U.S. OCCUPATIONAL SAFETY & HEALTH
 

REVIEW COMMISSION
 

PERFORMANCE AND ACCOUNTABILITY REPORT, 

INDEPENDENT AUDITOR’S REPORT
 

AND 

FINANCIAL STATEMENTS 

FOR THE YEARS ENDED 

SEPTEMBER 30, 2011 AND 2010 

Prepared By 

Brown & Company CPAs, PLLC 

November 10, 2011 
U.S. OCCUPATIONAL SAFETY & HEALTH REVIEW COMMISSION 

FINANCIAL STATEMENTS
 

FOR THE YEAR ENDED SEPTEMBER 30, 2011 AND 2010 

TABLE OF CONTENTS 

AGENCY HEAD MESSAGE 

MANAGEMENT DISCUSSION AND ANALYSIS . .......................................................... 1 

FINANCIAL SECTION 

INDEPENDENT AUDITOR'S REPORT ON THE FINANCIAL STATEMENTS ............ 14 

INDEPENDENT AUDITOR’S REPORT ON INTERNAL CONTROL OVER

 FINANCIAL REPORTING ................................................................................................. 16 

INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE WITH LAWS AND 

REGULATIONS................................................................................................................... 17 

BALANCE SHEET ............................................................................................................... 18 

STATEMENT OF NET COST ............................................................................................. 19 

STATEMENT OF CHANGES IN NET POSITION ............................................................. 20 

STATEMENT OF BUDGETARY RESOURCES................................................................ 21 

STATEMENT OF CUSTODIAL ACTIVITY ..................................................................... 22 

NOTES TO THE FINANCIAL STATEMENTS .................................................................. 23 

Occupational Safety and Health Review Commission
 

FY 2011 Performance and Accountability Report 

Management Discussion and Analysis 

Overview 

The Occupational Safety and Health Review Commission (OSHRC or 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 fair and expeditious 

resolution of disputes involving the 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. 

The Occupational Safety and Health Act and the Review Commission’s Rules of Procedure 

provide for two levels of adjudication when an employer contests an OSHA citation for alleged 

violations of the Act or failure to abate such alleged violations. The first is a trial level, which 

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

(ALJ). The Judge’s decision becomes final unless the decision is directed for review to the 

Commission by an individual Commissioner. The second level of review is by Commission 

members who are appointed by the President with the advice and consent of the Senate. 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 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 Review Commission has three members, who serve six-year terms, each of whom is 

appointed by the President and confirmed by the Senate. One of the members also serves as 

Chairman of the agency. The Review Commission has three major functions: the Commission 

function, the Administrative Law Judge function, and the Office of the Executive Director 

function. 

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

are two regional offices, one in Atlanta, Georgia, and the other in Denver, Colorado. 

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Our vision is simple, direct and performance oriented. We 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 its 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 depend 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 hearings 

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 Commission consists of three members appointed by the President with the advice and 

consent of the Senate. The Occupational Safety and Health Act requires a quorum of two 

Commissioners. By statute, decisions 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. 

Consequently, action on important issues may be postponed and issuance of some pending cases 

will be delayed. 

The Commission operated with a full Commission during the first seven months of FY 2011. For 

the remainder of the fiscal year, the Commission operated with only two Commissioners due to 

one Commissioner’s term expiring in April. 

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 have an impact on the number of cases contested before the Review 

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Commission. In addition, OSHA’s targeting during recent years of workplaces experiencing 

more serious workplace hazards, and the consequent increase in proposed penalties, has resulted 

in a greater number of complex cases, and more extensive pretrial and trial processes. 

Consequently, both the size and complexity of the cases at both the Administrative Law Judge 

and Commission levels has increased in recent years. 

OSHA conducted 40,648 inspections in FY 2011. The number of OSHA inspections and their 

likely focus on the highest hazard workplaces affects the Review Commission’s ALJ caseload. 

These inspections have tended to result in more complex and contentious cases, which consume 

extensive judicial time. For such cases, 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 Commission utilizes two alternative procedures to facilitate case adjudication in appropriate 

circumstances – Settlement Part, for certain relatively complex cases, and Simplified 

Proceedings, for certain relatively simple cases. 

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

Law Judge may assign a Settlement Judge to a pending proceeding to aid the parties 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 Law Judge has full control of the proceeding and may 

require that the parties’ 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 has been expanded 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 ensuring that due 

process requirements will be maintained. Under this process, a business, with or without 

counsel, can present its case before an administrative law 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. 

Performance Goals and Results 

OSHRC’s case resolution strategic goal is straightforward: To ensure fair, just, and expeditious 

adjudication of disputes brought before the Commission and its Administrative Law Judges. The 

Review Commission’s Strategic Plan covering the period FY 2010 - 2015 reflects this objective. 

It also reflects the Review Commission’s overall goal of management excellence. 

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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, consistent with our overall strategic goals. 

In FY 2011, the Commission had 31 cases pending at the beginning of the year. It received 30 

new cases and resolved 26 cases by year-end. Thus, the Commission entered FY 2012 with 35 

cases pending review. Of particular note, by the end of fiscal year 2011, the Commission 

succeeded in meeting its high priority goal of resolving all the “legacy” cases on its docket, those 

cases docketed at the Commission level prior to 2008. 

The Commission began FY 2011 with a full Commission. The Commission ended the year with 

only two Commissioners due to one Commissioner’s term expiring in April. 

New performance goals have been developed for fiscal years 2010 and 2011 to support the FY 

2010 – 2015 Strategic Plan. The following table provides the performance goals and results for 

FY 2007 – FY 2011: 

Outcome 

Goals 

Performance 

Measures 

FY 2007 

Actual 

(Target) 

FY 2008 

Actual 

(Target) 

FY 2009 

Actual 

(Target) 

FY 2010 

Actual 

(Target) 

FY 2011 

Actual 

(Target) 

Reduce the Percent of 32% 23% 18% New Goal New Goal 

length of time cases over 2 Target not Target not Target not developed developed 

to resolve years old met met met for FY for FY 

Commissionlevel cases disposed of 

at the (100%) (100%) (75%) 2010 2011 

Commission 

level 

Reduce the Percent of 100% 100% 100% New Goal New Goal 

length of time priority cases Target Target Target developed developed 

to resolve disposed of met met met for FY for FY 

priority cases within 6 (100%) (100%) (100%) 2010 2011 

months 

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Outcome 

Goals 

Performance 

Measures 

FY 2007 

Actual 

(Target) 

FY 2008 

Actual 

(Target) 

FY 2009 

Actual 

(Target) 

FY 2010 

Actual 

(Target) 

FY 2011 

Actual 

(Target) 

Resolve the All cases New Goal New Goal New Goal 20% 80% 

oldest cases docketed at developed developed developed Target not Target

on the Review the to support to support to support met met 

Commission’s 

docket. 

Commission 

level prior to 

2008 

resolved. 

FY 2010 

– 2015 

Strategic 

Plan 

FY 2010 – 

2015 

Strategic 

Plan 

FY 2010 – 

2015 

Strategic 

Plan 

(30% of 

oldest 

cases) 

(70% of 

oldest 

cases) 

Reduce the Average age New Goal New Goal New Goal 32 months 15 months 

average age of of open developed developed developed Target Target met 

open cases at 

the 

Commissionlevel.* 

cases. to support 

FY 2010 

– 2015 

Strategic 

to support 

FY 2010 – 

2015 

Strategic 

to support 

FY 2010 – 

2015 

Strategic 

met (41 

months or 

less) 

(36 

months or 

less) 

Plan Plan Plan 

Resolve all Percent of New Goal New Goal New Goal 100% 100% 

priority cases priority cases developed developed developed Target Target met 

in a timely 

manner. 

disposed of 

within 6 

to support 

FY 2010 

to support 

FY 2010 – 

to support 

FY 2010 – 

met 

(100%) (100%) 

months. – 2015 2015 2015 

Strategic 

Plan 

Strategic 

Plan 

Strategic 

Plan 

* As of September 30, 2009, and September 30, 2010, the average (mean) period of time for a case on the 

Review Commission’s docket was 46 months, and 32 months, respectively. The Review Commission’s revised 

Strategic Plan (FY 2010- 2015) anticipated reducing this average to 24 months by the end of FY 2015. 

