FY 2007 

Performance and 

Accountability 

Report 

Occupational Safety and Health 

Review Commission 
   

   

     

   

       

OCCUPATIONAL SAFETY AND
 

HEALTH REVIEW COMMISSION
 

Washington, D. C.
 

INDEPENDENT AUDITOR’S REPORTS
 

AND FINANCIAL STATEMENTS
 

September 30, 2007 and 2006
 
 

 

 

 

 

 

 

 

 

 

 

OCCUPATIONAL SAFETY AND HEALTH REVIEW COMMISSION
 

INDEPENDENT AUDITOR’S REPORTS AND
 

FINANCIAL STATEMENTS
 

September 30, 2007 and 2006
 

TABLE OF CONTENTS
 

PAGE 

INDEPENDENT AUDITOR’S REPORT ......................................................................................1
 

INDEPENDENT AUDITOR’S REPORT ON COMPLIANCE
 

AND OTHER MATTERS..........................................................................................................3
 

INDEPENDENT AUDITOR’S REPORT ON INTERNAL CONTROL...........................................4
 

FINANCIAL STATEMENTS........................................................................................................6
 

Balance Sheets.....................................................................................................................7
 

Statements of Net Cost .........................................................................................................8
 

Statements of Changes in Net Position .................................................................................9
 

Statements of Budgetary Resources ...................................................................................10
 

Notes to Financial Statements.............................................................................................11
 
             

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

A1
 

Independent Auditor’s Report 

To the Occupational Safety and 

Health Review Commission 

Washington, DC 

We have audited the accompanying balance sheets of the Occupational Safety and Health 

Review Commission (The Review Commission) as of September 30, 2007 and 2006, and the 

related statements of net cost, changes in net position and budgetary resources for the years 

then ended. These financial statements are the responsibility of The Review Commission’s 

management. Our responsibility is to express an opinion on these financial statements based 

on our audits. 

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

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

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

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

Federal Financial Statements. Those standards 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 audits provide 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 Review Commission as of September 30, 2007 and 2006, and its net 

cost; 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 Government Auditing Standards, we have also issued our reports dated 

November 13, 2007 on our consideration of The Review Commission’s internal control over 

financial reporting and on our tests of The Review Commission’s compliance with certain 

provisions of laws, regulations, contracts, grant agreements and other matters. The purpose of 

those reports is to describe the scope of our testing of internal control over financial reporting 

and compliance and the results of that testing, and not provide an opinion on the internal control 

over financial reporting or on compliance. Those reports are an integral part of our audit 

performed in accordance with Government Auditing Standards and should be considered in 

assessing the results of our audit. 

Offices in 17 states and Washington, DC 1 h
 

 

 

 

 

 

 

 

 

Our audits were made for the purpose of forming an opinion on the basic financial statements 

taken as a whole. The Management Discussion and Analysis is not a required part of the basic 

financial statements but is supplementary information required by accounting principles 

generally accepted in the United States of America. We have applied certain limited procedures 

to such information, which consisted principally of inquiries of The Review Commission 

management regarding the methods of measurement and presentation of this supplementary 

information. However, we did not audit the information and express no opinion on it. 

A1

Calverton, Maryland 

November 13, 2007 

2
 
             

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

A1
 

Independent Auditor’s Report on Compliance and Other Matters 

To the Occupational Safety and 

Health Review Commission 

Washington, DC 

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

Commission (The Review Commission), as of and for the year ended September 30, 2007 and 

have issued our report thereon dated November 13, 2007. 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 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. 

The management of The Review Commission is responsible for complying with laws and 

regulations applicable to The Review Commission. As part of obtaining reasonable assurance 

about whether The Review Commission’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 affect on the 

determination of financial statement amounts and certain other laws and regulations specified in 

OMB Bulletin No. 07-04. We limited our tests of compliance to these provisions and we did not 

test compliance with all laws and regulations applicable to The Review Commission. 

The results of our tests of compliance with laws and regulations described in the preceding 

paragraph, disclosed no instances of noncompliance with laws and regulations or other matters 

that are required to be reported under Government Auditing Standards and OMB Bulletin No. 

07-04. 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. 

This report is intended solely for the information and use of the management of The Review 

Commission, the Bureau of Public Debt, the Government Accountability Office, OMB and 

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

specified parties. 

A1

Calverton, Maryland 

November 13, 2007 

Offices in 17 states and Washington, DC 3 h
             

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

A1
 

Independent Auditor’s Report on Internal Control 

To the Occupational Safety and 

Health Review Commission 

Washington, DC 

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

Commission (The Review Commission), as of and for the year ended September 30, 2007, and 

have issued our report thereon dated November 13, 2007. We conducted our audit in 

accordance with auditing standards generally accepted in the United States of America; the 

standards applicable to the financial audits contained in 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. 

