Paperwork Reduction Act: Agencies Could Better Leverage Review Processes and Public Outreach to Improve Burden Estimates

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.

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.

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.

Federal agencies collect a wide variety of information to ensure that the  public is kept safe from harm, that qualified recipients receive benefits to  which they are entitled, and that agencies otherwise fulfill their respective  missions. For example, the Internal Revenue Service (IRS) collects  information from individuals and businesses to help taxpayers meet their  tax responsibilities and help IRS enforce the law with integrity and  fairness. Overall, based on government-wide estimates, the public spent  about 9.8 billion hours responding to federal information collections in  fiscal year 2015.

The primary goal of the Paperwork Reduction Act (PRA) is to minimize  the burden of these collections on the public and maximize their utility.  To accomplish this, the Act requires agencies to (1) justify, or describe  the necessity, of the information collected; (2) provide estimates of the  burden they will impose (i.e., the time and costs required to comply with  the collection); and (3) publish notices in the Federal Register and  otherwise consult with the public to obtain input. Reliable, publicly  informed burden estimates are essential to assist federal agencies to  minimize the burden and maximize the utility of their information  collections, and to effectively measure agencies’ progress toward burden  reduction goals.

Executive Order 13771 required executive agencies to identify at least  two existing regulations to be repealed whenever they publicly propose or  otherwise promulgate a new regulation, unless prohibited by law. The  Executive Order also required that for fiscal year 2017, the total cost of all  new regulations, including the savings for regulations that have been  repealed, must be zero or less, unless otherwise required by law or  consistent with advice provided in writing by the Director of the Office of  Management and Budget (OMB). According to OMB guidance  implementing the Executive Order, meaningful burden reduction through  the repeal or streamlining of mandatory paperwork requirements qualifies  as savings that can be used to offset new regulations.

You asked us to review the methodologies agencies used to estimate  burden and the steps agencies take to obtain input on their information  requests. This report examines (1) how agencies estimate both the  burden hours and costs of their information collections, and any  limitations of their approaches; and (2) the extent to which agencies  consult with and receive comments from the public on the collections’  estimated burden.

To address both of these objectives, we selected four agencies as case  studies based on OMB data of federal information collection requests  (ICR) available on Reginfo.gov as of April 7, 2017. We selected IRS,  which is responsible for the majority of the federal government’s burden  hours, and the three departments with the next highest percentages of  the federal government’s total information collection burden hours: the  Departments of Health and Human Services (HHS), Agriculture (USDA),  and Transportation (DOT). Together, the four selected agencies  represent more than 85 percent of the total estimated burden hours  across the federal government.

For each of these four agencies, we selected the 50 largest information  collections based on total burden hours (for a total of 200 information  collections) to obtain information about estimated burden hours and  resource costs, and the agencies’ efforts to consult with the public.

To examine how agencies prepare burden estimates, we selected the two  largest information collection requests from the 50 ICRs with the largest  burden hour estimates at each of the four agencies as case studies. For  these ICRs, we reviewed the data used to develop burden estimate,  checked the math used to calculate the burden estimate, and interviewed  agency officials about the review process for approving the ICR (see table  1 for list of case study ICRs).

These eight case study ICRs represent the majority of information  collection burden at each agency, and roughly 59 percent of the federal  government’s total burden hours.

We reviewed documents related to the eight case study ICRs, including  the supporting statements that accompanied each ICR. We also  reviewed Federal Register notices issued by the agencies to solicit  comments from the public on these ICRs. Additionally, we reviewed  agency and OMB requirements under the PRA as well as OMB guidance  issued to assist agencies in developing and reviewing their information  collections. We interviewed officials at the four selected agencies about  the methodologies for estimating burden. We also interviewed agency  officials and OMB staff about the processes for reviewing ICRs more  generally. Appendix I provides additional information about our objectives,  scope, and methodology.

To assess the reliability of data on ICR burden estimates in Reginfo.gov,  we compared them with the data found in the supporting statements. We  interviewed agency officials and OMB staff about discrepancies between  these two data sources. We reviewed documentation on the Reginfo.gov  website and the underlying system that agencies use to track information  collection requests. We found that the data were sufficiently reliable for  the purpose of selecting case study agencies and ICRs.

We conducted this performance audit from January 2017 to July 2018 in  accordance with generally accepted government auditing standards.  Those standards require that we plan and perform the audit to obtain  sufficient, appropriate evidence to provide a reasonable basis for our  findings and conclusions based on our audit objectives. We believe that  the evidence obtained provides a reasonable basis for our findings and  conclusions based on our audit objectives.

According to OMB’s regulation implementing the PRA, “information” is  broadly defined as any statement or estimate of fact or opinion,  regardless of form or format, whether in numerical, graphic, or narrative  form, and whether oral or maintained on paper, electronic, or other  media. Federal agencies collect this information in various formats, such  as forms and applications, recordkeeping information maintained by  entities, and third-party disclosures (see figure 1). Agencies collect this  information to ensure that the public is kept safe from harm, that qualified  recipients receive benefits to which they are entitled, and that agencies  otherwise fulfill their respective missions.

For example, DOT requires commercial motor vehicle drivers to record  information about the hours drivers spend operating their vehicles with  the goal of improving operational safety and reducing crashes, injuries,  and fatalities involving trucks or buses. USDA oversees SNAP, which  provides food assistance to low-income individuals and families, and state  agencies that administer the program must collect information from  applicants in order to determine eligibility. HHS collects compliance  information from entities and businesses to ensure that they are  appropriately safeguarding individuals’ health information. While such  information collection activities are important for the fulfillment of agency  missions, they have the potential to impose significant burdens on  individuals, businesses, and other entities.

The PRA created the Office of Information and Regulatory Affairs (OIRA)  within OMB to review and approve individual ICRs and oversee how  agencies implement the PRA. OIRA provides agencies with instructions  for preparing the supporting statements required for each ICR submitted  for review. OIRA also provides agencies with guidance documents on  specific information collection requirements, including how to conduct pre- testing on new or complex information collections, and how PRA applies  to the use of social media.

Estimating Information Collection Burden

An integral part of an agency’s ICR submission is the estimated burden  on the public associated with the collection—in terms of both time (i.e.,  burden hours) and costs (i.e., dollars spent). Under the PRA and OMB  regulations, agencies are required to develop a specific, objectively  supported estimate of the burden associated with each collection. OMB  directs agencies to estimate burden hours and costs to respondents for  each information collection as part of the ICR justification in the  supporting statement. According to OMB staff, estimated costs to  respondent should include the wage rate and any applicable employee  fringe benefits, such as paid leave, insurance, and retirement  contributions. The formulas shown in figure 2 illustrate the calculations  generally used by agencies to determine burden hours and costs  associated with the collections.

