Thirty-two years – promoting and protecting labormanagement relations for effective, efficient government.

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U.S. FEDERAL LABOR RELATIONS AUTHORITY

PERFORMANCE AND ACCOUNTABILITY REPORT
UNITED STATES

FEDERAL LABOR RELATIONS AUTHORITY

Performance and Accountability Report

FISCAL YEAR 2011
TABLE OF CONTENTS

MESSAGE FROM THE CHAIRMAN .................................................................1

MANAGEMENT’S DISCUSSION AND ANALYSIS .........................................3

Background and Mission .................................................................................................................3

Organizational Structure ..................................................................................................................3

Strategic and Performance Planning Framework ............................................................................6

Performance Summary...................................................................................................................10

Financial Analysis..........................................................................................................................14

Management Assurances ...............................................................................................................17

PERFORMANCE GOALS AND RESULTS......................................................18

Goal 1: Provide Timely Review and Disposition of Unfair Labor Practice Cases.......................18

Goal 2: Provide Timely Review and Disposition of Representation Cases..................................20

Goal 3: Provide Timely Review and Disposition of Arbitration Cases........................................22

Goal 4: Provide Timely Review and Disposition of Negotiability Cases ....................................23

Goal 5: Provide Timely Review and Disposition of Bargaining Impasse Cases..........................23

Goal 6: Use Collaboration Techniques and Alternative Dispute Resolution Services to

Minimize and/or Resolve Labor-Management Disputes..................................................25

Goal 7: Modernize Agency Information Technology Business Systems to Support and

Enhance Program Achievement .......................................................................................28

Goal 8: Develop, Manage, and Utilize the FLRA’s Human Capital to Meet Program Needs.....29

Verification and Validation of Performance Data .........................................................................31

PRINCIPAL FINANCIAL STATEMENTS .......................................................32

Message from the Chief Financial Officer.....................................................................................32

Balance Sheet.................................................................................................................................33

Statement of Net Cost ....................................................................................................................34

Statement of Changes in Net Position ...........................................................................................35

Statement of Budgetary Resources................................................................................................36

Notes to the Financial Statements..................................................................................................37

Report of Independent Auditors.....................................................................................................47

OTHER ACCOMPANYING INFORMATION.................................................51

Summary of Financial Statement Audit.........................................................................................51

Summary of Management Assurances...........................................................................................51

Memorandum on Inspector General Identified Management Challenges.....................................52

Management’s Response ...............................................................................................................56

Improper Payments Elimination and Recovery .............................................................................57
1

MESSAGE FROM THE CHAIRMAN

I am pleased to present the Federal Labor Relations Authority’s (FLRA) 

Performance and Accountability Report for Fiscal Year (FY) 2011. The work 

of the agency is critically important to the effectiveness and efficiency of the 

Federal government, assisting agencies, employees, and employee 

representatives to resolve disputes in order to effectuate the implementation 

of improvements in government operations. We are committed to fostering a 

productive and effective Federal government, providing leadership in

establishing policies and guidance related to Federal sector labor-management 

relations, and ensuring compliance with the Federal Service Labor-Management Relations 

Statute.

FY 2011 represented another outstanding year for the FLRA, demonstrating that our 

commitment and dedication to rebuilding the agency, along with effective management of 

resources and hard work, is producing results for the Federal government and the American 

taxpayer. To achieve our objectives, the FLRA updated its Strategic Plan for FY 2010 through 

FY 2015 and associated performance goals. The strategic and annual performance plans detail 

the key strategies and programs the agency uses to reach its goals. The FLRA team has 

undertaken a series of initiatives to improve staffing and performance in terms of timely case 

processing, as well as training, outreach, and alternative dispute resolution services to assist 

parties in their labor-management relationships.

The FLRA continues to improve its efficiency by engaging in new and innovative ways in which 

to conduct agency business. Some highlights from FY 2011 include: the first-ever, large-scale 

electronic election involving 43,000 Transportation Security Agency employees; and in 

collaboration with the U.S. Department of Veterans Affairs, development of web-based 

interactive training on President Obama’s Executive Order 13522, Creating Labor-Management 

Forums to Improve Deliver of Government Services, which allows the agency to deliver critical 

training across the government at no cost.

