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Principles and Practices for a Federal Statistical Agency: Fourth Edition (2009)

Chapter: Appendix B: Legislation and Regulations That Govern Federal Statistics

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Suggested Citation:"Appendix B: Legislation and Regulations That Govern Federal Statistics." National Research Council. 2009. Principles and Practices for a Federal Statistical Agency: Fourth Edition. Washington, DC: The National Academies Press. doi: 10.17226/12564.
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Suggested Citation:"Appendix B: Legislation and Regulations That Govern Federal Statistics." National Research Council. 2009. Principles and Practices for a Federal Statistical Agency: Fourth Edition. Washington, DC: The National Academies Press. doi: 10.17226/12564.
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Suggested Citation:"Appendix B: Legislation and Regulations That Govern Federal Statistics." National Research Council. 2009. Principles and Practices for a Federal Statistical Agency: Fourth Edition. Washington, DC: The National Academies Press. doi: 10.17226/12564.
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Suggested Citation:"Appendix B: Legislation and Regulations That Govern Federal Statistics." National Research Council. 2009. Principles and Practices for a Federal Statistical Agency: Fourth Edition. Washington, DC: The National Academies Press. doi: 10.17226/12564.
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Suggested Citation:"Appendix B: Legislation and Regulations That Govern Federal Statistics." National Research Council. 2009. Principles and Practices for a Federal Statistical Agency: Fourth Edition. Washington, DC: The National Academies Press. doi: 10.17226/12564.
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Suggested Citation:"Appendix B: Legislation and Regulations That Govern Federal Statistics." National Research Council. 2009. Principles and Practices for a Federal Statistical Agency: Fourth Edition. Washington, DC: The National Academies Press. doi: 10.17226/12564.
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Suggested Citation:"Appendix B: Legislation and Regulations That Govern Federal Statistics." National Research Council. 2009. Principles and Practices for a Federal Statistical Agency: Fourth Edition. Washington, DC: The National Academies Press. doi: 10.17226/12564.
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Suggested Citation:"Appendix B: Legislation and Regulations That Govern Federal Statistics." National Research Council. 2009. Principles and Practices for a Federal Statistical Agency: Fourth Edition. Washington, DC: The National Academies Press. doi: 10.17226/12564.
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Suggested Citation:"Appendix B: Legislation and Regulations That Govern Federal Statistics." National Research Council. 2009. Principles and Practices for a Federal Statistical Agency: Fourth Edition. Washington, DC: The National Academies Press. doi: 10.17226/12564.
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Suggested Citation:"Appendix B: Legislation and Regulations That Govern Federal Statistics." National Research Council. 2009. Principles and Practices for a Federal Statistical Agency: Fourth Edition. Washington, DC: The National Academies Press. doi: 10.17226/12564.
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Suggested Citation:"Appendix B: Legislation and Regulations That Govern Federal Statistics." National Research Council. 2009. Principles and Practices for a Federal Statistical Agency: Fourth Edition. Washington, DC: The National Academies Press. doi: 10.17226/12564.
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Suggested Citation:"Appendix B: Legislation and Regulations That Govern Federal Statistics." National Research Council. 2009. Principles and Practices for a Federal Statistical Agency: Fourth Edition. Washington, DC: The National Academies Press. doi: 10.17226/12564.
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Suggested Citation:"Appendix B: Legislation and Regulations That Govern Federal Statistics." National Research Council. 2009. Principles and Practices for a Federal Statistical Agency: Fourth Edition. Washington, DC: The National Academies Press. doi: 10.17226/12564.
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Suggested Citation:"Appendix B: Legislation and Regulations That Govern Federal Statistics." National Research Council. 2009. Principles and Practices for a Federal Statistical Agency: Fourth Edition. Washington, DC: The National Academies Press. doi: 10.17226/12564.
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Suggested Citation:"Appendix B: Legislation and Regulations That Govern Federal Statistics." National Research Council. 2009. Principles and Practices for a Federal Statistical Agency: Fourth Edition. Washington, DC: The National Academies Press. doi: 10.17226/12564.
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Suggested Citation:"Appendix B: Legislation and Regulations That Govern Federal Statistics." National Research Council. 2009. Principles and Practices for a Federal Statistical Agency: Fourth Edition. Washington, DC: The National Academies Press. doi: 10.17226/12564.
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Appendix B Legislation and Regulations That Govern Federal Statistics This appendix summarizes the major legislation and agency regulations and guidance that govern the operations of the federal statistical system as a whole: • The 1980 Paperwork Reduction Act, as reauthorized in 1995, and associated guidance (the discussion also covers the 1942 Federal Reports Act and the 1950 Budget and Accounting Procedures Act). • The 2000 Information Quality Act and associated guidelines. • The 1997 Office of Management and Budget (OMB) Order Provid- ing for the Confidentiality of Statistical Information. • The 2002 Confidential Information Protection and Statistical Ef- ficiency Act (CIPSEA—Title V of the E-Government Act) and associated guidance. • The 2002 E-Government Act, Section 208, which requires privacy impact assessments for federal data collections and associated guidance (the discussion also covers the 1974 Privacy Act). • The 2002 Federal Information Security Management Act (FISMA— Title III of the E-Government Act). • 2004 OMB peer review guidance. • 2002-2008 OMB provisions for rating the performance of federal programs using the Program Assessment Rating Tool (PART). • OMB statistical policy directives. 91