ICRs are subject to multiple levels of review to ensure that they comply  with the requirements of the PRA. Programs or components within an  agency (e.g., bureaus) often perform an initial review. In addition, PRA  requires that agencies have an independent review process, whereby  agency staff who are independent of program responsibilities review the  ICRs. During this review, staff evaluate the need for the information  collection and the burden estimate, including whether the information  collection minimizes burden on the public, among other things. Before an  information collection is submitted by an agency to OMB for final review  and approval, the independent reviewer must certify that the collection  meets the standards that are set forth in the PRA. These standards  include ensuring that the collection contains sufficient information to allow  respondents to evaluate the estimated burden.

Once an ICR has been submitted to OMB, OMB will then review it for  compliance with procedural requirements of the PRA and OMB’s PRA  regulations. OMB can approve an ICR without changes or request  changes or additional information from the agency. OMB can approve a  collection for up to 3 years at one time. If the agency wants to continue to  collect the information after the approval period, it must submit another  ICR to OMB for approval and provide the public with an opportunity to  comment on the continuation of the collection.

The PRA requires agencies to solicit public input on their ICRs as a  means of validating their burden estimates. Agencies can engage the  public in a variety of ways such as through a notice of proposed  rulemaking (NPRM), a PRA 60-day notice published in the Federal  Register, or other agency-specific mechanisms. Figure 3 shows the  process that agencies generally use to engage the public, which involves  a PRA 60-day notice published in the Federal Register. In some  circumstances, an NPRM in the Federal Register can be used to solicit  input on an information collection in lieu of the 60-day notice where an  information collection is part of larger rulemaking.

Selected Agencies Used Data and Professional Judgment to Estimate Burden, but Limitations Include Inconsistent Cost Estimates and Insufficient Review

IRS Used Original Data to Estimate Burden, While Other Agencies Used Existing Data and Professional Judgment

When estimating burden hours, USDA, HHS, DOT, and IRS used data  and professional judgment to develop their estimates. The PRA requires  that agencies develop an objectively supported burden hour estimate, but  neither the act, nor OMB regulations, prescribe how agencies should  develop these estimates. Among our four agencies, IRS was the only one  to report gathering original data on public burden through surveys of  individual taxpayers and businesses to help inform the estimates for its  two largest ICRs. Each year, IRS surveys a representative sample of  taxpayers who submitted completed tax returns, according to IRS  officials. The surveys collect information on the actual time and cost that  taxpayers invest in paperwork-related activities.

For the U.S. Individual and Business Tax Return ICRs—the federal  government’s two largest information collections—IRS used its Taxpayer  Burden Model to combine original survey results with existing taxpayer  data to estimate taxpayer burden in terms of both time and out-of-pocket  costs. The survey results also help IRS forecast its burden hour estimates  each year, taking into account changes in law, regulations, and  technology.

For the remaining six case study ICRs that we reviewed, USDA, HHS,  and DOT used already existing data and information to estimate at least  one burden hour element (i.e., number of respondents, frequency of  responses, or average burden time per response), such as in the  following examples:

Historical data. To estimate the number of respondents for the SNAP  ICR, USDA’s Food and Nutrition Service used historical program data  on the number of applicants in previous years.

Other internal agency data. To estimate the number of respondents,  such as drivers and motor carriers, for the Hours of Service of Drivers  Regulations ICR, DOT’s Federal Motor Carrier Safety Administration  (FMCSA) used data from the 2014 Pocket Guide to Large Truck and  Bus Statistics, according to agency officials. This publication  compiles data from the Federal Highway Administration, the National  Highway Traffic Safety Administration, and FMCSA’s Motor Carrier  Management Information System, including data on the number of  commercial motor vehicle drivers operating in the United States.

Third-party data. To estimate the frequency of response for some of  the third-party disclosures included in its Prescription Drug Labeling  ICR, HHS’s Food and Drug Administration used data from a survey  conducted by the National Association of Boards of Pharmacy,  according to agency officials. The data included the number of drugs  on the market and the percentage of drugs requiring medication  guides. These data helped Food and Drug Administration staff  estimate how often the pharmaceutical industry might need to comply  with the information collection.

Research studies. To help estimate the burden of applying for SNAP  benefits, USDA’s Food and Nutrition Service relied, in part, on a  program research study. Specifically, a 2004 Food Stamp Program  Access Study estimated that applicants spend, on average, 2.2 hours  travelling for face-to-face interviews during the application process.  Food and Nutrition Service staff incorporated this information in its  burden hour estimates to determine the average burden time per  response for the SNAP ICR.

In cases where data did not exist to inform burden hour estimates, such  as for average burden time per response, the selected agencies relied on  their professional judgment to develop estimates, informed in some  instances by internal consultation or public input. For example, HHS’s  Office for Civil Rights (OCR) did not have data for the average burden  time per response for some Health Insurance Portability and  Accountability Act (HIPAA) Privacy, Security, and Breach Notification  Rules information collection activities. The information collection  addresses HIPAA requirements related to the use, disclosure, and  safeguarding of individually identifiable health information. According to  HHS officials, some of the reporting or recordkeeping activities required  by HIPAA may be conducted by security experts. To help estimate the  average burden time for these particular activities, OCR officials stated  that they consulted with internal HHS security experts to determine the time it might take a security expert to complete the applicable information  collection activities.

When available, public input helped some agencies refine their burden  hour estimates. For example, as part of its Prescription Drug Labeling  information collection, HHS’s Food and Drug Administration had originally  estimated that it would take approximately 5 seconds for a pharmacist to  provide a patient with a medication guide. During the 2001 renewal of the  ICR, however, the agency received a comment from a distributor stating  that such disclosure could take additional time, especially if the  pharmacist did not already receive the medication guides and had to print  them on-site, according to agency officials. After receiving this comment,  agency officials considered that some distributions of medication guides  to patients may take longer than others, and revised its previous estimate  from 5 seconds to 3 minutes.

Agencies Did Not Always Estimate Time Costs nor Estimate Time Costs Consistently

In some cases, the four agencies did not estimate respondent time costs  as a monetized dollar amount in their supporting statement, as required  by OMB. Of the 200 ICRs reviewed (including the 8 largest ICRs), 76  ICRs did not include respondent time cost estimates.

Specifically, of the 50 ICRs with the largest burden hours at each agency,  we found agencies did not include total annual respondent time costs for  IRS—all 50, including its 2 largest ICRs;

HHS—5, including its second-largest ICR; and

OMB requires agencies to include estimated respondent time costs in the  ICR supporting statements. Supporting statements provide the public with  detail information about the burden estimates and underlying  methodology used to calculate them, among other things. However, OMB  reviewed and approved all 76 ICRs we identified that did not include  these estimates.