The Authority has also demonstrated a significant, marked improvement in the delivery of its 

services that have a direct bearing on how well and quickly any improvements in government 

operations can be effectuated. In this regard, the Authority has reduced its overall inventory of 

overage cases by close to 90 percent since FY 2009 – from 269 to 34; and its overall pending 

case inventory by close to 70 percent – from 400 to 93 cases. The Office of the General Counsel 

also increased its productivity in FY 2011 by approximately 20 percent over FY 2009. In 

addition, the Federal Service Impasses Panel (FSIP) – which continues to experience increased 

case filings – showed improved performance outcomes. In particular, over the past two years, 

the FSIP closed more cases each year than it had in FY 2007, FY 2008, and FY 2009, and with 

its commitment to obtaining settlements rather than issuing decisions, returned the FSIP to its 

original guiding philosophy that the voluntary settlement of bargaining impasses is the most 

effective and efficient form of dispute resolution. 

One of the FLRA's most notable accomplishments over the last year is the outstanding results the 

agency achieved on its new performance goal for FY 2011 – Using Collaboration Techniques 
2

and Alternative Dispute Resolution (ADR) Services to Minimize and/or Resolve LaborManagement Disputes. The FLRA greatly exceeded almost every performance target, resolving 

several hundred cases using ADR methods. In addition, the FLRA reestablished its leadership 

role in labor-management relations by delivering training to close to 12,000 individuals in more 

than 330 in-person training sessions over the last year. 

Of significant import is that all of these successes were accomplished in full partnership with our 

employees and with extraordinary increases in employee satisfaction. In this regard, I note that 

in 2010 the FLRA was honored with the distinction of being named the Most Improved Small 

Agency by the Partnership for Public Service. Moving out of last place in the two previous 

surveys ranked by the partnership – with a dramatic and unprecedented overall score increase of 

250 percent – provides solid evidence that the FLRA is on the right track in emphasizing mission 

accomplishment and performance improvement through transparency, employee engagement 

and collaboration. We recently received data from the FY 2011 Federal Employee Viewpoint 

Survey, and it indicates that we will continue to move up in the rankings. The data provided 

shows that the FLRA improved in all human capital indices, and that the outcome of our 

renewed commitment to performance management was not only improved agency performance, 

but also a strong "Results Orientated Culture" within the agency and among our employees. In 

short, the agency, which has accomplished significant and measurable organizational 

performance and employee morale improvements in every component, is beginning to hit its 

stride and is providing customers with the timely, quality dispute resolution services and 

resources that they deserve and that are critical – now more than ever – to effectuate the 

implementation of improvements in Federal government operations. This is an achievement of 

which I am very proud. 

With the likelihood that FY 2012 will be a difficult year financially, we are focused on 

identifying solutions to put the agency on solid financial footing. We will continue to work with 

the Administration, the Congress, and our stakeholders to identify and implement solutions for a 

sustainable funding model. We are confident that the FLRA’s financial and performance data 

are complete, accurate, and reliable. For the eighth consecutive year, the FLRA earned an 

unqualified audit opinion on its principal financial statements or its effectiveness of internal 

control over financial reporting.

The talent, creativity, and innovative spirit of the FLRA’s employees are producing positive 

results for the Federal government and therefore the American people. I look forward to another 

productive year working with our employees and stakeholders to fulfill the FLRA’s mission.

Carol Waller Pope

Chairman

Federal Labor Relations Authority

November 15, 2011
3

MANAGEMENT’S DISCUSSION AND ANALYSIS

BACKGROUND AND MISSION

The U.S. Federal Labor Relations Authority (FLRA) is the sole agency responsible for 

establishing policies and guidance regarding the labor-management relations program for 1.6 

million non-Postal, Federal employees worldwide, approximately 1.1 million of whom are 

represented in 2,200 bargaining units. The FLRA was created by Title VII of the Civil Service 

Reform Act of 1978, also known as the Federal Service Labor-Management Relations Statute 

(the Statute). The agency’s real genesis, however, dates from the issuance of Executive Order 

10988 by President Kennedy in 1962. Executive Order 10988 established the first governmentwide, labor-management relations program within the Federal government. In 1970, President 

Nixon established the Federal Labor Relations Council by Executive Order 11491 to administer 

the Federal labor-management relations program and to make final decisions on policy questions 

and major disputes arising under the Order. Executive Order 11491, as amended, was the basis 

for President Carter’s proposal to Congress to create the Federal Labor Relations Authority as an 

independent agency.