92 principles and practices for a federal statistical agency Most of this legislation, regulations, and guidance pertains to the authority of OMB, which plays a critical role in oversight of the federal government’s widely dispersed statistical operations. The oversight dates to 1939, when the functions of a Central Statistical Board, created in 1933, were transferred to the then-named Bureau of the Budget (see Anderson, 1988; Duncan and Shelton, 1978; Norwood, 1995). Recent legislation and guidance addresses such system-wide issues as confidentiality protection and privacy of respondents, data quality (including peer review prior to dissemi- nation), efficiency of operations, and evaluation of agencies’ performance. THE PAPERWORK REDUCTION ACT AND ASSOCIATED GUIDANCE The 1980 Paperwork Reduction Act (PRA) (Title 44, Section 35 of the U.S. Code, amended in 1986 and reauthorized in 1995 by P.L. 104-13) is the foundation for the modern statistical coordination and management mission of the Office of Management and Budget. It establishes OMB’s review power not only over federal statistical agencies, but also over the myriad other agencies throughout the federal government that collect information from individuals and organizations. This review power covers both data collection budgets and methods and practices for data collection and dissemination. Background The PRA’s origins trace back to Executive Order 6226, signed by Franklin D. Roosevelt in July 1933, which established a Central Statistical Board to “appraise and advise upon all schedules of all Government agencies engaged in the primary collection of statistics required in carrying out the purposes of the National Industrial Recovery Act, to review plans for tabu- lation and classification of such statistics, and to promote the coordination and improvement of the statistical services involved.” Members of the board were appointed by relevant cabinet secretaries. The board was established in law for a 5-year period in 1935. Its functions were transferred to the Bureau of the Budget (itself established in 1921) in 1939, when the Budget Bureau was transferred to the Executive Office of the President. The 1942 Federal Reports Act represented another milestone: It codi- fied the authority for the Budget Bureau to coordinate and oversee the work of federal statistical agencies. Most famously, it provided that no federal

APPENDIX B 93 agency could collect data from 10 or more respondents without approval of the budget director. (Data collections by contractors on behalf of federal agencies are covered by this provision, although data collections by govern- ment grantees are generally not covered.) The 1950 Budget and Account- ing Procedures Act (Title 31, Section 1104(d) of the U.S. Code) further strengthened the statistical coordinating and improvement role of OMB, including giving OMB authorization to promulgate regulations and orders governing statistical programs throughout the federal government. The statistical policy function continued in the budget office in the Executive Office of the President when the Budget Bureau became the Of- fice of Management and Budget in 1970. However, in 1977, the statistical policy staff was split into two groups—one group remained with OMB to handle the paperwork clearance and review function for statistical agencies; the other group was moved to the Department of Commerce to address statistical policy and standards issues. Paperwork Reduction The overarching goal of the 1980 Paperwork Reduction Act was to reduce the burden of filling out federal forms by businesses and individuals. It moved the statistical policy office back to OMB (from the Department of Commerce) under a new Office of Information and Regulatory Affairs (OIRA), which was charged to reduce the combined burden imposed by regulatory agencies and statistical agencies. The PRA required OMB, through the chief statistician, to engage in long-range planning to improve federal statistical programs; review statistical budgets; coordinate govern- ment statistical functions; establish standards, classifications, and other guidelines for statistical data collection and dissemination; and evaluate statistical program performance. In the 1995 reauthorization and extensive revision of PRA, the most important provision for statistical policy was to authorize the establishment of the Interagency Council on Statistical Policy (ICSP), chaired by the chief statistician, who heads a small staff in the Sta- tistical and Science Policy Office (see Appendix A). Survey Clearance Process The OMB Statistical and Science Policy Office released in January 2006 Guidance on Agency Survey and Statistical Information Collections—Questions

