Administrative use and cost recovery: Bane or boon?

Abstract

Both formula use of statistics and cost recovery programs can be of great benefit to a NSO and to a statistical system by leading to the initiation of new programs, program expansion, sample increase, or methodological innovation. These benefits, in our experience, far outweigh any distorting or restricting effects that these practices might have on priority-setting and resource allocation within the agency. However, there are measures which an agency can take to minimize any such effects and to extract maximum benefit from these practices. In the case of formula use, these include close liaison with the administrative agency during the definition and design stages of the programs that will utilize the formulae, and extreme openness on methodology and quality for estimates entering into formulae. In the case of cost recovery, they include the development of clear criteria for the type of cost recovery work that the agency will undertake, the formulation of conditions under which that work will be undertaken, and strategies and initiatives to relocate cost recovery work that is central to the statistical system into the agency's own funded program.

Key prerequisites for the full success of both approaches are: close client liaison; professional and organizational standing; operational flexibility (which, in turn, is rooted in a conscious human resource development program); and widely-recognized non-political objectivity. The latter establishes the attractiveness for clients of statistical information produced by the NSO.