FR 2021-01477

The document is a Federal Register notice from the Census Bureau, a part of the Department of Commerce, seeking public comments on the continued collection of information through the Quarterly Financial Report (QFR) program. This initiative gathers data on the financial status of U.S. corporations, particularly those in the manufacturing, mining, and various trade and service sectors. Corporations with significant assets, particularly those exceeding $5 million in manufacturing or $50 million in other sectors, are the primary subjects of this report. The collected information serves critical roles in economic analysis, influencing calculations of Gross Domestic Product (GDP) and other financial assessments by federal entities.

General Summary

The notice provides a framework for public feedback and outlines the procedures associated with the QFR program. The notice explains the forms involved in data collection, the legal statutes underpinning the program, and the methods used to ensure data gathering is secure and efficient. The Census Bureau offers two data collection methods: traditional mail and a secure online system. The aim is to collect accurate data while minimizing the burden on the businesses required to report.

Significant Issues and Concerns

The document, although comprehensive, raises several concerns:

1. Cost Burden Clarity: The notice specifies that the estimated total annual cost to the public is $0, yet it acknowledges that respondents might incur indirect costs for software, hardware, or accounting services. This issue might lead to confusion among stakeholders regarding the true cost implications.

2. Public Comment Utilization: While the notice invites public comments, it does not elaborate on how these comments will affect the decision-making process or address the possibility of publishing analysis on the received feedback.

3. Penalty for Non-compliance: The document states that participation is mandatory but lacks detail on potential penalties or consequences for non-compliance, leaving businesses uncertain about the risks of non-participation.

4. Technical Language: The document uses technical jargon such as "OMB Control Number" and "PRA Clearance Officer," which may be difficult for lay readers to understand. The inclusion of a glossary could enhance comprehension.

5. Data Security: Although the document mentions an encrypted online data collection system named Centurion, it fails to specify how data security will be stringently maintained, a crucial factor given the sensitivity of the information being collected.

Impact on the Public

The continuation of the QFR program potentially impacts the public by ensuring sound economic analysis through reliable data, which supports government and academic research. Affected stakeholders include various businesses that are required to submit data. For these companies, the program imposes obligations that could incur time and resource commitments, potentially impacting their operations.

Impact on Specific Stakeholders

1. Businesses: Companies with significant assets are mandated to comply, benefiting from streamlined data collection processes but facing possible indirect costs and obligations to maintain compliance.

2. Economic Analysts: Analysts relying on QFR data can continue to base their GDP calculations and broader economic evaluations on consistent, reliable data streams.

3. Policy Makers and Regulators: For federal agencies setting economic policies or regulations, this consistent data allows for informed decision-making that reflects current business climates.

Overall, this document reflects an effort to sustain crucial data collection activities while seeking public input to potentially refine and optimize the process. However, further clarifications on costs, penalties, and data security are needed to address public and business concerns comprehensively.

The document under discussion primarily concerns an announcement by the Department of Commerce regarding a public comment request on the extension of the Quarterly Financial Report (QFR). This commentary specifically focuses on the financial references and implications in the document.

Financial References

The QFR targets corporations based on their total assets. The document states that the target population includes corporations primarily engaged in manufacturing with total assets of $5 million or more. Additionally, it specifies that corporations involved in mining, wholesale trade, retail trade, information, or professional and technical services (excluding legal services) with total assets of $50 million or more are also included. This delineation underscores which businesses are obligated to participate in the information collection, impacting how these businesses manage their reporting obligations.

In terms of public financial implications, the document estimates the Total Annual Cost to Public as $0. This figure suggests that from the perspective of the Department of Commerce, there are no direct financial burdens placed on the public resulting from the report. However, this does not account for indirect costs, such as potential expenses businesses might incur in software, record maintenance, or compliance activities that, although not explicitly calculated as direct costs, can still be significant.

Issues Relating to Financial References

One notable issue concerning these financial references is the document's clarity regarding costs to the public. While stating an estimated total annual cost as $0, this might not adequately reflect all indirect costs that businesses might face. Such costs could include the purchase of specialized software or accounting services required to fulfill the reporting obligations, which could indirectly impact the businesses involved, especially given the asset requirements outlined.

Another issue is the document’s approach to verifying the accuracy of time and cost estimates related to the data collection process. The document does not detail how it assesses these estimates, which might leave stakeholders uncertain about the validity of the stated costs or the burden imposed on respondents.

Further discussion could be beneficial in delineating any financial consequences or incentives associated with compliance or non-compliance. While the document mentions that compliance is mandatory, it lacks information on potential penalties or enforcement mechanisms for businesses that do not adhere to these reporting requirements. This gap could influence how businesses plan and allocate resources to meet these requirements.

In conclusion, while the document asserts a no-cost implication to the public, there is an underlying complexity regarding potential indirect costs to businesses which might not be immediately apparent from a simple reading of the stated figures. Providing more transparency and detail about these financial aspects could enhance the document's clarity and utility to its diverse audience.