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scope of its clientele by including State statistical and (c) sufficient "lead” time for the agency officials agencies not now directly coordinating with Federal to initiate any legislative, administrative, operational, statistical programs, if the State had stringent or program content changes that may be required to confidentiality legislation. For such later extension a utilize the SSEL in the agency's statistical programs. State should have confidentiality legislation fol- This statement is also intended to inform Congress lowing Federal confidentiality laws such as title 13 and the public of the future development of the SSEL before it could be allowed broader access to the program and the basis and purpose of the proposed Directory. In no case would information on legislation. establishments or companies that are not operating in

More detailed criteria for determining qualifying the State be provided to State agencies. Canada has developed model confidentiality legislation and

agencies and guidelines for assuring adherence to the several provinces have enacted that legislation to

confidentiality standards will be developed by an provide as high or higher level of protection and

interagency task force. penalties for unauthorized disclosure or use of the information.'

The Proposed “Standard Statistical

Establishment List” Program for Federal Appendix

Statistical Agencies A statement developed by the Industrial Directory

A. Introductory Note: technical group follows.

This section outlines the principal elements Establishment List Statement

required of a Federal “Standard Statistical

Establishment List” (SSEL) program to assure its Nature of This Statement

effective use by participating statistical agencies. It

summarizes the scope and contents, objectives, This statement represents a Government-wide sources, uses, confidentiality requirements, and other consensus of the broad conceptual base from which essential elements needed to develop and maintain a each agency can make advance plans to participate viable Federal Government-wide statistical resource efficiently and effectively in the SSEL program. “list.” The proposal is essentially to be implemented However, this statement is not intended to be a within the context of the existing decentralized detailed or technical "blueprint" of specifications Federal Statistical System. It necessarily includes from which the participating agencies can prepare some aspects that may require significant and their operational procedures for implementation. The innovative changes for both source and user agencies use of the list in Federal statistical programs will be in the present framework of their statistical procoordinated by the Office of Federal Statistical Policy grams' content, operational techniques and/or and Standards.

confidentiality practices. More specifically, this statement is intended to The objective of these changes is to improve data provide (a) sufficient information about the proposed quality and reduce costs in the overall Federal list program and its use by statistical agencies other statistical system and to reduce the burden on the than the Census Bureau and their participation in the public of responding to Federal requests for program, so that the agency's policy officials and information. legal counsel may fully review the SSEL proposal and its implications for the agency, (b) sufficent

B. Historical Background: information so that the agency can approve (or modify) the proposed role to be played by the agency; In October 1968, the Office of Management and

Budget (OMB) designated the Census Bureau as the

“focal agency” for the establishment list of U.S. Standard Statistical Establishment List Working Papers: No. 1. Scope and Content of the Standard Statistical

business enterprises and their establishments for the Establishment List.

use of statistical agencies. The availability of such a No. 2. Organizational Structure of Firms in the Standard

central list facility, it was believed, will improve Statistical Establishment List.

significantly the comparability among important No. 3. Size Classification of Economic Characteristic.

economic data series published by the various No. 4. Scope of Industrial Classification and Classification

statistical agencies for ostensibly identical industries, Problems. No. 5. Geographic Coding.

sizes of operations, and geographic areas. No. 6. SSEL Maintenance and Update System. No. 7. Scope and Content of City and County Business

Existing classification differences were the result of Patterns.

differences in definition and coverage of the business

1

and statistical data records of various source agencies participating in this project.?

enterprises and establishments that constituted the reporting units for each agency. Several “matching" studies conducted in the past have indicated that these data discrepancies occur, to a large extent, because each statistical agency was obliged, under existing laws governing confidentiality, to compile and maintain its own files of businesses. Since these agencies independently assigned their industry, area, and size codes to the reporting units included in their respective surveys, the results were often inconsistent among agencies and burdensome on respondent companies. The routine exchanges of such classifying information among the statistical agencies to reconcile or eliminate these data discrepancies has not been possible in most instances due in part to the wide variety of data confidentiality provisions under which these agencies operate.

D. Objectives of the Proposed Program:

Although the major objectives of this program have been stated in a variety of ways, with differing emphasis by various groups over the past three decades, the following requirements are considered to be fundamental in developing policies, in setting goals, and in seeking support and cooperation for the program by participating statistical agencies, other governmental bodies, the business community, and the general public. To succeed in obtaining this broad base of support, the proposed program must show that it is likely to achieve the following objectives.

AS A MINIMUM:

To assist the Census Bureau staff in the initial development of the Government-wide statistical establishment list system and use by the Census itself, funding for the project has been provided, starting in fiscal year 1972. In addition, an interagency task force (first led by the Statistical Policy Division in OMB and now led by the Office of Federal Statistical Policy and Standards) was set up in 1972 to promote the interchanges of ideas between Census and the major participating source and user agencies in solving the operational and legal problems inherent in creating a viable Federal list system.

