FY 2005 Performance Report

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Fiscal Year 2005

Performance Report

November 2005

Occupational Safety and Health Review Commission

Performance Accountability Report

Fiscal Year (FY) 2005

Overview

The Review Commission is an independent, adjudicatory agency created by the Occupational Safety and Health

Act of 1970. Its sole statutory mandate is to serve as an administrative court providing just and expeditious

resolution of disputes involving the Department of Labor’s Occupational Safety and Health Administration (OSHA),

employers charged with violations of Federal safety and health standards, and employees and/or their

representatives. The Review Commission was created by Congress as an agency completely independent of the

Department of Labor to ensure that OSHA’s enforcement actions are carried out in accordance with the law, and

that all parties are treated consistent with due process when disputes arise with OSHA.

The Occupational Safety and Health Act and the Review Commission’s Rules of Procedure (which by law mirror

the federal rules) provide two levels of adjudication when an employer timely contests an OSHA citation for

alleged violations of the Act or failure to abate such alleged violations. The first is a hearing level. This level

affords an opportunity for a hearing before a Review Commission Administrative Law Judge for employers and

affected employees who have filed a timely notice of contest. The judge’s decision becomes final unless the

Commission chooses to review the decision. The second level is a discretionary appellate review of the judge’s

decision by the Commission members. Both before its judges and the Commissioners, the Review Commission

provides fair and impartial adjudication of cases concerning the safety and health of employees’ working conditions

in the United States.

Mission and Organizational Structure

The mission of the Occupational Safety and Health Review Commission is to provide an impartial forum for the

just and prompt adjudication of workplace safety and health disputes involving the Department of Labor, employers

and employees, and/or their representatives under the Occupational Safety and Health Act of 1970.

The Occupational Safety and Health Review Commission has three members, appointed by the President and

confirmed by the Senate, who serve six-year terms. One of the members also serves as Chairman of the

agency. The Review Commission has three major functions. They are: the Commission function, the

Administrative Law Judge function, and the Office of Administration function.

The principal (national) office of the Review Commission is located in Washington, D.C. There are also regional

offices in Atlanta and Denver.
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OSHRC’s vision is to continue to strive to be:

a quasi judicial body that is -- and is recognized for being -- objective, fair, prompt, and professional;

an agency that creates a body of law through decisions that define and explain the rights and

responsibilities of employers and employees under the Occupational Safety and Health Act of 1970;

a model Federal agency with highly effective processes, a highly motivated, qualified and diverse workforce,

and modern information management, communications, and administrative systems; and

an agency that values team work, develops its employees, and strives to improve its performance, service,

and value to the American people.

Challenges and Opportunities

The Review Commission’s ability to meet its case disposition goals depends on a variety of factors. These

include: (1) continued presence of a quorum at the Commission level; (2) the magnitude and nature of the cases

received; (3) the success of the parties’ settlement negotiations and the Agency’s Simplified Proceedings and

Mandatory Settlement programs in reducing the number of hearings needed; and (4) the number, location, length

and complexity of trials held. Although these factors are largely outside the Review Commission’s control, the

Review Commission is committed to working within such constraints to improve its service to the public.

The Occupational Safety and Health Act requires a quorum of two Commissioners. By statute cases can only be

decided on the affirmative vote of two Commissioners. During periods when the Commission lacks a quorum, no

cases can be decided. In addition, with only two Commissioners, it may be more difficult to reach agreement

sufficient to dispose of some cases. In cases where such agreement cannot be reached, deadlocks result. As a

result, action on important issues may be postponed and issuance of some pending cases will be delayed.

The Commission is now operating with two members because one Commissioner’s term expired during 2005.

President Bush has nominated a new Commissioner. If he is confirmed the Commission will have a full

complement of commissioners until late April of 2007.

The number of safety and health inspections carried out by OSHA each year, the nature of those inspections, and

the rate at which employers choose to contest the citations issued and penalties proposed by OSHA all impact on

the number of cases contested before the Review Commission. In addition, OSHA’s emphasis during recent

years on more serious workplace hazards, and the consequent increase in proposed penalties, has translated into

more complicated cases, and more costly trials. Consequently, the complexity and size of the cases both at the

Administrative Law Judge level and at the Commission level has increased steadily in recent years.

The Commission’s inventory of cases includes a number of extremely large and difficult cases. Preparation of

each of these cases consumes a huge amount of attorney and Commissioner time. This, in turn, slows work on

all other cases. The size and complexity of these cases have impacted the ability of the Office of the General

Counsel to prepare and present a steady flow of cases to the Commission for disposition and to prepare the initial

drafts of the Commission’s opinions.

