Report to the Secretary of Labor

United States Government Accountability Office

GAO

August 2004 WORKPLACE 

SAFETY AND 

HEALTH 

OSHA’s Oversight of 

Its Civil Penalty 

Determination and 

Violation Abatement 

Processes Has 

Limitations 

GAO-04-920 
Page i GAO-04-920 Workplace Safety and Health 

Letter 1

Appendix I Briefing Presented on July 7, 2004 7 

Appendix II Comments from the Department of Labor 28 

Abbreviations 

FIRM Field Inspection Reference Manual 

IMIS Integrated Management Information Systems 

OEA Office of Evaluations and Audit Analysis 

OSHA Occupational Safety and Health Administration 

Contents 

This is a work of the U.S. government and is not subject to copyright protection in the 

United States. It may be reproduced and distributed in its entirety without further 

permission from GAO. However, because this work may contain copyrighted images or 

other material, permission from the copyright holder may be necessary if you wish to 

reproduce this material separately. 
Page 1 GAO-04-920 Workplace Safety and Health 

August 13, 2004 

The Honorable Elaine L. Chao 

Secretary of Labor 

Dear Madame Secretary: 

This report presents the findings of our study of the Department of Labor’s 

Occupational Safety and Health Administration’s (OSHA) determination of 

civil penalties and abatement of violations. The objective of the study was 

to assess the extent of OSHA’s oversight of the civil penalty determination 

and the violation abatement processes. In addition, we developed a 

statistical model, known as a multivariate analysis, to better understand 

factors that influenced variation in penalty amounts. On July 7, 2004, we 

briefed Labor officials on the results of our study. This letter report 

formally conveys the information we presented at that briefing (see app. 

I). 

OSHA penalties are a critical enforcement strategy meant to deter 

employers from violating safety and health standards. In fiscal year 2003, 

OSHA proposed civil penalties that totaled over $114 million and 

conducted inspections across approximately 40,000 employers. In 

determining the penalty amount, OSHA inspectors must apply four factors 

identified in the Occupation Safety and Health Act of 1970:1

 (l) the gravity 

of the violation, (2) the size of the business, (3) the employer’s history of 

previous violations, and (4) the good faith of the employer.2

 OSHA’s Field 

Inspection Reference Manual (FIRM) contains the criteria inspectors 

should use in applying each of these four factors. For example, in 

assessing gravity, the manual instructs that the inspector consider two 

elements, severity and probability, which are then to be analyzed on a 

 1

Under the Occupational Safety and Health Act, OSHA is authorized to issue citations for 

violations of the act and propose penalties. Appeals are heard by the Occupational Safety 

and Health Review Commission, an independent federal agency, which has the authority to 

assess penalties. If a penalty is deemed proper, the commission considers a number of 

factors to determine the amount of the assessment. Citations and proposals that are not 

appealed become final decisions of the commission. 29 U.S.C.§§ 658, 659 (2000). Because 

most citations and proposed penalties are not appealed to the Commission, we refer only 

to OSHA’s enforcement activities in this report. 

2

29 U.S.C. § 666(j). 

United States Government Accountability Office

Washington, DC 20548 
Page 2 GAO-04-920 Workplace Safety and Health 

scale of high to low. Application of the gravity criteria results in an initial 

base penalty amount. The other factors, as described in the manual, may 

then be used to reduce the amount if applicable and can result in up to a 

95 percent reduction in the base penalty amount.3

 Given this approach for 

establishing penalty amounts, it is essential that inspectors apply the 

criteria for the four factors accurately and consistently. 

OSHA has delegated authority for overseeing its enforcement and program 

activities to the 10 regional offices. The regional offices oversee operations 

of 80 area offices. OSHA requires that regional offices conduct annual 

audits of area offices’ adherence to proper procedures for penalty 

calculation, penalty collection, and abatement of safety and health hazards 

found at work sites. OSHA allows regional offices to conduct these audits 

in several ways, including reviewing area offices’ statistical reports or 

inspection case files and by administering questionnaires to the area 

offices. In addition, every 2 years regional offices are required to conduct 

on-site audits at all area offices. Each area office is responsible for 

responding to recommendations for improvements that arise from these 

regional audits. Moreover, regional offices are responsible for sharing the 

results of their audits with OSHA’s national office. 

