Background Statutory and Executive requirements assert broad principles and require  agencies to consider alternative ways of regulating and preferred  regulatory designs, such as performance standards rather than means- based design standards. Further, these requirements and directives urge  agencies to consider alternative approaches to eliciting compliance, such  as alternative reporting methods or delaying compliance dates. The Regulatory Flexibility Act (RFA) requires federal agencies to  examine the impact of proposed, final, and existing rules on small  businesses, small organizations, and small governmental jurisdictions,  and to solicit the ideas and comments of such entities for this  purpose. Among other requirements, the RFA requires that agencies  consider regulatory alternatives that accomplish the stated objectives  of a proposed rule while minimizing any significant impact on small  entities. However, the RFA does not mandate any particular outcome  in rulemaking. Executive Order 12866 (E.O. 12866), issued in 1993, promotes a  regulatory philosophy and set of principles that, to the extent  permitted by law and where applicable, encourages agencies to  assess costs and benefits of their proposed and final regulations. It  also directs agencies to consider available regulatory alternatives in  all regulations, including the alternative of not regulating, and  generally select those alternatives that maximize net benefits, to the  extent permitted by statute. Alternatives to direct regulation include  providing economic incentives to encourage the desired behavior  (such as user fees or marketable permits) or providing information  upon which choices can be made by the public. If an agency  determines that direct regulation is necessary, the Executive Order  directs the agency, to the extent feasible, to specify performance  objectives, rather than specifying the behavior or manner of  compliance that regulated entities must adopt. Subsequent executive  orders across administrations have reaffirmed this philosophy and  these principles. Circular A-4, issued by OMB in 2003, provides guidance and best  practices to federal agencies for determining the potential effects of  new regulations. A-4 directs agencies to consider a number of  regulatory alternatives, including market-oriented approaches rather  than direct controls, performance standards rather than design  standards, informational measures, and different compliance dates  and enforcement methods, among others. The RFA, specific statutes, and multiple executive orders have also  emphasized the importance of regulatory lookbacks, also referred to as  retrospective reviews, in which agencies evaluate how existing  regulations work in practice: Statutory requirements: The RFA’s Section 610 requires agencies  to review all regulations that have or will have a significant impact on  small entities within 10 years of the publication of the rule to  determine whether such rules should be continued without change, or  should be amended or rescinded, consistent with the stated objectives  of applicable statutes, to minimize impacts on small entities. Congress  also established other requirements for agencies to review the effects  of regulations issued under specific statutes, such as the Clean Air  Act. Executive Order 13771, issued in January 2017, requires executive  agencies to identify at least two existing regulations to be repealed  whenever they publicly propose or otherwise promulgate a new  regulation, unless prohibited by law. Agencies must also annually  provide their best approximation of the total costs or savings  associated with each new regulation or repealed regulation to OMB.  Finally, the order requires that the total incremental cost of all new  regulations, including the savings for regulations that have been  repealed, be no greater than zero for fiscal year 2017, unless  otherwise required by law or consistent with advice provided in writing  by the OMB Director. Executive Order 13777, issued in February 2017, requires agencies  to designate an agency official as its Regulatory Reform Officer.  Regulatory Reform Officers oversee the implementation of regulatory  reform initiatives to ensure that agencies effectively carry out  regulatory reforms, consistent with applicable law. Agencies must also  establish Regulatory Reform Task Forces to evaluate existing  regulations and make recommendations regarding their repeal,  replacement, or modification, consistent with applicable law. Selected Agencies  Reported Using  Statutory and  Executive  Requirements and  Regulatory Objectives  in Their Decision- Making Processes Agencies Have Multiple  Regulatory Design  Options Available to  Achieve Their Objectives  Depending on Statutory  Discretion When agencies determine that they may need to regulate, they generally  have multiple regulatory designs available to achieve their objectives.  Agencies are directed by statute and Executive requirements to assess  alternatives to regulatory action—including not issuing new regulations— and different ways of regulating. Available regulatory designs range from  prescriptive regulations that specify the adoption of a certain technology  or action to designs that generally provide regulated entities with more  discretion and options for compliance, and in some instances hybrid  designs that incorporate both prescriptive and less prescriptive elements.  Alternatives to prescriptive regulations provide regulated entities with  greater flexibility. For example, performance-based regulations require a  certain outcome but allow regulated entities discretion to determine how  they will achieve that outcome, while market-based regulations use  tradeable permits or fees to influence behavior. Table 2 highlights the regulatory designs identified through our literature  review and corroborated by subject matter specialists and agency  officials. The table includes selected examples of applicable regulations  implemented by our case study agency subcomponents. Statutes give agencies varying degrees of discretion to consider multiple  designs as they develop regulations to meet their objectives. In some  instances, Congress directs agencies by statute to implement specific  regulatory designs. For example, the Occupational Safety and Health Act  directs the Occupational Safety and Health Administration (OSHA), when  promulgating a standard, to either (1) adopt existing scientific and  industry consensus standards for workplace health and safety, or (2)  explain why the standard adopted by the agency better protects workers  than the national consensus standard. In addition, requirements dealing  with exposures to toxic materials must be formulated in the terms of  “objective criteria and the performance desired” whenever practicable.  