[Federal Register Volume 64, Number 198 (Thursday, October 14, 1999)]
[Notices]
[Pages 55788-55790]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-26846]
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OFFICE OF MANAGEMENT AND BUDGET
Office of Information and Regulatory Affairs; Estimating
Paperwork Burden
AGENCY: Office of Information and Regulatory Affairs, Office of
Management and Budget.
ACTION: Notice of reevaluation of OMB guidance on estimating paperwork
burden.
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SUMMARY: The Paperwork Reduction Act (PRA) seeks to ensure that Federal
agencies balance their need to collect information with the paperwork
burden imposed on the public in complying with the collection. Agencies
must estimate the burdens that their individual collections impose on
the public. The public learns of these burden estimates by PRA notices
that agencies publish in the Federal Register and with the forms used
for collection.
The Office of Management and Budget (OMB) has begun a preliminary
reevaluation of its guidance to agencies on estimating and reporting
paperwork burden. As part of this effort, OMB seeks comment on how to
increase the uniformity, accuracy, and comprehensiveness of agency
burden measurement. Based on comments that OMB receives, as well as its
experience in evaluating agency burden estimates, OMB will prepare (and
seek additional comment on) a more detailed proposal to revise its
guidance to agencies on estimating and reporting paperwork burden. OMB
will consider comments on its proposal before finalizing its burden
guidance.
DATES: Written comments are encouraged and must be received on or
before January 12, 2000.
ADDRESSES: Comments should be submitted to the Office of Information
and Regulatory Affairs, Office of Management and Budget, New Executive
Office Building, Room 10202, 725 17th Street, NW, Washington, DC,
20503. Comments received on this notice will be available for public
inspection and copying at the Office of Information and Regulatory
Affairs
[[Page 55789]]
Docket Library, New Executive Office Building, Room 10102, 725 17th
Street, NW, Washington, DC, 20503. To make an appointment to inspect
comments, please call (202) 395-6881.
FOR FURTHER INFORMATION CONTACT: Alexander T. Hunt, Policy Analyst,
Commerce and Lands Branch, Office of Information and Regulatory
Affairs, at (202) 395-7860 or [email protected].
SUPPLEMENTARY INFORMATION:
I. Background
Under the 1995 PRA (44 U.S.C. Chapter 35) and OMB's implementing
regulations (5 CFR part 1320), we measure PRA paperwork burden in terms
of the time and financial resources the public devotes annually to meet
one-time and recurring information requests. The term ``burden'' means
the ``time, effort, or financial resources'' the public expends to
provide information to or for a Federal agency, or otherwise fulfill
statutory or regulatory requirements. 44 U.S.C. 3502(2); 5 CFR
1320.3(b). This includes:
Reviewing instructions;
Using technology to collect, process, and disclose
information;
Adjusting existing practices to comply with requirements;
Searching data sources;
Completing and reviewing the response; and
Transmitting or disclosing information.
Under the Paperwork Reduction Act, agencies must take into account
the burden that their information collections impose on the public.
This burden is balanced with the ``practical utility'' of the
information to be collected. In earlier decades, when information was
maintained manually rather than through automation, paperwork burden
could be captured by estimating the ``burden hours'' that an
individual, a company, or other entity would have to expend in filling
out a form or otherwise responding to an agency collection. Over the
succeeding years, as computers and other automated systems have assumed
an ever-increasing role in society, paperwork burden has increasingly
come to be represented by the financial costs associated with
information technology. The financial costs imposed by a Federal
collection have been included as ``burden'' in the Paperwork Reduction
Act and in OMB's implementing regulations. See 44 U.S.C. 3502(2) (1995
PRA); 44 U.S.C. 3502(3) (1980 PRA); 5 CFR 1320.3(b) (regulations issued
in 1995); 5 CFR 1320.7(b) (regulations in effect during 1983-95).
Currently, agencies separately estimate the ``hour burden'' and
``cost burden'' of each particular information collection. This ensures
that all types of burden are taken into account, but requires two
calculations of burden, one in the form of ``burden hours'' and the
other in the form of ``dollars.'' This approach also poses difficulties
for evaluating over the years a particular collection's overall burden.
For example, as respondents move from manual to automated information
processing, a collection's ``hour burden'' would typically decrease.