The Commission met all of its Commission-level case resolution targets in FY 2011. As noted, 

by the end of the fiscal year, the Commission succeeded in meeting its high priority goal of 

resolving all the “legacy” cases on its docket, those cases docketed at the Commission level prior 

to 2008. 

5 
 

 

 

 

 

 

The following table summarizes actual Commission case activity for fiscal years 2008, 2009, 

2010, and 2011, and provides estimated case activity for fiscal years 2012 and 2013. 

Commission Case Activity 

FY 2008 FY 2009 FY 2010 FY2011 FY 2012 FY 2013 

Actual Actual Actual Actual Estimate Estimate 

New Cases: 

Cases Directed for 

Review: 11 16 24 24 24 24 

Other New Cases: 

Interlocutory 

Appeals 0 0 0 6 3 3 

 Remands 2 6 0 0 2 2 

Other 0 0 0 0 0 0 

Total Other New 2 

Cases: 6 0 6 5 5 

Total New Cases: 13 22 24 30 29 29 

Case Inventory 

from Prior Year: 25 20 22 31 35 34 

Total Caseload: 38 42 46 61 64 63 

Dispositions: 18 20 15 26 30 30 

Case Inventory, 

End of Year: 20 22 31 35 34 33 

Administrative Law Judge Function 

The function of the Review Commission’s Administrative Law Judges is to conduct formal 

hearings and related proceedings in a fair, just, and expeditious manner, consistent with 

OSHRC’s overall strategic goals. 

The Administrative Law Judge function began the fiscal year with 983 cases in its inventory and 

received 3,175 new cases during the year, for a total of 4,158 cases. A total of 2,813 cases were 

disposed of, leaving 1,345 cases in the inventory at the end of the fiscal year. 

6 
 

 

 

 

The following table provides the performance goals and results for this function for FYs 2007-

2011. 

Outcome Goals Performance 

Measures 

FY 2007 

Actual 

(Target) 

FY 2008 

Actual 

(Target) 

FY 2009 

Actual 

(Target) 

FY 2010 

Actual 

(Target) 

FY 2011 

Actual 

(Target) 

Ensure that a 

significant 

proportion of noncomplex cases at 

the ALJ level are 

resolved in less 

than one year. 

Percent 

within one 

year. 

99% 

Target 

met 

(97%) 

99% 

Target met 

(99%) 

98% 

Target met 

(98%) 

98% 

Target 

 met 

(98%) 

98% 

Target 

met 

(98%) 

Ensure that a 

significant 

proportion of 

complex cases at 

the ALJ level are 

resolved in less 

than one year. 

Percent 

within one 

year.* 

97% 

Target not 

met 

(98%) 

99% 

Target met 

(99%) 

98% 

Target 

exceeded 

(95%) 

89% 

Target not 

met 

(95%) 

84% 

Target not

 met 

(95%) 

*Note: For FY 2007 – 2009, the target case resolution period for complex cases at the ALJ level was 18 months 

(540 days). In accordance with the Review Commission’s revised Strategic Plan (FY 2010- 2015), the target period 

has been reduced to one year commencing in FY 2010. 

Although Review Commission ALJs met their target goal for resolution of non-complex cases 

within one year, the resolution of complex cases was more problematic. There were several 

reasons for this. First, the ALJs FY 2010 workload substantially increased over prior FYs, an 

increase that continued in fiscal year 2011. Indeed, the caseload at the ALJ level increased over 

fifty percent over the past two fiscal years, from 2,058 in FY 2009 to 2,565 in FY 2010 to 3,175 

in FY 2011. In addition, this workload included a 60% increase in the number of cases disposed 

of with hearings. Hearings are necessarily time consuming, and this had an effect on case 

disposal. Finally, several long-serving ALJs retired midway through fiscal year 2011, leaving 

temporary vacancies as we recruited to fill the vacancies. 

7 
 

 

 

 

 

 

 

 

 

 

 

 

The following table provides actual Administrative Law Judge workloads for fiscal years 2008, 

2009, 2010, and 2011, and estimated workloads for fiscal years 2012 and 2013. 

OSHA 

Inspections*: 

FY 2008 

Actual 

38,591 

FY 2009 

Actual 

40,549 

FY 2010 

Actual 

40,942 

FY2011 

Actual 

40,648 

FY 2012 

Estimate 

TBD 

FY 2013 

Estimate 

TBD 

Administrative Law Judge Workload: 

a. Case 

Inventory, 625 739 777 983 1,345 1,545

Start of Year 

b. New Cases 1,962 2,058 2,565 3,175 3,250 3,350 

c. Total 2,587 2,797 3,342 Caseload 4,158 4,595 4,895 

d. Disposals 

(1) With 69 67 107 Hearing	 111 130 150 

(2) Without 1,779 1,953 2,252 Hearing	 2,702 2,920 3,050 

e.	 Total 

Dispositio 1,848 2,020 2,359 2,813 3,050 3,200 

ns 

Total Case 

Inventory, 739 777 983 1,345 1,545 1,695 

End of Year 

*Provided by Directorate of Evaluation and Analysis, OSHA. 

Office of the Executive Director Function 

The Office of the Executive Director provides administrative services to support the Review 

Commission in fulfilling its mission. 

The Executive Director function provides strategic planning and operational management for the 

organization. The Office of the Executive Director also includes: technology management, 

computer and information security, financial, and administrative services. The day-to-day work 

performed under the direction of the Executive Director includes: 

8 
 

 

 

•	 Supporting the development and implementation of the Agency’s strategic goals; 

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

Commission information; 

•	 Providing agency-wide support in the areas of finance, budget, procurement and contracting, 

human resources, equal opportunity and general administrative services; 

•	 Providing personnel, payroll, benefits, reproduction, 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; 

•	 Implementing case management and administrative systems through information technology 

hardware and software; 

•	 Developing and maintaining computer systems and information security enhancements; and 

•	 Enhancing telecommunications and improving technology efficiency and effectiveness. 

The following performance goals have been developed for fiscal years 2011, 2012, and 2013 to 

support the FY 2010 – 2015 Strategic Plan: 

Outcome Goals Performance Measures 

FY 

2011 Actual 

(Target) 

FY 

2012 

(Target) 

FY 

2013 

(Target) 

Invest in human One percent of basic .35% 

capital by payroll devoted to staff Target Partially (.55% of basic (.55% of

increasing staff training and Met* payroll to training basic payroll

development 

and training 

opportunities 

and increasing. 

development by FY 

2015, and no fewer than 

24 hours training per 

staff member per year. 

(.45% of basic 

payroll to training 

and 10 hours) 

and 12 hours) to training and 

12 hours) 

Examine and Percentage of positions One position (Insource position (Insource any 

identify identified appropriate for identified identified and additional 

contracted insourcing that are Target Met identify additional positions 

positions 

appropriate for 

insourcing. 

insourced (Position 

identified) 

positions to 

insource) 

identified) 

Use of 360 All supervisors subject Feedback (Feedback (Feedback 

degree to 360 degree feedback Instrument mechanism used to mechanism 

employee- and feedback is used to developed evaluate all used to 

supervisor ensure that individual Target Met supervisors) evaluate all 

feedback 

mechanisms. 

and organizational 

effectiveness goals are 

being met. 

