper SEDs filed monthly was more than 500,000. That number has been
reduced to approximately 170,000 per month. The Department of Commerce
has launched an aggressive marketing and training plan to reduce the number
of SEDs to 85,000 by September 2003.
Improving Program Performance
Air Carrier Traffic and Capacity Data. As a result
of a BTS final rule issued in July 2002, small certificated, commuter,
and all-cargo air carriers are required to report their air traffic activity
under the T-100 Traffic Reporting System. Prior to the final rule, there
was a lack of market and segment data for domestic all-cargo, domestic
charter and small aircraft operations. The regulatory changes were designed
to fill the data gaps for these rapidly growing segments in the air transportation
industry. Moreover, the final rule allows aviation data users to compare
operations of commuter and certificated air carriers.
Streamlining Health Information Collections. The
Centers for Disease Control and the Agency for Toxic Substances Disease
Registry (CDC/ATSDR) have initiated a comprehensive initiative to reduce
paperwork and increase program effectiveness. Specifically, all centers,
institutes, and offices are reviewing information collections to streamline
forms and procedures, collaborate within and outside CDC/ATSDR, meet GPEA
requirements, and use the latest technology available. Among the notable
achievements to date: the Mortality and Morbidity Weekly Reports series
of publications are now available on the internet in a searchable database;
CDC is now consulting with HRSA and NIH on data collections involving
HIV/AIDS in order to better evaluate HIV prevention programs; and the
two largest information collections for the National Center for Infectious
Disease are in the process of being streamlined and converted to electronic
reporting under the National Electronic Disease Surveillance System.
Aside from reporting their progress on past initiatives,
a few agencies (e.g., Interior, Labor, and the Veterans Administration)
identified new initiatives that emphasize their commitment to reducing
burden, hastening electronic reporting, and/or improving program performance:
Electronic Permitting. The Office of Surface
Mining (OSM) within the Department of Interior has identified electronic
permitting as a long-term initiative that will result in significant monetary
and time savings and provide more complete and up-to-date records. OSM
is currently assisting States in developing and implementing electronic
permitting. When implemented, electronic permitting provides permit reviewers
with computer-based tools to access documents, maps, and data, and to
perform necessary environmental analysis. The initiative will also reduce
costs for surface coal mining applicants.
Application for Service Disabled Veterans Insurance.
Currently, veterans only have a paper option when applying for service
disabled veterans insurance. The Veterans Benefits Administration (VBA)
proposes to offer the veteran the option of submitting the relevant form
electronically. The VA anticipates offering this option no later than
June 30, 2003.
Application for Designation of Beneficiary. Veterans
only have the option of using a paper form to designate a beneficiary
and select an optional settlement to be used when the insurance matures
by death. The VA proposes to offer the veteran the option of completing
the relevant form electronically. The electronic option should be available
by June 30, 2003.
Current Employment Statistics Survey. The Current
Employment Statistics (CES) Survey is a Federal/state program of the Bureau
of Labor Statistics (BLS) within the Department of Labor. It produces
monthly estimates of employment, hours, and earnings based on U.S. nonagricultural
establishment payrolls. CES is employing a number of collection methods
and techniques designed to ease reporting burden and simplify reporting.
For example, by the end of FY 2003, BLS will use a probability sample
to collect 327,000 reports. The probability sample design will reduce
burden by approximately 50,586 hours through reducing the number of reports
submitted by respondents.
Workplace Health Standards Improvement. The Occupational
Safety and Health Administration (OSHA) is undertaking rulemaking to update
numerous health standards that are inconsistent, duplicative, and outdated.
The proposal affects 18 information collections and would result in a
207,892-burden hour reduction. Time for completion of this project hinges
upon the number and complexity of public comments received on the proposed
Review of Certification Records Requirements.
Numerous OSHA standards contain certification records. OSHA is reviewing
the requirements associated with these records to reassess the information.
If some certification records requirements could be revoked without jeopardizing
worker safety and health, burden hours could be reduced significantly.
OSHA is currently examining possible options regarding certification records
and anticipates making a decision on this project during FY 2003.