The Clean Air Act provides EPA’s Office of Air and Radiation (OAR) with  varying degrees of discretion to consider different regulatory designs  when developing its regulatory programs. For example, the Clean Air  Act gave the office broad authority to establish a tradable emissions  allowance system—commonly referred to as cap and trade—with a  market-based design for its Acid Rain Program, but to promulgate specific  prescriptive regulations for the National Emission Standards for  Hazardous Pollutants program. Selected Agencies Stated  a Preference for Less  Prescriptive Designs to  Achieve Regulatory  Objectives Officials at selected agencies reported a general preference for less  prescriptive regulations in accordance with E.O. 12866, Circular A-4, and  other Executive requirements, which encourage agencies to consider less  prescriptive regulatory design options for achieving their objectives. For  example, DOT officials told us that, when choosing among regulatory  design options, they prefer performance-based regulations over means- based regulations. Officials from DOT’s Pipeline and Hazardous Materials  Safety Administration (PHMSA) told us that performance-based  regulations—as implemented for classifying and packaging hazardous  material—allow them to accommodate innovations among regulated  entities, adapt to technological advances, and promote the  competitiveness of U.S. firms in global markets without having to  subsequently revise the regulations. The following examples illustrate how some selected subcomponents  have (1) encouraged the development of less prescriptive design options  for new regulatory programs, and (2) updated or replaced existing  regulations to incorporate more flexible designs. Developing trainings to encourage less prescriptive designs:  Two selected subcomponents produced training materials to promote  the consideration of all options for designing effective regulation,  including less prescriptive regulations where appropriate. EPA’s Office  of Enforcement and Compliance Assurance developed a workbook  and supplemental training course that present principles and tools to  help rule drafters consider the relative effectiveness of different  designs for achieving regulatory objectives, including how the degree  of prescriptiveness can either promote or hinder compliance. The  Federal Aviation Administration’s (FAA) “Performance-Based  Regulations Training” course uses real world examples and team  exercises to teach rule drafters (1) the concepts that inform  performance-based designs, (2) the relationship between prescriptive  and less prescriptive regulatory approaches, and (3) considerations  for developing and assessing performance-based regulations. Updating or replacing existing regulations to incorporate flexible  designs: FAA’s 2016 airworthiness standards for small airplanes  replaced some prescriptive design requirements with more flexible  performance-based standards. Agency officials told us that they  expect the new regulation will improve safety and cost-effectiveness  (such as by reducing compliance costs) while facilitating future  technological innovations. Animal and Plant Health Inspection Service  (APHIS) officials told us that increased international demand for cattle  exports put pressure on their inspection infrastructure and prompted  them to replace their formerly prescriptive standards with  performance-based regulations that officials described as more  flexible and easier to adapt to changing circumstances. Food Safety  and Inspection Service (FSIS) officials told us that their Hazardous  Analysis and Critical Control Points (HACCP) Rule represented a shift  from FSIS’s traditional means-based regulations (which mandated  specific food production standards) to a mixed performance- and  management-based regulatory program (which monitors food safety  plans and production outcomes). Agencies Reported that  Regulatory Objectives  May Require Prescriptive  Designs or Use of Multiple  Designs Despite a general preference for less prescriptive designs among  selected agencies, officials from nine selected subcomponents told us  that their regulatory objectives sometimes required a prescriptive  regulation or that in some instances regulated entities expressed a  preference for prescriptiveness. Mine Safety and Health Administration (MSHA) officials told us that  their regulations were often necessarily prescriptive to implement and  enforce the mine health and safety standards required by statute.  For example, based on data from the National Institute for  Occupational Safety and Health, MSHA determined that requiring  more frequent respirable dust sampling for mining occupations known  to have high dust levels and requiring the use of certain monitoring  devices to measure respirable coal dust exposure are necessary to  limit exposure to respirable coal mine dust and thus reduce  occupational lung diseases. Bureau of Industry and Security (BIS) officials told us that their export  licensing regulations are necessarily prescriptive to narrowly target  specific items as unacceptable for export due to national security or  commercial sanctions against certain countries. Food and Drug Administration (FDA) officials told us that, while they  try to achieve a balance between prescriptive and less prescriptive  regulatory designs, in some instances prescriptive regulations are the  only means of ensuring public health and safety. Officials from EPA’s Office of Chemical Safety and Pollution  Prevention (OCSPP) told us that, when given non-prescriptive  regulatory options, small businesses generally prefer prescriptive  regulations with clear compliance requirements to minimize  uncertainty. An EPA OAR official told us that, during the update of a recent  regulation on refrigerants, the agency considered including a provision  allowing operators of pollutant-emitting facilities the option to either (1)  set a corporate-wide budget for leaks covering all facilities, or (2)  comply with a prescriptive regulation for individual appliances  susceptible to leakage. Based on feedback from regulated entities  and EPA enforcement officials, who voiced a need for predictability  and ease of monitoring, EPA officials said that they ultimately chose  to promulgate the more prescriptive regulation instead of the more  flexible, but challenging to implement, corporate-wide approach. Ten selected subcomponents incorporated multiple design elements into  their regulations—what we refer to as hybrid designs—that offer more  flexibility or, conversely, more clarity to meet the needs of different  regulated entities. PHMSA officials told us that their special permits programs for  hazardous materials and pipelines allow regulated entities the  flexibility to determine their own means of satisfying transportation  safety requirements if they achieve the same level of safety  prescribed by regulation. FAA officials told us that most of their safety standards are  necessarily prescriptive to ensure clarity and uniformity. However,  they said that they often encourage the use of multiple designs in their  rulemakings that allow for both performance-based and means-based  regulations—as with the 2016 airworthiness standards for small  airplanes. OSHA officials told us that they provide employers with multiple  options for achieving regulatory compliance that incorporate both  prescriptive and less prescriptive design elements. For example,  OSHA’s health standards regulating crystalline silica exposure among  construction site workers provides employers both a performance- based option (which allows regulated entities discretion in determining  how to meet permissible exposure limits), and a means-based option  (in which regulated entities implement specified exposure mitigation  measures for designated tasks). FDA and FSIS have both implemented voluntary programs to promote  the adoption of practices among regulated entities that align with the  agencies’ regulatory objectives. FSIS encourages regulated food  facilities to develop voluntary food defense plans as a means of  mitigating potential health hazards and strengthening food safety.  