OSHRC 2004 Performance Report

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Occupational Safety and Health Review Commission

FY 2004

Performance Report

Management Discussion and Analysis

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 Management and 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.

OSHRC’s vision is to strive to be:

C A quasi judicial body that is -- and is recognized for being -- objective, fair, prompt, and professional;
OSHRC 2004 Performance Report

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C 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;

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

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

C An agency that values team work, develops its employees, and strives to improve its performance,

service, and value to the American people.

Performance Overview

Consistent with the Government Performance and Results Act (GPRA), the agency targeted specific program service

levels, which collectively provide indications of success in achieving planned performance goals. At the trial level,

OSHRC exceeded goals. At the Commission level, it met one of two goals, and in doing so issued 14 cases that were

two years or more older. In addition, reviews of the agency’s IT operations and a financial audit were completed. The

IT audit revealed documentation weaknesses for which corrective action plans have been drafted. The FY 2004

Financial Audit, conducted by Clifton Gunderson LLP, was “unqualified” in all respects.

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 Settlement Part program 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

was without a quorum during almost nine months in FY 2002, from December 20, 2001 until late August 2002. From

late April 2003 until early September 2003, the Commission operated with only two members. The Commission now

has three members that have been confirmed, however, one Commissioner’s term will expire on April 27, 2005, and

based upon past experience, the position likely will be vacant for several months.

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. To address this problem, three team leader positions were established in the Office of the General Counsel

to speed preparation, facilitate coordination of issues, and to help assure consistency among cases. Team case

preparation has helped to shorten the time to analyze, present, and draft a number of these cases.
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OSHA projected that it would conduct 39,000 inspections in FY 2004, slightly fewer than in 2003, but more than the

37,493 conducted in FY 2002. As mentioned earlier, the Review Commission’s caseload is affected not only by the

number of inspections but also by OSHA’s focus on the highest hazard workplaces and most serious workplace

hazards. These inspections tend to result in more complex cases. These complex cases consume extensive judicial

time since the 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.

The Review Commission intends to expedite case processing by easing entry requirements to its E-Z Trial and

Settlement Part Programs. These programs grant full due process rights to all parties in adjudicating these cases

without bogging them down in legal formalities.

The Settlement Part (Rule 120) requires formal settlement efforts in cases where the proposed aggregate penalty is

$200,000, or the Chief Judge finds that the case is appropriate for this part because of its complexity. The Review

Commission hopes to expand this program by rule changes to include cases with an aggregate penalty of $100,000 or

more, allowing more cases to be assigned to mandatory settlement procedures.

The E-Z Trial 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. The process also allows more time for Administrative Law Judges to address the more complex

cases. The Review Commission arranged for an outside evaluation of the program in FY 2001. The evaluation showed

that program implementation was effective and that the program is generally being implemented in accordance with

the goals. The Review Commission hopes to expand this program by revising the eligibility requirements for entry.

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 a

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

Since 2002, the Review Commission has contracted with the Treasury Franchise Fund, Administrative Resource

Center for accounting services. The Administrative Resources Center prepared the Review Commission’s FY 2004

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
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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 2004, two program reviews took place: an audit of FY 2004 financial statements, and an audit of computer and

information security. The FY 2004 financial audit was “unqualified.”

The Agency contracted for an FY 2004 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 E-Government

Act (Public Law 107-347). This independent evaluation revealed that there were documentation weaknesses in

policies and procedures, specifically in Certification and Accreditation, IT Contingency Planning, and Life Cycle

Management

The system of internal control of 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 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

Performance Goals for the period FY 2003 through FY 2008 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 following table lists the performance goals and results for

this function in FY 2004.

The Review Commission met most of its case production goals for fiscal 2004 and reduced its backlog to 54 cases,

but the Commission fell short of its goal for cases that were at least two years old. At the beginning of fiscal 2004,

there were 33 cases before the Commission that were at least two years old. A good number of these cases were very

lengthy and complex, with huge records and a multitude of items. The Commission made substantial efforts to issue

decisions in these difficult cases as well as in cases that were more than two years old, but not as lengthy or complex.