In planning and performing our audit, we considered The Review Commission’s internal control 

over financial reporting as a basis for designing our auditing procedures, and to comply with the 

OMB audit guidance, for the purpose of expressing our opinion on the financial statements, but 

not for the purpose of expressing an opinion on the effectiveness of The Review Commission’s 

internal control over financial reporting. Accordingly, we do not express an opinion on the 

effectiveness of The Review Commission’s internal control. 

A control deficiency exists when the design or operation of a control does not allow 

management or employees, in the normal course of performing their assigned functions, to 

prevent or detect misstatements on a timely basis. A significant deficiency is a control 

deficiency, or combination of control deficiencies, that adversely affects the entity’s ability to 

initiate, authorize, record, process, or report financial data reliably in accordance with generally 

accepted accounting principles such that there is more than a remote likelihood that a 

misstatement of the entity’s financial statements that is more than inconsequential will not be 

prevented or detected by The Review Commission’s internal control. 

A material weakness is a significant deficiency, or combination of significant deficiencies, that 

results in more than a remote likelihood that a material misstatement of the financial statements 

will not be prevented or detected by The Review Commission’s internal control. 

Our consideration of internal control over financial reporting was for the limited purpose 

described in the second paragraph of this report and would not necessarily identify all 

deficiencies in internal control that might be significant deficiencies or material weaknesses. We 

did not identify any deficiencies in internal control that we consider to be material weaknesses, 

as defined above. 

Offices in 17 states and Washington, DC 4 h
 

 

 

 

 

 

 

 

 

 

 

 

Finally, with respect to internal controls related to performance measures reported in The 

Review Commission’s Management’s Discussion and Analysis, we obtained an understanding 

of the design of significant internal controls relating to the existence and completeness 

assertions, as required by OMB Bulletin No. 07-04. Our procedures were not designed to 

provide assurance on internal control over reported performance measures, and, accordingly, 

we do not provide an opinion on such controls. 

This report is intended solely for the information and use of the management of The Review 

Commission, the Bureau of Public Debt, the Government Accountability Office, OMB and 

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

specified parties. 

A1

Calverton, Maryland 

November 13, 2007 

5
 
FINANCIAL STATEMENTS
 

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OCCUPATIONAL SAFETY AND HEALTH REVIEW COMMISSION
 

BALANCE SHEETS
 

September 30, 2007 and 2006
 

ASSETS 

Intragovernmental: 

Fund balance with Treasury (Note 2) 

Other 

Total Intragovernmental 

$ 

2007 

4,053,230 

-

4,053,230 

$ 

2006 

4,891,536 

-

4,891,536 

Accounts receivable, net 

General property, plant and equipment, net (Note 3) 

Other 

200 

220,448 

219 

1,900 

188,463 

-

TOTAL ASSETS $ 4,274,097 $ 5,081,899 

LIABILITIES 

Intragovernmental: (Note 4) 

Accounts payable 

Other 

Total intragovernmental 

$ 7,175 

53,427 

60,602 

$ 6,518 

42,506 

49,024 

Other Liabilities: (Note 4) 

Accounts payable 

Accrued liabilities and payroll taxes payable 

Accrued annual leave 

Total other liabilities 

182,918 

366,937 

635,051 

1,184,906 

111,262 

342,105 

592,134 

1,045,501 

Total liabilities 1,245,508 1,094,525 

Contingencies (Note 12) 

NET POSITION 

Unexpended appropriations 

Cumulative results of operations 

Total net position 

3,443,383 

(414,794) 

3,028,589 

4,389,145 

(401,771) 

3,987,374 

TOTAL LIABILITIES AND NET POSITION $ 4,274,097 $ 5,081,899 

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

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OCCUPATIONAL SAFETY AND HEALTH REVIEW COMMISSION
 

STATEMENTS OF NET COST
 

Years Ended September 30, 2007 and 2006
 

PROGRAM COSTS (Note 7) 

Administrative Law Judge: 

Gross costs 

Less: earned revenue 

Net program costs 

$ 

2007 

4,968,629 

-

4,968,629 

$ 

2006 

5,096,031 

-

5,096,031 

Commission: 

Gross costs 

Less: earned revenue 

Net program costs 

6,171,795 

-

6,171,795 

5,886,794 

-

5,886,794 

NET COST OF OPERATIONS $ 11,140,424 $ 10,982,825 

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

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OCCUPATIONAL SAFETY AND HEALTH REVIEW COMMISSION 

STATEMENTS OF CHANGES IN NET POSITION 

Years Ended September 30, 2007 and 2006 

2007 2006 

CUMULATIVE RESULTS OF OPERATIONS 

Beginning balances $ (401,771) $ (461,997) 

BUDGETARY FINANCING SOURCES: 

Appropriations used 10,533,158 10,413,532 

OTHER FINANCING SOURCES (NON-EXCHANGE) 