To assess the extent of OSHA’s oversight of the civil penalty determination 

and violation abatement processes, we (1) reviewed 2002 and 2003 

regional audits from the five regions with the most inspections, (2) visited 

one of these regional offices and one area office within this region to 

interview officials and review documents and procedures, (3) conducted 

telephone interviews with the four remaining regional offices and one area 

office within each of those regions, (4) interviewed OSHA officials to 

identify relevant policies and procedures, and (5) reviewed relevant 

policies and procedures. In addition, we explored another possible 

oversight technique—a quantitative multivariate analysis to better 

understand factors that influence variation in penalty amounts. We 

calculated differences in final penalty amounts for serious violations and 

analyzed what might account for those differences. Using our statistical 

model, we first estimated how the gravity of the violation and size of the 

employer, two of the variables used to calculate penalties, affected 

penalties. We then added other variables to the model, such as industry 

type and region, to assess if and how other variables not formally used in 

 3

For example, according to the FIRM, good faith of an employer refers, among other things, 

to the extent to which an employer has implemented a safety and health program. 
Page 3 GAO-04-920 Workplace Safety and Health 

calculating penalties affected penalty amounts. We based our multivariate 

analysis on inspection and violation data (fiscal years 1999 to 2002) from 

OSHA’s Integrated Management Information System (IMIS). We assessed 

the completeness of these data by reviewing OSHA’s documentation on 

how the data were collected and performed electronic tests to look for 

outliers, missing values, or duplicate records. On the basis of these 

reviews and tests, we found the data sufficiently reliable for our purposes. 

We conducted our work between October 2003 and May 2004 in 

accordance with generally accepted government auditing standards. 

In summary, we found that OSHA’s oversight for ensuring that penalties 

are correctly determined and violations are properly abated has 

limitations. While the national office receives copies of the regions’ annual 

audits, it does not review them or use them to monitor the extent to which 

penalties are calculated correctly and violations are properly abated. The 

national office’s underutilization of audit results may be problematic 

because audit results identified significant problems. For example, audits 

found that some area offices miscalculated penalties and failed to conduct 

required follow-up inspections to ensure the proper abatement of 

violations. Even if OSHA were to use the results of annual audits for 

oversight purposes, the information these audits provide may not always 

be complete. In fact, four of the five regional offices we reviewed did not 

conduct audits in full accordance with OSHA procedures during fiscal 

years 2002 and 2003. For example, one region did not routinely conduct 

any on-site audits, while two regions failed to include all of their area 

offices in their audit reviews. 

OSHA has recently taken a significant step to improve its oversight efforts 

by establishing an Office of Evaluations and Audit Analysis (OEA) to focus 

on ways to better use data from regional audits. The OEA is in the initial 

planning stages. As the formation of OEA continues, officials may want to 

consider incorporating the use of multivariate analysis into efforts to 

better understand the factors that influence variation in civil penalty 

amounts. Such a statistical model would allow OSHA officials to 

determine how much of the variation in penalty amounts is due to 

established factors and how much is due to factors that are not used in 

penalty calculations. To explore the viability of such an analysis, we 

calculated how gravity of violation and employer size affected penalty 

amounts and found that these two factors explained 48 percent of the 

variation that existed among proposed penalty amounts for serious 
Page 4 GAO-04-920 Workplace Safety and Health 

violations. Using final penalty amounts, we found that the model explained 

36 percent of the variation.4

 When we expanded this model to include 

factors beyond those explicitly used in the penalty assessment process, we 

found that these factors explained some, but far less, of the variation in 

final penalties than the two factors above. For example, even after we 

controlled for differences in gravity and employer size, some industries 

were assessed penalties that averaged $257 more than others. Overall, this 

model explained 39 percent of the variation for final penalties. We 

recognize this model captures only some of the factors that influence 

penalty amounts and understand that area directors are given discretion in 

determining final penalties in response to employers’ efforts to ensure 

abatement and improve the safety of their workplaces. Nevertheless, we 

think that with additional data on factors like employer history and good 

faith, models like this could provide OSHA with insight into the extent to 

which penalties are being assessed correctly (including the degree that 

unexpected variables are affecting penalty amounts). 