Agencies provided a variety of reasons for not including these estimates  in the supporting documents. For example:

According to IRS officials the model they used to generate burden  estimates for all but their two largest information collection requests is  unable to calculate respondent time costs. They told us that the  model they used to generate burden estimates for their two largest  collections—called the Taxpayer Burden Model— does calculate  respondent time cost, but the IRS did not include this information in  the supporting statement. According to IRS officials, OMB is aware  of the old model’s limitation and told IRS its resources should be  devoted to transitioning these collections to its Taxpayer Burden  Model. IRS officials said that the agency plans, but has not developed  a timeline, to use the Taxpayer Burden Model on future ICRs and to  phase in use of the new model over a number of years, giving higher  priority to tax forms that affect the most taxpayers.

DOT officials stated that some respondent time costs were not  included in ICR supporting statements because, based on their  professional judgment, the information collection activities are  incidental to routine business operations and therefore should not be  included in respondent time cost estimates. While OMB’s guidance  states that agencies should not include burden hour estimates for  customary and usual business practices, the guidance also instructs  agencies to estimate respondent time costs for any estimated burden  hours included in the supporting statement. That is, any estimated  burden hours should have a corresponding time cost for carrying out  the information collection activities. DOT’s inclusion of burden hours in  the supporting statement in these cases indicates that the information  collection activities are not incidental to routine business operations,  and that respondent time costs should have been provided based on  OMB’s guidance.

An HHS official told us that, in general, while costs are not ignored,  they are also not considered high-impact information.

USDA officials said that it did not include respondent time costs in the  supporting statement in part because an ICR had been merged with  another information collection, but stated the agency would include  these costs in the ICR renewal’s supporting statement.

Unless OMB takes action to ensure that agencies consistently follow its  guidelines to include respondent time costs, agencies will likely continue  to not meet the requirement and omit this information. The PRA requires  that OMB establish and oversee standards and guidelines by which  agencies are to estimate the burden to comply with a proposed collection  of information. As part of its guidelines, OMB directs agencies to provide  certain standard information in its supporting statements, including  estimated respondent time costs. According to OMB staff, OMB reviews  these supporting statements as part of its ICR review process and has  the option of requesting changes from the agency prior to approving the  ICR. However, OMB staff said that the process is decentralized with  individual OMB desk officers responsible for managing their own review  of ICRs. OMB reviewed and approved all 76 ICRs we identified that did  not include these estimates. OMB officials told us that they will review the  findings in this report to determine what response is needed. Monetized  respondent time cost estimates will be particularly important if agencies  can use reductions in paperwork to offset new regulations under  Executive Order 13771.

For ICRs with monetized respondent time costs, agencies were  inconsistent in whether they included fringe benefits, such as paid leave,  insurance, and retirement contributions. OMB’s instructions for submitting  ICRs direct agencies to provide respondent time costs, but the  instructions do not specify how to calculate such costs. Of the 119 ICRs  we identified where employees might complete an information collection  activity on behalf an employer, 35 applied fringe benefits to their  respondent time cost estimates and 84 did not, as shown in table 2.

Table 3 shows that including fringe benefits in respondent time cost  estimates can have a significant effect on the total estimated respondent  time costs for an information collection. Of the two ICRs with the largest  burden hour estimates at USDA, the Mandatory Country of Origin  Labeling of Covered Commodities ICR includes fringe benefits, while the  SNAP ICR does not. The SNAP ICR’s respondent time cost for state  employees would have been $118 million higher if it had applied the  same fringe benefit estimate (33 percent of the wage rate) as the  Mandatory Country of Origin Labeling ICR. While different types of  respondents (e.g., state employees, farmers, or doctors) may not receive  the same percentage of wages as fringe benefits, the exclusion of such  benefits leads to an underestimate of respondent time costs.

OMB has not provided agencies with any formal, final guidance for  calculating respondent time costs or applying fringe benefits. The PRA  requires the Director of OMB to develop standards and guidelines for  information collections. Additionally, Standards for Internal Control in the  Federal Government states that management should externally  communicate the necessary quality information to external parties to  achieve the entity’s objectives. OMB provided non-binding draft  guidance on reviewing agency information collections in 1999 that states  that any wage rates used to estimate respondent time costs should be  “fully-loaded” to reflect the full cost of labor, including employee fringe  benefits, such as paid leave, insurance, and retirement contributions.  OMB staff told us that OMB continues to believe that using “fully-loaded”  wage rates is important. Without formal, final guidance clearly  communicating how agencies should apply fringe benefits to respondent  time cost estimates, agencies may continue to calculate costs  inconsistently.

Agencies’ inconsistent application of fringe benefits could contribute to  agencies underestimating the burden costs. Such underestimation could  contribute to inconsistent implementation of Executive Order 13771. As  previously stated, OMB guidance implementing the Executive Order  states that agencies may offset the incremental costs of new regulations  through the repeal or streamlining of mandatory information collection  burdens. HHS officials said that they have considered potential  information collection burden reductions as part of their efforts to comply  with the order. While USDA and IRS officials said that the agencies were  aware of the order, they did not yet have specific plans to reduce  information collection burden for the purposes of the order. Without clear  guidance about how to consistently estimate respondent time costs,  Congress and the administration cannot effectively compare information  collection cost savings for the public.

Agencies’ Independent Review Processes Did Not Detect Errors in Burden and Cost Estimates or Other Discrepancies

While our selected agencies reported having multiple levels of  independent review processes in place as part of the overall process for  preparing ICR burden estimates, we found instances where USDA, HHS,  and DOT did not detect math errors or inconsistencies. We found  multiple calculation errors in the supporting statements at three of the four  selected agencies—USDA, HHS, and DOT—that over- or underestimated  burden hours and costs to varying degrees, sometimes by millions of  hours or hundreds of millions of dollars. We also found inconsistencies  among estimates in Reginfo.gov and supporting statements. Reginfo.gov  provides summary information to the public on information collections,  including information on the estimated time and cost burdens. Supporting  statements provide the public with more detailed information on the  underlying methodology used to estimate burden, among other things.

The PRA requires that agencies establish a process independent of  program responsibility to review each ICR before submission to OMB for  approval, including a specific, objectively supported estimate of the  burden. Agency officials reported that reviewers assessed the  reasonableness of burden estimates by reviewing calculations, comparing  current estimates to previously approved estimates, or reading the  accompanying narrative in the supporting statement, which contains the  assumptions used in calculating burden hours and costs. However, the  agencies we reviewed did not adequately follow their own review  processes, resulting in estimates that misrepresented the burden hours  and costs of information collection activities, as described in the following  examples.