Imputed financing sources (Note 10) 594,243 629,519 

Total financing sources 11,127,401 11,043,051 

Net cost of operations 11,140,424 10,982,825 

Net changes (13,023) 60,226 

CUMULATIVE RESULTS OF OPERATIONS (414,794) (401,771) 

UNEXPENDED APPROPRIATIONS 

Beginning balances 4,389,145 5,089,949 

BUDGETARY FINANCING SOURCES 

Appropriations received 10,470,779 10,510,000 

Other adjustments (883,383) (797,272) 

Appropriations used (10,533,158) (10,413,532) 

Total budgetary financing sources (945,762) (700,804) 

Total unexpended appropriations 3,443,383 4,389,145 

NET POSITION $ 3,028,589 $ 3,987,374 

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

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OCCUPATIONAL SAFETY AND HEALTH REVIEW COMMISSION
 

STATEMENTS OF BUDGETARY RESOURCES
 

Years Ended September 30, 2007 and 2006
 

2007 2006 

BUDGETARY RESOURCES 

Unobligated balance brought forward, October 1: 

Recoveries of prior year unpaid obligations 

Budget authority - appropriation 

Permanently not available 

$ 2,363,573 

638,016 

10,470,779 

(883,383) 

$ 2,742,364 

463,017 

10,510,000 

(797,272) 

TOTAL BUDGETARY RESOURCES 

STATUS OF BUDGETARY RESOURCES 

Obligations incurred - direct 

Unobligated balance apportioned 

balance, currently available 

Unobligated blance not available 

$ 

$ 

12,588,985 

10,637,007 

78,050 

1,873,928 

$ 

$ 

12,918,109 

10,554,536 

186,118 

2,177,455 

TOTAL STATUS OF BUDGETARY RESOURCES 

CHANGE IN OBLIGATED BALANCE 

Obligated balance, net unpaid obligations, 

brought forward, October 1 

Obligations incurred, net 

Less: gross outlays 

Less: recoveries of prior year unpaid 

obligations, actual 

Subtotal 

$ 

$ 

12,588,985 

2,527,963 

10,637,007 

10,425,702 

638,016 

2,101,252 

$ 

$ 

12,918,109 

2,693,111 

10,554,536 

10,256,667 

463,017 

2,527,963 

OBLIGATED BALANCE, NET, END OF PERIOD ­

UNPAID OBLIGATIONS 

NET OUTLAYS 

Gross outlays 

Less: offsetting collections 

$ 

$ 

2,101,252 

10,425,702 

-

$ 

$ 

2,527,963 

10,256,667 

-

NET OUTLAYS $ 10,425,702 $ 10,256,667 

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

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OCCUPATIONAL SAFETY AND HEALTH REVIEW COMMISSION
 

NOTES TO FINANCIAL STATEMENTS
 

September 30, 2007 and 2006
 

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. 

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, the Accountability of Tax Dollars 

Act of 2002 and the Office of Management and Budget (OMB) Bulletin 07-04, Audit 

Requirements for Federal Financial Statements. 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 principals of 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 Statement of Budgetary Resources. In accordance with OMB Circular A-136, 

the financial statements and associated notes are presented on a comparative basis. 

C. Basis of Accounting 

Transactions are recorded on 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. 

These financial statements were prepared following accrual accounting. Budgetary accounting 

facilitates compliance with legal requirements on the use of federal funds. Balances on these 

statements may therefore differ from those on financial reports prepared pursuant to other OMB 

directives that are primarily used to monitor and control The Review Commission’s use of 

budgetary resources. 

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OCCUPATIONAL SAFETY AND HEALTH REVIEW COMMISSION
 

NOTES TO FINANCIAL STATEMENTS
 

September 30, 2007 and 2006
 

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 

D. Revenues and 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 expended for capitalized property and 

equipment are recognized as expenses when an asset is consumed in operations. 

E. 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. 

F. 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. 

G. Receivables 

Accounts receivable represents an employee related receivable. 

H. General Property, Plant and Equipment 

The Review Commission’s property and equipment is recorded at cost and is depreciated 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 charged to expense as 

incurred. The Review Commission’s capitalization threshold is $50,000 for individual purchases 

and $500,000 for bulk purchases. Service lives are shown below. See Note 3 for additional 

information. 

Description Life 

Office Equipment 

Office Furniture 

5 

7 

I. Advances and Prepayments 

The Review Commission records payments for goods and services not yet received as 

advances and reduces the advances by charges to expense as the goods and services are 

received. 