In a recently published GAO report, we recommended that OSHA create a 

system to ensure that regions complete audits and that OSHA use audit 

results to improve the consistency of the complaint process.5

 Consistent 

with those recommendations and on the basis of the findings presented 

here, we are recommending that the Secretary of Labor direct the 

Assistant Secretary for Occupational Safety and Health to 

• ensure that regions complete audits in accordance with OSHA’s required 

audit procedures and 

• monitor audit results in their overseeing of the civil penalty determination 

and violation abatement processes. 

In addition, we are recommending that the Secretary of Labor direct the 

Assistant Secretary for Occupational Safety and Health to 

• evaluate the feasibility of using statistical modeling to help OSHA 

determine if penalties are being assessed correctly and identify if 

unanticipated factors are influencing penalty amounts. 

 4

For our research, final penalty is defined as an assessed penalty in a case that has been 

closed. 

5

See U.S. General Accounting Office, OSHA Complaint Response Policies: OSHA Credits 

Its Complaint System with Conserving Agency Resources, but the System Still Warrants 

Improvement, GAO-04-658 (Washington, D.C.: June 18, 2004). 
Page 5 GAO-04-920 Workplace Safety and Health 

OSHA provided written comments on a draft of the briefing slides (see 

app. II). We incorporated the agency’s comments, including oral comments 

we received during the briefing, into the briefing slides and this letter as 

appropriate. In general officials agreed with our first two 

recommendations regarding the better use of audit results, although they 

questioned how we arrived at these recommendations. In particular they 

were uncertain about which regions we reviewed and the magnitude of the 

problems we identified. As documented in both the slides and this letter, 

we based our findings on the key results of OSHA regional audits 

conducted in the five regions with the most inspections during fiscal years 

2002 and 2003. We reported on problems that appeared across regions and 

years but did not report on the magnitude of the problems because the 

audits did not always identify error rates or the total number of case files 

reviewed. We commend OSHA for recognizing that more useful 

information can be gathered from the audit reports. 

Concerning the third recommendation, OSHA officials stated during the 

briefing that the multivariate model could be useful but raised some 

concerns in their oral and written comments. First, OSHA officials 

questioned the validity of the model, given the fact that two of the factors 

used in calculating penalty amounts could not be included. Specifically, 

OSHA believed that these two missing factors would explain additional 

variation among penalties and would decrease the amount of variation we 

found attributable to nonstatutory variables. Though we recognized that 

IMIS could not provide us with data on all four factors, we pursued 

developing the model to test its potential value as an oversight tool for 

OSHA. Based on the test, we believe that with additional data, such as the 

two missing factors of history and good faith, this type of modeling could 

provide OSHA with insight into the extent to which penalties are being 

assessed correctly and the degree to which unexpected variables are 

affecting penalty amounts. 

OSHA was also concerned that the results of our model on final penalty 

amounts did not appropriately capture the adjustments made by area 

directors to proposed penalty amounts when employers abate their 

violations and improve the safety of their workplaces. Currently, OSHA’s 

database does not capture area directors’ negotiations of final penalties. If 

OSHA chooses to explore the feasibility of using statistical modeling, it 

may wish to consider the value of developing such a variable. On a related 

issue, OSHA suggested that in this letter we provide the results of the 

model for proposed penalty amounts, in addition to final penalty amounts, 

to get a better sense of how consistently inspectors applied the penalty 

factors. We added these results, which also showed a sizeable amount of 
Page 6 GAO-04-920 Workplace Safety and Health 

unexplained variation in initial penalty amounts. Finally, OSHA was 

concerned about the resources required to collect additional information 

to make the model more robust. However, it is unclear at this time how 

large the additional cost of this task would be, since the good faith and 

history data are currently collected by the area offices and stored in the 

same local data system from which other IMIS data are retrieved. As 

requested by OSHA, we will be sharing our statistical model and 

accompanying database with the agency so that it may further explore the 

model’s oversight potential. 

We are sending copies of this report to the respective congressional 

committees and to other interested parties and will make copies available 

to others upon request. In addition, the report will be available at no 

charge on GAO’s Web site at http://www.gao.gov. 

If you have any questions about this report, please contact me on 

(202) 512-9889 or Brett Fallavollita on (202) 512-8507. Mikki Holmes and 

Linda Stokes, as well as Catherine Hurley, Julian Klazkin, Luanne Moy, and 

Douglas Sloane, made significant contributions to this report. 