OSHA conducted approximately 37,700 inspections in FY 2005. The number of OSHA inspections, and their likely

focus on the highest hazard workplaces affects the Review Commission’s caseload. These inspections tend to

result in more complex and contentious cases, which consume extensive judicial time. Their discovery process is

lengthy and time consuming, motion practice is expanded, legal research and decision-writing time is protracted

and, of necessity, the trial process is elongated and complicated.

Effective August 1, 2005, the Review Commission eased entry requirements to its Mandatory Settlement and

Simplified Proceedings programs. These programs grant full due process rights to all parties in adjudicating these

cases without bogging them down in legal formalities.

Under Commission Rule 2200.120, where the parties consent thereto, the Chief Administrative Judge may assign

a Settlement Judge to a pending proceeding to aid the party’s in disposing of cases. Where the aggregate

amount of the penalty sought by the Secretary of Labor is $100,000 or greater, the Mandatory Settlement

procedure goes into effect. The Settlement Judge appointed by the Chief Administrative Judge has full control of
FY 2005 Performance Report

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the proceeding and may require that the party’s’ representatives be accompanied by officials having full settlement

authority. This procedure has aided the Commission in disposing of some extremely complex cases, with the

approval of all parties.

The Simplified Proceedings process (formerly E-Z Trial) was enlarged to include cases where proposed penalties

are not more than $20,000, and up to $30,000, when found eligible by the Chief Judge. The Simplified

Proceedings process allows parties with relatively simple cases to have their “day in court” unencumbered by the

formal Rules of Procedure and evidence, while assuring that due process requirements will be maintained. Under

this process, a business, with or without counsel, can present its case before a Review Commission judge and

receive a prompt decision. Most paperwork, including legal filings, has been eliminated so that justice can be

rendered swiftly and inexpensively. The process is intended to reduce the time and legal expenses to employers

contesting relatively small penalty cases.

Analysis of Financial Statements

The Review Commission had biennial audits of its financial statements from 1996 through 2002. Consistent with

the Accountability of Tax Dollars Act of 2002, OSHRC began annual audits in FY 2003, and has received an

"unqualified" opinion for each biennial and annual review by independent auditors.

Since 2002, the Review Commission has contracted with the Bureau of Public Debt, Administrative Resource

Center for accounting services. The Administrative Resources Center prepared the Review Commission’s FY

2005 financial statements. The principal financial statements include the Balance Sheet, Statement of Net Cost,

Statement of Net Position, Statement of Budgetary Resources, Statement of Financing, and the Statement of

Custodial Activity.

Limitations of the Financial Statements

The principal financial statements have been prepared to report the financial position and results of operations of

the Review Commission, pursuant to the requirements of 31 U.S.C. 3515 (b).

The statements have been prepared from the books and records of the Review Commission in accordance with

generally accepted accounting principles (GAAP) for Federal entities and formats prescribed by the Office of

Management and Budget (OMB). The statements are in addition to the financial reports used to monitor and

control budgetary resources, which are prepared from the same books and records. These statements should be

read with the realization that they are for a component of the United States Government, a sovereign entity.

Systems, Controls, and Legal Compliance

The Occupational Safety and Health Review Commission is a small agency and does not have a separate

Inspector General Office. Therefore, the Review Commission’s management team assumes the responsibility for

assessing or overseeing the assessment of the Agency’s internal operations and determining if there are any

weaknesses that need correction.

In FY 2005, two program reviews took place: an audit of FY 2005 financial statements, and an audit of computer

and information security. The financial audit was clean, with no reported material weaknesses in any area.

The Agency contracted for an FY 2005 independent audit of its computer and information security, consistent with

the Federal Information Security Management Act (December 17, 2002) signed into law as part of the EGovernment Act (Public Law 107-347). This independent evaluation revealed that there was a material weakness

in policies and procedures, specifically in Certification and Accreditation. Recommendations for improvement were

made for the Agency’s security program and plan. The Agency is using recommendations generated from the

audit to develop management initiatives.

The system of internal controls for this Agency is functioning well. It provides reasonable assurance as to the

efficiency and effectiveness of programs and operations, reliability of financial and performance information, and

compliance with laws and regulations. These controls satisfy the requirements of the Federal Managers' Financial

Integrity Act. As previously mentioned, the Review Commission has had biennial, and more recently, annual

audits of its financial statements, including reviews of the adequacy of the Review Commission’s internal control
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systems. The Review Commission has received an unqualified opinion for each audit conducted.

The Review Commission has contracted with the Treasury Franchise Fund, Administrative Resource Center,

[Bureau of Public Debt (BPD)], for accounting, disbursement, and travel services and with the National Finance

Center for payroll and personnel services. In addition to the Agency’s internal controls and procedures that

safeguard assets and ensure that obligations and disbursements are made consistent with management’s

direction, the BPD and the National Finance Center have established practices and procedures that assure

appropriate internal controls. The two agencies’ internal control systems are evaluated independently.