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OCCUPATIONAL SAFETY AND HEALTH REVIEW COMMISSION
 

NOTES TO FINANCIAL STATEMENTS
 

September 30, 2007 and 2006
 

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 

J. Liabilities 

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 not covered by budgetary or other resources represent amounts owed in excess of 

available congressionally appropriated funds or other amounts. The liquidation of liabilities not 

covered by budgetary or other resources is dependent on future Congressional appropriations 

or other funding. Intragovernmental liabilities are claims against the Review Commission by 

other Federal agencies. Liabilities not covered by budgetary resources on the Balance Sheet 

are equivalent to amounts reported as components requiring or generating resources on the 

Reconciliation of Net Cost to Budget. Additionally, the Government, acting in its sovereign 

capacity, can abrogate liabilities. 

K. Accounts Payable 

Accounts payable consists of amounts owed to other federal agencies and trade accounts 

payable. 

L. Annual, Sick, and Other Leave 

Annual leave is accrued as it is earned, and the accrual is reduced as leave is taken. Each year, 

the balance in the accrued leave account is adjusted to reflect current pay rates. Liabilities 

associated with other types of vested leave, such as restored leave, are accrued at year-end, 

based on latest pay rates and unused hours of leave. To the extent current or prior year 

appropriations are not available to fund annual leave and other types of vested leave earned but 

not taken, funding will be obtained from future financing sources. Sick leave and other types of 

nonvested leave are expensed when used. 

M. Accrued Workers’ Compensation 

A liability is recorded for actual and estimated future payments to be made for workers’ 

compensation pursuant to the Federal Employees’ Compensation Act (FECA). The actual costs 

incurred are reflected as a liability because The Review Commission will reimburse the 

Department of Labor (DOL) two years after the actual payment of expenses. 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. 

N. Retirement Plans 

The Review Commission’s employees participate in the Civil Service Retirement System 

(CSRS) or the Federal Employees’ Retirement System (FERS). FERS was established by the 

enactment of Public Law 99-335. Pursuant to this law, FERS and Social Security automatically 

cover most employees hired after December 31, 1983. Employees hired before January 1, 1984 

elected to join either FERS and Social Security or remain in CSRS. 

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OCCUPATIONAL SAFETY AND HEALTH REVIEW COMMISSION
 

NOTES TO FINANCIAL STATEMENTS
 

September 30, 2007 and 2006
 

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 

N. Retirement Plans (continued) 

All employees are eligible to contribute to the Thrift Savings Plan (TSP). For those employees 

participating in the FERS, a TSP account is automatically established and The Review 

Commission makes a mandatory one percent contribution to this account. In addition, The 

Review Commission makes matching contributions, ranging from one to four percent, for FERS 

eligible employees who contribute to their TSP accounts. 

Matching contributions are not made to the TSP accounts established by CSRS employees. 

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 Office of 

Personnel Management. 

O. Use of Estimates 

Management has made certain estimates when reporting assets, liabilities, revenue, and 

expenses, and in the note disclosures. The preparation of financial statements in conformity 

with generally accepted accounting principles requires management to make 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. 

P. Net Position 

Net position is the residual difference between assets and liabilities and is comprised of 

unexpended appropriations and cumulative results of operations. Unexpended appropriations 

represent the amount of unobligated and unexpended budget authority. Unobligated balances 

are the amount of appropriations or other authority remaining after deducting the cumulative 

obligations from the amount available for obligation. The cumulative results of operations is the 

net result of The Review Commission’s operations since inception. 

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OCCUPATIONAL SAFETY AND HEALTH REVIEW COMMISSION
 

NOTES TO FINANCIAL STATEMENTS
 

September 30, 2007 and 2006
 

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 

Q. 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 2007 and 2006 to the extent directed by the OMB. 

R. Contingencies 

A contingency is an existing condition, situation or set of circumstances involving uncertainty as 

to possible payment by OSHRC. 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. 

S. Reclassification 

Certain fiscal year 2006 balances have been reclassified, retitled, or combined with other 

financial statement line items for consistency with current year presentation. Pursuant to OMB 

Bulletin A-136, Financial Reporting Requirements, the Statement of Financing, previously 

included as a basic financial statement, is now presented in Note 13 as Reconciliation of Net 

Cost of Operations to Budget. 

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. 

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OCCUPATIONAL SAFETY AND HEALTH REVIEW COMMISSION
 

NOTES TO FINANCIAL STATEMENTS
 

September 30, 2007 and 2006
 

NOTE 2 – FUND BALANCE WITH TREASURY 

Fund balance with Treasury account balances as of September 30, 2007 and 2006 were: 

Fund balances 

Appropriated funds 

Total fund balance 

Status of fund balance with Treasury 

Unobligated balance: 

Available 

Unavailable 

Obligated balance not yet disbursed 

Total 

2007 2006 

$ 4,053,230 $ 4,891,536 

$ 4,053,230 $ 4,891,536 

$ 78,050 $ 186,118 

1,873,928 2,177,455 

2,101,252 2,527,963 

$ 4,053,230 $ 4,891,536 

Restricted 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. 