The Statute protects the rights of Federal employees to form, join, or assist a labor organization 

or to refrain from such activity freely and without fear of penalty or reprisal. These rights 

include acting for a labor organization as a representative and, in that capacity, presenting the 

views of the organization. Employees also have the right to engage in collective bargaining with 

respect to conditions of employment through representatives chosen by the employees 

themselves.

The mission of the FLRA is to promote stable, constructive labor-management relations in the 

Federal government by resolving and assisting in the prevention of labor disputes in a manner 

that gives full effect to the collective-bargaining rights of employees, unions, and agencies. 

Although the FLRA is a small agency, accomplishing its mission, including the timely, quality 

resolution of disputes, is essential for program performance government-wide. If a labormanagement dispute in another agency remains unresolved for too long, the mission 

accomplishment in that agency likely will suffer. In many ways, the FLRA provides grease for 

the wheels of government. As such, its vitality is important beyond its size.

ORGANIZATIONAL STRUCTURE

The FLRA consists of the Authority, the Office of the General Counsel, and the Federal Service 

Impasses Panel. The agency also provides full staff support to two other organizations, the 

Foreign Service Impasse Disputes Panel and the Foreign Service Labor Relations Board.
4

U.S. Federal Labor Relations Authority

The Authority

The Authority is composed of three full-time Members appointed by the President with the 

advice and consent of the Senate. The Members are appointed for five-year, staggered terms and 

one Member is designated by the President to serve as Chairman, who acts as the agency’s chief 

executive and administrative officer. The Authority is empowered to: resolve disputes over the 

negotiability of proposals made in collective bargaining; decide whether conduct alleged in a 

complaint constitutes an unfair labor practice (ULP); resolve exceptions to grievance arbitration 

awards; and review the decisions of Regional Directors in representation disputes over union 

elections and unit determinations.

The Authority appoints Administrative Law Judges (ALJs) to hear and prepare decisions in cases 

involving alleged ULPs, as well as decisions involving applications for attorney fees filed 

pursuant to the Back Pay Act or the Equal Access to Justice Act. The Office of the 

Administrative Law Judges (OALJ) also provides settlement opportunities in all ULP cases. 

Decisions of the ALJs may be appealed to the Authority.

The Office of the Solicitor represents the Authority in court proceedings. Parties aggrieved by 

certain Authority decisions may institute an action for judicial review within 60 days after the 

FOREIGN

SERVICE

LABOR

RELATIONS

BOARD

FOREIGN

SERVICE

IMPASSE

DISPUTES PANEL

AUTHORITY

MEMBERS

(2)

FEDERAL

SERVICE

IMPASSES

PANEL

GENERAL

COUNSEL

CHIEF COUNSEL 

TO THE 

CHAIRMAN

CHIEF COUNSELS

(ONE TO EACH

MEMBER)

& STAFF

COLLABORATION

AND

ALTERNATIVE

DISPUTE

RESOLUTION

PROGRAM

REGIONAL

OFFICES

(7)

OFFICE OF THE

EXECUTIVE

DIRECTOR

OFFICE OF THE

SOLICITOR

OFFICE OF THE

ADMINISTRATIVE

LAW JUDGES

OFFICE OF THE

INSPECTOR

GENERAL

EQUAL

EMPLOYMENT

OPPORTUNITY

PROGRAM

CASE INTAKE

AND

PUBLICATION

DIVISION

HUMAN

RESOURCES

DIVISION

ADMINISTRATIVE

SERVICES

DIVISION

INFORMATION

RESOURCES

MANAGEMENT

DIVISION

BUDGET AND

FINANCE

DIVISION

AUTHORITY 

CHAIRMAN AND 

CHIEF 

EXECUTIVE 

OFFICER
5

decision issues. The Authority may also seek enforcement of its orders, temporary relief or 

restraining orders in the appropriate U.S. court of appeals or district court.