(Appropriate 

feedback 

instrument 

developed) 

supervisors) 

* $31,970, or .45 percent of basic payroll, was devoted to training in FY 2011. However, of the total amount 

obligated $24,822 was expensed. This is due in part to being under a continuing resolution the first six months of 

FY 2011, during which spending on training was severely constrained. The hourly goal will be implemented in FY 

2012. 

9 
 

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. OSHRC has received an “unqualified” opinion for each biennial and annual review 

conducted by an independent auditor. 

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

Administrative Resources Center (Bureau of the Public Debt – BPD), for accounting services. 

The Administrative Resources Center prepared the Review Commission’s FY 2011 financial 

statements, which include comparative data for FY 2010. The principal financial statements 

include the Balance Sheet, Statement of Net Cost, Statement of Changes in Net Position, and 

Statement of Budgetary Resources. 

The changes described in the analyses below generally indicate that the budget execution process 

has become more effective. This is due to improved budget management, higher payroll costs, 

the costs of improving our IT infrastructure, and higher costs for goods and services to maintain 

operations and fulfill our mission. 

Analysis of the Balance Sheet 

OSHRC’s assets in fiscal year 2011 were $3,253,756 as of September 30, 2011. This represents 

an increase of $23,273 from fiscal year 2010. The Fund Balance with Treasury of $3,158,051 

represents OSHRC’s largest asset as of September 30, 2011. This is a decrease of approximately 

1 percent from fiscal year 2010 and represents approximately 97 percent of the agency’s total 

assets. General Property, Plant, and Equipment account for approximately 2.32 percent of 

OSHRC’s total assets as of September 30, 2011. The net fixed asset value of $75,548 equals the 

cost less accumulated depreciation and represents the current book value of those assets. 

OSHRC’s liabilities in fiscal year 2011 totaled $1,252,650 as of September 30, 2011. This is a 

decrease of $46,284 from fiscal year 2010. The accounts payable balance at September 30, 

2011, was $185,033, an increase of $45,325 from September 30, 2010. Unfunded annual leave 

decreased $89,816 in 2011 from 2010. Unfunded annual leave represents approximately 48 

percent of total agency liabilities. 

Net Position is the difference between total assets and total liabilities. The total net position for 

fiscal year 2011 increased by $69,557 from fiscal year 2010. 

Analysis of Statement of Net Cost 

The Statement of Net Cost shows the net cost of operations for the agency, and it is broken out 

between OSHRC’s two major programs, Administrative Law Judge and Commission. The Total 

net cost of operations in 2011 was $12,141,226, a decrease of $379,366, or 3 percent less than 

the 2010 net cost of operations of $12,520,592. 

10 
 

 

Analysis of the Statement of Changes in Net Position 

The Statement of Changes in Net Position reports the change in the agency’s net position during 

the reporting period. The net position consists of two components, the unexpended 

appropriations and the cumulative results of operations. The Net Position increased $69,557 in 

2011 from 2010, a change of approximately 3.6 percent. 

Analysis of the Statement of Budgetary Resources 

The Statement of Budgetary Resources presents how the budgetary resources were made 

available and the status of the budgetary resources at the end of the reporting period. The total 

budgetary resources must always equal the total status of budgetary resources. For fiscal year 

2011, OSHRC had total budgetary resources of $12,777,068, which is $170,657 less than in 

2010. 

Management Assurances 

Systems, Controls, and Legal Compliance 

The Review Commission is in compliance with the Federal Managers Financial Integrity Act and 

OMB Circular A-123, Management’s Responsibility for Internal Control. 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. 

The 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 the Agency’s internal operations and determining if there are any weaknesses that need 

correction. In FY 2011, two program reviews took place: an audit of FY 2011 financial 

statements, and an audit of computer and information security. 

Financial Audit 

The Review Commission has had annual audits of its financial statements since FY 2003, 

including reviews of the adequacy of the Review Commission’s internal control systems. The 

Review Commission has received an unqualified opinion for each financial audit conducted, 

including FY 2010. 

With regard to financial management, the National Finance Center (NFC) provided payroll 

services, and the Bureau of Public Debt (BPD) provided accounting, disbursement, and financial 

statement preparation services for the agency. Accordingly, certain aspects of the Review 

Commission’s financial management system are largely influenced by the practices and 

procedures of the NFC and the BPD. 

11 
In addition to the practices and procedures of the NFC and BPD, the Review Commission has 

established certain internal controls and procedures that safeguard assets and ensure that 

obligations and disbursements are made consistent with management’s direction. For example, 

BPD reports are reviewed and reconciled to assure that the agency’s obligation and disbursement 

actions are properly recorded and that the year-end financial statements are correctly stated. The 

agency’s Budget and Finance Office also prospectively certifies funds availability for all 

obligations and conducts periodic reviews of internal systems including travel, payroll, and 

procurement. 

The financial audit resulted in an “unqualified” opinion with no reported material weaknesses or 

other significant deficiencies. Generally, 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 annual 

audits of its financial statements since 2003, 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 contracts 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. 

Computer and Information Security Program 

Since FY 2003, the Review Commission has contracted for annual independent evaluations of its 

computer and information security programs, consistent with the Federal Information Security 

Management Act (December 17, 2002) which was signed into law as part of the E-Government 

Act (Public Law 107-347). These evaluations are conducted under the requirements of the 

Government Information Security Reform Act (the predecessor to Federal Information Security 

Management Act (FISMA)), as well as the Office of Management and Budget’s (OMB) 

implementing guidelines, and National Institute of Standards and Technology (NIST) guidance. 

Our FISMA audits have revealed one material weakness in policies and procedures. OSHRC is 

in the process of an infrastructure upgrade and will need to update its Certification and 

Authorization (C&A). OSHRC maintains updated security processes, and has a system security 

plan that complies with NIST standards. OSHRC tested its continuity of operations plan 

(COOP) during a June and September 2011 Department of Homeland Security exercise and is in 

the process of fine-tuning the plan to fully incorporate all newly adopted technologies. 

The executive summary for the current (FY 2011) FISMA Program Review Report reveals that 

the Review Commission continues to take steps to enhance its computer security posture. 

12 
The provisions of the Review Commission’s security policy directive apply to all Review 

Commission employees and contractors who use our computer and network systems or gain 

access to our computer generated information. 

The agency’s information security program will, at a minimum, continue to implement 

appropriate recommendations made by the independent evaluator; incorporate performance 

measures to ensure that the security plan is practiced throughout the life cycle of the agency’s 

system; establish additional personnel controls for sensitive information; monitor procedures for 

program effectiveness and compliance with security requirements; assure that systems and 

applications operate effectively and provide appropriate confidentiality, integrity and 

availability; and protect information commensurate with the level of risk and magnitude of harm 

resulting from loss, misuse, unauthorized access, or modification. 

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 

2011, each of the 3,175 new cases docketed at the Administrative Law Judge level were 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. 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 goals and to improve management. 

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. 

13 
 

 

U.S. OCCUPATIONAL SAFETY & HEALTH
 

REVIEW COMMISSION 

INDEPENDENT AUDITOR’S REPORT
 

AND 

FINANCIAL STATEMENTS
 

FOR THE YEARS ENDED 

SEPTEMBER 30, 2011 AND 2010 

Prepared By 

Brown & Company CPAs, PLLC 

November 10, 2011 
INDEPENDENT AUDITOR'S REPORT ON THE FINANCIAL STATEMENTS 

U.S. Occupational Safety and Health Review Commission 

Washington, D.C. 

We have audited the accompanying balance sheet of the U.S. Occupational Safety and Health Review 

Commission (OSHRC) as of September 30, 2011 and 2010 and the related statements of net cost, changes 

in net position, and budgetary resources, for the years then ended (collectively referred to as the financial 

statements). These financial statements are the responsibility of OSHRC’s management. Our 

responsibility is to express an opinion on these financial statements based on our audit. 