NOTE 3 – GENERAL PROPERTY, PLANT AND EQUIPMENT 

Property, plant and equipment account balances as of September 30, 2007 and 2006 were as 

follows: 

2007 

Acquisition 

Cost 

ADP/office equipment $ 423,313 

Acquisition 

Cost 

ADP/office equipment $ 443,562 

NOTE 4 – LIABILITIES 

Accumulated 

Depreciation 

$ 202,865 

2006 

$ 

Net Book 

Value 

220,448 

Accumulated 

Depreciation 

$ 255,099 $ 

Net Book 

Value 

188,463 

The accrued liabilities for The Review Commission are comprised of program expense accruals, 

payroll accruals and unfunded annual leave earned by employees. Program expense accruals 

represent expenses that were incurred prior to year-end but were not paid. Similarly, payroll 

accruals represent payroll expenses that were incurred prior to year-end but were not paid. 

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OCCUPATIONAL SAFETY AND HEALTH REVIEW COMMISSION
 

NOTES TO FINANCIAL STATEMENTS
 

September 30, 2007 and 2006
 

NOTE 4 – LIABILITIES (CONTINUED)
 

Schedule of Liabilities 

2007 2006 

Intragovernmental: 

Accounts payable $ 7,175 $ 6,518 

Payroll taxes payable 53,036 42,506
 

FECA liability 391 ­

Total Intragovernmental 60,602 49,024
 

Other Liabilities: 

Accounts payable 182,918 111,262 

Payroll taxes payable 16,913 11,975 

Accrued liabilities 350,024 330,130 

Unfunded annual leave 635,051 592,134 

Total other liabilities 1,184,906 1,045,501 

Total Liabilities $ 1,245,508 $ 1,094,525 

All liabilities are current liabilities. 

NOTE 5 – OPERATING LEASE 

The Review Commission occupies office space under a lease agreement that is accounted for 

as an operating lease. The leased office space is in Washington, DC, Atlanta, Georgia, and 

Denver, Colorado. 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 

terms commence on April 2003 for Washington, DC, February 2004 for Atlanta, GA, for a period 

of 60 months each, and the final lease commences on February 2004 for Denver, CO, and will 

run for a period of 53 months. Lease payments are increased annually based on the 

adjustments for operating cost and real estate taxes. 

Schedule of Future Operating Lease Payments 

Fiscal Year Totals 

2008 $ 808,614 

2009 32,592 

Total Future Payments $ 841,206 

17
 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OCCUPATIONAL SAFETY AND HEALTH REVIEW COMMISSION
 

NOTES TO FINANCIAL STATEMENTS
 

September 30, 2007 and 2006
 

NOTE 6 – LIABILITIES NOT COVERED BY BUDGETARY RESOURCES 

The liabilities on The Review Commission’s Balance Sheet as of September 30, 2007 and 2006, 

include liabilities not covered by budgetary resources, which are liabilities for which 

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. 

The following is a summary of unfunded liabilities at September 30, 2007 and 2006: 

2007 2006 

FECA liability $ 391 $ -

Accrued annual leave 635,051 592,134 

Total Liabilities Not Covered by 

Budgetary Resources $ 635,442 $ 592,134 

NOTE 7 – INTRAGOVERNMENTAL COSTS 

2007 2006 

Administrative Law Judge 

Intragovernmental costs $ 1,729,018 $ 1,711,531 

Public costs 3,239,611 3,384,500 

Total Administrative Law Judge Costs $ 4,968,629 $ 5,096,031 

Commission 

Intragovernmental costs $ 2,147,703 $ 1,977,113 

Public costs 4,024,092 3,909,681 

Total Commission Costs $ 6,171,795 $ 5,886,794 

The Review Commission had no earned revenues. 

NOTE 8 – UNDELIVERED ORDERS AT THE END OF THE PERIOD 

Beginning with FY06, the format of the Statement of Budgetary Resources has changed and the 

amount of undelivered orders at the end of the period is no longer required to be reported on the 

face of the statement. 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 years ended September 30, 2007 

and 2006, Undelivered Orders amounted to $1,491,405 and $2,025,572 respectively. 

18
 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OCCUPATIONAL SAFETY AND HEALTH REVIEW COMMISSION
 

NOTES TO FINANCIAL STATEMENTS
 

September 30, 2007 and 2006
 

NOTE 9 – BUDGETARY RESOURCE COMPARISONS TO THE BUDGET OF THE
 

UNITED STATES GOVERNMENT 

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

Financing Sources and Concepts for Reconciling Budgetary and Financial Accounting, calls for 

explanations of material differences between amounts reported in the Statement of Budgetary 

Resources (SBR) and the actual balances published in the Budget of the United States 

Government (President’s Budget). However, the President’s Budget that will include FY07 

actual budgetary execution information has not yet been published. The President’s Budget is 

scheduled for publication in February 2008 and can be found at the OMB Web site: 

http://www.whitehouse.gov/omb. The 2008 Budget of the United States Government, with the 

Actual column completed for 2006, has been reconciled to the Statement of Budgetary 

Resources and there are no material differences. 