Sincerely yours, 

Robert E. Robertson 

Director, Education, Workforce, 

 and Income Security Issues 
Appendix I: Briefing Presented on July 7, 

2004 

Page 7 GAO-04-920 Workplace Safety and Health 

Appendix I: Briefing Presented on July 7, 

2004 

1

WORKPLACE SAFETY 

AND HEALTH

OSHA’s Oversight of Its Civil Penalty 

Determination and Violation Abatement Processes 

Has Limitations

Briefing of Officials at the 

Occupational Safety and Health Administration, 

U.S. Department of Labor, July 7, 2004
Appendix I: Briefing Presented on July 7, 

2004 

Page 8 GAO-04-920 Workplace Safety and Health 

2

Contents

• Objective

• Introduction

• Scope and methodology

• Finding: OSHA’s oversight has limitations

• Recommendations
Appendix I: Briefing Presented on July 7, 

2004 

Page 9 GAO-04-920 Workplace Safety and Health 

3

Objective

To assess the extent of OSHA’s oversight of the 

civil penalty determination and violation abatement 

processes
Appendix I: Briefing Presented on July 7, 

2004 

Page 10 GAO-04-920 Workplace Safety and Health 

4

Introduction

OSHA penalties are a critical enforcement strategy meant to deter 

employers from violating safety and health standards. 

 The average proposed penalty for serious violations (which 

represent the majority of violations cited) for 1999 through 2002 

was $1,438 and the average final penalty for serious violations 

was $863. 

 In fiscal year 2003, OSHA proposed civil penalties totaling over

$114 million.
Appendix I: Briefing Presented on July 7, 

2004 

Page 11 GAO-04-920 Workplace Safety and Health 

5

Introduction

OSHA’s Field Inspection Reference Manual

operationalizes the four considerations specified in the 

law that inspectors should use in determining penalty 

amounts:

 gravity of the violation—based on severity (rated high, 

medium, or low) and probability (rated high or low).

 employer size, 

 past violation history of the employer, and

 good faith of the employer—based on the extent to which 

an employer has implemented a health and safety plan.
Appendix I: Briefing Presented on July 7, 

2004 

Page 12 GAO-04-920 Workplace Safety and Health 

6

Introduction

OSHA has delegated authority for overseeing its 

enforcement and program activities to the 10 regional 

offices and 80 area offices.

Area office directors responsibilities’ include:

 conducting weekly reviews of inspection files,

 reviewing statistical reports on enforcement 

activities, and

 providing training to inspectors.
Appendix I: Briefing Presented on July 7, 

2004 

Page 13 GAO-04-920 Workplace Safety and Health 

7

Introduction

OSHA requires that regional offices conduct annual audits 

to ensure that area offices adhere to procedures for penalty 

determination and violation abatement. 

• Annual audits can include:

 statistical report reviews,

 inspection file reviews, and

 questionnaires. 

• On-site audits of all area offices are required every 

2 years.
Appendix I: Briefing Presented on July 7, 

2004 

Page 14 GAO-04-920 Workplace Safety and Health 

8

Scope and Methodology 

To assess the extent of OSHA’s oversight of the civil penalty determination 

and violation abatement processes, we

(1) reviewed the 2002 and 2003 regional audits in the five regions that conducted the largest number of inspections,

(2) visited one of those regional offices and one area office within that region,

(3) conducted telephone interviews with the remaining four regional offices and one area office within each of those regions, 

(4) interviewed officials at the national office, and 

(5) reviewed relevant policies and procedures.

We conducted our work between October 2003 and May 2004 in accordance with generally 

accepted government auditing standards.
Appendix I: Briefing Presented on July 7, 

2004 

Page 15 GAO-04-920 Workplace Safety and Health 

9

Scope and Methodology

Penalty factors*:

 Gravity of violation (i.e., severity 

and probability of injury or illness)

 Employer size

*Two factors—employer history and 

good faith—were excluded from our 

analysis because OSHA headquarters 

does not track them. 