94 principles and practices for a federal statistical agency and Answers When Designing Surveys for Information Collections (see http:// www.whitehouse.gov/omb/inforeg/pmc_survey_guidance_2006.pdf ). It is a set of 81 questions and answers that attempts to demystify the OMB clearance process (required by the PRA) for surveys and other statisti- cal information collections. Its purpose is to explain OMB’s review process, assist in strengthening supporting statements for information collection re- quests, and provide advice for improving information collection designs. The Guidance covers such topics as the purpose of the guidance; sub- mission of information collection requests (often called clearance packages) to OMB; scope of the information collection (e.g., calculation of burden hours on respondents); choice of methods; sampling; modes of data collec- tion; questionnaire design and development; statistical standards; informing respondents about their participation and the confidentiality of their data; response rates and incentives; analysis and reporting; and studies using stated preference methods (which ask respondents about the use or non-use value of a good in order to obtain willingness-to-pay estimates relevant to benefit or cost estimation). The guidance includes a glossary of terms and examples of the OMB clearance request forms. The guidance outlines the timing and process requirements for all statistical information collection requests in order to obtain OMB approval (which is indicated by an OMB control number on approved survey ques- tionnaires). First, the agency must publish a 60-day notice in the Federal Register inviting public comment on the proposed collection. At this stage, the agency must have at least a draft survey instrument for the public for review. Following this initial comment period, the agency may submit its clearance package to OMB, at which time it must place a second notice in the Federal Register, allowing a 30-day public comment period and notifying the public that OMB approval is being sought and that comments may be submitted to OMB. This notice runs concurrent with the first 30 days of OMB review, and OMB has a total of 60 days after receipt of the clearance package to make its decision to approve or disapprove the package or to instruct the agency to make a substantive change to its proposed collection. Generally, agencies need to allow 6 months to complete the entire process, including agency and departmental review.

APPENDIX B 95 2000 INFORMATION QUALITY ACT AND ASSOCIATED GUIDELINES The Information Quality Act (IQA) of 2000 requires federal agencies to develop procedures that will ensure the quality of information they dis- seminate and to develop an administrative mechanism whereby affected parties can request that agencies correct low-quality information. The act directs OMB to issue guidelines “ensuring and maximizing the quality, objectivity, utility, and integrity of information . . . disseminated by Federal agencies.” OMB first published proposed government-wide IQA guidelines in the Federal Register on June 28, 2001 (66 Federal Register 34489). It issued final guidelines (after incorporating changes pursuant to public comments) on February 22, 2002 (67 Federal Register 8452-8460) (see also http://www. whitehouse.gov/omb/inforeg/iqg_2002.pdf ). A few months later, 13 sta- tistical agencies issued a Federal Register notice (67 Federal Register 38467- 38470, June 4) outlining a common approach to the development and provision of guidelines for ensuring and maximizing the quality, objectivity, utility, and integrity of disseminated information. The notice directed peo- ple to the websites of each agency for more information and to learn how to comment on draft guidelines. Each agency then finalized its own guidelines (see, e.g., http://www.census.gov/qdocs/www/quality_guidelines.htm). The framework developed by the agencies was followed in the 2006 revision of OMB’s standards and guidelines for statistical surveys (see OMB Statistical Policy Directives below). 1997 ORDER PROVIDING FOR THE CONFIDENTIALITY OF STATISTICAL INFORMATION OMB issued the Order Providing for the Confidentiality of Statistical Information in 1997 (Federal Register, Vol. 62, No. 124, Friday, June 27, 1997; see http://www.whitehouse.gov/omb/inforeg/conf-order.pdf ). The order was designed to bolster the confidentiality protections afforded by sta- tistical agencies or units (as listed in the order), some of which lacked legal authority to back up their confidentiality protection. CIPSEA (see below) placed confidentiality protection for statistical information on a strong legal footing across the entire federal government.

