	Aspects of the OIRA Regulatory Review Process Could Be More Transparent

Our reports on cost-benefit analysis in the rulemaking process, rule  development and regulatory reviews, and OMB’s role in reviews of  agencies’ rules under Executive Order 12866 illustrate specific actions  that, if taken, would increase the transparency of the rulemaking process. For example, in 72 percent of these rules,  there was no explanation for why the rule was designated as significant,  thus triggering additional oversight required by Executive Order 12866. Rules Development and Regulatory Reviews

In our 2009 report on the regulatory review process, we found that OIRA’s  reviews of agencies’ draft rules often resulted in changes. However, we  found that the transparency of this documentation could be improved. In  particular, there was uneven attribution of changes made during the OIRA  review period and differing interpretations regarding which changes were  “substantive” and thus required documentation. OMB’s Role in Reviews of Agencies’ Draft Rules

In 2003, we examined 85 rules from nine health, safety, or environmental  agencies and found that the OIRA review process had significantly  affected 25 of those 85 rules. The agencies’  docket files did not always provide clear and complete documentation of  the changes made during OIRA’s review or at OIRA’s suggestion, as  required by the executive order, even though a few agencies exhibited  exemplary transparency practices. We made eight recommendations in  2003 targeting aspects of the OIRA review process that remained unclear  and where improvements could allow the public to better understand the  effects of OIRA’s review, including that the Director of OMB:  1.  instruct agencies to document the changes made to rules submitted  for OIRA review in public rulemaking dockets and within a reasonable  time after the rules have been published;  2.  define the types of substantive changes made during the review  process that agencies should disclose;  3.  disclose the reasons for withdrawal of a rule from OIRA review;  4.  reexamine OIRA policy that only documents exchanged by agencies  with OIRA branch chiefs and above during the review process need to  be disclosed;  5.  differentiate in OIRA’s database which rules were substantively  changed at OIRA’s suggestion or recommendation and which were  changed in other ways and for other reasons;  6.  define transparency requirements to also include the informal review  period when OIRA says it can have its most important impact on  agencies’ rules;  7.  encourage agencies to use best practice methods of documentation  that clearly describe changes; and  8.  disclose in OIRA’s logs of meetings with outside parties which  regulatory action was being discussed and the affiliation of the  meeting participants. Additional Opportunities Exist to Enhance Transparency and Congressional Oversight of Federal Regulations and the Rulemaking Process

Improvements made to the transparency of the regulatory process benefit  the public and aid congressional oversight. Four relevant reports covering  the topics of regulatory guidance, retrospective regulatory review  processes, and exceptions for expediting the rulemaking process  illustrate additional opportunities to enhance transparency of federal  regulations. All four departments identified standard practices to follow when  developing guidance and addressed OMB’s requirements for significant  guidance to varying degrees. In a 2014 report on reexamining regulations, we found that agencies often  changed regulations in response to completed retrospective analyses, but  could improve the reporting of progress and strengthen links between  those analyses and the agencies’ performance goals. We also  concluded that OMB could do more to enhance the transparency and  usefulness of the information provided to the public. We also found that agencies, though not required, often requested  comments on major final rules issued without an NPRM. However, they  did not always respond to the comments received. To better  balance the benefits of expedited rulemaking procedures with the benefits  of public comments, and to improve the quality and transparency of  rulemaking records, we recommended that OMB issue guidance to  encourage agencies to respond to comments on final major rules issued  without a prior notice of proposed rulemaking. In summary, OIRA to date has implemented 9 of the 25 recommendations  we made to improve transparency and effectiveness of the Executive  Order review process and other aspects of federal rulemaking. We  believe that the other 16 related recommendations cited in this statement  that have not been implemented still have merit and, if acted upon, would  improve the transparency of federal rulemaking. In a step in that direction,  the OIRA Administrator in 2015 noted that OIRA has worked with  agencies to help them with their Executive Order disclosure requirements. Regulatory Reform: Procedural and Analytical Requirements in Federal  Rulemaking.
Why GAO Did This Study

Federal regulation is a basic tool of government. Agencies issue regulations to achieve public policy goals such as ensuring that workplaces, air travel, foods, and drugs are safe; that the nation's air, water, and land are not polluted; and that the appropriate amount of taxes is collected. Congresses and Presidents have acted to refine and reform the regulatory process during the last several decades. Among the goals of such initiatives are enhancing oversight of rulemaking by Congress and the President, promoting greater transparency and public participation in the process, and reducing regulatory burdens on affected parties.
Congress has often asked GAO to evaluate the implementation of procedural and analytical requirements that apply to the rulemaking process. The importance of improving the transparency of the rulemaking process emerged as a common theme throughout GAO's body of work. Based on that body of work, this testimony addresses (1) GAO's prior findings and OIRA's progress to date on recent GAO recommendations to improve the transparency of the regulatory review process, and (2) other challenges and opportunities GAO has identified for increasing the transparency and oversight of the rulemaking process.
GAO has made 25 prior related recommendations of which OMB has implemented 9 to date.

What GAO Found

GAO has consistently found opportunities to improve the transparency of regulatory processes coordinated through the Office of Management and Budget's (OMB) Office of Information and Regulatory Affairs (OIRA). Three GAO reports on OIRA's reviews of agencies' rules under Executive Order 12866 illustrate current and specific actions that would increase the transparency of that review process.
In a 2014 report on cost-benefit analysis, GAO found that OIRA's reviews resulted in changes. However, in 72 percent of the 109 rules GAO reviewed, there was no explanation for why the rule was designated as significant.
In a 2009 report on the development of rules, GAO found that documentation of OIRA's reviews could be improved. In reviews of 12 case studies, GAO found uneven attribution of changes made during the OIRA review period and differing interpretations regarding which changes required documentation.
In a 2003 report, GAO examined 85 rules from nine health, safety, or environmental agencies. GAO found that, while the OIRA review process had significantly affected 25 of those rules, some agencies' files did not provide clear and complete documentation of changes made during OIRA's review. However, a few agencies exhibited exemplary transparency practices.
Four GAO reports covering the topics of regulatory guidance, retrospective regulatory review processes, and exceptions for expediting the rulemaking process further illustrate opportunities for OMB to enhance transparency.
In a 2015 report on guidance development processes at four agencies GAO found that all four identified standard practices to follow when developing guidance. However, the four agencies addressed OMB's requirements on significant guidance to varying degrees.
In 2007 and 2014 reports on retrospective regulatory reviews, GAO found that, while such reviews often resulted in changes, OMB and agencies could improve the reporting of progress to enhance the transparency and usefulness of information provided to the public.
In a 2012 report on exceptions to proposed rules, GAO reviewed a generalizable sample of final rules published over an 8 year period. GAO found that, although agencies often requested comments on final major rules (rules with an annual impact of $100 million or more) issued without a prior notice of proposed rulemaking, the agencies did not always respond to comments received.
GAO made 25 recommendations to OMB to address the transparency issues identified in these seven reports. OMB has implemented 9 of the recommendations. GAO believes that the other 16 recommendations that have not been implemented still have merit and, if acted upon, would improve the transparency of federal rulemaking. In a step in that direction, the OIRA Administrator in 2015 noted that OIRA has worked with agencies to help them with their Executive Order disclosure requirements.