NOTE 10 – 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, the Office of Personnel 

Management (OPM). For the fiscal years ended September 30, 2007 and 2006, respectively, 

imputed financing from OPM were $594,243 and $629,519. 

NOTE 11 – CUSTODIAL ACTIVITY 

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

collecting entity, The Review Commission measures and reports cash collections and refunds. 

The type of cash collected is for Freedom of Information Act fees. Amounts collected from and 

distributed to others for fiscal year 2007 and 2006 were $1,206 and $1,940, respectively. 

NOTE 12 – CONTINGENCIES 

There are legal actions pending against the Review Commission in which claims have been 

asserted that may be based on action taken by the Review Commission. Management intends 

to vigorously contest all such claims. Management believes, based on information provided by 

legal counsel, that losses, if any, for these cases would not have a material impact on the 

Financial Statements. No loss accrual has been made for these cases outstanding at 

September 30, 2007. 

19
 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OCCUPATIONAL SAFETY AND HEALTH REVIEW COMMISSION
 

NOTES TO FINANCIAL STATEMENTS
 

September 30, 2007 and 2006
 

NOTE 13 – RECONCILIATION OF NET COST TO BUDGET
 

2007 2006 

Resources Used to Finance Activities: 

Budgetary resources obligated 

Obligations incurred 

Less: spending authority from offsetting collections 

and recoveries 

Obligations net of offsetting collections and recoveries 

Less offsetting receipts 

Net obligations 

Other Resources 

Imputed financing from costs absorbed by others 

Net other resources used to finance activities 

$ 10,637,007 

638,016 

9,998,991 

-

9,998,991 

594,243 

594,243 

$ 10,554,536 

463,017 

10,091,519 

-

10,091,519 

629,519 

629,519 

Total resources used to finance activities 10,593,234 10,721,038 

Resources Used to Finance Items Not Part of the 

Net Cost of Operations 

Change in budgetary resources obligated for goods, 

services and benefits ordered but not yet provided 

Resources that fund expenses recognized in prior periods 

Resources that finance the acquisition of assets 

(534,167) 

(1,700) 

92,617 

(322,013) 

93,095 

Total resources used to finance items not part of the 

net cost of operations (443,250) (228,918) 

Total resources used to finance the net cost of operations 11,036,484 10,949,956 

Components of the Net Cost of Operations That Will Not 

Require or Generate Resources in the Current Period 

Components requiring or generating resources in future periods 

Increase in annual leave liability 

Other 

Total components of net cost of operations that will 

require or generate resources in future periods 

Components not requiring or generating resources: 

Depreciation and amortization 

Other 

Total components of net cost of operations that will 

not require or generate resources 

42,917 

391 

43,308 

60,632 

-

60,632 

4,533 

-

4,533 

29,984 

(1,648) 

28,336 

Total components of net cost of operations that will 

not require or generate resources in the current period 103,940 32,869 

NET COST OF OPERATIONS $ 11,140,424 $ 10,982,825 

This information is an integral part of the accompanying financial statements.
 

20
 
Occupational Safety and Health Review Commission 

Management Discussion and Analysis 

September 30, 2007 
Occupational Safety and Health Review Commission 

FY 2007 Performance Accountability Report 

Management Discussion and Analysis 

Overview 

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

Safety and Health Act of 1970. Its sole statutory mandate is to serve as an administrative court 

providing just and expeditious resolution of disputes involving the Department of Labor’s 

Occupational Safety and Health Administration (OSHA), employers charged with violations of 

Federal safety and health standards, and employees and/or their representatives. The Review 

Commission was created by Congress as an agency completely independent of the Department 

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

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

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

(which by law mirror the federal rules) provide two levels of adjudication when an employer 

timely contests an OSHA citation for alleged violations of the Act or failure to abate such alleged 

violations. The first level affords an opportunity for a hearing before a Review Commission 

Administrative Law Judge (ALJ) for employers and affected employees who have filed a timely 

notice of contest. The judge’s decision becomes final unless the Commission chooses to review 

the decision. The second level is a discretionary appellate review of the judge’s decision by the 

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

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

working conditions in the United States. 

Mission and Organizational Structure 

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

impartial forum for the just and prompt adjudication of workplace safety and health disputes 

involving the Department of Labor, employers, and employees and/or their representatives under 

the Occupational Safety and Health Act of 1970. 

The Occupational Safety and Health Review Commission has three members, each of whom is 

appointed by the President and confirmed by the Senate, and serves a six-year term. 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 

Administration function. 