We conducted our audits in accordance with auditing standards generally accepted in the United States of 

America; the standards applicable to financial audits contained in U.S. Government Auditing Standards, 

issued by the Comptroller General of the United States; and Office of Management and Budget (OMB) 

Bulletin No. 07-04, Audit Requirements for Federal Financial Statements, as amended. Those standards 

and OMB Bulletin No. 07-04, as amended, require that we plan and perform the audit to obtain 

reasonable assurance about whether the financial statements are free of material misstatement. An audit 

includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial 

statements. An audit also includes assessing the accounting principles used and significant estimates 

made by management, as well as evaluating the overall financial statement presentation. We believe that 

our audit provides a reasonable basis for our opinion. 

In our opinion, the financial statements referred to above present fairly, in all material respects, the 

financial position of the OSHRC as of September 30, 2011 and 2010 and its net costs, changes in net 

position, and budgetary resources for the years then ended in conformity with accounting principles 

generally accepted in the United States of America. 

In accordance with U.S. Government Auditing Standards and OMB Bulletin No. 07-04, as amended, we 

have also issued our reports dated November 10, 2011 on our consideration of the OSHRC internal 

control over financial reporting and its compliance with certain provisions of laws and regulations. Those 

reports are an integral part of an audit performed in accordance with U.S. Government Auditing Standards 

and should be read in conjunction with this report in considering the results of our audit. 

Accounting principles generally accepted in the United States of America require that the Management 

Discussion and Analysis (MD&A) be presented to supplement the basic financial statements. Such 

information, although not a part of the basic financial statements, is required by OMB Circular A-136, 

Financial Reporting Requirements, as revised, that considers it to be an essential part of financial 

reporting for placing the basic financial statements in an appropriate operational, economic, or historical 

context. We have applied certain limited procedures to the required supplementary information in 

accordance with auditing standards generally accepted in the United States of America, which consisted 

of inquiries of management about the methods of preparing the information and comparing the 

information for consistency with management's responses to our inquiries, the basic financial statements, 

and other knowledge we obtained during our audit of the basic financial statements. We do not express an 

opinion or provide any assurance on the information because the limited procedures do not provide us 

with sufficient evidence to express an opinion or provide any assurance. 

LARGO RICHMOND 

1101 MERCANTILE LANE, SUITE 122 1504 SANTA ROSA ROAD, SUITE 107 

LARGO, MD 20774 14 RICHMOND, VA 23229

(240) 492-1400 - FAX: (301) 773-2090 (804) 288-2006 - FAX: (804) 288-2233 

mail@brownco-cpas.com tdavis@brownco-cpas.com 
This report is intended solely for the information and use of the management of the OSHRC, OMB and 

Congress, and is not intended to be and should not be used by anyone other than these specified parties. 

Largo, Maryland 

November 10, 2011 

15 
 

INDEPENDENT AUDITOR’S REPORT 

ON INTERNAL CONTROL OVER FINANCIAL REPORTING 

U.S. Occupational Safety and Health Review Commission 

Washington, D.C. 

We have audited the financial statements of the U.S Occupational Safety and Health Review Commission 

(OSHRC) as of and for the year ended September 30, 2011 and have issued our report thereon dated 

November 10, 2011. We conducted our audit in accordance with auditing standards generally accepted in 

the United States of America; the standards applicable to financial audits contained in U.S. Government 

Auditing Standards, issued by the Comptroller General of the United States; and Office of Management 

and Budget (OMB) Bulletin No. 07-04, Audit Requirements for Federal Financial Statements, as 

amended. 

In planning and performing our audit, we considered the OSHRC’s internal control over financial 

reporting by obtaining an understanding of the OSHRC’s internal control, determined whether internal 

controls had been placed in operation, assessed control risk, and performed tests of controls in order to 

determine our auditing procedures for the purpose of expressing our opinion on the financial statements. 

We limited our internal control testing to those controls necessary to achieve the objectives described in 

OMB Bulletin No. 07-04, as amended. The objective of our audit was not to provide an opinion on 

internal control and therefore, we do not express an opinion on internal control. 

Our consideration of the internal control over financial reporting would not necessarily disclose all 

matters in the internal control over financial reporting that might be a significant deficiency or material 

weakness. Under standards issued by the American Institute of Certified Public Accountants and OMB 

Bulletin No. 07-04, as amended, a material weakness is a deficiency, or combination of deficiencies, in 

internal control, such that there is a reasonable possibility that a material misstatement of the entity’s 

financial statements will not be prevented, or detected and corrected on a timely basis. A significant 

deficiency is a deficiency in internal control, or a combination of deficiencies, in internal control that is 

less severe than a material weakness, yet important enough to merit attention by those charged with 

governance. Because of inherent limitations in internal controls, misstatements, losses, or noncompliance may nevertheless occur and not be detected. However, we noted no matters involving the 

internal control and its operation that we considered to be a material weakness as defined above. 

This report is intended solely for the information and use of the management of the OSHRC, OMB and 

Congress, and is not intended to be and should not be used by anyone other than these specified parties. 

Largo, Maryland 

November 10, 2011 

LARGO RICHMOND 

1101 MERCANTILE LANE, SUITE 122 1504 SANTA ROSA ROAD, SUITE 107 

LARGO, MD 20774 16 RICHMOND, VA 23229

(240) 492-1400 - FAX: (301) 773-2090 (804) 288-2006 - FAX: (804) 288-2233 

mail@brownco-cpas.com tdavis@brownco-cpas.com 
 

INDEPENDENT AUDITOR'S REPORT ON
 

COMPLIANCE WITH LAWS AND REGULATIONS
 

U.S. Occupational Safety and Health Review Commission 

Washington, D.C. 

We have audited the financial statements of the U.S. Occupational Safety and Health Review 

Commission (OSHRC) as of and for the year ended September 30, 2011, and have issued our report 

thereon dated November 10, 2011. We conducted our audit in accordance with auditing standards 

generally accepted in the United States of America; the standards applicable to financial audits contained 

in U.S. Government Auditing Standards, issued by the Comptroller General of the United States; and 

Office of Management and Budget (OMB) Bulletin No. 07-04, Audit Requirements for Federal Financial 

Statements, as amended. 

The management of the OSHRC is responsible for complying with laws and regulations applicable to the 

OSHRC. As part of obtaining reasonable assurance about whether the OSHRC’s financial statements are 

free of material misstatement, we performed tests of its compliance with certain provisions of laws and 

regulations, noncompliance with which could have a direct and material effect on the determination of 

financial statement amounts, and certain other laws and regulations specified in OMB Bulletin No. 07-04, 

as amended. We limited our tests of compliance to these provisions and we did not test compliance with 

all laws and regulations applicable to the OSHRC. 

The results of our tests of compliance with laws and regulations disclosed no reportable instances of 

noncompliance with laws and regulations discussed in the preceding paragraph that are required to be 

reported under U.S. Government Auditing Standards or OMB Bulletin No. 07-04, as amended. 

Providing an opinion on compliance with certain provisions of laws and regulations was not an objective 

of our audit, and, accordingly, we do not express such an opinion. However, we noted no noncompliance 

with laws and regulations, which could have a direct and material effect on the determination of financial 

statement amounts. 

This report is intended solely for the information and use of the management of the OSHRC, OMB and 

Congress, and is not intended to be and should not be used by anyone other than these specified parties. 