Its ``cost burden'' might increase or decrease, depending on the level
of offsetting ``cost burden'' reductions from electronic recordkeeping
and reporting. While the use of automation can decrease overall burden,
the current reliance on separate categories of burden poses
difficulties for arriving at precise comparisons over time of a
collection's overall burden. For similar reasons, the current reliance
on separate burden categories can sometimes pose difficulties for
comparing the overall burden imposed by different collections of
information, since collections can involve significantly different
mixes of ``hour burden'' and ``cost burden.'' For example, in the case
of collections involving household respondents, overall burden would
typically consist primarily of ``burden hours.'' In the case of
collections involving large business respondents, ``cost burden'' would
assume a larger significance, due to the greater reliance on
automation.
Given these complexities, agency estimation methodologies can
produce imprecise and inconsistent burden estimates. A detailed
description and assessment of current burden estimation practices is
provided in the FY 1999 Information Collection Budget. See Information
Collection Budget of the United States Government, Fiscal Year 1999,
Office of Management and Budget, pp. 31-36 (available at http://
www.whitehouse.gov/OMB/inforeg/icb-fy99.pdf).
II. Burden Measurement
In reevaluating its guidance on estimating burden, OMB has relied
on a number of principles:
Consistency. Burden estimation techniques should be
applied consistently to help ensure that a burden hour reported by one
agency represents a burden hour equal to that of a burden hour reported
by any other agency. Since the value of precise burden estimates
increases with the size of information collections, we must use
competent professional judgment to balance the thoroughness of the
analysis with its practical limits.
Accuracy. Burden measurement should incorporate recent
developments in methodological, data collection, and estimation
techniques and reflect changes in the collection, storage, processing,
preparation, and transmission of information.
Integrity. Measurement should provide proper incentives to
agencies to undertake initiatives that actually reduce burden, as
opposed to initiatives that simply reduce burden estimates. Such
measures, for example, would not rely exclusively on proxies for
burden, such as the number of lines on a form.
Sensitivity. A burden measure should allow agencies to
assess the impact of ongoing improvements in procedures and customer
service that are not measured by current methodologies.
Comprehensiveness. The measurement of burden must capture
all burden (time and out-of-pocket expenses) without double-counting
and must reflect the real costs imposed on the public.
Practicality. Agency personnel must be able to implement
measurement methods in a practical and straightforward way.
Transparency. Improved burden estimates should improve our
understanding of the tradeoffs among burden, customer satisfaction, and
the utility of collected information.
In relying on these principles, OMB hopes to minimize variation in
paperwork burden measurement so that future estimates are more useful
in comparing agency inventories and evaluating individual agency and
governmentwide performance. It also hopes to improve the
comprehensiveness, consistency, and accuracy of burden hour measurement
and the way agencies now measure and report out-of-pocket dollar costs.
Agencies can continue to report time and financial costs, but estimates
of burden hours and financial costs will reflect improved estimation
methodologies.
III. Issues for Comment
OMB invites comment generally on all aspects of measuring and
reporting paperwork burden. OMB welcomes any suggestions on how to
address problems with the current agency practices, as well as
recommendations on methodologies to improve estimates of time burden
and financial burden. It specifically requests comments on burden
measurement options.
Please give particular attention to these issues:
[[Page 55790]]
Monetizing Burden Hours. OMB seeks comment on the idea of
monetizing the ``burden hour'' calculation by converting a collection's
burden hours into a dollar measure of burden. If a dollar-equivalent
value is calculated for a given collection's ``burden hours,'' a single
estimate--in dollar terms--of the collection's overall burden could be
provided by combining the monetized ``burden hour'' calculation with
the ``cost burden'' calculation. This approach would raise a number of
implementation issues. Two issues deserve particular attention. The
first involves improving agency burden accounting practices to resolve
salient differences and improve the dollar measure of out-of-pocket
expenses. The second issue involves revising OMB guidance to agencies
to provide consistency in the measurement of time and financial burden.
One potential benefit of developing a unified dollar measure of
burden is that it would be available for cost-effectiveness analysis.
Analytically, a dollar measure has the potential to better capture
opportunity cost (as explained below), as well as the burden of PRA
requirements not easily measured in hours (e.g., recordkeeping). We
seek comments on whether this and/or any other potential benefits would
outweigh possible negative effects of this approach.
