	Background

In 1994, the Congress established NRCS and gave it jurisdiction over  programs of the former Soil Conservation Service, as well as other USDA  financial or technical assistance programs for natural resource  conservation and rural development. NRCS’s Technical Assistance Cost Estimates Differ from Actual Costs Reported by NRCS

NRCS tested cost estimates from its model for fiscal years 2002 and 2003 by  comparing them with the agency’s actual costs. Our analysis of these  comparisons shows that program-by-program estimates from NRCS’s  model vary considerably from the agency’s actual costs as shown in table 1. These results do not meet the agency’s goal of achieving a difference of no  more than 10 percent between estimates and reported costs. Of the remaining program  estimates for 2003, six were higher than the actual cost data by 17  percent to 50 percent, and three were lower by 16 percent to 60 percent. Altogether, NRCS estimated its technical assistance costs for 10 Farm  Bill conservation programs would be about $295 million, about 15  percent higher than its actual costs of about $257 million. According to NRCS officials, as a result, less technical assistance  work was performed than the estimates reflected. Second, NRCS’s model  includes costs for work performed by partners’ staff and paid for by the  partner organizations, while the actual cost data generally contains only  the costs for the work of NRCS’s staff. This is likely to have contributed  to differences between estimates and actual costs reported by NRCS. Actual Timing of NRCS Work Differed from Timing Assumed When Estimating Costs

In several instances, NRCS performed technical assistance work at  different times than NRCS originally assumed it would when estimating  technical assistance costs. Time Per Task Data Used in the Model Are Based on Inaccurate Assumptions

NRCS’s estimates of technical assistance costs for 10 Farm Bill  conservation programs are developed, in part, using time per task data that  are based on inaccurate assumptions. First, estimating staff are to assume that all NRCS staff are fully trained. NRCS’s  overall technical assistance cost estimate for 10 Farm Bill conservation  programs for fiscal year 2003 is closer to the reported cost than the  estimate was for fiscal year 2002, but too much variation is evident on a  program-by-program basis in both years. Recommendations

To improve the accuracy, and therefore the usefulness of NRCS’s program  cost estimating, we are recommending that the Secretary of Agriculture  direct the Chief of NRCS to take the following three actions:  clearly identify nonreimbursable costs incurred by NRCS’s partners  when presenting estimates of NRCS’s costs, ensuring that its model’s  estimates are comparable with actual data;    change the assumptions used for developing time per task data for the  model so that they better reflect actual work conditions; and   pilot test the feasibility of proposed changes in the development of the  time per task data, including changes in development of typical work  descriptions in several diverse areas of the country before proceeding  with another nationwide workload analysis. Objectives, Scope, and Methodology

Our objectives were to (1) review the technical assistance cost estimates  produced by the model and (2) identify the sources of differences that may  occur between the estimates and NRCS’s reported costs.
Why GAO Did This Study

The U.S. Department of Agriculture's (USDA) Natural Resources Conservation Service (NRCS), working with state and local partners, provides landowners with technical assistance for multiple programs to plan and implement conservation measures that protect soil, water, and wildlife. For years, the Congress has been seeking detailed cost information on this assistance as it examined USDA budget requests. In part, because NRCS's financial system was not designed for estimating future budgets, in 1998 NRCS began developing additional cost data and a computer model for estimating future technical assistance costs. GAO was asked to (1) review NRCS's technical assistance cost estimates and (2) identify causes of any differences between the estimates and actual costs ultimately reported by NRCS.

What GAO Found

In 2003, NRCS started testing its computer model by comparing estimates of technical assistance costs for 10 Farm Bill conservation programs, with actual costs reported by NRCS. GAO's analysis of these comparisons shows that NRCS's model made estimates, program-by-program, which varied considerably from the agency's actual costs. For fiscal year 2003, for example, NRCS's model estimated that the technical assistance costs for seven Farm Bill programs would be higher by 9 to 50 percent, than NRCS ultimately incurred. For three other Farm Bill programs, the estimates were lower than the agency incurred by 16 to 60 percent. Most of the estimates fell outside NRCS's goal of estimating to within 10 percent of the agency's actual costs. In addition, for the 10 Farm Bill conservation programs combined, NRCS estimated its technical assistance costs at $295 million for fiscal year 2003, which is about 15 percent more than the $257 million that NRCS incurred. NRCS officials generally agreed with this analysis. GAO identified several reasons for the differences between the cost estimates and the actual costs. First, some of NRCS's technical assistance work was delayed, occurring later than NRCS assumed when it estimated its costs. This contributed to some overestimation by the model, according to NRCS officials. Second, NRCS's estimates include costs incurred by NRCS's partners. Such costs are generally not included in the actual costs reported by NRCS. Third, some data NRCS uses in its model are based on inaccurate assumptions. For example, when developing estimates about the time it takes NRCS staff to perform technical assistance tasks for use in the model, NRCS assumes, among other things, that its staff are fully trained and perform technical assistance work without interruption. These assumptions do not reflect actual workplace conditions and lead to underestimates. NRCS officials said they would reconsider these and other assumptions.