FDA officials told us they issued voluntary food labeling standards for  raw fruits and vegetables to assist in establishing an industry  standard, and achieved 80 percent compliance among regulated  entities. Selected Agency  Processes Included  Practices for Considering  and Assessing Regulatory  Design Options All selected agencies told us their processes for drafting regulations  incorporated internal discussions to consider available regulatory design  options. For example, Employee Benefits Security Administration (EBSA)  officials told us that the agency’s process encourages rule drafters to  solicit input from internal and external stakeholders to inform the  consideration of all possible regulatory design options available to  achieve statutory objectives. BIS officials told us that proposals for  broadly applicable regulations—including available design options—are  discussed and vetted with multiple stakeholders, including (1) BIS  subcomponent officials, (2) Office of General Counsel staff, (3) agency  engineers, and (4) external technical advisory committees. However, some selected subcomponents’ processes for drafting  proposed regulations also included documentation of identified design  options for achieving objectives and assessments of risk or enforcement  and compliance implications of identified design options. These practices  for identifying and assessing regulatory designs are described in the  following examples. Documenting the assessment of design options for achieving  regulatory objectives: EPA uses an Analytical Blueprint to identify  the range of regulatory design options considered throughout the  Action Development Process (ADP)—the agency’s process for  developing and responding to public comments on new regulatory  proposals. FSIS officials told us that rule drafters develop an “options  paper” to identify and assess alternative approaches to achieving  regulatory objectives based on multiple inputs, including (1) data  analyses, (2) subject matter expertise, and (3) stakeholder feedback.  FAA officials told us that rule-drafting groups discuss regulatory  design options when developing a Rulemaking Action Plan and  present these alternatives in briefing documents to the principal  agency managers, referred to as “principals briefs.” FDA officials told  us that rule-drafting groups generally develop a concept paper or  other summary document to determine the optimal means of  achieving a regulatory goal, including considerations of multiple  design options. Assessing the risk associated with identified regulatory design  options: Three selected subcomponents incorporated assessments  of risk into their rule-drafting procedures. DOT’s Rulemaking  Requirements direct agency officials to “consider, to the extent  reasonable, the degree and nature of the risks posed [by agency  action]” and “how the agency action will reduce risks to public health,  safety, and the environment” per Executive Order 12866. EPA’s ADP  specifies that Analytic Blueprints identify, assess, and discuss the risk  management implications of proposed regulatory design options.  USDA’s Regulatory Decisionmaking Requirements direct rule drafters  to conduct a comparison of risks for regulatory design options and  provide a description of the level of uncertainty and unknowns  associated with each design. Assessing the enforcement and compliance implications of  identified regulatory design options: An official from FSIS told us  that representatives from its Office of Field Operations or Office of  Investigation, Enforcement, and Audit often participate in rule-drafting  groups to provide an enforcement perspective. A BIS official told us  that rule drafters solicit informal feedback from enforcement officials to  ensure the practicability of regulatory standards during both the  development of prospective regulations and the initial implementation  of new regulations. EPA’s procedures require that enforcement officials participate in  EPA’s ADP rule-drafting groups for rules involving “precedent-setting  policy implications” and “extensive cross-agency participation,” and  EPA officials told us that enforcement officials also are often involved  in the drafting of other rules. Further, EPA Office of Enforcement  and Compliance Assistance’s training and guidance materials  encourage rule drafters to incorporate compliance principles—such as  clarity, consistency, and transparency—into their decision making and  consider how regulatory design choices can influence later  compliance and need for enforcement. Considering compliance and enforcement implications while making  regulatory design decisions is important because agency officials  stated that different design choices have implications for future  compliance and enforcement resources. For example, PHMSA  officials told us they create an implementation plan for any proposed  regulation with an expected impact on enforcement resources.  Officials from OSHA and EPA Office of Land and Emergency  Management (OLEM) told us that management-based regulations— such as OSHA’s Process Safety Management requirements for oil  refineries and chemical facilities and OLEM’s Risk Management  Program for facilities that use hazardous chemical substances—can  be resource-intensive to enforce because of the greater technical  expertise needed to review highly individual and technical plans  among heterogeneous regulated entities to ensure compliance. An  EPA OAR official told us that the design of its cap-and-trade system— tradeable allowances that require regulated entities to monitor and  report their emissions to EPA—limits the need for enforcement  resources to only those entities that do not comply with monitoring,  reporting, and allowance-holding requirements. Selected Agencies  Reported Using  Multiple Tools and  Approaches for  Allocating Resources  to Elicit Compliance To Elicit Compliance,  Agencies Generally Have  Flexibility to Use a Mix of  Available Tools When regulations are promulgated, agency officials must determine how  they will promote compliance with their regulations and deter  noncompliance. Agencies generally have the flexibility to tailor their  compliance and enforcement strategies to encourage voluntary  compliance and inform regulated entities of regulatory requirements.  Agency officials decide on the appropriate mix of compliance assistance  together with monitoring and enforcement efforts to achieve regulatory  outcomes. Based on our review of relevant academic literature, there are multiple  tools available to agencies to elicit compliance, although agencies  traditionally use two tools to achieve their objectives. The first,  compliance assistance, helps regulated entities understand and meet  regulatory requirements. For example, an agency may consider providing  assistance through educational materials and outreach to promote  compliance among regulated entities. The second, the use of monitoring,  enforcement, and data reporting, ensures that regulations are followed  and deters noncompliance. Agencies may also supplement these  traditional approaches with options that provide more accommodating  and flexible opportunities to promote compliance among regulated  entities, such as developing cooperative programs or providing onsite  consultation services. Table 3 identifies some of the options by which  agency officials may accomplish their regulatory goals. As described in table 3, agencies use compliance assistance tools, such  as education and consultation, to ensure that regulated entities  understand regulatory requirements and provide examples of how to  comply. One way that agencies do this is by providing regulatory  guidance to regulated entities in the forms of Frequently Asked  Questions, tools, or factsheets. We reported in 2015 that agencies used a  wide variety of guidance to interpret new regulations and clarify policies in  response to questions or compliance findings. However, we have also  recommended that selected agencies could further help regulated entities  comply, and agencies have implemented those recommendations by  offering further clarifications and guidance. The selected  subcomponents