96 principles and practices for a federal statistical agency 2002 CONFIDENTIAL INFORMATION PROTECTION AND STATISTICAL EFFICIENCY ACT AND ASSOCIATED GUIDANCE The Confidential Information Protection and Statistical Efficiency Act (CIPSEA) (Title V of the E-Government Act of 2002, P.L. 107-347) was landmark legislation to strengthen the statistical system with regard to con- fidentiality protection and data sharing. Enactment of CIPSEA culminated more than 30 years of efforts to standardize and bolster legal protections for data collected for statistical purposes by federal agencies while permitting limited sharing of individually identifiable business information among three statistical agencies for efficiency and quality improvement. CIPSEA has two subtitles, A and B, covering confidentiality and sharing data. Subtitle A—Protecting Confidentiality Subtitle A, Confidential Information Protection, strengthens and ex- tends statutory confidentiality protection for all statistical data collections of the U.S. government. Prior to CIPSEA, such protection was governed by a patchwork of laws applicable to specific agencies, judicial opinions, and agency practice. For all data furnished by individuals or organizations to an agency under a pledge of confidentiality for exclusively statistical purposes, Subtitle A provides that the data will be used only for statistical purposes and will not be disclosed in identifiable form to anyone not authorized by the title. It makes knowing and willful disclosure of confidential statistical data a class E felony with fines up to $250,000 and imprisonment for up to 5 years. Subtitle A pertains not only to surveys, but also to collections by a federal agency for statistical purposes from administrative records (e.g., state government agency records). Data covered under Subtitle A are not subject to release under a Freedom of Information Act request. Subtitle B—Sharing Data Subtitle B of CIPSEA, Statistical Efficiency, permits the Bureau of Economic Analysis (BEA), the Bureau of Labor Statistics (BLS), and the Census Bureau to share individually identifiable business data for statisti- cal purposes. The intent of the subtitle is to reduce respondent burden on businesses; improve the comparability and accuracy of federal economic statistics by permitting these three agencies to reconcile differences among

APPENDIX B 97 sampling frames, business classifications, and business reporting; and in- crease understanding of the U.S. economy and improve the accuracy of key national indicators, such as the National Income and Product Accounts. Several data-sharing projects have been initiated under Subtitle B. However, it does not permit sharing among BEA, BLS, and the Census Bureau of any individually identifiable tax return data that originates from the Internal Revenue Service (IRS). This limitation currently blocks some important kinds of business data sharing for improving the efficiency and quality of business data collection by statistical agencies. For tax return information, data sharing is limited to a small number of items for specified uses by a small number of specific agencies (under Title 26, Section 6103 of the U.S. Code and associated Treasury Department regulations, as modified in the 1976 Tax Reform Act). The law provides access to specific tax return items by the Census Bureau for use in its popula- tion estimates program and economic census and survey programs, by the National Agricultural Statistics Service for conducting the Census of Agri- culture, by the Congressional Budget Office for evaluation of government revenue and expenditure initiatives, and by BEA for producing the National Income and Product Accounts. (Prior to the act, the President could issue an Executive Order authorizing access to tax records.) The governing statute would have to be modified to extend sharing of tax return items to agencies not specified in the 1976 legislation. A proposal for legislation was developed through interagency discus- sions in 2008 that would authorize the Bureau of Labor Statistics to receive limited business data from the Census Bureau (comingled with business tax information) for the purpose of synchronizing the two agencies’ business lists. It would also authorize the Bureau of Economic Analysis to receive business tax information for noncorporate businesses with receipts greater than $1 million, allowing BEA to improve the measurement of income and international transactions in the national accounts. OMB CIPSEA Guidance OMB is charged to oversee and coordinate the implementation of CIPSEA; after a long interagency coordination process, OMB released final guidance in June 2007 (see http://www.whitehouse.gov/omb/ fedreg/2007/061507_cipsea_guidance.pdf ). The guidance, which pertains to both Subtitles A and B, covers such topics as the steps that agencies must take to protect confidential information; wording of confidentiality