Department of Agriculture: We found math errors in the supporting  statement of USDA’s second largest ICR based on estimated burden  hours. Specifically, we found that USDA’s Agricultural Marketing Service  did not follow its stated assumptions in calculating burden hours and  respondent time costs for the Mandatory Country of Origin Labeling ICR,  resulting in an overestimation of hours and an underestimation of costs.  By using the incorrect number of respondents when calculating burden  hours, the Agricultural Marketing Service overestimated the Mandatory  Country of Origin Labeling ICR’s total burden by 171,444 hours.

In addition, the agency did not consistently apply its stated assumptions  (e.g., about the average burden time per response) in the development of  respondent time cost estimates, resulting in underestimated costs  presented to the public, as shown in table 4. For instance, the ICR  contained two different maintenance recordkeeping costs: one described  in the narrative and another in the summary tables in the supporting  statement. Both underestimated recordkeeping costs. Our review found  that, had the agency’s stated assumptions been consistently applied, the  actual cost estimate would have been approximately $463.2 million, or  $104.5 million higher than the largest maintenance recordkeeping cost  estimate in the supporting statement. According to Agricultural Marketing  Service officials, external pressure and accelerated timelines resulted in a less effective review of the ICR. Agency officials acknowledged that they  did not follow review processes or adequately review the supporting  statement. An official said that the agency will ensure that estimates for  this ICR are corrected in the future.

Department of Health and Human Services: We found both math  errors in the supporting statements and inconsistencies between the  supporting statements and Reginfo.gov for some of HHS’s 50 largest  IRCs based on estimated burden hours. Specifically, HHS did not detect  calculation errors in the supporting statements in 6 of 50 ICRs (none of  which were the top two case study ICRs for HHS) that we reviewed,  resulting in incorrect burden hour or cost estimates. For example, in a  Centers for Medicare & Medicaid Services (CMS) ICR, we found that the  agency correctly stated its assumptions in the supporting statement but,  due to a math error that was not detected during the review process,  incorrectly calculated the respondent time cost in the second year of the  collection based on these assumptions. Because it did not detect this  error, HHS underestimated respondent time costs by approximately $14.4  million or about 40 percent of the published total respondent time costs in  the second year for that ICR, as shown in table 5.

In another ICR, published in July 2013, CMS overestimated the public’s  burden by approximately 12.8 million hours. Agency officials attributed  the discrepancy to two significant math errors. Officials said that these  math errors were resolved and the burden hours recalculated in a  subsequent renewal of the information collection in 2017. According to  HHS officials, ICRs go through multiple levels of review before HHS  approves the ICR. Program offices conduct an initial review of ICRs  before passing them on to the Office of the Chief Information Officer  (OCIO), which then conducts a final review of ICRs before final  submission to OMB, including a basic check of the math used in  calculating burden hours.

Additionally, in 19 of the 50 HHS ICRs we reviewed, including HHS’s  largest ICR and the two CMS examples above, we identified  discrepancies in reported burden hours between the supporting  statements and Reginfo.gov (see table 6). For the public to evaluate the  methodology used to develop the final burden estimate posted on  Reginfo.gov, the two sources need to be consistent. Reasons for such  discrepancies, according to HHS officials, included data entry errors,  estimate changes made in supporting statements that were not reflected  on Reginfo.gov, and calculation errors. We also found 14 instances where  HHS did not include an ICR supporting statement on Reginfo.gov. Based  on our findings, HHS examined the discrepancies in table 6, and in June  2018 reported that all of the issues that we identified had been corrected.  CMS said that in general most of the issues identified can be attributed to  human error due in part to staff shortages and tight ICR submission  timelines. CMS said that it takes the errors very seriously and will continue to work to refine its internal review processes to improve the  quality of its ICR submissions.

HHS officials attributed some the discrepancies between the burden  estimates found in the supporting statements and the estimates found on  Reginfo.gov to instances when OMB works directly with program offices  within the department on revisions to a burden estimate without involving  OCIO. For example, according to HHS officials, in one instance shown in  table 6, the supporting statement reported an initial estimate of 30,708  burden hours. Later, the estimate was revised based on input that OMB  provided directly to the program office and was reported on Reginfo.gov  as 12,845,827 burden hours. OCIO was not aware that the change had  been made. Officials from HHS OCIO said the office is working to  improve coordination and serve more as an intermediary between OMB  and HHS components.

Department of Transportation: We found, and DOT officials  acknowledged, a calculation error in the supporting statement for the  Inspection, Repair, and Maintenance ICR, DOT’s second largest ICR  based on estimated burden hours. In the ICR’s supporting statement,  DOT calculated its total annual burden hours by using an average burden  time per response of 170 seconds for one information collection activity.  However, DOT did not include 30 seconds for one of the inspection tasks  that was stated in the calculation’s assumptions found in the supporting  statement. Officials said that this error may have been an inadvertent  miscalculation and identified 200 seconds as the accurate average  burden time per response. As a result, DOT underestimated the ICR’s  total annual burden by approximately 450,000 hours, nearly 4 percent of  the reported total annual burden hours for the ICR (see table 7).

As part of its review process, DOT uses a checklist for reviewing ICRs,  which includes checking the math for burden hours and costs in  supporting statements. An official acknowledged that, while DOT follows  its review process, the agency missed this calculation error at multiple  steps. The official said that the information collection had been active for  a long period of time and that not detecting the error was not material in  terms of PRA compliance. However, this example illustrates that a small  error of 30 seconds per response can have a large impact on the overall  burden hour and cost estimate. The DOT official said that it will correct  the error in a revised ICR.

In the examples above, both OMB and agencies reviewed and approved  the ICRs—including some of the largest ICRs at each of the agencies— but did not detect or address the math errors in the supporting  statements, inconsistencies between published estimates in supporting  statements and Reginfo.gov, or missing supporting statements during the  review process, allowing incorrect burden hour and cost estimates to be  publicly released. The PRA requires OMB to provide directions and  oversee the review and approval of collections of information and the  reduction of the information collection burden. OMB reviews the ICRs to  ensure they are consistent with applicable laws and policies related to  information quality. According to OMB officials, OMB desk officers check  the burden calculations for consistency and reasonableness. The desk  officers also check that the estimates are properly and consistently  calculated. This includes reviewing the burden calculations to ensure that  they are mathematically accurate. When we asked OMB officials about  the ICRs cited in this report where we detected mathematical errors, they  told us that they will review these ICRs to determine what response is  needed.