that we reviewed employed a variety of compliance  assistance activities. For example: FSIS provides compliance guidance and makes training materials  available to its regulated entities, such as meat, poultry, and egg  product plants, and maintains help desks to provide technical  assistance to its regulated community. BIS holds domestic and international seminars, provides online and  in-person trainings, responds to inquiries submitted online, issues  industry advisory opinions, and works with other federal agencies to  provide immediate error alerts to filers using their Automated Export  System. FDA provides web-based, in-person, and telephone education and  outreach; hosts webinars, public meetings, and stakeholder meetings;  and posts training videos and blogs. For example, the agency  established a central source of information for questions related to its  2011 Food Safety Modernization Act rules, programs, and  implementation strategies. Regulatory agencies also engage in enforcement activities such as  inspections, monitoring reported data, and issuing fines when  noncompliance is identified. The selected agencies we reviewed reported  using criteria such as data, compliance history, and trends in  noncompliance to identify risks and more efficiently target enforcement  activities. For example: OSHA conducts two types of inspections—“un-programmed” and  “programmed”—to target resources for the 8 million workplaces it  regulates. Un-programmed inspections respond to specific complaints  or injuries, while programmed inspections target resources towards  specific high-risk industries and employers. FSIS officials analyze noncompliance trends for its food safety  process control regulations at meat, poultry, and egg processing  facilities and send inspection officials “early warning” alerts when the  establishments they inspect reach certain noncompliance rates. APHIS’s Animal Care program uses its Risk Based Inspection System  to conduct more frequent and in-depth inspections at facilities with a  higher risk of animal welfare concerns, and fewer at those that are  consistently compliant. The system uses criteria, such as past  compliance history and the seriousness of documented  noncompliance, to determine minimum inspection frequencies for  licensed and registered facilities. The selected agencies also reported supplementing traditional  compliance assistance and enforcement approaches with other tools,  including: Cooperative programs: OSHA uses multiple cooperative programs  to recognize employers who have introduced health and safety  initiatives at their worksites that exceed requirements. OSHA’s  Voluntary Protection Program rewards employers that exceed worker  safety requirements through an exemption from routine inspections  while they maintain their status in the program. Participating  employers are reevaluated every 3 to 5 years. OSHA uses its  Challenge Program to partner successful employers as mentors for  employers who are attempting to improve their safety and health  programs. The Centers for Medicare and Medicaid Services’ (CMS)  Skilled Nursing Home Facilities Value Based Purchasing Program is  authorized to use incentive payments to recognize nursing homes that  exceed minimum standards of quality. Onsite consultation services: OSHA works with state governments  to provide onsite consultation services to small- and medium-sized  businesses. These consultations assist employers to identify potential  hazards and improve their injury and illness prevention programs.  MSHA offers compliance assistance and outreach through “walk and  talks” during which MSHA inspectors and education outreach staff  provide mine operators and miners with information on hazardous  tasks and conditions, as well as offer best practices to prevent  accidents, injuries, and fatalities. Voluntary disclosures: FAA implements a number of voluntary  reporting programs. For example, its Flight Operational Quality  Assurance program allows commercial airlines and their employees to  anonymously report incident information. The agency then uses this  information to monitor trends and target resources. BIS encourages  parties who believe they may have violated its export regulation to  self-disclose. Officials then review the disclosure to determine if a  violation has occurred and to identify the appropriate corrective action.  BIS views a self-disclosure as an indicator of a party’s intent to  comply with its requirements. EBSA’s Voluntary Fiduciary Correction  Program and Delinquent Filer Voluntary Correction Program  encourage voluntary compliance by allowing plans and plan  fiduciaries to self-correct certain violations and by offering relief from  higher civil penalty assessments. Third-party certification: EPA OCSPP’s formaldehyde emissions  rules require foreign and domestic wood mills to receive a third party  certification that certain wood products meet defined standards. EPA  must approve the third parties that certify the products. Selected Agencies  Reported Considering  Multiple Factors and Take  Different Approaches to  Allocating Resources to a  Mix of Compliance and  Enforcement Tools Agencies generally have flexibility in making decisions on and allocating  resources for a mix of compliance assistance and enforcement strategies.  However, some selected agencies reported that statutory requirements,  programmatic constraints, and changing priorities affected how they  allocated resources for compliance and enforcement activities. For  example: MSHA must prioritize available resources to fund inspections because  they are required by law to inspect every underground mine four times  a year and every surface mine twice each year. Once those  resources have been allocated for inspection, any additional  resources may then be used for compliance related activities. FSIS’ allocation of resources is similarly constrained because it is  statutorily required to be present at every meat, poultry, and egg  product facility whose product enters into commerce in order for the  facility to operate. APHIS is programmatically constrained in allocating resources  between enforcement and compliance assistance because another  federal department enforces some of their promulgated regulations,  and thus determines compliance resources and approaches. The  agency’s Agricultural Quarantine Inspection program inspection  activities are performed by Customs and Border Protection within the  Department of Homeland Security. The type and behavior of regulated entities also affects selected agency  decisions on strategies to achieve compliance. The characteristics of  regulated entities—such as the hetero- and homogeneity of the regulated  community and frequency of interaction with agency officials—may inform  agency compliance assistance and enforcement resource decisions.  Some of the selected agencies described frequent interaction with  regulated entities that were homogeneous or easily identified. As a result,  officials said it is easier for their agencies to ensure that regulated entities  are aware of applicable requirements, and that there may be less need to  invest in compliance assistance. For example, the operators of the  pipelines PHMSA regulates are a small and well known community.  