98 principles and practices for a federal statistical agency pledges in materials that are provided to respondents; steps that agencies must take to distinguish any data or information they collect for nonstatis- tical purposes and to provide proper notice to the public of such data; and ways in which agents (e.g., contractors, researchers) may be designated to use individually identifiable information for analysis and other statistical purposes and be held legally responsible for protecting the confidentiality of that information. A key provision of the CIPSEA guidance defines statistical agencies or units, which are the only federal agencies that may assign agent status for confidentiality protection purposes to contractors, researchers, or others. The guidance defines a statistical agency or unit as “an agency or organiza- tional unit of the executive branch whose activities are predominantly the collection, compilation, processing, or analysis of information for statistical purposes.” Twelve statistical agencies that were enumerated in OMB’s 1997 Confidentiality Order are recognized in OMB’s CIPSEA implementation guidance as statistical agencies for the purposes of CIPSEA: the members of the Interagency Council on Statistical Policy (ICSP) (see Appendix A), excluding the Office of Environmental Information in the Environmental Protection Agency and the Office of Research, Evaluation, and Statistics in the Social Security Administration. During 2007, OMB recognized two more statistical units that applied for designation under the procedures outlined in the guidance: the Office of Applied Studies in the Substance Abuse and Mental Health Services Administration in the Department of Health and Human Services, and the Microeconomic Surveys Section of the Board of Governors of the Federal Reserve. 2002 E-GOVERNMENT ACT, SECTION 208 Section 208 of the E-Government Act of 2002 requires federal agencies to conduct a privacy impact assessment whenever the agency develops or obtains information technology that handles individually identifiable in- formation or whenever the agency initiates a new collection of individually identifiable information. The assessment is to be made publicly available and cover such topics as what information is being collected and why, with whom the information will be shared, what provisions will be made for informed consent regarding data sharing, and how the information will be Section 208 also mandates that OMB lead interagency efforts to improve federal infor- mation technology (IT) and use of the Internet for government services.

APPENDIX B 99 secured. Typically, privacy impact assessments cover not only privacy issues, but also confidentiality, integrity, and availability issues (see, e.g., U.S. Cen- sus Bureau, 2003). OMB is required to issue guidance for development of the assessments, which was done in a memorandum from the OMB director to the heads of executive agencies and departments on September 26, 2003 (see http://www.whitehouse.gove/omb/memoranda/m03-22html). Section 208, Title III (see below), and Title V (see above) are the latest in a series of laws dating back to 1974 that govern access to individual records main- tained by the federal government. The Privacy Act of 1974 states in part: No agency shall disclose any record which is contained in a system of records by any means of communication to any person, or to another agency, except pursuant to a written request by, or with the prior written consent of, the individual to whom the record pertains. . . . There are specific exceptions allowing the use of personal records without prior consent for statistical purposes by the Census Bureau, for statistical research or reporting when the records are to be transferred in a form that is not individually identifiable, for routine uses within a U.S. government agency, for archival purposes “as a record which has sufficient historical or other value to warrant its continued preservation by the United States Gov- ernment,” for law enforcement purposes, for congressional investigations, and for other administrative purposes. The Privacy Act mandates that every federal agency have in place an administrative and physical security system to prevent the unauthorized release of personal records. 2002 FEDERAL INFORMATION SECURITY MANAGEMENT ACT The Federal Information Security Management Act (FISMA) was en- acted in 2002 as Title III of the E-Government Act of 2002 (P.L. 107-347). The act was meant to bolster computer and network security within the federal government and affiliated parties (such as government contractors) by mandating yearly audits. FISMA imposes a mandatory set of processes that must be followed for all information systems used or operated by a federal agency or by a contrac- tor or other organization on behalf of a federal agency. These processes must follow a combination of Federal Information Processing Standards (FIPS) documents, the special publications SP-800 series issued by the National Institute of Standards and Technology, and other legislation pertinent to