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

are two regional offices, one in Atlanta, GA, and the other in Denver, CO. 
OSHRC’s continuing vision is to strive to be: 

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

professional; 

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

and responsibilities of employers and employees under the Occupational Safety and 

Health Act of 1970; 

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

diverse workforce, and modern information management, communications, and 

administrative systems; and 

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

performance, service, and value to the American people. 

Challenges and Opportunities 

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

factors. These include: (1) continued presence of a quorum at the Commission level; (2) the 

magnitude and nature of the cases received; (3) the success of the parties’ settlement negotiations 

and the Agency’s Simplified Proceedings and Mandatory Settlement programs in reducing the 

number of hearings needed; and (4) the number, location, length and complexity of trials held. 

Although these factors are largely outside the Review Commission’s control, the Review 

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

The Commission consists of three members appointed by the President. 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. As a result, action on important issues may be 

postponed and issuance of some pending cases will be delayed. 

 The Review Commission began FY 2007 with the full complement of three Members, but ended 

the year with one vacancy (one Commissioner’s term ended on April 27, 2007 and no 

replacement has been confirmed to date). 

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 

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 

2
 
 

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

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

Commission levels has increased steadily in recent years. 

OSHA conducted close to 40,000 inspections in FY 2007. 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 Review Commission eased entry requirements to its Mandatory Settlement and Simplified 

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

cases without the necessity for many legal formalities. 

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

Judge may assign a Settlement Judge to a pending proceeding to aid the 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 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 (formerly E-Z Trial) 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 

assuring that due process requirements will be maintained. Under this process, a business, with 

or without counsel, can present its case before a Review Commission judge and receive a prompt 

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

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

expenses to employers contesting relatively small penalty cases. 

Performance Goals and Results 

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

disputes brought before the Commission and its judges. The Review Commission’s Strategic 

Plan and associated Outcome Goals for the period FY 2006 through FY 2011 reflect objectives 

for the Commission and Administrative law functions that support this goal. The public service 

goal for the Review Commission is: To ensure fair, just and expeditious adjudication of disputes 

brought before the Review Commission and its Judges. 

3
 
 

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 public service goal. 

In FY 2007, the Commission had 27 cases pending at the beginning of the year. It received 25 

new cases and issued 27 cases by year-end. Thus, the Commission entered FY 2008 with 25 

cases pending on review. 

The Commission began FY 2007 with a full complement of Commissioners, but ended the year 

with one vacancy (one Commissioner’s term ended on April 27, 2007). Nevertheless, the two 

remaining Commissioners issued 13 cases during the remainder of the fiscal year. 

The following table provides the performance goals and results for this function for FYs 2004-

2007. 

Performance Goals Performance 

Indicators 

FY 2004 

Actual 

(Target) 

FY 2005 

Actual 

(Target) 

FY 2006 

Actual 

(Target) 

FY 2007 

Actual 

(Target) 

Reduce the length of 

time to resolve 

Commission-level 

cases 

Percent of cases over 2 

years old disposed of at 

the Commission level 

42% 

Target 

not met 

(100%) 

52% 

Target 

not met 

(100%) 

22% 

Target 

not met 

(100%) 

32% 

Target 

not met 

(100%) 

Reduce the length of 

time to resolve 

priority cases 

Percent of priority 

cases disposed of 

within 6 months 

100% 

Target 

met 

(100%) 

100% 

Target 

met 

(100%) 

100% 

Target 

met 

(100%) 

100% 

Target 

met 

(100%) 

Administrative Law Judge Function 

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

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

OSHRC’s public service goal. 

The Administrative Law Judge function began the fiscal year with 685 cases in its inventory and 

received 1,998 new cases during the year, for a total of 2,683 cases. A total of 2,058 cases were 

disposed of, leaving 625 cases at the end of the fiscal year. 

4
 
The following table provides the performance goals and results for this function for FYs 2004-

2007. 

Performance 

Goals 

Performance 

Indicators 

FY 2004 

Actual 

Target 

FY 2005 

Actual 

Target 

FY 2006 

Actual 

Target 

FY 2007 

Actual 

Target 

Increase the percent of noncomplex cases at the ALJ 

level that are resolved in less 

than one year 

Percent within 

365 days 

98% 

Target 

exceeded 

(93%) 

98% 

Target 

exceeded 

(93%) 

99% 

Target 

exceeded. 

(94%) 

99 % 

Target met. 

(99%) 

Increase the percent of 

complex cases at the ALJ 

level that are resolved within 

18 months 

Percent within 

540 days 

98% 

Target 

exceeded 

(93%) 

98% 

Target 

exceeded 

(93%) 

99% 

Target 

exceeded. 

(94%) 

97% 

Target not 

met. 

(98%) 

Office of Administration Function 

The Office of Administration provides administrative services to support the Review 

Commission in fulfilling its mission. 