Similarly, FSIS inspectors must be present at each meat, poultry, or egg  products facility, at frequencies determined by the type of operation being  conducted, for it to function. MSHA inspects a fixed number of mines, and  its inspectors are often onsite; however, MSHA officials stated that some  mines are better at complying with health and safety standards than other  mines. In contrast, large and heterogeneous communities present different  needs and considerations that may inform agencies’ compliance  assistance and enforcement resource decisions. When regulated entities  are less likely to engage with inspectors or other federal officials,  agencies’ decisions on allocating resources to ensure all regulated  entities understand requirements and to elicit voluntary compliance are  important. As previously discussed, OSHA regulates and monitors a large  and diverse community of regulated entities. EBSA monitors  approximately 685,000 private retirement plans and 2.2 million health  plans, and similar numbers of other welfare benefit plans. CMS regulates  more than 15,000 large and small nursing home facilities across the  country. In contrast to its pipeline-related regulations, PHMSA also  regulates a broad spectrum of transportation operators and hazardous  materials, requiring a different approach to disseminating information and  providing outreach. At the selected agencies we reviewed, agency officials told us that the  main objective of their regulatory enforcement efforts is to achieve  compliance with regulatory requirements. The selected agencies we  reviewed took different approaches to achieve compliance, and used  compliance and enforcement tools to escalate pressure to get regulated  entities to comply. For example, FDA officials told us that when the  agency identifies noncompliance, it may not immediately sanction a  regulated entity. Rather, the agency may begin with a meeting or call with  the regulated entity to address the noncompliance, and gradually  implement more serious regulatory compliance measures (such as a  negative inspection report or warning letter) or even seek an injunction  from the relevant court(s) if it cannot resolve the noncompliance. APHIS also uses a range of compliance assistance activities to promote  compliance and reserves its enforcement authority for the most serious  situations and noncompliance. For example, APHIS officials told us it  offers facilities struggling to maintain compliance the opportunity to work  with trained compliance specialists to develop options and plans to  promote future compliance. PHMSA officials told us the agency uses the  Systems Integrity Safety Program as a non-adversarial tool that provides  compliance assistance to regulated entities not currently in compliance.  They said that the agency generally will not initiate enforcement actions  against regulated entities enrolled in this program, but will pursue them if  there are violations that PHMSA believes to be willful, and where a safety  violation presents an imminent hazard. Despite a common objective to elicit compliance, selected agency  approaches to resource allocations for compliance and enforcement  differ. While some agencies consider allocations for compliance and  enforcement to implement each individual regulation, others allocate  resources across regulations and regulatory programs. For example,  Labor allocates compliance assistance and enforcement resources for  individual regulations depending on multiple factors, such as the nature of  the regulation and underlying subject matter. In contrast, EPA allocates  resources across regulations, programs, and regions. Its Office of  Enforcement and Compliance Assurance works with each regional office  to allocate enforcement and compliance assistance resources for the  various programs across EPA. In addition, certain agencies we reviewed distinguish between compliance  assistance and enforcement activities, while others view these activities  as a joint effort. For example, EBSA allocates its resources between  benefits advisors, who provide compliance assistance, and their  enforcement staff. Conversely, OSHA inspectors provide compliance  assistance to regulated entities in addition to their enforcement roles,  supplementing onsite outreach and education provided by compliance  assistance specialists located in regional offices. To appropriately allocate their enforcement and compliance resources,  selected agencies we reviewed also collect and review data to identify  noncompliance trends. For example: OSHA uses collected data to identify national and local special  emphasis programs to highlight specific workplace health and safety  issues as the focus of targeted outreach and enforcement efforts. EBSA’s national office annually establishes enforcement priorities— and shifts resources to respond with new emphases—through its  guidance outlined in its Enforcement Program Operating Plan. In  preparing this guidance, EBSA assesses current enforcement  activities, identifies recent enforcement trends, analyzes available  information regarding industry activities and areas of noncompliance,  and reviews current policy considerations to identify possible areas of  potential risk within the employee benefit plan industry. EPA officials told us they use their National Enforcement Initiatives to  prioritize resources to compliance concerns that are particularly  entrenched or problematic. Further, EPA initiated its Next Generation  Compliance (NextGen) strategy to structure regulations and permits  with new monitoring and information technology, expanded  transparency, and innovative enforcement activities. NextGen was  designed to increase transparency and real time information made  possible by electronic reporting and advanced monitoring, and allows  the agency and its stakeholders the opportunity to experiment with  innovative approaches. Furthermore, EPA stated that it and its  stakeholders are better able to identify and solve environmental  issues, and address large regulated communities with approaches  that go beyond traditional single facility inspections and enforcement. Selected Agencies Have  Made Efforts to Make  Compliance Data  Transparent and  Accessible Transparency and availability of data are important to promoting  compliance and achieving regulatory objectives. The selected agencies  that we reviewed have made efforts to make compliance and  enforcement information more transparent and accessible to the public,  including: All the Labor subcomponents we reviewed made efforts to make data  and information more publically accessible. MSHA developed online  compliance tools that allow the public to monitor a mine’s compliance  with key safety and health standards by providing a broad range of  mine safety and health data, including information about mine  inspections, accidents, injuries, illnesses, violations, employment,  production totals, and air sampling. One of these tools is the “Rules to  Live By Calculator,” which focuses on the 49 safety standards most  often associated with fatal mining accidents and serious injuries. EPA’s Enforcement and Compliance History Online (ECHO) database  provides integrated compliance and enforcement data for over  800,000 regulated facilities on air emissions, surface water  discharges, hazardous waste, and drinking water systems. The  database includes EPA, state, local, and tribal environmental agency  compliance and enforcement records that are reported into national  databases. ECHO also incorporates EPA environmental data sets to  provide additional context for analyses. CMS created a “Nursing Home Compare” website to assist  consumers in comparing information about nursing homes. The  website contains detailed information on the quality of care and  staffing information for more than 15,000 Medicare- and Medicaid- participating nursing homes including a five-star scale of quality  ratings of overall and individual performance on health inspections,  quality measures, and hours of care provided per resident by staff  performing nursing care tasks. Selected Agencies  Reported They  Evaluated Regulatory  Decisions by  Collecting