The Office of the Inspector General provides independent and objective assessments of the 

FLRA’s efficiency, effectiveness, and compliance with laws and regulations. This is 

accomplished through proactive evaluations of agency operational processes. In addition to 

striving to prevent and detect fraud, waste, and abuse of the FLRA’s resources and operations, a 

key goal of the Inspector General is to serve as a catalyst for improving operations and 

maximizing the efficiency and integrity of agency programs.

The Office of the General Counsel

Appointed for a five-year term by the President with the advice and consent of the Senate, the 

General Counsel has independent Statutory responsibility for investigating ULP charges and for 

filing and prosecuting ULP complaints. Pursuant to the Statute, the General Counsel has direct 

authority over, and responsibility for, all employees in the Office of the General Counsel (OGC), 

including those in the regions. The Regional Offices, on behalf of the General Counsel, 

investigate alleged ULPs, file and prosecute ULP complaints, and provide training and 

alternative dispute resolution (ADR) services. In addition, through delegation by the Authority, 

the Regional Offices process and determine representation matters.

The General Counsel has a small staff in FLRA Headquarters, located in Washington, DC. 

Headquarters management staff provides administrative oversight and develops policies, 

guidance, procedures, and manuals that provide programmatic direction for the OGC’s seven 

regions and training and education for the parties. Each Regional Office has a Regional Director 

who provides leadership and management expertise for the respective region.

Atlanta Regional 

Office

Boston Regional 

Office

Chicago Regional 

Office

Dallas Regional 

Office

Denver Regional 

Office

San Francisco 

Regional Office

Washington DC 

Regional Office
6

The Federal Service Impasses Panel

The Federal Service Impasses Panel (FSIP or the Panel) resolves impasses between Federal 

agencies and unions representing Federal employees arising from negotiations over conditions of 

employment under the Statute and the Federal Employees Flexible and Compressed Work 

Schedules Act. The Chairman and six other Members of the Panel are appointed by the 

President for five-year terms. If bargaining between the parties, followed by mediation 

assistance, does not result in a voluntary agreement, either party or the parties jointly may 

request the FSIP’s assistance. Following a preliminary investigation by its staff, the Panel may 

determine to assert jurisdiction over the request. If jurisdiction is asserted, then the FSIP has the 

authority to recommend and/or direct the use of various ADR procedures. These include 

informal conferences, additional mediation, fact-finding, written submissions, and mediationarbitration by Panel Members, the Panel’s staff, or private arbitrators. If the parties still are 

unable to reach a voluntary settlement, then the FSIP may take whatever action it deems 

necessary to resolve the dispute, including imposition of contract terms through a final action. 

The merits of the FSIP’s decision may not be appealed to any court.

STRATEGIC AND PERFORMANCE PLANNING FRAMEWORK

The FLRA’s performance planning framework is based on the FY 2010 – 2015 Strategic Plan, 

and is supported by the Annual Performance Plan. The FLRA’s Performance Plan reflects the 

agency’s commitment to establishing measures that will enable it to assess performance 

outcomes, align resources, and effectively identify staffing and training needs for future years. 

To accomplish its mission, the FLRA has established the following four strategic goals.

FLRA Strategic Goals

1. Achieve superior customer service.

2. Develop leaders at every level to meet goals and position the agency for the future.

3. Advance performance through organizational and management excellence.

4. Develop, empower, and engage FLRA employees to meet program needs and improve job 

satisfaction.

The agency seeks to achieve its strategic goals primarily through the timely review and 

disposition of cases. The FLRA supplements these efforts with a focus on reducing litigation 

and its attendant costs by helping the parties resolve their own disputes through collaboration,

ADR, and labor-management cooperation activities. These efforts are further supported by the 

FLRA focusing on internal improvements in information technology and more effective and 

efficient use of human capital.
7

FY 2011 Performance Goals

1. Provide timely review and disposition of unfair labor practice cases.

2. Provide timely review and disposition of representation cases.

3. Provide timely review and disposition of arbitration cases.

4. Provide timely review and disposition of negotiability cases.

5. Provide timely review and disposition of bargaining impasse cases.

6. Use collaboration techniques and alternative dispute resolution services to minimize and/or 

resolve labor-management disputes.