Largo, Maryland 

November 10, 2011
 

LARGO RICHMOND 

1101 MERCANTILE LANE, SUITE 122 1504 SANTA ROSA ROAD, SUITE 107 

LARGO, MD 20774 17 RICHMOND, VA 23229

(240) 492-1400 - FAX: (301) 773-2090 (804) 288-2006 - FAX: (804) 288-2233 

mail@brownco-cpas.com tdavis@brownco-cpas.com 
FINANCIAL STATEMENTS AND NOTES
 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. OCCUPATIONAL SAFETY & HEALTH REVIEW COMMISSION
 

BALANCE SHEET
 

AS OF SEPTEMBER 30, 2011 AND 2010
 

(In Dollars)
 

2011 2010 

Assets : 

Intragovernmental 

Fund Balance With Treasury (Note 2) $ 3,158,051 $ 3,189,341 

Accounts Receivable, Net (Note 3) 13,719 -

Total Intragovernmental 3,171,770 3,189,341 

Accounts Receivable, Net (Note 3) 6,438 -

Property, Equipment, and Software, Net (Note 4) 75,548 41,142 

Total Assets $ 3,253,756 $ 3,230,483

Liabilities : 

Intragovernmental 

Accounts Payable 

Other (Note 6) 

Total Intragovernmental 

$ 3,696 

80,499 

84,195 

$ 3,696 

79,379 

83,075 

Accounts Payable 

Other (Note 6) 

Total Liabilities $ 

181,337 

987,118 

1,252,650 $ 

136,012 

1,079,847 

1,298,934 

Commitments and Contingencies 

Net Position: 

Unexpended Appropriations - Other Funds 

Cumulative Results of Operations - Other Funds 

2,526,322 

(525,216) 

2,582,875 

(651,326) 

Total Net Position $ 2,001,106 $ 1,931,549

Total Liabilities and Net Position $ 3,253,756 $ 3,230,483

The accompanying notes are an integral part of these financial statements. 

18 
 

 

 

 

 

 

 

U.S. OCCUPATIONAL SAFETY & HEALTH REVIEW COMMISSION
 

STATEMENT OF NET COST
 

FOR THE YEARS ENDED SEPTEMBER 30, 2011 AND 2010
 

(In Dollars)
 

2011 2010 

Program Costs: 

Administrative Law Judge (Note 8) 

Gross Costs 

Less: Earned Revenue 

Net Program Costs 

$ 

$ 

5,299,556 

(5,981) 

5,293,575 

$ 

$ 

5,458,978 

-

5,458,978 

Commission (Note 8) 

Gross Costs 

Less: Earned Revenue 

Net Program Costs 

$ 

$ 

6,855,389 

(7,738) 

6,847,651 

$ 

$ 

7,061,614 

-

7,061,614 

Net Cost of Operations $ 12,141,226 $ 12,520,592 

The accompanying notes are an integral part of these financial statements. 

19 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. OCCUPATIONAL SAFETY & HEALTH REVIEW COMMISSION
 

STATEMENT OF CHANGES IN NET POSITION
 

FOR THE YEARS ENDED SEPTEMBER 30, 2011 AND 2010
 

(In Dollars)
 

2011 2010 

Cumulative Results of Operations: 

Beginning Balances $ (651,326) $ (550,571) 

Budgetary Financing Sources: 

Appropriations Used 11,519,037 11,621,084 

Other Financing Sources (Non-Exchange): 

Imputed Financing Sources (Note 9) 

Total Financing Sources 

Net Cost of Operations 

Net Change 

Cumulative Results of Operations $ 

748,299 

12,267,336 

(12,141,226) 

126,110 

(525,216) $ 

798,753 

12,419,837 

(12,520,592) 

(100,755) 

(651,326) 

Unexpended Appropriations: 

Beginning Balances $ 2,582,875 $ 2,889,409 

Budgetary Financing Sources: 

Appropriations Received 

Other Adjustments 

Appropriations Used 

Total Budgetary Financing Sources 

11,712,000 

(249,516) 

(11,519,037) 

(56,553) 

11,712,000 

(397,450) 

(11,621,084) 

(306,534) 

Total Unexpended Appropriations $ 2,526,322 $ 2,582,875

Net Position $ 2,001,106 $ 1,931,549

The accompanying notes are an integral part of these financial statements. 

20 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. OCCUPATIONAL SAFETY & HEALTH REVIEW COMMISSION
 

STATEMENT OF BUDGETARY RESOURCES
 

FOR THE YEARS ENDED SEPTEMBER 30, 2011 AND 2010
 

(In Dollars)
 

2011 2010 

Budgetary Resources: 

Unobligated Balance Brought Forward, October 1 $ 1,192,210 $ 1,460,066 

Recoveries of Prior Year Unpaid Obligations 108,655 173,109 

Budget Authority 

Appropriation 11,712,000 11,712,000 

Change In Receivables From Federal Sources 13,719 -

Permanently Not Available (249,516) (397,450) 

Total Budgetary Resources $ 12,777,068 $ 12,947,725 

Status of Budgetary Resources: 

Obligations Incurred (Note 11) 

Direct $ 11,577,716 $ 11,755,515 

Reimbursable 13,719 -

Subtotal 11,591,435 11,755,515 

Unobligated Balance 

Apportioned 246,666 28,527 

Unobligated Balance Not Available 938,967 1,163,683 

Total Status of Budgetary Resources $ 12,777,068 $ 12,947,725 

Change in Obligated Balance: 

Obligated Balance, Net 

Unpaid Obligations, Brought Forward, October 1 $ 1,997,131 $ 1,987,577 

Obligations Incurred Net 11,591,435 11,755,515 

Gross Outlays (11,493,774) (11,572,852) 

Recoveries of Prior Year Unpaid 

Obligations, Actual (108,655) (173,109) 

Change In Uncollected Customer Payments 

From Federal Sources (13,719) -

1,972,418 1,997,131 

Obligated Balance, Net, End of Period 

Unpaid Obligations 

Uncollected Customer Payments From 

Federal Sources 

Total, Unpaid Obligated Balance, Net, End of Period $ 

1,986,137 

(13,719) 

1,972,418 $ 

1,997,131 

-

1,997,131 

Net Outlays: 

Gross Outlays 

Distributed Offsetting Receipts 

Net Outlays 

$ 

$ 

11,493,774 

(177,255) 

11,316,519 

$ 

$ 

11,572,852 

(2,027) 

11,570,825 

The accompanying notes are an integral part of these financial statements. 

21 
 

 

 

 

U.S. OCCUPATIONAL SAFETY & HEALTH REVIEW COMMISSION
 

STATEMENT OF CUSTODIAL ACTIVITY
 

FOR THE YEARS ENDED SEPTEMBER 30, 2011 AND 2010
 

(In Dollars)
 

2011 2010 

Revenue Activity: 

Sources of Cash Collections: 

Miscellaneous $ 177,255.00 $ 2,027.00 

Total Cash Collections 177,255 2,027 

Disposition of Collections: 

Transferred to Others (by Recipient) 177,255 2,027 

Net Custodial Activity $ - $ -

The accompanying notes are an integral part of these financial statements. 

22 
 

U.S. OCCUPATIONAL SAFETY & HEALTH REVIEW
 

COMMISSION 

 NOTES TO THE FINANCIAL STATEMENTS 

NOTE 1. SUMMARY OF SIGNIFICANT 

ACCOUNTING POLICIES 

A. Reporting Entity 

The Occupational Safety and Health Review 

Commission (The Review Commission) is an 

independent, adjudicatory agency created by 

the Occupational Safety and Health Act 

(OSHA) of 1970. Its sole statutory mandate is 

to serve as an administrative court providing 

just and expeditious resolution of disputes 

involving 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 should a dispute arise. 

The Review Commission reporting entity is 

comprised of General Funds and General 

Miscellaneous Receipts. 

General Funds are accounts used to record 

financial transactions arising under 

congressional appropriations or other 

authorizations to spend general revenues. 