Other factors:

 Region

 Industry type (e.g., service 

versus construction)

 Inspection type

 Union or nonunion employer

 Type of resolution (whether 

violations were informally 

settled or contested)

 Fiscal year

In addition, we developed a statistical model to explore other oversight 

techniques for identifying factors that influence variation in penalty 

amounts. The factors used in the model included:
Appendix I: Briefing Presented on July 7, 

2004 

Page 16 GAO-04-920 Workplace Safety and Health 

10

Finding

OSHA’s oversight of the penalty 

determination and violation abatement 

processes has limitations. 
Appendix I: Briefing Presented on July 7, 

2004 

Page 17 GAO-04-920 Workplace Safety and Health 

11

National office is not using available audit 

results. 

 does not currently monitor the results of regional audits. 

 may not be aware of problems revealed by some audits. 

The national office: 
Appendix I: Briefing Presented on July 7, 

2004 

Page 18 GAO-04-920 Workplace Safety and Health 

12

Audits revealed various problems.

Problems included:

 Inaccurate classification of gravity in four of five 

regions in 2002, which recurred in two regions in 

2003. For example, one audit reported that in several cases the gravity 

did not coincide with the types of injuries or illnesses listed as a result of 

the violation.

 Improper application of penalty reductions in four of 

five regions in 2002, which recurred in three regions in 2003. In two cases, while a zero percent good faith was applied to 

high-gravity serious violations, a 15 percent reduction was applied to all 

the remaining violations with a penalty amount—something not allowed 

under OSHA policy. 
Appendix I: Briefing Presented on July 7, 

2004 

Page 19 GAO-04-920 Workplace Safety and Health 

13

Other problems audits identified included:

 Improper follow-up inspections of serious, willful, repeat, 

or imminent danger situations in three of five regions in 

2002, which recurred in two regions in 2003. For example, 

20 of 42 randomly selected inspection files in one region were found not to 

be ready for closure although they were closed. 

 Improper documentation and management review of 

penalty determinations and penalty reductions in each 

of the five regions for 2002, which recurred in four of the 

five regions in 2003. For example, some files did not contain 

adequate notes regarding the substance of informal conferences or 

information to justify the amount of penalty reduction or changes to the 

classification.
Appendix I: Briefing Presented on July 7, 

2004 

Page 20 GAO-04-920 Workplace Safety and Health 

14

Other problems audits identified included:

 Improper management review of violation abatements in 

all five regions for 2002, which recurred in four of the 

five regions in 2003. For example, deficiencies were found in 

obtaining adequate abatement information and in contacting the employer 

in a timely manner to obtain verification of abatement, as required by 

OSHA policy.
Appendix I: Briefing Presented on July 7, 

2004 

Page 21 GAO-04-920 Workplace Safety and Health 

15

Not all regions follow OSHA’s required audit 

procedures.

Even if OSHA were to fully incorporate findings from regional 

audits into its oversight, the information would still not be 

complete. Of the five regional offices we reviewed, we found:

 One does not routinely conduct on-site audits or annual 

audits, but relies on monthly statistical data. 

 Two do not conduct annual audits in all of their area offices.

 Three failed to conduct audits on some of the required 

program areas.
Appendix I: Briefing Presented on July 7, 

2004 

Page 22 GAO-04-920 Workplace Safety and Health 

16

OSHA has taken some steps to improve its 

oversight efforts.

 OSHA recently established an Office of Evaluations and 

Audit Analysis (OEA) to focus on ways to better use data 

from regional audits.

 Although OEA is just in the initial planning stages, OSHA 

may want to consider using multivariate analysis to 

assess the consistency of civil penalty determinations. 
Appendix I: Briefing Presented on July 7, 

2004 

Page 23 GAO-04-920 Workplace Safety and Health 

17

With a statistical model, OSHA officials would be able 

to identify factors that affected penalty amounts.

Officials would be able to identify how much variation is due to:

 established factors, such as gravity of violation and 

employer size, and

 other factors not used in penalty calculations.
Appendix I: Briefing Presented on July 7, 

2004 

Page 24 GAO-04-920 Workplace Safety and Health 

18

Our model, using only gravity and employer size, explained 

36 percent of variation in final penalty amounts.*

The average penalty for the:

 highest-gravity violation was $1,395 more than the 

average penalty for the lowest-gravity violation. 

 largest employer group was $1,090 more than the 

average penalty for the smallest employer group. 