7. Modernize agency information technology business systems to support and enhance 

program achievement.

8. Develop, manage, and utilize the FLRA’s human capital to meet program needs.

Timeliness

Improvements in the quality and timeliness of case dispositions further the FLRA’s critical role in 

facilitating orderly, efficient and effective change within the Federal government. The agency

affects how well and quickly improvements in government operations can be implemented. 

Changes within the Federal government inevitably impact employee working conditions and 

implicate bargaining rights. Unless management and labor can timely reach agreements or, failing 

that, have their disagreements resolved expeditiously, the mission accomplishment in that agency 

may suffer. This is particularly relevant now as Federal agencies are making significant 

adjustments and changes in how they perform their missions in order to meet necessary reductions 

in response to the current budget environment. Moreover, the core purpose of the Statute is to 

promote collective bargaining as a means of fostering improved employee performance and 

government operations. Failure by the FLRA to process cases in a timely manner adversely 

impacts employee performance and government operations.

Alternative Dispute Resolution

The FLRA established the Collaboration and Alternative Dispute Resolution (CADR) Program to 

place greater emphasis on the use of ADR and consensus decision making in resolving workplace 

disputes. The program offers ADR services in pending ULP, representation, negotiability, and 

bargaining impasse disputes at every step – from investigation and prosecution to the adjudication 

of cases and resolution of bargaining impasses. Throughout the years, the CADR Office 

(CADRO), as well as the OGC and the OALJ, have conducted on-site and telephone interventions 

in hundreds of cases pending before the FLRA. In well over 80 percent of the cases, CADRO 

interventions result in either the full resolution of the underlying disputes or withdrawal of the 

pending case. In addition, the OGC has placed a renewed emphasis on resolving ULP and 

representation disputes, both before and after charges and petitions are filed. The OGC’s ULP 

regulations were amended to include references to the office’s encouragement of pre-and post 

charge settlements, and field agents have been trained in ADR techniques to facilitate amicable 

resolution of disputes between the parties.
8

Information Technology

The agency makes extensive use of automation and technology systems to promote an efficient 

and effective FLRA and to meet its timeliness goals. Continuing the progress started in FY 2009 

on the new cloud-based Case Management System (CMS), the FLRA migrated away from 

Oracle, the legacy CMS, and implemented the new CMS. The agency will experience a savings 

by saving on storage and infrastructure, eliminating Oracle licenses, and eliminating the need for 

an Oracle database administrator. Additionally, the agency identified and procured a second 

cloud-based solution in FY 2011 to track and report on Freedom of Information Act requests.

The FLRA will continue to identify other cloud solutions that are both secure and cost-effective 

to replace costly existing systems.

The FLRA uses technology so that many agency employees can travel to provide mission-related 

services at the site of the dispute. Consistent with the Telework Enhancement Act of 2010, the 

FLRA is also embarking on a program to increase telework beyond its current 65 percent 

participation rate. Mobile employees require a more agile information technology (IT) support 

system. The initiative to move information systems to the cloud will ensure that agency 

personnel and customers have anywhere/anytime access to not only the resource, but to the 

enhanced IT support provided by the cloud vendor. This will facilitate teleworking capabilities, 

reduce costs, and continue to reinforce the ability of the FLRA to meet the expectations of its 

customers.

In addition, in FY 2011, the OGC began to conduct representation elections that provide Federal 

employees remote access voting, and held the largest, first-ever electronic election involving 

43,000 Transportation Security Agency (TSA) employees. The FLRA also completed transition 

from the General Services Administration’s FTS2001 contract for telecommunication services to 

the new Networx contract, and the agency will begin to experience a savings in related costs in 

FY 2012. The FLRA is also in the process of implementing Homeland Security Presidential 

Directive 12 to support secure physical and logical access.