General Fund Miscellaneous Receipts are 

accounts established for receipts of nonrecurring activity, such as miscellaneous 

receipts for services and benefits. 

The Review Commission receives custodial 

collections and holds custodial receivables that 

are non-entity assets and are transferred to 

Treasury at fiscal year end. 

B. Basis of Presentation 

The financial statements have been prepared to 

report the financial position, net cost of 

operations, changes in net position, and the 

status and availability of budgetary resources 

of The Review Commission. The statements 

are a requirement of the Chief Financial 

Officers Act of 1990, the Government 

Management Reform Act of 1994 and the 

Accountability of Tax Dollars Act of 2002. 

They have been prepared from, and are fully 

supported by, the books and records of The 

Review Commission in accordance with the 

hierarchy of accounting principles generally 

accepted in the United States of America, 

standards approved by the Federal Accounting 

Standards Advisory Board (FASAB), OMB 

Circular A-136, Financial Reporting 

Requirements and The Review Commission’s 

accounting policies which are summarized in 

this note. These statements, with the exception 

of the Statement of Budgetary Resources, are 

different from financial management reports, 

which are also prepared pursuant to OMB 

directives that are used to monitor and control 

The Review Commission’s use of budgetary 

resources. 

The statements consist of the Balance Sheet, 

Statement of Net Cost, Statement of Changes 

in Net Position, and the Statement of 

Budgetary Resources. In accordance with 

OMB Circular A-136, the financial statements 

and associated notes are presented on a 

comparative basis. Unless specified otherwise, 

all amounts are presented in dollars. 

C. Budgets and Budgetary Accounting 

Congress usually enacts appropriations to 

permit The Review Commission to incur 

obligations for specified purposes. In fiscal 

23
 
 

 

years 2011 and 2010, The Review Commission 

was accountable for General Fund 

appropriations. The Review Commission 

recognizes budgetary resources as assets when 

cash (funds held by the U.S. Treasury) is made 

available through the Department of Treasury 

General Fund warrants. 

D. Basis of Accounting 

Transactions are recorded on both an accrual 

accounting basis and a budgetary basis. Under 

the accrual method, revenues are recognized 

when earned, and expenses are recognized 

when liabilities are incurred, without regard to 

receipt or payment of cash. Budgetary 

accounting facilitates compliance with legal 

requirements on the use of federal funds. 

E. Revenues & Other Financing Sources 

The review Commission receives all funding 

through Congressional appropriation from the 

budget of the United States. Annual 

appropriations are used, within statutory limits, 

for salaries and administrative expenses and 

operating and capital expenditures for essential 

personal property. 

Appropriations are recognized as revenues at 

the time the related program or administrative 

expenses are incurred. Appropriations are 

expended for capitalized property and 

equipment are recognized as expenses when an 

asset is consumed in operations. 

The Review Commission recognizes as an 

imputed financing source the amount of 

accrued pension and post-retirement benefit 

expenses for current employees paid on our 

behalf by the Office of Personnel Management 

(OPM). 

F. Taxes 

The Review Commission, as a Federal entity, 

is not subject to Federal, State, or local income 

taxes, and accordingly, no provision for 

income taxes has been recorded in the 

accompanying financial statements. 

G. Fund Balance with Treasury 

The U.S. Treasury processes cash receipts and 

disbursements. Funds held at the Treasury are 

available to pay agency liabilities. The 

Review Commission does not maintain cash in 

commercial bank accounts or foreign currency 

balances. 

H. Accounts Receivable 

Accounts receivable consists of amounts owed 

to The Review Commission by other Federal 

agencies and the general public. Amounts due 

from Federal agencies are considered fully 

collectible. Accounts receivable from the 

public include reimbursements from 

employees. An allowance for uncollectible 

accounts receivable from the public is 

established when, based upon a review of 

outstanding accounts and the failure of all 

collection efforts, management determines that 

collection is unlikely to occur considering the 

debtor’s ability to pay. 

I. Property, Equipment, and Software 

The Review Commission's property and 

equipment represent furniture, fixtures, 

equipment, and information technology 

hardware which are recorded at original 

acquisition cost and are depreciated or 

amortized using the straight-line method over 

the estimated useful life of the asset. Major 

alterations and renovations are capitalized, 

while maintenance and repair costs are 

expensed as incurred. The Review 

Commission's capitalization threshold is 

$50,000 for individual purchases and $500,000 

for bulk purchases. Applicable standard 

governmental guidelines regulate the disposal 

and convertibility of agency property and 

equipment. The useful life classifications for 

capitalized assets are as follows: 

Description Useful Life (years) 

Office Furniture 7 

Office Equipment 5 

24
 
 

 

J. Advances and Prepaid Charges 

Advance payments are generally prohibited by 

law. There are some exceptions, such as 

reimbursable agreements, subscriptions and 

payments to contractors and employees. 

Payments made in advance of the receipt of 

goods and services are recorded as advances or 

prepaid charges at the time of prepayment and 

recognized as expenses when the related goods 

and services are received. 

K. Liabilities 

Liabilities represent the amount of monies or 

other resources likely to be paid by The 

Review Commission as a result of transactions 

or events that have already occurred. 

Intragovernmental liabilities are claims against 

The Review Commission by other Federal 

agencies. Liabilities covered by budgetary or 

other resources are those liabilities for which 

Congress has appropriated funds or funding is 

otherwise available to pay amounts due. 

Liabilities for which an appropriation has not 

been enacted or other funds received are, 

therefore, classified as not covered by 

budgetary resources. No liability can be paid, 

however, absent an appropriation or other 

funding. There is no certainty that the 

appropriation will be enacted. Additionally, 

the Government, acting in its sovereign 

capacity, can abrogate liabilities. 

L. Accounts Payable 

Accounts payable consists primarily of 

amounts owed to other Federal agencies and 

the public for contracts for goods or services, 

such as leases, utilities, telecommunications 

and consulting and support services. 

M. Annual, Sick, and Other Leave 

Annual leave is accrued as it is earned, and the 

accrual is reduced as leave is taken. The 

balance in the accrued leave account is 

adjusted to reflect current pay rates. Liabilities 

associated with other types of vested leave, 

including compensatory, restored leave, and 

sick leave in certain circumstances, are accrued 

at year-end, based on latest pay rates and 

unused hours of leave. Funding will be 

obtained from future financing sources to the 

extent that current or prior year appropriations 

are not available to fund annual and other 

types of vested leave earned but not taken. 

Nonvested leave is expensed when used. Any 

liability for sick leave that is accrued but not 

taken by a Civil Service Retirement System 

(CSRS)-covered employee is transferred to 

OPM upon the retirement of that individual. 

Credit is given for sick leave balances in the 

computation of annuities upon the retirement 

of Federal Employees Retirement System 

(FERS)-covered employees effective at 50% 

beginning FY2010 and 100% in 2014. 

N. Accrued and Actuarial Workers’ 

Compensation 

The Federal Employees' Compensation Act 

(FECA) administered by the U.S. Department 

of Labor (DOL) addresses all claims brought 

by The Review Commission employees for onthe-job injuries. A liability is recorded for 

actual and estimated future payments to be 

made for workers' compensation pursuant to 

the FECA. The DOL bills each agency 

annually as its claims are paid, but payment of 

these bills is deferred for two years to allow for 

funding through the budget process. Similarly, 

employees that The Review Commission 

terminates without cause may receive 

unemployment compensation benefits under 

the unemployment insurance program also 

administered by the DOL, which bills each 

agency quarterly for paid claims. Future 

appropriations will be used for the 

reimbursement to DOL. The liability consists 

of (1) the net present value of estimated future 

payments calculated by the DOL, and (2) the 

unreimbursed cost paid by DOL for 

compensation to recipients under the FECA. 

O. Retirement Plans 

The Review Commission employees 

participate in either the CSRS or the FERS. 