Monetizing burden hours would present a daunting methodological
challenge and raises issues concerning certainty and ease of
administration by agencies. The key issue would be how to estimate the
value of the time devoted by the public to complying with the
government's information collection requirements. Monetizing time
burden presents different issues when considering information
collections from firms versus collections from households. When
information is collected from firms, it may be relatively easy to
estimate the employee cost associated with responding to the
collection. Indeed, some agencies already do this, using, for example,
data on wage rates provided by the Bureau of Labor Statistics. The
challenge in firm-based collections is primarily one of implementation.
In order to assure a meaningful basis for comparison of costs across
agencies, it will be necessary to obtain appropriate wage rates.
In estimating the appropriate wage rate, it is critical that the
wage be properly ``loaded'' to include overhead and fringe benefit
costs associated with the employee's time. For example, although a
technical employee's wage may be $20 per hour, she may also receive
benefits from her firm such as health and life insurance, paid
vacation, and contributions to a retirement plan. To support her work
activities, her employer must also purchase office supplies and
services, including office space, furniture, heat and air conditioning,
electricity, a telephone and telephone service, a personal computer,
printer and photocopier access, and various office supplies. These
costs need to be accounted for when assessing the overall impact of the
Federal information collection on the resources of the respondent.
For household-based collections, the issue is inherently more
complex. People are generally not paid a wage for non-work activities
that they perform at home. Instead, for burden measurement purposes,
the value that people place on their time is usually expressed in
economic terms as ``opportunity cost,'' or the value of an activity
(for example, spending time with family or developing a new
professional skill) that a person would expect to engage in were he or
she not occupied in complying with a government reporting requirement.
Economic theory suggests that the opportunity cost of giving up an hour
of leisure will be equal to the wage foregone from the next hour the
individual would have worked. In most cases, this will be the same as
the respondent's average wage. In other cases--for example, if the
respondent is eligible for overtime pay for her forty-first hour of
work in a week--it may be more than the average wage.
Alternatively, to measure the value of leisure time, agencies could
observe the actual fees paid by individuals and businesses to others
(e.g., paid tax preparers, contractors) to prepare and submit
information to the government. This measurement approach is sometimes
referred to as ``revealed preference.''
Given the methodological and implementation challenges involved
with monetizing burden hours, OMB requests responses to a number of
specific questions:
What are the advantages and disadvantages to trying to
monetize burden hours?
Is monetization worth doing at all?
Should a single valuation of time (as represented, for
example, by a respondent's wage rate or the fee paid to a contractor)
be used for all collections, or should it be derived separately for
different types of collections? A successful methodology may need to be
tailored to individual collections and agencies.
If the latter, should a single valuation be used for all
respondents to a particular collection, or should valuations differ
according to respondent characteristics. A successful methodology may
need different values of time for collections responded to by
individuals in different circumstances.
Should OMB establish a means for reporting annual burden
estimates rather than the three-year average burden estimates that are
commonly reported today?
Categories of Burden. OMB also seeks comment on the advantages and
disadvantages of expanding the categories of burden that agencies
report to OMB. Such an approach could involve dividing estimates of
Federal paperwork burden into three categories, with a fourth category
representing an aggregate measure of burden. The first two categories,
burden hours and financial costs, are used under the current approach,
but could be improved using new procedures designed to address problems
with burden estimation practices. A possible third category could be
burden hours converted, or ``monetized,'' into dollars, depending on
resolution of the issue discussed above. A possible fourth category
might combine financial costs and monetized burden hours to create, for
the first time, a dollar measure of total Federal paperwork burden.
Estimating Burden Hours. Whether or not the categories of burden
are expanded, OMB plans to provide guidance to agencies intended to
help them improve their estimates of time burden, measured in burden
hours. OMB seeks comments specifically on ways to improve current
agency hour burden estimation methodologies.
OMB will review and consider all comments received in response to
this notice. It will then prepare a draft revised guidance to Federal
agencies and provide another opportunity for public comment before
issuing final guidance to agencies.
Dated: October 4, 1999.
John T. Spotila,
Administrator, Office of Information and Regulatory Affairs.
[FR Doc. 99-26846 Filed 10-13-99; 8:45 am]
BILLING CODE 3110-01-P