Performance Goals and Results

The Review Commission’s strategic goal is to provide fair, just, and expeditious adjudication of disputes brought

before the Commission and its judges. To this end, the Review Commission’s Strategic Plan and associated

Outcome Goals for the period FY 2006 through FY 2011 reflect objectives for the Commission and Administrative

law functions.

Commission Function

The function of the Commissioners is to review and decide cases contested under the Act, following an initial

decision by an Administrative Law Judge. This higher level of review must be prompt, fair, and protective of the

parties’ rights. Overall, this is our public service goal.

The Commission is now operating with two members because one Commissioner’s term expired on April 27,

2005, but it still expects to make substantial progress in addressing its caseload. The Commission previously

estimated that a total of 59 cases would be pending at the end of FY 2005, however, the Commission actually had

40 cases pending at the end of the fiscal year, a significant reduction in its backlog. If a new Commissioner is

confirmed in FY 2006, the Commission will have a full complement of commissioners until late April 2007. This

period of full membership should enable the Commission to issue decisions in a number of large, difficult cases

now pending before it. Issuing decisions in these large cases will also allow the Commissioners, their staffs, and

the Office of General Counsel to consider and decide the other cases on the backlog more expeditiously.

To facilitate workflow, the Office of the Executive Secretary was moved from the Office of the Executive Director to

the Office of the Chairman in FY 2005. The Executive Secretary dockets incoming cases resulting from OSHA

appeals, and communicates with the public in general and case parties in particular.

The following table lists the performance goals and results for this function in FY 2005.

Performance

Goals

Performance

Indicators

FY 2003

Actual

(Target)

FY 2004

Actual

(Target)

FY 2005

Actual

(Target)

Reduce the length

of time to resolve

Commission-level

cases

Percent of cases

over 2 years old

disposed of at the

Commission level

New for FY 04 42%

(100%)

52% - Target not

met. (100%)

Reduce the length

of time to resolve

priority cases

Percent of priority

cases disposed of

within 6 months

New for FY 04 100%

(100%)

100 % - Target

met (100%)

Administrative Law Judge Function

The function of the Review Commission’s Administrative Law Judge Division is to conduct formal hearings and

related proceedings in a fair, just, and expeditious manner. The function is directly related to the public service

goal. The following table lists the performance goals and results for this function in FY 2005.
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Performance

Goals

Performance

Indicators

FY 2003

Actual

(Target)

FY 2004

Actual

(Target)

FY 2005

Actual

(Target)

Increase the

percent of noncomplex cases at

the ALJ level that

are resolved in

less than one

year

Percent within 365

days

New for

FY 04

98% 

(93%)

99.5 - Target

exceeded

(94%)

Increase the

percent of

complex cases at

the ALJ level that

are resolved

within 18 months

Percent within 540

days

New for 

FY 04

98%

(93%)

98.2 - Target

exceeded

(94%)

Office of Administration Function

The function of the Office of Administration is to provide administrative support services for the Review

Commission, to assure its success in fulfilling its mission.

The Administration function provides strategic planning and operational management of the organization.

Administration also includes the office of public information, technology management, computer and information

security, financial, and administrative services. The day-to-day tasks performed under the direction of the

Executive Officer include:

Supporting the development and implementation of the Agency’s strategic goal

Maintaining a public information office, including providing case decisions to the public

Responding to Congressional, and public inquiries

Maintaining and enhancing a website to provide the public with greater access to Review Commission

information

Providing support agency-wide in the areas of finance, budget, procurement, personnel, equal opportunity

and administration

Providing personnel, payroll, benefits, reproduction, and mail services, and travel assistance to agency

employees

Procuring goods and services, maintenance and needed repairs of equipment, training, reference materials,

supplies and office space

Maintaining a library in the national office and in each regional office for legal and technical research

Implementing improved computerized case management and administrative systems through hardware and

software

Developing computer systems and information security enhancements enhancing telecommunications and

improving technology efficiency and effectiveness

Performance Data Verification

For each strategic goal and its related objectives, the Review Commission formulated performance measures and

numerical annual targets, whenever possible. A few measures are necessarily qualitative in nature. Case

processing and adjudication measurements are used for several objectives contained in our Public Service Goal.

Most of the data related to the Public Service Goal resides in the Review Commission’s case

management/tracking system. In FY 2005, each of the more than 2,150 new cases filed with the agency was

entered into the case management system, and progress on all cases was tracked. In order to assure the quality

of the data, management periodically reviews the information in the case management/tracking system. The

agency conducts test runs of the data to ensure that information is entered and updated on a timely basis. Semiannual and annual reviews are conducted by the appropriate managers to ensure the accuracy of the data, to

monitor performance goals and progress, and produce reports. The reports are used to assess workload and

make workload adjustments, when necessary. At the end of the year, this data is used by the offices to measure
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performance related to the goal and improve management.