Until agencies ensure that their review processes adequately detect  errors and inconsistencies, the agencies cannot ensure that their burden  estimates are reliable, may result in less confidence in agencies’ ability to  accurately compute and report burden and as such, less confidence in  agencies’ ability to effectively manage and minimize the burden they  impose on the public. According to the Standards for Internal Control in  the Federal Government, management should periodically review  policies, procedures, and related control activities for continued relevance  and effectiveness in achieving the entity’s objectives. Therefore, if  agencies’ review processes do not detect errors or inconsistencies in  supporting documents, then the public may have inaccurate or incomplete  information on the burden imposed by an information collection.  Additionally, without reliable burden estimates and complete information,  Congress and the administration cannot ensure that agencies’ efforts to  reduce burden to comply with Executive Order 13771 are effective.

Agencies We Reviewed Conducted Varying Levels of Public Consultation and Received Little Input on Burden Estimates

Agencies Conducted Public Outreach, but Public Notices Received Few Comments and Did Not Always Contain Needed Information to Evaluate Burden Estimates

Agencies met the PRA requirement to post Federal Register notices and  solicit public comments for all 200 information collections that we  reviewed. They generally received few, if any, comments from the public  in response. We found that 161 ICRs solicited comments through 60- day notices. Table 8 shows that while 35 of the 161 ICRs received  comments (including 3 of the top 8 case study ICRs), only 10 received  comments that were related to the burden estimates (including only one  case study ICR), according to the ICR supporting statement and related  documents.

Based on our review of these 10 comments, 2 comments resulted in  increases to agencies’ burden estimates while another 5 resulted in no  burden estimate change, but allowed the agency to further explain the  basis for its estimates, and provided increased transparency for the  public. For example, as a result of feedback from a trade association, USDA revised its burden hour estimate for a particular component of the  National Organic Program ICR from 1 hour to 10 hours. The trade  association said it would take 10 to 60 hours to develop a label and get it  approved. Because this estimate was not based on a formal survey,  USDA did not use the upper range provided by the commenter but did  acknowledge that it may have underestimated the burden, according to  the ICR supporting statement. In the other example, DOT officials revised  the overall burden for an ICR on drivers’ medical certificates from 9.8  million hours to 10.2 million hours based on a comment that called to their  attention an incorrect assumption about the collection’s frequency. The  agencies also made more transparent the specific sources used to  determine the burden estimates for five of the ICRs in response to public  comments. For example, one comment prompted HHS to provide  additional details on the components of the burden hour estimate for the  ICR and identify the relevant source data.

Officials at DOT and HHS said that, in some cases, they rely on public  input in response to the 60-day Federal Register notices to validate their  burden estimates, and if they do not receive any comments, they do not  make any changes to the ICRs. For example, according to DOT officials,  FMCSA relies on public comments to suggest revisions to ICRs that are  up for renewal. In cases where no one has submitted any comments on  the burden estimate, DOT officials reported that they assume the burden  hour estimate per respondent is accurate and do not change the  estimate.

Despite the value of public input, agencies’ Federal Register notices did  not always contain a complete description of the elements that make up  the burden estimates. As a result, the public may not have had enough  information to comment on the reasonableness of the estimates. PRA  and OMB regulations require that agencies solicit comments from the  public both in the Federal Register and through other means, in part to  evaluate the accuracy of the agency’s burden estimate, including the  validity of the methodology and assumptions used to calculate the  burden. Generally, three basic elements of the burden estimate formula in  the Federal Register notices provide the public with sufficient information  to review the burden estimates. As previously stated, these elements are:  (1) the number of respondents, (2) the frequency of response, and (3) the  average burden time per response. However, agencies do not  consistently include all of these elements in the Federal Register notices.

Figures 4 and 5 show two examples of 60-day Federal Register notices in  which agencies provided varying levels of detail on the burden hour  estimates. In figure 5, USDA has provided burden information in its SNAP  information collection by using tables and a summary that provides the  estimated number of respondents, the frequency of response (i.e.,  number of responses per respondent), and the average burden time per  response. In addition to providing data on these three elements, USDA  grouped burden estimates by activity and type of respondent. This made  it possible for the public to be able to review and comment on the specific  assumptions used to develop the estimated hours per response. In  particular, the notice shows burden data for time spent on the application,  recertification application, reports, and notices for both state agencies and  households.

Conversely, figure 5 shows an example where IRS has only provided the  estimated total annual burden hours for the ICR without providing any of  the elements used to calculate the estimated burden hours—the  frequency of the information collection, the number of respondents, and  the average burden time per response.

A member of the public is more likely to be able to meaningfully comment  on the average burden time per response (e.g., 19 minutes for a  household to complete the initial SNAP application, as shown in figure 4)  than an aggregate estimate (e.g., 284,599 total burden hours to complete  a form used to report and summarize income from rents, royalties,  partnerships, and other sources, as shown in figure 5).

In 9 of the 10 instances in which USDA, HHS, and DOT received  comments related to the burden estimates, the 60-day notices contained  either all of these required elements or sufficient information to be able to  calculate all of these elements. Agencies that do not consistently  include these basic elements of the burden estimate reduce the likelihood  that the public will be able to provide meaningful input to improve the  accuracy of their burden estimates. For the two ICRs that resulted in a  change in the burden estimate, USDA and DOT included detailed  information for the burden time per response in their respective 60-day  notices, which allowed the public to comment on these estimates.

As shown in table 9, of the 200 ICRs that we reviewed, 25 did not contain  enough information to allow the public to reasonably determine the  frequency of response, number of respondents, or average burden time  per response: 13 at IRS, 11 at DOT, and 1 at HHS. In general, if  agencies do not provide sufficient data for the elements needed to  evaluate burden estimates, they may not benefit from receiving well- informed comments to ensure more reliable estimates, or to provide an  opportunity for greater transparency concerning their rationale for existing  burden estimates.

Our analysis found that 13 IRS ICRs (none of which were case study  ICRs) did not have enough information on the frequency of the collection  to allow the public to reasonably review the burden estimate and thereby  provide meaningful input. IRS officials said that they did not always  include data on the frequency of the collection because it might cause  confusion for those instances where only a portion of the respondent  population will respond to the collection more than once in a given year.  Instead, IRS officials noted that their current policy is to include the  estimated number of respondents, the estimated time per response, and  the estimated total burden hours in each Federal Register notice for ICRs.