ES-202 Program. The ES-202 program is a Federal/state
cooperative effort, which compiles monthly employment and quarterly wage
data submitted to state workforce agencies by employers subject to state
unemployment insurance (UI) laws. The ES-202 Program provides a virtual
census of nonagricultural employees and their wages, and nearly half of
agricultural workers are covered as well. The Bureau of Labor Statistics
(BLS) is in the process of automating this data collection. The initiative
was originally scheduled as an FY02 burden reduction initiative, but was
rescheduled for FY03.
OMB Efforts to Improve Program Performance
The Paperwork Reduction Act charges OMB with the responsibility
of weighing the burdens of information collection on the public against
the practical utility the information will have for the agency. While
OMB and the Federal agencies have worked hard to reduce burden, OMB has
not forgotten about working to improve program performance. To illustrate,
I would like to provide a couple of examples of how we have worked with
Federal agencies to improve their information collections.
Department of Health and Human Services, Substance
Abuse and Mental Health Services Administration: An Assessment of the
Status of PASRR and Mental Health Services for Persons in Nursing facilities.
The Preadmission Screening and Resident Review (PASRR) program was enacted
to prevent the inappropriate admission and erroneous retention of people
with mental disabilities in nursing facilities. When the Department of
Health and Human Services originally requested OMB approval for a study,
they planned only to conduct case studies in four states to examine the
implementation of PASRR and gain insights about its effectiveness. We
were concerned about the practical utility of such a limited investigation,
and asked SAMHSA to also do a nationally representative survey of State
Medicaid and State Mental Health Authority Officials to gather systematic
data on oversight responsibilities and procedures for implementing PASRR
in all states to provide a core of representative findings and to better
inform the selection of states for the case studies. SAMHSA agreed and
conducted the national survey, and in coordination with the Centers for
Medicare and Medicaid Services will use the results to gain a better understanding
of how to provide guidance to State Mental Health Authorities, Medicaid
Agencies, and nursing facilities on the use of PASRR.
Department of Housing and Urban Development: Section
8 Random Digit Dialing Fair Market Rent Surveys. Section 8 Fair Market
Rents (FRS) for the certificate and voucher programs serve as the payment
standard for approximately one million assisted rental units. The Department
is required to update FMR standards annually, and has developed two telephone
surveys to help obtain accurate and current estimates of FRS in areas
where other data, such as the Consumer Price Index, are not available
or cover too broad an area. In OMB’s review of this information
collection, we noticed a marked decline in response rates to these surveys
and were concerned that no response bias could be impacting the quality
of the estimates and therefore directly affecting the amount of money
the government spends for assistance. We outlined procedures for HUD and
their contractor to calculate response rates that reflect accepted professional
standards, made several suggestions for methodological improvements to
increase response rates and requested HUD conduct additional research
on no response bias. Recent communication with HUD indicated that the
changes in methodology have significantly improved response rates.
That concludes my prepared testimony. I would be happy
to answer any questions you may have.
U.S. General Accounting Office, GAO-02-598T.
The change in burden associated with deliberate agency actions that often
affect the time required to complete an information collection are considered
“program changes.” Program changes can be further subdivided
into three categories: those changes due to new statute, those due to
a lapse in OMB approval (“violations”), and those changes
due to agency action.
This type of program change accounts for the burden associated with the
creation of new collections or the material revision or elimination of
existing collections that an agency must undertake because a recent statute
requires the action.
This type of program change includes the creation of new collections or
the material revision or elimination of existing collections that an agency
undertakes without a specific and recent statutory mandate. Changes due
to new or revised policies and collections that are authorized but not
explicitly required by statute are also included in this category.
This kind of program change occurs when an agency allows OMB approval
for a collection to expire even though the agency continues to conduct
or sponsor the collection. These program changes are the result of the
burden hours associated with violations of the PRA. Overall, burden hour
estimates decrease when a collection’s approval lapses, and increase
again upon reinstatement of approval. This burden change does not represent
a true increase or decrease in the public’s burden, only a change
in the burden that is being reported.