100 principles and practices for a federal statistical agency federal information systems, such as the Privacy Act of 1974 and the Health Insurance Portability and Accountability Act. The first step is to determine what constitutes the “information system” in question. There is not a direct mapping of computers to an information system; rather an information system can be a collection of individual com- puters put to a common purpose and managed by the same system owner. The next step is to determine the types of information resident in the system and categorize each according to the magnitude of harm resulting were the system to suffer a compromise of confidentiality, integrity, or availability. Succeeding steps are to develop complete system documentation, conduct a risk assessment, put appropriate controls in place to minimize risk, and ar- range for an assessment and certification of the adequacy of the controls. FISMA affects federal statistical agencies directly in that each of them must follow the FISMA procedures for its own information system. In addi- tion, some departments are taking the position that all information systems within a department constitute a single information system for purposes of FISMA. As a consequence, these departments are taking steps to require that statistical agencies’ information systems and personnel be incorporated into a centralized department-wide system. 2004 OMB PEER REVIEW GUIDANCE In 2003-2004, under the authority of the 2000 Information Quality Act, OMB developed guidance for federal agencies with regard to seeking peer review of policy-related information an agency disseminates. The Final Information Quality Bulletin for Peer Review was issued on December 16, 2004; it requires federal agencies to conduct a peer review of “influential scientific information” before the information is released to the public (see http://www.whitehouse.gov/omb/memoranda/fy2005/m05-03.pdf ). “Influential scientific information” is defined as “scientific information the agency reasonably can determine will have or does have a clear and substan- tial impact on important public policies or private sector decisions” (U.S. Office of Management and Budget, 2004a:10). The bulletin grants agencies discretion to select the type of peer review process for a given information product. The bulletin excludes from the guidelines “routine statistical in- formation released by federal statistical agencies (e.g., periodic demographic and economic statistics) and the analysis of these data to compute standard indicators and trends (e.g., unemployment and poverty rates)” (U.S. Office of Management and Budget, 2004a:40).

APPENDIX B 101 2002-2008 PERFORMANCE ASSESSMENT RATING TOOL The Office of Management and Budget began a major initiative in 2002 to develop a tool for assessing the performance of federal agencies and programs that would identify effective and ineffective programs and provide information that could be used in making budgetary decisions. The tool is the Performance Assessment Rating Tool (PART), which has sets of questions or measures on program design and purpose, program goals, agency management of programs, and results that agencies can report with accuracy and consistency. (There are several versions of the PART for use by different kinds of programs, such as research and development programs, competitive grant programs, or direct federal programs.) Answers to the questions in each section produce a numeric score for that section from 0 to 100; the section scores are then combined to achieve an overall qualita- tive rating: Effective, Moderately Effective, Adequate, Ineffective, or Results Not Demonstrated (for more information, see http://www.whitehouse/gov/ omb/part/2004_fax.html). The members of the ICSP collaborated to develop an initial set of common performance standards for use in completing PART and in developing strategic plans required by the Government Performance and Results Act of 1993 (GPRA). The agencies agreed on two general areas of focus—product quality and program performance—and on three dimen- sions of each focus area. For product quality, the dimensions are relevance, accuracy, and timeliness; for program performance, the dimensions are cost, dissemination, and mission achievement. Example indicators were developed for each dimension, such as measures of customer satisfaction as an indicator of mission achievement (see U.S. Office of Management and Budget, 2008a:37-41). OMB STATISTICAL POLICY DIRECTIVES The Statistical and Science Policy Office issues and periodically updates a number of directives that pertain to federal agency data collection and dissemination. The oldest two directives on standards for statistical surveys and publication of statistics, first issued in the 1950s and updated in the 1970s, were recently combined as part of a major overhaul. A 1969 directive on the official poverty measure was updated in a minor way in 1978; the standards on Metropolitan Statistical Areas and industry and occupation classifications are updated at least every 10 years; the newest directive on

102 principles and practices for a federal statistical agency release of statistical products, issued in 2008, complements a directive is- sued in the 1970s and updated in 1985 on release of economic indicators. Among the statistical policy directives are the following, which are briefly summarized below: • Standards and Guidelines for Statistical Surveys (replaces and com- bines Statistical Policy Directives Nos. 1 and 2) • Statistical Policy Directive No. 3—Compilation, Release, and Eval- uation of Principal Federal Economic Indicators (and Schedule of Release Dates for Principal Federal Economic Indicators) • Statistical Policy Directive No. 4—Release and Dissemination of Statistical Products Produced by Federal Statistical Agencies • Metropolitan Statistical Areas • North American Industry Classification System (NAICS)/Standard Industrial Classification (SIC) • Standard Occupational Classification (SOC) • Statistical Policy Directive No. 14—Definition of Poverty for Sta- tistical Purposes • Standards for Maintaining, Collecting, and Presenting Federal Data on Race and Ethnicity Standards and Guidelines for Statistical Surveys OMB issued Standards and Guidelines for Statistical Surveys in Sep- tember 2006 (see http://www.whitehouse.gov/omb/inforeg/statpolicy/ standards_stat_surveys.pdf ) as an update and revision of Statistical Policy Directive No. 1, Standards for Statistical Surveys, and Statistical Policy Direc- tive No. 2, Publication of Statistics (see http://www.whitehouse.gov//omb/ fedreg/2006/09226_stat_surveys.html; see also http://www.whitehouse. gov/omb/inforeg/backgrd_stat_surveys.html). The new document includes 20 standards and one or more associated guidelines for every aspect of sur- vey methodology from planning through data release: (1) Survey planning. (2) Survey design. All of the directives are available at or can be linked to from http://www.whitehouse. gov/omb/inforeg/statpolicy.html, with the exception of Statistical Policy Directive No. 14, which is available at http://www.census.gov/hhes/www/povmeas/ombdir14.html.