In early 2017, IRS established a new position to review ICRs and ensure  that the agency’s PRA policies are properly implemented. According to  IRS, this has helped to ensure that IRS includes estimated number of  respondents, the estimated time per response, and the estimated total  burden hours in each Federal Register notice. However, if IRS does not  also report on the frequency of the collection and the frequency cannot be  calculated using the other elements, the public may not be able to fully  evaluate the burden estimate.

According to a DOT official, in some instances, program officials did not  follow DOT’s prescribed templates for Federal Register notices, which  direct officials to include the number of respondents, the frequency of  response, and burden time per respondent to be able to calculate the  total annual burden hours in each notice. According to the DOT official, in  response to our findings, DOT’s Office of General Counsel is conducting  an education campaign to reinforce the necessity of providing fully  transparent information regarding ICR burden during all stages of the  notice process.

In addition, DOT did not always include the average burden time per  response in its Federal Register notices, in part because DOT’s templates  do not direct officials to provide this information. A DOT official said that  the templates presume that the individual reading the notice will have  sufficient information to calculate this element. However, we found that  average burden time per response could not reasonably be calculated  using the other information provided in 10 of the notices that we reviewed  in part because one or more other elements of the burden estimate were  missing. Average burden time per response is a key element for the  public to be able to reasonably evaluate the burden. A DOT official said  that DOT plans to update the template based on our findings.

Agencies Did Not Always Consult with the Public beyond Public Notices and Did Not Solicit Input about Burden Estimates

The agencies we reviewed did not always consult with the public on  information collections beyond Federal Register notices, as required by  the PRA and regulations. While the PRA requires consultation on every  ICR, OMB guidance only recommends public consultation in general but  does not direct agencies to consult beyond the publication of the notices.  When they did consult with the public, agencies did not always use these  consultations as an opportunity to explicitly ask about burden hour  estimates. Of the 200 information collections we reviewed, 113  contained information in their supporting statements indicating that the  agencies performed public consultations beyond the Federal Register  notices (see table 10). Only 3 of the 8 case study ICRs that we reviewed  indicated that the agencies performed public consultations beyond the  Federal Register notices.

In the 50 ICRs we reviewed, DOT provided information about public  consultation in about one-quarter of its ICR supporting statements. A  DOT official stated that DOT generally conducts outreach through the  rulemaking process through discussions with stakeholders about the  activities and fundamentals of the rule. Through this outreach process,  rather than speaking explicitly about estimated burden hours, DOT and  stakeholders discuss what the regulations require and whether those  requirements are burdensome. According to the official, stakeholders will  tell OMB if the burden estimate is incorrect. But DOT generally does not  conduct additional outreach about burden estimates during ICR renewals,  which occur at least every 3 years. HHS also provided information about  public consultation in about one-third of its ICRs.

Agencies’ public consultation beyond the publication of Federal Register  notices include federal advisory committee meetings, board meetings,  webinars, and periodic stakeholder meetings. In addition, the outreach  targeted a wide range of stakeholders, including associations, individuals  subject to the information collection, and industry representatives.

OMB’s guidance directs agencies to include descriptions in ICR  supporting statements of efforts to consult with the public about  information collection burden. However, only 6 of these 113 ICR  supporting statements—4 at USDA and 2 at DOT—indicated that public  outreach was related to the burden hour estimates, despite OMB’s  guidance. Agencies generally did not use public consultation beyond the  publication of Federal Register notices to seek input on burden estimates.  For example, USDA officials said that the Agricultural Marketing Service  engages industry on a regular basis through meetings and seminars, but  that it does not explicitly ask for feedback on the ICR burden hour or cost  estimates and assume that industry representatives will raise any existing  issues with the ICRs at these meetings.

At HHS, Office for Civil Rights (OCR) officials stated that there are  instances where they receive feedback during conferences or through  communications initiated by the public or members of Congress.  However, OCR officials let people bring up the subject of the accuracy of  OCR’s burden hour estimates on their own. At DOT, for five of the six  Federal Railroad Administration ICRs we reviewed that involved  consultation with the Railroad Safety Advisory Committee, the supporting  statements do not show evidence of discussions of the ICRs’ burden  estimates during committee meetings, and the agency did not reference  any comments on these estimates or summarize them in the supporting  statements. At IRS, 40 of the 43 IRS ICR supporting statements that  identified public consultation specifically highlighted periodic meetings to  discuss tax laws and tax forms with representatives of professional  associations in the fields of law and accounting. IRS officials said that  they do not specifically raise the issue of burden hour estimates during  these meetings, but only ask stakeholders for general comments.

The lack of public consultation beyond Federal Register notices is due, in  part, to a lack of guidance from OMB. In 2005, we recommended that  OMB alter its current guidance to all federal agencies to direct agencies  to consult with potential respondents beyond the publication of Federal  Register notices. OMB disagreed with this recommendation, stating that  it interprets publication in the Federal Register as the principal means of  agency consultation with the public, with PRA notices on forms providing  an opportunity for further public input. OMB staff told us in January 2018  that they still hold this view. Specifically, OMB staff said that additional  consulting should occur for those ICRs where important information may  be missed by the notice and comment period. In a June 2018  conversation, OMB staff acknowledged that public consultation could be  particularly beneficial the first time that an ICR is renewed after the initial  approval. At that point, the public will have had its first experiences  responding to the information collection, which can inform its feedback to  agencies. However, given the different types of changes that can occur  over time that could affect burden estimates—such as changes in  technology, the economy, and the original source data used to generate  burden estimates—we continue to believe that it is important to actively  consult with the public on each renewal, particularly given the low level of  response that agencies receive in response to Federal Register notices  for ICR renewals.

In our 2005 report, agencies also expressed concerns that consultation  for every ICR would not be a good use of agency resources. Officials  stated that the greatest opportunity is at the rulemaking stage. However,  as previously discussed, agencies have existing public outreach efforts  whose broader use would not require significant additional time and  resources. Without leveraging opportunities to engage in direct public  consultation with the public for every ICR, agencies may miss  opportunities to obtain additional comments on ICRs, which some  agencies stated they rely on to check the accuracy of their estimates and  in two cases have resulted in significant revisions. Further, emphasizing  those elements of the burden estimate where quality data are limited and  stakeholder experiences are most relevant (e.g., the time per response)  could help agencies focus outreach on the most pertinent information.

We maintain that the PRA requirement regarding public consultation in  addition to the 60-day Federal Register notice is clear: both requirements  are introduced together, with no distinction between them: agencies shall  “provide 60-day notice in the Federal Register, and otherwise consult with  members of the public and affected agencies concerning each proposed  collection.” Based on our review of the four agencies, we believe that  such consultation can be completed in an efficient and effective  consultation manner using many of the outreach mechanisms currently in  place. However, given OMB’s continued disagreement with our 2005  recommendation, congressional action may be needed to clarify the  language in the PRA to more explicitly require federal agencies to consult  with potential respondents on each information collection beyond the  publication of Federal Register notices.