Feedback,  and Responses to  Identified  Noncompliance  Varied Selected Agencies  Supplement Feedback on  Effectiveness of  Regulatory Design and  Enforcement Approaches  with Evaluations While agency officials receive feedback on their regulations during  rulemaking, they also have opportunities to receive feedback during  implementation of the regulation and as part of later retrospective review  efforts. In 2007 and 2014, we reported on retrospective reviews of  individual regulations, which agencies use to evaluate how existing  regulations work in practice. As mentioned previously, two executive  orders issued in 2017 also emphasize the importance of retrospective  review, and officials from two agencies told us that they are currently  examining their regulatory evaluation processes in response to these  directives. To supplement retrospective review efforts, officials told us that  they collect feedback from both internal and external stakeholders on the  effectiveness of their regulatory design and enforcement decisions. This  feedback may occur during rulemaking or during implementation, and  might prompt changes. For example: EPA officials told us they provide opportunities for regulated entities to  give feedback, and that they may reconvene the initial Regulatory  Working Group for a rule if they heard complaints or concerns. At DOT, FAA officials told us they collect feedback about potential  needs to update or change rules through requests for exemptions and  through their various advisory committees. According to PHMSA  officials, advisory committee inputs or petitions are two ways they  evaluate the success of their regulations. MSHA officials told us that in response to comments received during  rulemaking, they changed their rule on proximity detection systems for  continuous mining machines, which protects miners from being struck  by such machines. MSHA initially proposed specifying certain  requirements for a technology but used a performance-based  approach in its final rule. This experience subsequently informed  MSHA’s proposed design for its new rule for proximity detection  systems for mobile machines, in which the agency proposed a  performance standard from the outset of the rulemaking. A BIS enforcement official told us that his office requested a revision  to an existing regulation that was difficult to enforce because it did not  provide clear requirements for how companies could determine when  a government-identified “red flag”—a party on BIS’ Unverified List— could be resolved. BIS received similar feedback from advisory  committees and revised the regulation for clarity. According to APHIS officials, they evaluate the effectiveness of their  compliance and enforcement activities by tracking compliance rates  under the Animal Welfare Act and through feedback from their  regulated entities. USDA officials also stated that interactions with  inspectors and listening sessions provide the department’s agencies  with feedback. Selected agency officials cited concerns about changing the design of  established regulatory programs and the resources required for the rulemaking process. Two of our selected agencies mitigated these  concerns by piloting new regulatory designs. USDA implemented an  ongoing project—the HACCP Inspection Models Project—to assess the  viability of applying potential performance-based regulations to ensure  food safety at hog and poultry processing facilities. After assessing  inspection findings for the poultry pilot project and in response to public  comments on the program, they ultimately determined that the regulation  should be broadened to additional facilities. FAA used feedback from  pilot studies, in which more than 30 public-use airports participated, to  inform a proposed rule for Airport Safety Management Systems. Agencies also typically have flexibility to continue to change and adjust  their compliance and enforcement strategies in response to feedback and  evaluation without going through the rulemaking process to amend a final  regulation. As previously mentioned, agencies assess the effectiveness of  their enforcement and compliance efforts by collecting data to target their  enforcement efforts. In addition, selected agencies identified evaluations  of their enforcement and compliance efforts, including: DOL’s Chief Evaluation Office officials told us they work with Labor  components to (1) develop and implement research studies, (2)  address how collected information is used to assess effectiveness,  and (3) support data analysis to inform management decision making.  For example, the office worked with OSHA to pilot changes to issuing  and following up citations to increase employer responsiveness. The  study, which began in 2015, found that employers who were part of  the new citation process, which included elements such as a handout  during inspections, postcard reminders, and a follow-up call, were 3.9  percentage points more likely to engage with OSHA. EPA’s Office of Enforcement and Compliance Assistance wrote a  guide for EPA managers and staff on their integrated strategic  approach to effectively eliciting compliance, focusing on compliance  assistance, incentives, monitoring, enforcement, and other tools.  EPA has also conducted research on what makes a regulation more  likely to be complied with and identified principles and tools to aid in  writing more effective regulations. For example, EPA directs rule  drafters to use clear and objective regulatory requirements and  applicability criteria, to structure regulations to make compliance  easier than noncompliance, and to leverage regulated entities and/or  third parties to assess compliance and prevent noncompliance. It also  encourages agency officials to leverage accountability and  transparency through e-reporting to government and public access to  data on websites. According to PHMSA officials, they developed formal enforcement  goals, strategies, and metrics after reviewing leading practices for  enforcement, including reviewing the compliance strategies at other  DOT subcomponents. They analyzed data to identify commonalities  between violations that are causal to incidents, as well as those that  increased the severity of incidents. They also reviewed enforcement  data to identify guidance that needs to be improved, provide feedback  to inspectors, and ultimately provide ideas for improved rulemaking  and regulatory design. Selected Agency  Responses to Continued  Widespread  Noncompliance Varied Selected agencies responded differently when they identified continued  widespread noncompliance through their evaluations or monitoring of  compliance data. Some agencies told us they view a record of  noncompliance as a fault in the regulation and may update their  regulatory design, while others may change compliance strategies. FSIS  officials told us they use enforcement data to analyze the effectiveness of their regulations, and may make changes to their regulations based on  trends in noncompliance. According to PHMSA officials, they analyze  enforcement data in several ways, including identifying regulations with  the highest rates of noncompliance to understand weaknesses in  individual regulations. MSHA officials told us that when an Inspector General audit found that its  enforcement actions were not strong enough for repeat violators, the  agency updated its Pattern of Violations regulation to better attain  compliance. Conversely, OSHA officials told us that they view persistent  noncompliance or workplace injuries and illness as indicating a need to  revisit and readdress how compliance assistance is being provided and  enforcement applied, rather than as a reason to adjust the regulation.  