The employees who participate in CSRS are 

beneficiaries of The Review Commission's 

contribution, equal to seven percent of pay, 

25
 
 

 

distributed to their annuity account in the Civil 

Service Retirement and Disability Fund. 

Prior to December 31, 1983, all employees 

were covered under the CSRS program. From 

January 1, 1984 through December 31, 1986, 

employees had the option of remaining under 

CSRS or joining FERS and Social Security. 

Employees hired as of January 1, 1987 are 

automatically covered by the FERS program. 

FERS offers a savings plan to which The 

Review Commission automatically contributes 

one percent of pay and matches any employee 

contribution up to an additional four percent of 

pay. For FERS participants, The Review 

Commission also contributes the employer’s 

matching share of Social Security. 

FERS employees and certain CSRS 

reinstatement employees are eligible to 

participate in the Social Security program after 

retirement. In these instances, The Review 

Commission remits the employer’s share of the 

required contribution. 

The Review Commission recognizes the 

imputed cost of pension and other retirement 

benefits during the employees’ active years of 

service. OPM actuaries determine pension 

cost factors by calculating the value of pension 

benefits expected to be paid in the future and 

communicate these factors to The Review 

Commission for current period expense 

reporting. OPM also provides information 

regarding the full cost of health and life 

insurance benefits. The Review Commission 

recognized the offsetting revenue as imputed 

financing sources to the extent these expenses 

will be paid by OPM. 

The Review Commission does not report on its 

financial statements information pertaining to 

the retirement plans covering its employees. 

Reporting amounts such as plan assets, 

accumulated plan benefits, and related 

unfunded liabilities, if any, is the responsibility 

of the OPM. 

P. Other Post-Employment Benefits 

The Review Commission employees eligible to 

participate in the Federal Employees Health 

Benefit Plan (FEHBP) and the Federal 

Employees Group Life Insurance Program 

(FEGLIP) may continue to participate in these 

programs after their retirement. The OPM has 

provided The Review Commission with certain 

cost factors that estimate the true cost of 

providing the post-retirement benefit to current 

employees. The Review Commission 

recognizes a current cost for these and Other 

Retirement Benefits (ORB) at the time the 

employee's services are rendered. The ORB 

expense is financed by OPM, and offset by 

The Review Commission through the 

recognition of an imputed financing source. 

Q. Use of Estimates 

The preparation of the accompanying financial 

statements in accordance with generally 

accepted accounting principles requires 

management to make certain estimates and 

assumptions that affect the reported amounts 

of assets and liabilities and disclosure of 

contingent assets and liabilities at the date of 

the financial statements and the reported 

amounts of revenues and expenses during the 

reporting period. Actual results could differ 

from those estimates. 

R. Imputed Costs/Financing Sources 

Federal Government entities often receive 

goods and services from other Federal 

Government entities without reimbursing the 

providing entity for all the related costs. In 

addition, Federal Government entities also 

incur costs that are paid in total or in part by 

other entities. An imputed financing source is 

recognized by the receiving entity for costs 

that are paid by other entities. The Review 

Commission recognized imputed costs and 

financing sources in fiscal years 2011 and 

2010 to the extent directed by OMB. 

26
 
 

 

 

 

 

 

 

S. Contingencies 

The Review commission recognizes contingent 

liabilities when a past event or exchange 

transaction has occurred, a future outflow or 

other sacrifice of resources is probable, and the 

future outflow or sacrifice of resources is 

measurable. A contingency is an existing 

condition, situation or set of circumstances 

involving uncertainty as to possible payment 

by The Review Commission. The uncertainty 

will ultimately be resolved when one or more 

future events occur or fail to occur. For 

pending, threatened or unasserted litigation, a 

liability/cost is recognized when a past 

transaction or event has occurred, a future 

outflow or other sacrifice of resources is 

probable, and the related future outflow or 

sacrifice of resources can be reasonably 

estimated. There are no commitments or 

contingencies that require disclosure. 

T. Expired Accounts and Cancelled 

Authority 

Unless otherwise specified by law, annual 

authority expires for incurring new obligations 

at the beginning of the subsequent fiscal year. 

The account in which the annual authority is 

placed is called the expired account. For five 

fiscal years, the expired account is available 

for expenditure to liquidate valid obligations 

incurred during the unexpired period. 

Adjustments are allowed to increase or 

decrease valid obligations incurred during the 

unexpired period but not previously reported. 

At the end of the fifth expired year, the expired 

account is cancelled. 

NOTE 2. FUND BALANCE WITH TREASURY 

Fund balance with Treasury account balances as of September 30, 2011 and 2010 were as 

follows: 

2011 2010 

Fund Balances: 

Appropriated Funds $ 3,158,051 $ 3,189,341 

Total $ 3,158,051 $ 3,189,341 

Status of Fund Balance with Treasury: 

Unobligated Balance

 Available $ 246,666 $ 28,527 

 Unavailable 938,967 1,163,683 

Obligated Balance Not Yet Disbursed 1,972,418 1,997,131 

Total $ 3,158,051 $ 3,189,341 

The available unobligated fund balances represent the current-period amount available for 

obligation or commitment. At the start of the next fiscal year, this amount will become part of the 

unavailable balance as described in the following paragraph. 

The unavailable unobligated fund balances represent the amount of appropriations for which the 

period of availability for obligation has expired. These balances are available for upward 

adjustments of obligations incurred only during the period for which the appropriation was 

available for obligation or for paying claims attributable to the appropriations. 

27
 
 

 

 

 

 

 

 

 

 

 

The obligated balance not yet disbursed includes accounts payable, accrued expenses, and 

undelivered orders that have reduced unexpended appropriations but have not yet decreased the 

cash balance on hand (see also Undelivered Orders at the End of the Period, Note 12). 

NOTE 3. ACCOUNTS RECEIVABLE 

Accounts receivable balances as of September 30, 2011 and 2010 were as follows: 

2011 2010 

Intragovernmental 

Accounts Receivable $ 13,719 $ -

Total Intragovernmental Accounts Receivable $ 13,719 $ -

With the Public 

Accounts Receivable 6,438 -

Total Public Accounts Receivable $ 6,438 $ -

Total Accounts Receivable $ 20,157 $ -

Accounts receivable consists of one receivable due from reimbursable services and employee 

receivables. 

Historical experience has indicated that most of the receivables are collectible. There are no 

material uncollectible accounts as of September 30, 2011 and 2010. 

NOTE 4. PROPERTY, EQUIPMENT, AND SOFTWARE 

Schedule of Property, Equipment, and Software as of September 30, 2011 

Major Class 

Acquisition 

Cost 

Accumulated 

Amortization/ 

Depreciation 

Net Book 

Value 

Furniture & Equipment $ 441,237 $ 365,689 $ 75,548 

Total $ 441,237 $ 365,689 $ 75,548 

Schedule of Property, Equipment, and Software as of September 30, 2010 

Major Class 

Acquisition 

Cost 

Accumulated 

Amortization/ 

Depreciation 

Net Book 

Value 

Furniture & Equipment $ 361,344 $ 320,202 $ 41,142 

Total $ 361,344 $ 320,202 $ 41,142 

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NOTE 5. LIABILITIES NOT COVERED BY BUDGETARY RESOURCES 

The liabilities for The Review Commission as of September 30, 2011 and 2010, include liabilities 

not covered by budgetary resources. Congressional action is needed before budgetary resources 

can be provided. Although future appropriations to fund these liabilities are likely and 

anticipated, it is not certain that appropriations will be enacted to fund these liabilities. 