APPENDIX B 103 (3) Survey response rates. (4) Pretesting survey systems. (5) Developing sampling frames. (6) Required notification to potential survey respondents. (7) Data collection methodology. (8) Data editing. (9) Nonresponse analysis and response rate calculation. (10) Coding. (11) Data protection. (12) Evaluation. (13) Developing estimates and projections. (14) Analysis and report planning. (15) Inference and comparisons. (16) Review of information products. (17) Releasing information. (18) Data protection and disclosure avoidance for dissemination. (19) Survey documentation. (20) Documentation and release of public-use microdata. Principal Economic Indicators OMB issued Statistical Policy Directive No. 3—Compilation, Release, and Evaluation of Principal Federal Economic Indicators in the 1970s and strengthened it in 1985 (Federal Register, Vol. 50, No. 186, Wednesday, Sep- tember 25, 1985; see http://www.whitehouse.gov/omb/inforeg/statpolicy/ dir_3_fr_09251985.pdf ). Its purpose is clearly stated: [This directive] designates statistical series that provide timely measures of economic activity as Principal Economic Indicators and requires prompt re- lease of these indicators by statistical agencies in a politically-neutral manner. The intent of the directive is to preserve the time value of such information, strike a balance between timeliness and accuracy, prevent early access to in- formation that may affect financial and commodity markets, and preserve the distinction between the policy-neutral release of data by statistical agencies and their interpretation by policy officials. Each September OMB issues the Schedule of Release Dates for Principal Federal Economic Indicators for the subsequent calendar year (see http:// www.whitehouse.gov/omb/inforeg/statpolicy.html#sr). At present, the following agencies issue one or more principal economic indicators (38 indicators in all):

104 principles and practices for a federal statistical agency • Bureau of Economic Analysis (5 indicators, including gross domes- tic product, personal income and outlays, corporate profits). • Bureau of Labor Statistics (7 indicators, including the employment situation, Consumer Price Index). • Census Bureau (13 indicators, including new residential construc- tion, monthly wholesale trade). • Energy Information Administration (weekly natural gas storage report). • Federal Reserve Board (4 indicators, including money stock mea- sures, consumer installment credit). • Foreign Agricultural Service (world agricultural production). • National Agricultural Statistics Service (6 indicators, including agricultural prices and grain production). • World Agricultural Outlook Board (world agricultural supply and demand estimates). Release and Dissemination of Statistical Products OMB issued Statistical Policy Directive No. 4—Release and Dissemina- tion of Statistical Products Produced by Federal Statistical Agencies in 2008 (Federal Register, Vol. 73, No. 46, Friday, March 7, 2008) as a companion to Directive 3 (see http://www.whitehouse.gov/omb/fedreg/2008/030708_ directive-4.pdf ). Directive 4 essentially covers all statistical releases other than those specified in Directive 3. It includes not only statistical informa- tion released in printed reports or on the Internet, but also statistical press releases, which describe or announce a statistical data product. Statistical press releases are the sole responsibility of the relevant statistical agency. Each fall statistical agencies must issue a schedule of when they expect each regular or recurring product to be released and give timely notification of any change to the published schedule. North American Industry Classification System The North American Industry Classification System (NAICS) updates and substantially revises the old Standard Industrial Classification (SIC) (see http://www. census.gov/epcd/www/naics.html). The NAICS was developed by the United States, Canada, and Mexico to provide a common, contem- porary classification system for economic production activity following on the enactment of the North American Free Trade Agreement (NAFTA).