EPA officials told us that they will update an existing regulation to solve  an ongoing compliance problem only as a last resort due to the large  resource investment required and disruption to regulated entities to adapt  to changes in regulatory design. Key Considerations  Could Strengthen  Agency Regulatory  Design and  Enforcement  Decisions We built upon current statutory and executive requirements and selected  agencies’ current practices to identify key considerations to strengthen  agency processes for regulatory design and enforcement decisions. As  agency officials craft regulations, they are guided by high-level statutory  requirements, economic principles in executive orders, and OMB  directives and resources. In accordance with those directives, our  selected agencies have implemented varied practices to facilitate their  regulatory design and enforcement decisions. Based on our review of  those directives and the selected agencies’ processes, as well as  academic and practitioner research, past IG work and our own past work,  and existing criteria and resources for federal managers, we identified key  considerations for regulatory design and compliance to aid decision  makers in designing—or redesigning—their regulations and determining  how best to elicit compliance. The following key considerations for regulatory design and compliance in  figure 1 are intended to serve as a resource to supplement existing  directives and guidance. We identified these considerations to bridge the  gap between high-level directives and current agency practices. These  considerations can provide criteria for decision makers to identify, assess,  and evaluate options for achieving their regulatory objectives. Further, we  have offered elements for each consideration as concrete questions that  agencies can ask themselves as they design their regulatory approaches  to elicit compliance within statutory authority and available resources. Not  all considerations are applicable in every instance. We recognize there  are tradeoffs inherent in any choice, but we believe that these key  considerations can strengthen agency decision making, resulting in more  informed designs, plans for evaluations, and ongoing changes to  compliance and enforcement approaches. We provided a draft of this report to the Secretaries of Agriculture,  Commerce, Health and Human Services, Labor, and Transportation, the  Administrator of the Environmental Protection Agency and the Director of  the Office of Management and Budget for comment. The Departments of  Agriculture, Health and Human Services, and Labor and the  Environmental Protection Agency provided technical comments that were  incorporated as appropriate. The Departments of Commerce and  Transportation and the Office of Management and Budget did not provide  comments. As agreed with your office, unless you publicly announce the contents of  this report earlier, we plan no further distribution until 30 days from the  report date. At that time, we will send copies to the appropriate  congressional committees, the Secretaries of Agriculture, Commerce,  Health and Human Services, Labor, and Transportation; the Administrator  of the Environmental Protection Agency; the Director of the Office of  Management and Budget; and other interested parties. In addition, the  report is available at no charge on the GAO website at  http://www.gao.gov. If you or your staff have any questions about this report, please contact  me at (202) 512-6806 or krauseh@gao.gov. Contact points for our Offices  of Congressional Relations and Public Affairs may be found on the last  page of this report. GAO staff who made key contributions to this report  are listed in appendix II. Appendix I: Objectives, Scope, and  Methodology You asked us to review how agencies make key decisions related to  regulatory design, compliance and enforcement, and updating of  regulations. This report describes how selected agencies report (1)  making decisions on regulatory designs among available options, (2)  making decisions to designate resources among available compliance  and enforcement activities, and (3) evaluating those decisions, and also  identifies (4) key considerations for decision makers related to regulatory  design and enforcement. To describe agency experiences and decisions regarding regulatory  design and compliance and how they evaluate those decisions, we  reviewed regulatory processes at 6 departments and 13 subcomponents  within those departments. To illustrate a wide range of regulatory designs  and resulting compliance activities, we selected the six executive branch  departments—excluding the Department of Defense—that promulgated  the most significant regulations between September 1, 2011 and August  31, 2016. These departments were the United States Departments of  Agriculture (USDA), Commerce (Commerce), Health and Human  Services (HHS), Labor (Labor), and Transportation (DOT), and the  Environmental Protection Agency (EPA). Among other inputs, the  selected departments were also among those that most often  promulgated regulations that were anticipated to affect small entities  (such as small businesses, nonprofits, and governments) during the same  time period. We used reginfo.gov to identify the number of significant  regulations. We assessed the reliability of those data by reviewing  relevant documentation, interviewing knowledgeable agency officials, and  electronically and manually testing the data for missing values, outliers,  and invalid values, and we found the data to be sufficiently reliable for the  purpose of identifying selected departments. The experiences of these  selected executive branch departments are illustrative and  nongeneralizable. From these departments, we selected subcomponents for  nongeneralizable case studies. These subcomponents were selected  based on information provided by department officials engaged in  regulatory activities on their departmental subcomponents’ use of a  variety of regulatory designs and any experience making changes to their  regulatory design or compliance strategies based on new information  (such as evaluations) or new circumstances (such as evolving  technologies or changes in agency resources for compliance). We also  asked department officials about subcomponents’ use of compliance  activities other than traditional compliance assistance and enforcement.  To further inform our selection of subcomponents, we reviewed past  Inspector General and our own work on types of regulatory designs and  compliance strategies. We did not include independent regulatory  agencies in our scope as they are not subject to directives from the Office  of Management and Budget’s (OMB) Office of Information and Regulatory  Affairs. Furthermore, many independent agencies promulgate and  administrate financial regulations, which present different considerations  and have been the focus of other work we performed. In reviewing  enforcement strategies used by agencies, we did not review federal  regulatory programs for which enforcement has been delegated to states  or localities. To illustrate how our selected agencies make decisions regarding  regulatory design and compliance and how they evaluate those decisions,  we reviewed agency written procedures and interviewed department and  subcomponent officials on their practices for making these decisions. To develop themes and examples from our documentary and testimonial  evidence, we analyzed information from relevant documents and  interviews to identify and confirm common patterns as well as differences  across selected agencies. These experiences illustrate how the selected  agencies currently make these decisions, the outcomes of