C. Scope and Content:

The SSEL, when fully operational, will consist of a computerized file of all U.S. business firms and their establishments. It will have for each organizational unit: the name, mailing and actual address, tax identification mumber, physical location code, Standard Industrial Classification or Enterprise Standard Industrial Classification code, product class codes or merchandise line codes when these codes are available from existing surveys, central administrative office or auxiliary code, legal-form-oforganization code, and standard size class codes for employment, payroll, and total receipts or business receipts. Individual establishments on the List will be identified with the legal entity of which they are part. In addition, establishments of multilocation enterprises can be identified because the establishment identification code contains the company or enterprise code.

The frequency of updating and verifying the accuracy of these list records will vary, of course, depending upon the size and industry characteristics of the particular entities involved and the availability of list-type information from existing administrative

(1) Improve significantly the comparability

among published economic data series which purport to represent the same industry, size, or geographical location of firms or establishments. At present, differences arise due to the need of different agencies to classify and tabulate data independently without reference to a government-wide

source of classification codes. (2) Reduce the duplicative data collection costs

to government and the duplicative reporting burden on the business community. Both costs are now largely unavoidable because of the need for most statistical agencies to

develop and update their own list files. (3) Provide a current file of the business universe

organized within an accessible statistical framework so that scientific statistical samples (e.g., stratified by industry, area, size, or other available economic characteristics) can be drawn. It should provide flexibility so that samples can be selected from the fully consolidated enterprise, unconsolidated legal entity, or individual establishment level. At present some agencies cannot develop adequate samples since they do not have access to a complete list of firms with the data

necessary from which to construct the sample. (4) Provide, wherever existing and possible, both

primary industry codes and economic activity codes such as merchandise line codes and

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? The year of the latest SIC code update is available for establishment records, along with a source code indicating a reliability category (e.g. the SIC or size class indicator was obtained from a detailed, data oriented survey, and therefore has a "high" reliability.)

product class codes, so that such information can be used in developing more efficient sampling frames for particular uses. Some agencies do not (and should not) collect such

data direct from businesses. (5) Develop as an integral by-product of the

SSEL system, an annual publication program presenting the statistical information compiled as part of the List operation. This publication substitutes for the County Business Patterns program, based on the Social Security Administration's (SSA) Reporting Unit concept, and is issued as a joint project of the SSA and the Bureau of the Census. The new publication will provide those agencies using the SSEL file, and all other interested data users. with equivalent benchmark "control totals" of the universe

for their individual programs. (6) Assure list accessibility to those Federal

statistical agencies that can ensure, on the basis of legal or administrative regulation, and with the protection afforded by the proposed bill, the confidentiality of the data collected from business respondents in any statistical surveys conducted with lists derived from the statistical establishment list files. In addition, the program must provide for effective implementation by these user statistical agencies of the confidentiality guidelines and disclosure avoidan procedures required by such use of the list files.

incorporated into the file annually. Those statistical agencies with major responsibilities for collecting current economic data from broad segments of the business universe (e.g., Labor Department's Bureau of Labor Statistics and Agriculture Department's Economics, Statistics, and Cooperatives Service), as well as those agencies in the Department of Health, Education, and Welfare covering specific segments of the services sector of the economy (e.g., Office of Education, National Center for Health Statistics, etc.), will be likely sources as well as users. This coordination of statistical information will enable user programs to obtain the latest changes without having to request the identical information from respondents through additions to their individual programs. Reconciliation of establishment definitions and codes will be done where there are discrepancies that are important to the agencies involved.

F. Users of the List File:

Users of the list will be limited to Federal statistical agencies (and their cooperating State agency counterparts) that conduct statistical surveys and that can assure by legal or administrative regulation that the individual reports submitted by the respondent companies are confidential and will not be used for investigation, taxation, enforcement, or judicial proceedings.

E. Source of Input:

To minimize costs and maximize the use of existing statistical programs and computer technology, the development of the initial file proceeded as a "piggyback" extension of the 1972 Economic Censuses operations and its subsequent annual, quarterly, and monthly industry and trade surveys including the Agricultual Census, as well as the Bureau's Company Organization Survey and supplemental classification questionnaires. As such, the primary information sources of the initial file consisted of the Internal Revenue Service (IRS) 1972 business income tax return files, the IRS-SSA 1972 quarterly employer payroll tax and business “birth” files, augmented by the 1972 Economic Censuses and reports of all multiunit firms and large single-unit firms.

To maintain this initial file on a current, accurate, and minimum-cost basis, supplemental and/or substitute sources of information will be explored. Data from the IRS Business Master File will be

G. Confidentiality Requirements:

The list file will be confidential and must be used only for statistical purposes. Any individual company or establishment information collected as a result of using the file for sampling frames or mailing lists must also be confidential and only be released in a form that will not identify data pertaining to the particular establishments or companies.