2011 2010 

Intragovernmental – Unemployment Insurance $ 4,550 $ -

Unfunded Leave 602,652 692,468 

Total Liabilities Not Covered by Budgetary Resources 607,202 $ $ 692,468 

Total Liabilities Covered by Budgetary Resources 645,448 606,466 

Total Liabilities $ 1,252,650 $ 1,298,934 

Unemployment Insurance liabilities represent the unfunded liability for actual unemployment 

benefits paid on The Review Commission's behalf and payable to the DOL. 

Unfunded leave represents a liability for earned leave and is reduced when leave is taken. The 

balance in the accrued annual leave account is reviewed quarterly and adjusted as needed to 

accurately reflect the liability at current pay rates and leave balances. Accrued annual leave is 

paid from future funding sources and, accordingly, is reflected as a liability not covered by 

budgetary resources. Sick and other leave is expensed as taken. 

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NOTE 6. OTHER LIABILITIES
 

Other Liabilities as of September 30, 2011: 

Current Non Current Total 

Intragovernmental 

Unemployment Insurance Liability $ 4,550 $ - $ 4,550 

Payroll Taxes Payable 75,949 - 75,949 

Total Intragovernmental Other Liabilities $ 80,499 $ - $ 80,499 

With the Public

 Payroll Taxes Payable $ 11,014 $ - $ 11,014 

 Accrued Funded Payroll and Leave 373,452 - 373,452

 Unfunded Leave 602,652 - 602,652 

Total Public Other Liabilities $ 987,118 $ - $ 987,118 

Other Liabilities as of September 30, 2010: 

Current Non Current Total 

Intragovernmental 

Payroll Taxes Payable $ 79,379 $ - $ 79,379 

Total Intragovernmental Other Liabilities $ 79,379 $ - $ 79,379 

With the Public

 Payroll Taxes Payable $ 11,791 $ - $ 11,791 

 Accrued Funded Payroll and Leave 375,588 - 375,588

 Unfunded Leave 692,468 - 692,468 

Total Public Other Liabilities $ 1,079,847 $ - $ 1,079,847 

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NOTE 7. OPERATING LEASES 

The Review Commission occupies office space under a lease agreements that are accounted for as 

operating leases. Annual rent for each location is charged by the General Services 

Administration (GSA), which acts as the leasing agent for The Review Commission. The lease 

locations and terms are listed below: 

Location Term Lease Expiration Date 

Washington DC 60 months 04/23/2013 

Atlanta, GA 59 months 01/31/2014 

Denver, CO 120 months 09/30/2018 

Lease payments are increased annually based on the adjustments for operating cost and real estate 

tax escalations. Below is a schedule of future payments for the term of the lease. 

Fiscal Year Building 

2012 $ 1,304,658 

2013 849,493 

2014 124,520 

2015 95,770 

2016 96,604 

Thereafter 195,787 

Total Future Payments $ 2,666,832 

The operating lease amount does not include estimated payments for leases with annual renewal 

options. 

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NOTE 8. INTRAGOVERNMENTAL COSTS AND EXCHANGE REVENUE 

Intragovernmental costs represent goods and services exchange transactions made between two 

reporting entities within the Federal government, and are in contrast to those with non-federal 

entities (the public). Such costs and revenue are summarized as follows: 

2011 2010 

Administrative Law Judge

 Intragovernmental Costs $ 1,784,469 $ 1,719,053 

 Public Costs 3,515,087 3,739,925

 Total Program Costs 5,299,556 5,458,978

 Intragovernmental Earned Revenue (5,981) -

 Net Program Costs 5,293,575 5,458,978 

Commission

 Intragovernmental Costs 2,308,350 2,223,730

 Public Costs 4,547,039 4,837,884

 Total Program Costs 6,855,389 7,061,614

 Intragovernmental Earned Revenue (7,738) -

 Net Program Costs 6,847,651 7,061,614 

Total Intragovernmental costs 4,092,819 3,942,783 

Total Public costs 8,062,126 8,577,809

 Total Costs 12,154,945 12,520,592

 Total Intragovernmental Earned Revenue (13,719) -

Total Net Cost $ 12,141,226 $ 12,520,592 

NOTE 9. IMPUTED FINANCING SOURCES 

The Review Commission recognizes as imputed financing the amount of accrued pension and 

post-retirement benefit expenses for current employees. The assets and liabilities associated with 

such benefits are the responsibility of the administering agency, OPM. For the fiscal years ended 

September 30, 2011 and 2010, respectively, imputed financing was as follows. 

2011 2010 

Office of Personnel Management $ 748,299 $ 798,753 

Total Imputed Financing Sources $ 748,299 $ 798,753 

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NOTE 10. BUDGETARY RESOURCE COMPARISONS TO THE BUDGET OF THE 

UNITED STATES GOVERNMENT 

The President’s Budget that will include FY11 actual budgetary execution information has not yet 

been published. The President’s Budget is scheduled for publication in February 2012 and can be 

found at the OMB Web site: http://www.whitehouse.gov/omb/. The 2012 Budget of the United 

States Government, with the Actual column completed for 2010, has been reconciled to the 

Statement of Budgetary Resources and there were no material differences. 

NOTE 11. APPORTIONMENT CATEGORIES OF OBLIGATIONS INCURRED 

Obligations incurred and reported in the Statement of Budgetary Resources in 2011 and 2010 

consisted of the following: 

2011 2010 

Direct Obligations, Category A $ 11,577,716 $ 11,755,515 

Reimbursable Obligations, Category A 13,719 -

Total Obligations Incurred $ 11,591,435 $ 11,755,515 

Category A apportionments distribute budgetary resources by fiscal quarters. 

NOTE 12. UNDELIVERED ORDERS AT THE END OF THE PERIOD 

Statement of Federal Financial Accounting Standards No. 7, Accounting for Revenue and Other 

Financing Sources and Concepts for Reconciling Budgetary and Financial Accounting, states that 

the amount of budgetary resources obligated for undelivered orders at the end of the period 

should be disclosed. For the fiscal years ended September 30, 2011 and 2010, undelivered orders 

amounted to the following: 

2011 2010 

Undelivered Orders $ 1,340,688 $ 1,390,664 

Total Undelivered Orders $ 1,340,688 $ 1,390,664 

NOTE 13. CUSTODIAL ACTIVITY 

The Review Commission is an administrative agency collecting for the General Fund. The 

Review Commission reports cash collections and refunds as custodial activity. The type of cash 

collected primarily consists of Freedom of Information Act fees. However, during fiscal year 

2011, The Review Commission received a large custodial receipt for a refund of tenant 

improvement allowance. While these collections are considered custodial, they are neither 

primary to the mission of The Review Commission nor material to the overall financial 

statements. The Review Commission's total custodial collections are $177,255 and $2,027 for the 

fiscal years ended September 30, 2011, and 2010, respectively. 

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NOTE 14. RECONCILIATION OF NET COST OF OPERATIONS TO BUDGET 

The Review Commission has reconciled its budgetary obligations and non-budgetary resources 

available to its net cost of operations. 

2011 2010 

Resources Used to Finance Activities: 

Budgetary Resources Obligated 

Obligations Incurred $ 11,591,435 $ 11,755,515 

Spending Authority From Offsetting Collections and Recoveries (122,374) (173,109) 

Offsetting Receipts (177,255) (2,027) 

Net Obligations 11,291,806 11,580,379 

Other Resources 

Imputed Financing From Costs Absorbed By Others 748,299 798,753 

Net Other Resources Used to Finance Activities 748,299 798,753 

Total Resources Used to Finance Activities 12,040,105 12,379,132 

Resources Used to Finance Items Not Part of the Net Cost of Operations 52,417 41,034 

Total Resources Used to Finance the Net Cost of Operations 12,092,522 12,420,166 

Components of the Net Cost of Operations That Will Not Require or 

Generate Resources in the Current Period: 48,704 100,426 

Net Cost of Operations $ 12,141,226 $ 12,520,592 

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