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NRCS Needs to Improve TA Estimation Methods

GAO report recommends changes to explain why technical assistance costs end up costing 15% more than estimated. Compiled by staff

USDA conducts various conservation programs that help protect the nation's soil, water, and wildlife. In partnership with state and local agencies, USDA's Natural Resources Conservation Service (NRCS) provides technical assistance to farmers, ranchers, and others to help them take part in these conservation programs.

However, a new report from the General Accounting Office (GAO) says USDA should improve it's methods for estimating technical assistance costs. While studying 10 Farm Bill conservation programs, the Natural Resources Conservation Service's (NRCS) model made cost estimates, program-by-program, which varied considerably from the agency's actual cost.

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.

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%, than NRCS ultimately incurred. For three other Farm Bill programs, the estimates were lower than the agency incurred by 16 to 60%.

Most of the estimates fell outside NRCS's goal of estimating to within 10% 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% more than the $257 million that NRCS incurred.

The GAO report, requested by the House of Representatives Agriculture Committee, recommends the Secretary of Agriculture direct the Chief of NRCS to identify the estimated costs incurred by partners, ensuring that estimates are more comparable with actual tests when tested, and modify the assumptions for estimating the time that tasks take to better reflect actual work conditions.

Reasons for the differences

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.

NRCS generally agreed with the findings and recommendations and has indicated it would use them as the basis for making improvements to its estimation methods.

To view the full report, click HERE.

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