The FLRA continues to improve its website tools and resources for the public. For example, the

agency has improved its on-line search capability for Authority manuals, decisions, and 

guidance. The Authority posts decisions on the FLRA website within 24 hours, eliminating the 

need for costly, voluminous printed manuals. The FLRA also expects to make available on the 

website all decisions from the OALJ over the next fiscal year.

With respect to cybersecurity and Federal Information Security Management Act compliance, 

the FLRA has implemented the Trusted Internet Connection and fully implemented a mandatory 

set of processes and system controls to ensure the confidentiality, integrity, and availability of 

system-related information and information resources. This includes continuous monitoring, 

development, and enforcement of agency information assurance policies, and continuing 

mitigation of security issues and threats.
9

Human Capital

The FLRA and the Union of Authority Employees are working together through its LaborManagement Forum (the Forum) to continue its focus on improving all aspects of employee 

work life, including: providing workplace flexibilities, such as development and implementation 

of a new alternative work schedule policy; developing a new performance management system; 

increasing access to telework; holding a health benefits fair; sharing work experiences and 

stimulating career interests through a “bring your child to work” day; sponsoring a blood drive; 

holding regular presidential and career management meetings; establishing collaborative 

workgroups to address workplace issues; and increasing internal communication between and 

among employees at all levels. The Forum also began work in FY 2011 on recognizing diversity 

through special emphasis programs and updating employee awards program policies. The 

agency continued its commitment to develop employees through developmental details in the 

OGC, leadership and development programs, and skills-based training. The agency also began 

an initiative to identify the core competencies for its mission-critical positions and to conduct a 

training needs assessment to assist in future planning. To supplement training, the agency began 

an educational series with briefings from sister agencies, FLRA components and offices, and 

external human resources, financial, and communications professionals.

The agency contracts with the U.S. Department of Health and Human Services to provide basic 

occupational health and wellness services, on-site monthly health visits to FLRA Headquarters, 

and access to an employee assistance program (EAP) for employees throughout the country. The 

EAP assists the agency in addressing productivity issues by providing both prevention and 

intervention for employee problems. The FLRA has also leveraged the use of technology in 

human resources management, converting the entire agency from paper records to electronic

Official Personnel Files and implementing USAStaffing, the Office of Personnel Management’s 

(OPM) web-based hiring system.

In 2010, the FLRA was named the Most Improved Small Agency by the Partnership for Public 

Service. Building upon this success, the initial results from the 2011 Federal Employee 

Viewpoint Survey are very encouraging, and early indicators are that the agency continues to 

move up in the rankings. FLRA employees’ response rate was 75 percent – significantly greater 

than the government-wide rate of 49 percent. The agency increased in all four human capital 

indices, scoring 76 percent in leadership and knowledge management, 66 percent in talent 

management, 71 percent in results-oriented performance culture, and 74 percent in job 

satisfaction – each exceeding the government-wide average. Of particular significance is the

FLRA’s score on the new index developed by OPM to measure employee “engagement” – 74 

percent of agency employees responded positively in comparison to 66 percent of employees 

government-wide. The FLRA analyzes the survey results each year to maintain agency 

strengths, taking steps to improve areas where there are relative weaknesses, and to evaluate 

employee satisfaction levels.

Over the last two and a half years, the FLRA has taken substantial steps to address the serious 

human capital, performance management, and employee morale issues that had developed over 

many years at the FLRA. The recent dramatic increases in positive responses reflects both the 

commitment of agency leadership to managing the FLRA with transparency and accountability 
10

and engaging employees at all levels, and the commitment and dedication of all FLRA 

employees. Consistent with the significant increase in employee morale and satisfaction is the 

significant, marked improvement in the FLRA's mission performance and delivery of services to 

its customers – the American public.

Generally, the overall results from the 2011 survey indicate that FLRA employees believe that 

the work they do is important (94 percent), and that employees in the work unit share job 

knowledge with each other (93 percent). In addition, employees are very satisfied with the 

support they receive for balancing work and family issues (92 percent), feel a sense of 

accomplishment in doing their jobs (81 percent), and like the kind of work they do (86 percent). 

Leadership and management are committed to continuing to work with employees to improve 

the organizational performance, as well as performance management and employee satisfaction, 

so that the FLRA can effectively and efficiently fulfill its important statutory mission.

