The supporting data of the  estimate is not timely because it does not contain the most current  information from testing and evaluation. As noted above, the  Bureau now estimates the 2010 Census will cost $11.3 billion, making it the  most expensive in history, even after adjusting for inflation. As we stated in our January 2004 report, in June 2001, the Bureau derived  its 2010 cost estimate by using the actual cost of the 2000 Census  combined with assumptions about cost drivers, such as (1) staffing needs,  (2) enumerator productivity, (3) pay rates for census workers, (4) the  nonresponse rate for mailing back the questionnaires, and (5) inflation. However, the most recent life-cycle cost estimate does not incorporate  current information about those 2001 assumptions. However, the  Bureau’s existing assumptions about the use and reliability of the MCD  were not updated to reflect information from the 2004 test, which showed  that assumptions about staffing and space associated with the new  technology had changed since the June 2001 estimate. The Bureau’s  evaluations about those test results indicate that more help desk staff at  the local census office were needed to support the use of the MCD, and  additional storage space was needed for the devices. Bureau Has Taken Steps to Reduce Nonresponse Follow- up Costs, But Challenges with Technology Remain

Since 2000, the Bureau has reengineered the decennial census and has  begun to implement new initiatives. While these initiatives show promise, the  Bureau will need to address technological challenges with the MCD that  will be used to collect data for nonresponse follow-up. During the 2004 Census Test, the MCDs experienced transmission  problems, memory overloads, and difficulties with a mapping feature—all  of which added inefficiencies to the nonresponse follow-up operation. However, if after the 2008 Dress Rehearsal the MCD is  found not to be reliable, the Bureau could be faced with a remote but  daunting possibility of having to revert to the costly, paper-based census  used in 2000. As the Bureau moves from testing to demonstrating the design in the Dress  Rehearsal, it will be important for the Bureau to have risk mitigation plans  in place to reduce the severity of challenges to a cost-effective census. We have made  recommendations addressing those issues, such as developing mitigation  plans with milestones for key activities and regularly briefing senior  managers. The Bureau has agreed to complete these activities as soon as  possible. Bureau Does Not Have a Plan to Assess Resources Needed to Update Address and Map Files in Areas Affected by Hurricanes Katrina and Rita

The Bureau does not have a plan to assess additional resources that may  be needed to update the address and map file for areas affected by  hurricanes Katrina and Rita. The task of updating Census address files to  reflect the changes caused by the hurricanes will be formidable and  possibly costly, as much has changed to the landscape since the 2000  Census. For example, the Red Cross estimated that nearly 525,000  people were displaced as a result of hurricane Katrina and approximately  90,000 square miles were affected. Given the  magnitude of the area, population, and infrastructure affected, it would be  prudent for the Bureau to begin assessing whether new procedures will be  necessary, determining whether additional resources may be needed, and  identifying whether local partners will be available to assist the Bureau in  its effort to update address and map data, as well as other census-taking  activities. 2010 Census: Counting Americans Overseas as Part of the Decennial  Census Would Not Be Cost-Effective.
Why GAO Did This Study

The decennial census is a constitutionally mandated activity, with immutable deadlines. It produces data used to allocate about $200 billion yearly in federal financial assistance, reapportion the seats of the House of Representatives, and provide a profile of the nation's people to help guide policy decisions. The U.S. Census Bureau (Bureau) estimates the 2010 Census will cost $11.3 billion, making it the most expensive census in the nation's history, even after adjusting for inflation. Based primarily on GAO's issued reports, this testimony addresses the extent to which the Bureau has (1) developed detailed and timely cost data for effective oversight and cost control, (2) reduced nonresponse mail follow up costs, and (3) produced risk mitigation plans to address identified challenges.

What GAO Found

The Bureau's most recent life-cycle cost estimate for the 2010 Census does not reflect the most current information from testing and evaluation nor provide complete information on how changing assumptions may affect cost. As GAO reported in January 2004, the Bureau derived its initial cost estimate by considering the cost of the 2000 Census along with certain assumptions that drive costs, such as staffing needs, the nonresponse rate for mailing back the census questionnaire, census worker productivity and pay rates, and inflation; however, GAO's ongoing work has found that the most recent (September 2005) estimate does not incorporate current information on certain 2001 assumptions. For example, the 2004 Census Test suggests some assumptions about staffing and space associated with new technology have changed. Specifically, Bureau evaluations indicate that more staff at the local census office was needed to support the use of the new hand-held mobile computing device (MCD) and additional storage space was needed for the MCDs. Since 2000, the Bureau has reengineered the decennial census and has begun new initiatives to reduce nonresponse follow up costs. Key to the Bureau's steps to reduce the costs of nonresponse follow up is successfully using the MCDs to eliminate millions of paper questionnaires and maps. Importantly, the Bureau must first resolve the MCD's technological challenges. During 2004 and 2006 tests, the MCDs had significant reliability problems. For example, in the 2004 test the MCDs experienced transmission problems, memory overloads, and difficulties with the map ping feature. Bureau officials have contracted the design and implementation for a new MCD that will not be ready until the 2008 Dress Rehearsal. If after the Dress Rehearsal the MCD is found not to be reliable, the Bureau could be faced with the remote but daunting possibility of having to revert to the costly paper-based Census used in 2000. The Bureau does not have risk mitigation plans to address certain identified challenges to a cost-effective census. Most notably, the Bureau does not have a plan to assess additional resources that may be needed to update the address and map file for areas affected by hurricanes Katrina and Rita. Moreover, the Bureau has not yet assessed whether new procedures will be necessary nor whether local partners will be available to assist in updating address and map data. Updating address files to reflect the changes caused by the hurricanes will be formidable, in part because, according to Red Cross estimates, nearly 525,000 people were displaced in a 90,000 square mile area. Another risk to be mitigated stems from the need to closely monitor the performance of about $1.9 billion in contracts. The Bureau has agreed to take steps to mitigate some of those risks. For example, the Bureau has said it will enhance the ability of key contract project offices to better manage contracts through such actions as developing mitigation plans with milestones for key activities and regularly briefing senior managers.