One of the PRA’s key requirements is for agencies to produce estimates  of the burden that information collections will impose on the public. This  information is essential for agencies to appropriately balance the burden  of these information collections with their public benefit and for properly  measuring progress toward applicable burden reduction goals. The PRA  provides two mechanisms to help ensure the quality of these estimates: a  multi-layered independent review process and mandatory public  consultation requirements. However, the errors, omissions, and other  discrepancies that we found in agencies’ ICRs indicate these  mechanisms are not operating as effectively as they could be.

Independent review processes are only able to ensure an accurate and  reliable estimate when agencies and OMB use them consistently to  detect errors and correct them. However, we found that USDA, HHS, and  DOT failed to adequately apply their own review processes, resulting  errors and discrepancies between the supporting statement and  Reginfo.gov. Similarly, OMB approved ICRs containing mathematical  errors in the supporting statements and inconsistencies between the  supporting statements and Reginfo.gov. If the agencies’ and OMB’s  review processes do not detect mathematical errors and inconsistencies,  then Congress and the public may have inaccurate or incomplete  information on the estimated burden imposed by an information collection  may result in less confidence in agencies’ abilities to accurately compute  and report the burden and as such, less confidence in agencies’ ability to  effectively manage and minimize the burden they impose on the public.

As part of its review process, OMB also reviews ICRs for compliance with  PRA and applicable regulations, and policies. However, OMB approved  numerous ICRs without the required respondent time cost information. If  OMB does not take action to ensure that agencies consistently follow its  guidance to include respondent time costs, agencies will likely continue to  and omit this information. In addition, OMB’s current formal guidance  does not offer specific instructions on when and how to include fringe  benefits like paid leave and retirement contributions in respondent time  costs. Without clear guidance, agencies may continue to inconsistently  estimate respondent time costs, which could potentially result in  underestimated time costs at some agencies as well as inconsistent  implementation of efforts to reduce regulatory burden.

Public input, when available, often resulted in improvements in the quality  of agencies’ burden estimates. However, the four agencies are missing  opportunities to improve the quality of their estimates by not better  leveraging existing public outreach efforts. While Federal Register notices  provide the public with an opportunity to comment on the burden  estimates, we found that DOT and IRS did not always provide sufficient  information in their notices on the methodologies used to calculate the  burden to allow the public to meaningfully comment on agencies’ burden  estimates.

At the same time, given the few comments that agencies receive in  response to these notices, it is clear that Federal Register notices alone  are not sufficient. We found that agencies are already actively engaging  with stakeholders through a number of means, including federal advisory  committee meetings, periodic stakeholder meetings, and webinars, but  are not fully using these opportunities to explicitly seek input on their  burden estimates. Emphasizing those elements of the burden estimate  (e.g., average time per response) during these events could help the  agencies target their outreach on the most pertinent information.

IRS uses a methodically rigorous process to develop the initial burden  estimates for the federal government’s two largest information  collections—U.S. Individual and Business Tax Return ICRs. This process  includes gathering detailed information from the public on the time and  money spent on tax preparation through its taxpayer surveys. IRS plans  to transition additional information collections to this more rigorous  approach in the coming years. This could improve the quality of burden  hour estimates and provide the cost estimates that IRS is currently  lacking for other collections. IRS could also do more do consult with the  public after the initial burden estimate has been developed. IRS reported  that it already periodically meets with representatives from professional  associations to discuss tax laws and tax forms. If IRS used these  opportunities to explicitly seek input on the initial burden estimate, the  agency could both obtain valuable feedback on burden estimates and  comply with the consultation requirements in PRA.

OMB could help ensure that agencies more consistently obtain valuable  public input on each of their ICRs by providing guidance directing  agencies to consult with the public beyond the Federal Register notices  on every ICR, as required in the PRA and as we previously  recommended. However, while we consider the PRA requirement  regarding public consultation in addition to the 60-day Federal Register  notice for each ICR to be clear, OMB continues to believe that additional  consulting should occur for those ICRs where important information may  be missed by the public notice and comment period. We maintain that  agencies should comply with the additional consultation requirement in  the PRA. We acknowledge OMB’s concerns that public consultation not  overly be burdensome to agencies. However, we found that the agencies  we reviewed have already identified efficient and effective mechanisms  for gathering input from the public, such as through periodic stakeholder  meetings and webinars. Given that OMB continues to disagree with our  2005 recommendation, congressional action to clarify the legal  requirement may be required.

We are making the following matter for congressional consideration:  Congress should 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)

We are making a total of 11 recommendations, including 2 to OMB; 2  each to the Departments of Agriculture and Health and Human Services;  3 to the Department of Transportation; and 2 to the Internal Revenue  Service.

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)

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)

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)

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)

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)

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)

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)

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)

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)

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)

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)

We provided a draft of this report to the Director of OMB; the Secretaries  of USDA, HHS, DOT; and the Commissioner of the IRS for comment,  respectively. OMB did not provide written comments, and OMB staff  informed us that OMB neither agreed nor disagreed with our  recommendations to the agency. The Audit Liaison from the USDA’s  Office of the Chief Information Officer informed us in an email that USDA  concurs with our recommendations to the agency. HHS, DOT, and IRS  provided written comments, which we have reprinted in appendixes II, III  and IV.

In its written comments, HHS and DOT concurred with our  recommendations to the agencies. HHS said it intends to continually  review PRA processes and procedures as well as closely monitor their  implementation to further reduce human error. DOT stated that the  agency has taken action to improve its PRA program, and reported that it  issued a new Federal Register notice for its Inspection, Repair, and  Maintenance ICR to address mathematical errors identified in this  report.

In its written comments, IRS also concurred with our recommendations to  the agency. However, IRS stated that its existing PRA policies and  procedures sufficiently address the PRA requirements. In response to our  recommendation on leveraging existing consultation mechanisms to  obtain public comments on ICR burdens, IRS noted its public participation  process includes consultation with stakeholders. Specifically, IRS said  that, as resources allow, it partners with industry and stakeholder groups  to consult with taxpayers on tax product development and assess the  burden experience in understanding the tax forms and complying with  requirements to complete them.

However, we believe that IRS could better leverage this stakeholder  consultation. Our analysis of supporting statements and interviews with  IRS officials indicates that IRS did not explicitly seek input on burden  estimates for its largest collections during these consultations. Soliciting  input through the published forms themselves provides additional  opportunities to obtain valuable stakeholder input, but it is not a substitute  for actively reaching out to stakeholders for input on its burden estimates  prior to approval, which could be readily accomplished through the  mechanisms IRS already has in place for stakeholder consultation.