those decision- making processes, and their evaluation practices. To identify key considerations for decision makers related to regulatory  design and enforcement, we reviewed existing criteria documents,  including (1) elements of the Regulatory Flexibility Act; (2) applicable  executive orders and guidance such as Executive Order 12866 and OMB  Circulars A-4, A-11, and A-123; and (3) resources for federal managers,  and leading practices we had previously reported on for enterprise risk  management. To ensure that our considerations incorporated applicable academic and  government research and findings we conducted a literature review. Our  literature review incorporated searches of several academic, literature,  and government sources—including bibliographic databases such as  ProQuest, Scopus, Academic OneFile, Public Affairs Information Service,  and LexisNexis—for articles or studies published from January 2011  through August 2016. The team searched for articles using several  combinations of relevant key words such as: “regulatory design,”  “regulatory structure,” “regulatory compliance,” and “regulatory  enforcement.” We then identified the articles that were relevant to our  objectives based on the independent review of two team analysts. In  addition, we searched our own and selected federal Inspector General  websites for any reports relevant to our objectives. These searches were  not meant to be a comprehensive search of all available literature on the  topic, but rather conducted to identify relevant work to inform our  identification of key regulatory design and enforcement considerations for  decision makers. We developed a data collection instrument for each of the academic and  government literature search sources and our own reports. To analyze  and summarize the results of the academic literature search, two analysts  independently reviewed each relevant record in the search results to  document information that was relevant to our objectives and to identify  key themes to inform our key considerations. We reviewed all relevant  articles and reports and summarized information in the data collection  instrument that related to the following topics: regulatory design;  regulatory design principles; enforcement and compliance; enforcement  and compliance principles; regulatory or subject matter area; and general  observations that were relevant to the engagement’s objectives. In  addition, we reviewed the annotated citations and references in selected  articles to identify additional articles to include in the literature review and  ensure that we were not omitting key literature related to regulatory  design and enforcement. After applying identified criteria—including key practices and elements of  those practices—to decision making about regulatory design and  compliance, we obtained input on those considerations with officials from  our selected agencies and with subject matter specialists. We initially  selected and interviewed relevant specialists based on the results of our  literature review (i.e., the authors of relevant articles or books included in  our review). Based on suggestions from those individuals, we expanded  our list of specialists and conducted a second round of interviews,  ultimately speaking with 14 specialists. These considerations were also  refined by the current practices and approaches of the selected agencies  we reviewed. We conducted this performance audit from August 2016 to October 2017  in accordance with generally accepted government auditing standards.  Those standards require that we plan and perform the audit to obtain  sufficient, appropriate evidence to provide a reasonable basis for our  findings and conclusions based on our audit objectives. We believe that  the evidence obtained provides a reasonable basis for our findings and  conclusions based on our audit objectives. Appendix II: GAO Contact and Staff  Acknowledgments GAO Contact Heather Krause at (202) 512-6806 or krauseh@gao.gov. Acknowledgments In addition to the contact named above, key contributors to this report  were Tim Bober, Assistant Director, Alexandra Edwards, Danny Berg,  and Travis Hill. In addition, John Hussey, Timothy Guinane, Andrea  Levine, Kayla Robinson, Robert Robinson, and Cynthia Saunders  provided key assistance.
Within the limits of their statutory authority, agencies may design their regulations in different ways to achieve intended policy outcomes. Agencies also decide how they will promote compliance with their regulations and ensure that regulated entities are informed of regulatory requirements. GAO was asked to review how agencies make regulatory design and enforcement decisions. This report describes how selected agencies report (1) making decisions on regulatory designs among available options, (2) making decisions to designate resources among available compliance and enforcement activities, and (3) evaluating those decisions, and also identifies (4) key considerations for decision makers related to regulatory design and enforcement. To describe how agencies make and evaluate these decisions, GAO reviewed regulatory processes and spoke with officials at six executive departments—the Departments of Agriculture (USDA), Commerce, Health and Human Services (HHS), Labor (Labor), and Transportation and the Environmental Protection Agency (EPA)—based on volume of significant rulemaking, and 13 subcomponents within those departments. To identify key considerations for regulatory decision makers, GAO reviewed existing criteria, including statutory and Executive requirements, conducted a literature review, and obtained input on identified considerations with subject matter specialists. GAO is not making any recommendations in this report. USDA, HHS, Labor, and the EPA provided technical comments that were incorporated as appropriate. Agencies have multiple available regulatory designs. Selected agency processes for choosing among them are informed by statutory and Executive requirements, regulatory objectives, and statutory discretion. Officials reported a preference for “performance” designs that establish an outcome but allow flexibility in how to achieve it, but stated that in some cases their objectives could require use of more prescriptive “design-based” regulations that specify a certain required technology or action. Officials at all selected agencies stated that they discuss potential regulatory designs internally, but some agency processes also included practices such as documentation of identified design options and assessments of the options' risks and enforcement implications. Selected agencies used multiple tools and approaches for allocating resources to elicit compliance. Agencies generally have flexibility to use a mix of tools, including providing compliance assistance to help regulated entities understand requirements, and monitoring and enforcement through inspections. Selected agency processes to allocate compliance resources vary, and agencies reported using collected data to target enforcement resources to address risks. Selected agencies supplemented feedback on effectiveness of their regulatory design and enforcement approaches with evaluations, which agency officials said could prompt changes. When agencies identify noncompliance, selected agencies may update their regulation or their compliance strategy. GAO identified key considerations to strengthen agency decisions related to regulatory design and enforcement (see figure). These build on current directives, academic research, and the experiences of selected agencies and are intended to serve as a resource for decision makers in designing—or redesigning—their regulations and determining how best to elicit compliance.