The Administration function provides strategic planning and operational management for the 

organization. Administration also includes, technology management, computer and information 

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

direction of the Director include: 

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

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

Commission information; 

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

5
 
 

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 Resource Center, for accounting services. The Administrative Resources Center 

prepared the Review Commission’s FY 2007 financial statements, which include comparative 

data for FY 2006. The principal financial statements include the Balance Sheet, Statement of 

Net Cost, Statement of Net Position, and Statement of Budgetary Resources. The Statement of 

Financing is now part of the Notes to the financial statements. 

The changes described in the analyses below generally indicate that OSHRC has been more 

efficient in the obligation of the funds available. This is due to higher payroll costs, both rising 

costs and filling critical positions, as well as higher costs for goods and services to maintain 

operations and fulfill our mission. 

Analysis of the Balance Sheet 

OSHRC’s assets in fiscal year 2007 were $4,274,097 as of September 30, 2007. This represents 

a decrease of $807,802 from fiscal year 2006. The Fund Balance with Treasury of $4,053,230 

represents OSHRC’s largest asset as of September 30, 2007. This is a decrease of approximately 

17.1 percent from fiscal year 2006 and represents approximately 94.8 percent of the agency’s 

total assets. General Property, Plant, and Equipment accounts for approximately 5.2 percent of 

OSHRC’s total assets as of September 30, 2007. The net fixed asset value of $220,448 equals 

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

OSHRC’s liabilities in fiscal year 2007 totaled $1,245,508 as of September 30, 2007. This is an 

increase of $150,983 over the fiscal year 2006 balance of $1,094,525. Accounts payable balance 

at September 30, 2007, was $190,093, an increase of $72,313 from September 30, 2006. 

Accrued liabilities and payroll taxes payable increased slightly in 2007. Unfunded annual leave 

increased $42,917 in 2007 from 2006. Unfunded annual leave represents approximately 51 

percent of total agency liabilities. 

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

fiscal year 2007 decreased by $958,785 from fiscal year 2006. 

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 

6
 
net cost of operations in 2007 was $11,140,424, an increase of $157,599, or 1.4 percent, over the 

2006 net cost of operations of $10,982,825. 

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 decreased $958,785 in 

2007 from 2006, a change of approximately 24 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 

2007, OSHRC had total budgetary resources of $12,588,985, which is $329,124 less than in 

2006. 

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

separate Inspector General Office. Therefore, the Review Commission’s management team 

assumes the responsibility for assessing the Agency’s internal operations and determining if 

there are any weaknesses that need correction. In FY 2007, two program reviews took place: an 

audit of FY 2007 financial statements, and an audit of computer and information security. 

The Review Commission has had biennial, and more recently, annual audits of its financial 

statements, including reviews of the adequacy of the Review Commission’s internal control 

systems. The Review Commission has received an unqualified opinion for each financial audit 

conducted, including FY 2006. 

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 

7
 
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. 

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 

payments 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 biennial, and 

more recently, annual audits of its financial statements, including reviews of the adequacy of the 

Review Commission’s internal control systems. The Review Commission has received an 

unqualified opinion for each audit conducted. 

The Review Commission 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. 

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. 

As a follow-up to the FY 2006 audit, as well as the current one, both of which revealed a 

material weakness in policies and procedures, specifically in Certification and Authorization 

(C&A), OSHRC is updating all security processes, including the continuity of operations plan 

(COOP), the system security plan and security plan to comply with NIST standards. This 

8
 
process, as described below, will resolve the material weakness and should be completed during 

FY 2008. 

The executive summary for the current (FY 2007) FISMA Program Review Report reveals that 

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

August 2007, the agency performed a review of its continuity of operations plan (COOP), which 

indicated that the plan requires revision to incorporate new technologies and to adapt 

communication and coordination procedures to adjust to newly identified threats to continuity of 

operations. OSHRC is in the process of making these and other necessary revisions. In the 

interim, the existing plan has been tested successfully annually, and has been updated through 

supplemental procedures and policies to implement recommendations made by the independent 

evaluators, implement the plan of action and milestones established by the agency, and to 

otherwise assist in strengthening the security of agency programs and applications. 

The provisions of the 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. In addition to establishing and separating roles and responsibilities for the agencywide security program, the plan addresses issues relating to all aspects of computer systems 

security. The plan also elaborates on day-to-day safeguards, rules of the system, accessibility, 

software licensing, user responsibilities, business continuity in the event of system failure, 

incidents responses, training, personnel controls, and security incident reporting. 

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 

2007, each of the approximately 2,000 new cases filed with the agency was entered into the case 

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

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

The agency conducts test runs of the data to ensure that information is entered and updated on a 

9
 
timely basis. Semi-annual and annual reviews are conducted by the appropriate managers to 

ensure the accuracy of the data, to monitor performance goals and progress, and produce reports. 

The reports are used to assess workload and make workload adjustments, when necessary. At 

the end of the year, this data is used by the offices to measure performance related to the goal 

and improve management. 

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. 

10