In response to our recommendation on providing the public with sufficient  information in its public notices to allow the public to evaluate an ICR’s  burden, IRS acknowledged that public notices issued before February  2017 may not have included all the elements needed by the public to be  able to evaluate the burden estimates (number of respondents, frequency  of response, and average burden time per response). However,  according to IRS, the agency has since implemented a procedure to  ensure that these elements are in the ICRs and that recent ICR public  notices contain all three elements. If effectively implemented, these new  procedures could help ensure that the public has the information it needs  to review and provide input to on the specific assumptions used to  develop the burden estimates.

The public notices we reviewed for this report were all published prior to  February 2017. When we spoke with IRS officials in February 2018, they  said that their current policy is to include the estimated number of  respondents, the estimated time per response, and the estimated total  burden hours in each Federal Register notice for ICRs. IRS officials  added that they did not always include data on the frequency of the  collection because it might cause confusion for those instances where  only a portion of the respondent population will respond to the collection  more than once in a given year. Although IRS stated in its written  comments that it had implemented new procedures to include all the  necessary elements, we found some ICRs issued after February 2017  that do not contain the necessary elements, including frequency, to allow  the public to evaluate the specific assumptions used to develop the  burden estimates. We will follow-up with IRS to ensure that new ICR  procedures fully address the issues we identified.

OMB, USDA, HHS, and DOT also provided technical comments, which  we incorporated as appropriate throughout our report.

As agreed with your office, unless you publicly announce the contents of  this report earlier, we plan no further distribution until 30 days from the  report date. At that time, we will send copies to the appropriate  congressional committees, the Director of the Office of Management and  Budget; the Secretaries of the Departments of Agriculture, Health and  Human Services, and Transportation; and the Commissioner of the  Internal Revenue Service, and other interested parties. In addition, the  report will be available at no charge on the GAO website at  http://www.gao.gov.

If you or your staff has any questions about this report, please contact  Tranchau (Kris) T. Nguyen at (202) 512-2660 or Nguyentt@gao.gov.  Contact points for our Offices of Congressional Relations and Public  Affairs may be found on the last page of our report. Key contributors to  this report are listed in appendix V.

This report examines (1) how agencies estimate both the burden hours  and costs of their information collections, and any limitations of their  approaches, and (2) the extent to which agencies consult with and  receive comments from the public on the collections’ estimated burden.

To address both of these objectives, we reviewed Office of Management  and Budget (OMB) data on federal information collection requests (ICR)  available on Reginfo.gov as of April 7, 2017. To obtain more information  about the ICR process at the agency level, we selected four agencies to  serve as case studies. We identified the four agencies with the largest  number of total annual estimated burden hours across the federal  government based on the Reginfo.gov data. The selected agencies are  the Internal Revenue Service (IRS)—which alone accounts for  approximately 70 percent of the federal government’s total information  collection burden hours—and the Departments of Health and Human  Services (HHS), Agriculture (USDA), and Transportation (DOT). HHS  represents 12 percent of the total burden hours in the federal  government, while USDA and DOT each represent 2 percent of the  federal information collections burden. The four selected agencies  represent more than 85 percent of the total estimated burden hours  across the federal government.

For each of the four agencies, we selected the 50 largest ICRs based on  total annual burden hours, for a total of 200 ICRs, to provide us with  information about the agencies’ efforts to consult with the public and their  approach for estimating burden hours, respondent time costs, and  resource costs related to each ICR. As part of this analysis, we reviewed  information about (1) burden hour and (2) cost estimates and public  consultation from Reginfo.gov and the ICR supporting statement.

To obtain a more detailed understanding of the methodologies, policies,  and public outreach efforts related to estimating and reviewing the burden  associated with each ICR, we selected the two ICRs with the largest  burden hour estimates from each selected agency as case studies. The  eight case study ICRs, shown in table 11, represent the majority of  information collection burden at each agency and roughly 59 percent of  the federal government’s total burden hours. We reviewed the supporting  statements for each case study ICR to determine how the agencies  calculated burden hours, respondent time costs, and respondent resource  costs.

We reviewed the Federal Register notices issued by the agencies to  solicit comments from the general public on these ICRs, as well as the  comments received in response to the 60-day notices. We reviewed the  Paperwork Reduction Act and OMB guidance issued to assist agencies in  developing and reviewing their information collections. We interviewed  knowledgeable officials at the four selected agencies to obtain information  on the methodologies used to estimate burden time and costs, the  processes and policies for ICR review and submission, and public  participation in providing comments about the burden estimates. In  addition, we interviewed OMB staff to obtain information about its role in  reviewing ICRs submitted by agencies, as well as its relationship with the  selected agencies.

To assess the reliability of Reginfo.gov data on burden hours and  annualized costs for each ICR, we interviewed OMB staff and reviewed  documentation of the Reginfo.gov website and the Regulatory Information  Service Center/Office of Information and Regulatory Affairs Consolidated  Information System (ROCIS), which is the system that agencies use to  track information collection requests and that underlies information  provided on Reginfo.gov. We compared the data from Reginfo.gov with  the data found in the supporting statements. We interviewed agency  officials and OMB staff about the discrepancies between these two  information sources. We found that the Reginfo.gov data were sufficiently  reliable for the purpose of selecting the case study agencies and ICRs  subject to our review.

We conducted this performance audit from January 2017 to July 2018 in  accordance with generally accepted government auditing standards.  Those standards require that we plan and perform the audit to obtain  sufficient, appropriate evidence to provide a reasonable basis for our  findings and conclusions based on our audit objectives. We believe that  the evidence obtained provides a reasonable basis for our findings and  conclusions based on our audit objectives.

Appendix II: Comments from the Department of Health and Human Services

Appendix III: Comments from the Department of Transportation

Appendix IV: Comments from the Department of the Treasury

Appendix V: GAO Contacts and Staff Acknowledgments

In addition to the above contact, Thomas J. McCabe (Assistant Director)  and Joseph L. Santiago (Analyst-in-Charge) supervised the development  of this report. Michael Bechetti, Tim Bober, Alyssia Borsella, Jaqueline  Chapin, Steven Flint, Tim Guinane, Heather Krause, Ying Long, Sharon  Miller, Ed Nannenhorn, Kayla Robinson, Robert Robinson, Cindy  Saunders, Wesley Sholtes, and Chris Zakroff made major contributions to  this report. Dawn Bidne, Jeffrey DeMarco, Jessica Nierenberg, and Laurel  Plume verified the contents of this report.

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.)