The list can be used to support Federal/State coordinated statistical programs if legal or administrative protection for the list information and data collected using the list can be provided at the State level as well. List information for establishments not within a State or enterprises not operating in a State will not be available to that particular State.

H. Uses of the List:

Agencies may want samples drawn for their purposes by the Bureau of the Census where ad

? Where States have laws allowing or requiring publication of directories, the list could be used only under the McGranery decision. That is, SIC codes could be matched and corrected, but additional information will not be available.

ditional information such as a more detailed employment break, the amount of a particular commodity produced, or the amount of a particular commodity class sold will be beneficial to sample design. Such specialized samples can be provided on a reimbursable basis, but only the list information will be furnished to the agency.

The total establishment list will be made available to eligible agencies, but in most cases only a portion will be needed. In many cases only various segments and/or samples required for their particular purposes will be needed by the agencies (for instance, all establishments and companies with over 20 employees in particular industry divisions and a sample of the smaller ones).

Items of information that are not needed by an agency will not be provided.

a continuous basis, but will be available to users on the basis of the latest available information, for instance, on all establishments owned or operated at any time during a specific calendar year.

All information in the list will be updated whenever new information is available, but at a minimum all employer firms, (both multiestablishment and single establishment) will be updated annually from one or more previously described sources or input. Single establishment firms having no paid employees will be updated at least every five years.

J. Charges For List Use:

All costs of updating and maintaining the list will be borne by the Census Bureau.

Charges to agencies will be based on the actual cost of providing the list or sample information. Costs of more frequent updating or for specialized processing of the SSEL will have to be negotiated.

I. Maintenance of The List:

The list will be updated for creation or dissolution of firms or establishments ("births" and "deaths") on

Chapter 24. INTERAGENCY FUNDING

Introduction

In the context of Federal statistical programs, interagency funding means the transfer of funds from one Federal agency to another for the performance of data collection, analysis, or a related statistical activity. In each case, there is involvement of one or more sponsor agencies which provide the funds and a performing agency which does the work.

To put the discussion of interagency funding in the proper perspective, the close relationship between the issues of interagency funding and organizational questions should be recognized. In recent years, a principal emphasis of efforts to reorganize Federal statistical activities has been to limit the number of Federal offices directly engaged in statistical operations and to establish an appropriate number of statistical centers to perform statistical operations for all of the other Federal offices. The by-product of such a reorganization effort is an increase in reimbursable funding, that is, an increase in the transfer of Federal funds to the recognized statistical centers. Inversely, the cases in which recognized statistical centers are not heavily engaged in reimbursable programs indicate areas in which the concept of statistical centers has been only partially carried out. This of course is not clear cut. For example, the total reimbursable work done by the National Center for Health Statistics (NCHS) in fiscal year 1976 was only $221 thousand but a part of the short-fall in its role as a reimbursable center is its lack of flexible staffing to respond to outside calls for assistance.

the budget process tends to specify, in advance, the objects of expenditure and hence to limit the possibilities for setting priorities within broad areas.

Another factor which complicates the situation is that many statistical programs are addressed to both agency-specific and general-purpose needs. The market is broader than an identifiable agency and, therefore, willingness to pay does not provide a good measure of the overall need and hence the real priority of the project from the point of view of overall governmental needs.

In spite of all of the above limitations, market demand does have a definite role in shaping the outputs of the Federal Statistical System. Within broader budget constraints the reimbursable mechanism provides flexibility for funding some major statistical projects and not funding others as agency priorities shift.

Current Activities

Only a small number of agencies perform significant amounts of statistical work for other Federal agencies. Since data collection is more expensive and requires more specialists than data analysis, most of the interagency funding reimburses data collection rather than analytic projects and thus the principal performers are the core collection agencies.' The degree of concentration in only three agencies, the Bureau of the Census, the Bureau of Labor Statistics, and the Statistical Division of the Economics, Statistics, and Cooperatives Service of the Department of Agriculture, however, is quite striking and may be surprising to those who are used to thinking of the U.S. Federal Statistical System as highly decentralized. When reimbursable situations are included, these agencies account for approximately 40% of the Federal statistical budget. With regard to deciding what data are needed, the system is correctly described as decentralized, but statistical collection is, in fact, quite centralized.

Another issue to which reimbursable funding has frequently been linked is the role of market demand in the funding of statistical activities. Stated simply, the proposition is that an agency which needs data should pay for them. If an agency is unwilling to pay, there is the presumption that failure to pay is the equivalent of a market response which states that either there is no need or the expressed need is of a lower order of priority than other needs. There are certain situations where willingness to pay is a legitimate test of priority, but any broad application must confront the nature of the budget formulation process which definitely limits applicability. In short,

'See Section II, “The Organizaion of U.S. Federal Statistics" for discussion of the roles and missions of this group of agencies.

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