* When we ran the model for proposed penalties, the model explained 48 percent of variation 

in proposed penalty amounts.
Appendix I: Briefing Presented on July 7, 

2004 

Page 25 GAO-04-920 Workplace Safety and Health 

19

The model that included additional factors explained 

39 percent of the variation for final penalties.

Even after we controlled for gravity level and employer size, penalty 

variation existed.

Largest variation by factor*:

 $257 depending on industry type

 $158 depending on region 

 $123 depending on whether programmed or unprogrammed inspection

 $79 depending on whether union or nonunion employer

 $31 depending on fiscal year.

Violations that had an informal settlement, and were not contested, 

had the lowest penalties.

* These variations could be different if history and good faith were included in the model.
Appendix I: Briefing Presented on July 7, 

2004 

Page 26 GAO-04-920 Workplace Safety and Health 

20

OSHA could improve its oversight by 

applying this type of model.

With additional data on factors like history and good 

faith, models like this could provide OSHA with insight 

into

 the extent to which penalties are being assessed 

correctly. 

 the degree to which unexpected variables are 

affecting penalty amounts.
Appendix I: Briefing Presented on July 7, 

2004 

Page 27 GAO-04-920 Workplace Safety and Health 

21

Recommendations

Consistent with recommendations from a recent GAO report (GAO-04-658) 

and on the basis of findings presented here, we are recommending that the 

Secretary of Labor direct the Assistant Secretary for Occupational Safety 

and Health to:

• ensure that regions complete audits in accordance with OSHA’s required audit procedures, and

• monitor audit results in their overseeing of the civil penalty determination and violation abatement processes.

In addition, we are recommending that the Secretary of Labor direct the 

Assistant Secretary for Occupational Safety and Health to:

• evaluate the feasibility of using statistical modeling to better understand the variation in civil penalty amounts. 
Appendix II: Comments from the Department 

of Labor 

Page 28 GAO-04-920 Workplace Safety and Health 

Appendix II: Comments from the Department 

of Labor 
Appendix II: Comments from the Department 

of Labor 

Page 29 GAO-04-920 Workplace Safety and Health (130314) 
GAO’s Mission The Government Accountability Office, the audit, evaluation and 

investigative arm of Congress, exists to support Congress in meeting its 

constitutional responsibilities and to help improve the performance and 

accountability of the federal government for the American people. GAO 

examines the use of public funds; evaluates federal programs and policies; 

and provides analyses, recommendations, and other assistance to help 

Congress make informed oversight, policy, and funding decisions. GAO’s 

commitment to good government is reflected in its core values of 

accountability, integrity, and reliability.

Obtaining Copies of 

GAO Reports and 

Testimony

The fastest and easiest way to obtain copies of GAO documents at no cost 

is through GAO’s Web site (www.gao.gov). Each weekday, GAO posts 

newly released reports, testimony, and correspondence on its Web site. To 

have GAO e-mail you a list of newly posted products every afternoon, go to 

www.gao.gov and select “Subscribe to Updates.”

Order by Mail or Phone The first copy of each printed report is free. Additional copies are $2 each. 

A check or money order should be made out to the Superintendent of 

Documents. GAO also accepts VISA and Mastercard. Orders for 100 or 

more copies mailed to a single address are discounted 25 percent. Orders 

should be sent to:

U.S. Government Accountability Office

441 G Street NW, Room LM

Washington, D.C. 20548

To order by Phone: Voice: (202) 512-6000 

TDD: (202) 512-2537 

Fax: (202) 512-6061

To Report Fraud, 

Waste, and Abuse in 

Federal Programs

Contact:

Web site: www.gao.gov/fraudnet/fraudnet.htm

E-mail: fraudnet@gao.gov

Automated answering system: (800) 424-5454 or (202) 512-7470

Congressional 

Relations

Gloria Jarmon, Managing Director, JarmonG@gao.gov (202) 512-4400

U.S. Government Accountability Office, 441 G Street NW, Room 7125 

Washington, D.C. 20548

Public Affairs Jeff Nelligan, Managing Director, NelliganJ@gao.gov (202) 512-4800

U.S. Government Accountability Office, 441 G Street NW, Room 7149 

Washington, D.C. 20548