APPENDIX B 105 Interagency and country working groups (under the aegis of OMB in the United States) are updating the NAICS every 5 years so that it keeps up reasonably well with changes in industrial activity in the three countries. Standard Occupational Classification The Standard Occupational Classification (SOC) is used by federal statistical agencies to classify workers into occupational categories for col- lecting, calculating, and disseminating data (see http://www.bls.gov/soc/). Historically, the SOC has been revised prior to each decennial census through an interagency process under the aegis of OMB and has been used in surveys conducted during the following decade. With the advent of the American Community Survey (which provides occupational data in place of the decennial census “long-form” sample), future timing of SOC revisions is under study. Work to revise the 2000 Standard Occupational Classification for 2010 should be completed shortly. Metropolitan Area Classification For more than 50 years, the OMB Metropolitan Area Classification Program has provided standard statistical area definitions for use throughout the federal government. The usefulness of standardizing these classifications became clear in the 1940s, and the Bureau of the Budget (the predecessor to OMB) led an effort to develop what were then called ‘‘standard metro- politan areas’’ in time for their use in 1950 census publications. Since then, OMB has updated as appropriate the definitional criteria for metropolitan areas before each census; based on those criteria, after each census, OMB has issued a list of recognized areas. The definitional criteria issued before the 2000 census marked a major revision to the coverage of the program. Standards for Defining Metropoli- tan and Micropolitan Statistical Areas (Federal Register, Vol. 65, No. 249, Wednesday, December 27, 2000) defined not only metropolitan statisti- cal areas, but also, for the first time, micropolitan areas (see http://www. whitehouse.gov/omb/fedreg/metroareas122700.pdf ). Metropolitan areas are those with a central urbanized core of 50,000 or more people in one or more counties; micropolitan areas are those with a central urbanized core of 10,000 or more people in one or more counties. The list of metropolitan and micropolitan areas is annually updated by OMB on the basis of the Census Bureau’s population estimates (see, e.g., Update of Statistical Area

106 principles and practices for a federal statistical agency Definitions and Guidance on Their Uses, issued November 20, 2008; http:// www.whitehouse.gov/omb/bulletins/fy2009/09-01.pdf ). Definition of Poverty OMB first issued Statistical Policy Directive No. 14—Definition of Poverty for Statistical Purposes in 1969. The directive adopted the poverty thresholds first defined by Mollie Orshansky of the Social Security Admin- istration for 1963 for different categories of families defined by size, number of children, gender of the family head, and farm-nonfarm residences. It specified that these thresholds would be updated each year for the change in the Consumer Price Index and compared with families’ total money income as measured in the Current Population Survey. The directive was reissued in 1978; additional minor modifications were made to the poverty thresholds beginning in 1982 (see http://www.census.gov/hhes/www/poverty/prevcps/ p60-133.pdf#page=9). Data on Race and Ethnicity OMB first issued Statistical Policy Directive No. 15—Race and Ethnic Standards for Federal Statistics and Administrative Reporting in 1977. It specified a minimum set of racial and ethnic categories for reporting of race and ethnicity on federal surveys and in administrative records systems. It recommended two separate questions—one on ethnicity (Hispanic or non-Hispanic) and one on race (white, black, Asian or Pacific Islander, American Indian or Alaska Native), or, alternatively, a combined question that included Hispanic as a category. The U.S. census has historically in- cluded additional categories within the two-question format. Following an intensive research, testing, and consultation process, OMB issued revised Standards for Maintaining, Collecting, and Presenting Federal Data on Race and Ethnicity on October 30, 1997 (see http://www.whitehouse.gov/omb/ fedreg/1997standards.html). The updated directive retains a two-question format, includes separate categories for Asians and for Native Hawaiian and other Pacific Islanders, and allows respondents to select more than one racial category.

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Since 1992, the Committee on National Statistics (CNSTAT) has produced a book on principles and practices for a federal statistical agency, updating the document every 4 years to provide a current edition to newly appointed cabinet secretaries at the beginning of each presidential administration.

This fourth edition presents and comments on four basic principles that statistical agencies must embody in order to carry out their mission fully:

(1) They must produce objective data that are relevant to policy issues,

(2) they must achieve and maintain credibility among data users,

(3) they must achieve and maintain trust among data providers, and

(4) they must achieve and maintain a strong position of independence from the appearance and reality of political control.

The book also discusses 11 important practices that are means for statistical agencies to live up to the four principles. These practices include a commitment to quality and professional practice and an active program of methodological and substantive research. This fourth edition adds the principle that statistical agencies must operate from a strong position of independence and the practice that agencies must have ongoing internal and external evaluations of their programs.

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