In the end, the Commission diverted resources to enable it to issue 14 decisions (42% of the total), in cases that were

more than 2 years old.

The Commission will redouble its efforts to meet the goal of issuing decisions in all the over two year-old

cases. First, the Commission will concentrate its efforts on only those very complex cases that it will be able to issue
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by April 27, 2005. This is the date one of the Commission members' terms will expire. Based on past experience, the

number of items and issues presented in these complex cases, and the critical nature of some of the issues, a twomember Commission is extremely unlikely to find sufficient common ground to issue decisions in those

complex cases. Second, having identified the very complex cases that can be issued, the Commission will devote the

rest of its resources to issuing the remainder of the cases in the two-year category. This approach will allow the

Commission to optimize its resources and issue as many of the old complex cases as it can and still make

a significant dent in the total number of over two-year old cases. The Commission will also issue decisions in newer

cases, but until the two-year case goal is met these will be limited to high-priority cases such as those requiring

remand to a Commission judge for reconsideration.

Performance Goals

Performance

Indicators

FY 2002

Actual

(Target)

FY 2003

Actual

(Target)

FY 2004

Target

FY 2004

Actual

$ Reduce the

length of

time to

resolve

Commissionlevel cases

Percent of

cases over 2

years old

disposed of at

the

Commission

level

New for

FY 04

New for

FY 04

100%

42%

Target not

met.

$ Reduce the

length of

time to

resolve

prioritycases

Percent of

priority cases

disposed of

within 6

months

New for

FY 04

New for

FY 04

100% Target met

1.5 Increase the

percent of

Commissionlevel

dispositions

issued within

325days

Percent of

cases that are

disposed of

within 325

days

43%

(55%)

35%

(57%)

This goal

was replaced

with the

goals above

 

This goal was

replaced with

the goals

above

1.6 Reduce the

number of

cases

pending

Commissionlevel

disposition

for more

than two

years

Reduce by a

percent the

number of

cases pending

for more than

2 years

22%

(30%)

38%

 (32%)

This goal

was replaced

with the

goals above

This goal was

replaced with

the goals

above
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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 2004.

Performance

Goals

Performance

Indicators

FY

2002

Actual

(Target)

FY 2003

Actual

(Target)

FY 2004

Target

FY 2004

Actual

$

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

New for

FY 04 93% 98%

Target Exceeded

$ Increase the

percent of

complex cases at

the ALJ level that

are resolved within

18 months

Percent within

540 days

New for

FY 04

New for

FY 04 93% 98%

Target exceeded

1. Increase the

percent of noncomplex cases

disposed of with

hearing that are

disposed of within

325 days

Percent within

325 days

77%

(75%)

within

325

days

 82%

(78%)

within

325 days

This goal was

replaced with

the goals above

This goal was

replaced with the

goals above

1.2 Increase the

percent of

complex cases

disposed of with

hearing that are

disposed of within

18 months

Percent within

540 days

92%

(75%)

within

540

days

81%

(80%)

within

540 days

This goal was

replaced with

the goals above

This goal was

replaced with the

goals above

1.3 Increase the

percent of cases

Percent within

180 days

77%

(75%)

80%

(76%) This goal was

This goal was

replaced with the
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that are disposed

of without a

hearing that are

disposed of within

six months

within

180

days

within

180 days

replaced with

the goals above

goals above

1.4 Increase the

percent of cases

that are disposed

of without a

hearing that are

disposed of in less

than one year

Percent within

365 days

98%

(99%)

within

365

days

98%

(99%)

within

365 days

This goal was

replaced with

the goals above

This goal was

replaced with the

goals above

Management and Administration Function

The function of Management and Administration is to provide executive management and administrative support

services for the Review Commission, to assure its success in fulfilling its mission.

The Review Commission updated its strategic plan for the period FY 2003 through FY 2008. As part of the update

two strategic goals have been eliminated, the external communications and the organizational goals. However, while

the goals have been deleted from the Strategic Plan, they will continue to be a priority within the Agency and will be

monitored for 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

2004, each of the more than 2200 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. Semi-annual 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 performance related to the goal and improve management.