PERFORMANCE SUMMARY

The FLRA's rebuilding efforts since FY 2009, which have been fueled by the effective 

management of resources and the hard work and dedication of agency leadership and employees, 

are showing real, measurable results. FY 2011 was yet another year of improved performance 

for the FLRA, including sustaining the dramatic and unprecedented increases in employee 

satisfaction and morale that were reported in FY 2010. These accomplishments provide solid 

evidence that the FLRA is on the right track in emphasizing mission accomplishment and 

performance improvement through transparency, employee engagement, and collaboration. 

Moreover, the FLRA continues to improve its efficiency by engaging in new and innovative 

ways to conduct business, successfully holding the first-ever large scale electronic election 

involving 43,000 TSA employees, and in collaboration with the Department of Veterans Affairs, 

developing and launching web-based interactive training on Executive Order 13522, Creating 

Labor-Management Forums to Improve Delivery of Government Services, and bargaining over 5 

U.S.C. 7106(b)(1) matters, allowing the agency to deliver critical training across the government 

to employees right at their desks at no cost. 

With respect to its mission accomplishments, the FLRA again made vast improvements in 

providing customers with the timely, quality dispute resolution services that they deserve and 

that are critical – now more than ever – to effectuate the implementation of improvements in 

Federal government operations. In this respect, the Authority issued 232 merits decisions in FY 

2011, beating FY 2009 and FY 2010 by seven decisions and ten decisions, respectively – more 

decisions than in any year since FY 2003. Since February of FY 2009, the Authority has 

reduced its pending case inventory by 77 percent – from 400 to 93, its overage case inventory by 

87 percent – from 269 to 34, and the average age of pending cases by 284 days or 65 percent –

from 438 to 154 days. In FY 2011, the CADRO worked with parties to resolve or narrow their 

disputes in pending cases. As a result, close to 20 pending cases were expeditiously resolved 

with no further need for litigation, getting the parties back to conducting the business of 

government. Most noteworthy are a number of cases that involved complex, long-standing 

disputes that the parties had expended resources over for many years, and were able to resolve

with the assistance of the CADRO. The CADRO also provided training, contract negotiations 

and facilitation services in close to 60 instances. 
11

Furthermore, the OGC increased its productivity in both FY 2010 and FY 2011 by 

approximately 15 percent over FY 2009. Beginning in FY2010, the OGC eliminated a backlog

of more than 340 complaint cases and more than 800 appeals, and in FY 2011, the OGC closed 

more than 4,400 ULP cases and held 20 trials; the OGC also closed close to 300 representation 

cases and conducted 35 elections. The OALJ also resolved cases at an expeditious pace with 

more than 400 cases on their docket in the last two years. Of significant import is that the ALJs

had to hold fewer than 50 trials over the last two years, due to their considerable settlement 

efforts that resulted in cases being resolved without a trial.

In addition, the FSIP – which continues to experience increased case filings – has also showed 

improved performance outcomes. In particular, over the last two years, the FSIP closed more 

cases each year than it had in FY 2007, FY 2008 and FY 2009, and with its commitment to 

obtaining settlements rather than issuing decisions, returned the FSIP to its original guiding 

philosophy that the voluntary settlement of bargaining impasses is the most effective and 

efficient form of dispute resolution.

The FLRA also built upon its leadership role in labor-management relations by delivering more 

than 330 training, outreach, and facilitation sessions in FY 2011 to nearly 12,000 practitioners. 

The FLRA has also re-engaged with the labor-management community by issuing numerous 

press releases, conducting town halls, and holding focus groups on agency processes and 

procedures.

Performance Outcome Measures

FY 2011

Target

FY 2011

Actual Result

Strategic Goal 1: Achieve superior customer service.

Performance Goal 1: Provide timely review and disposition of unfair labor practice cases.

Measure 1.1: The percentage of ULP 

charges resolved by the OGC by 

complaint, withdrawal, dismissal, or 

settlement within 120 days of filing of the 

charge.

55% 54% Substantially 

Met

Measure 1.2: The percentage of decisions 

on an appeal of a Regional Director’s 

dismissal of a ULP charge issued within 60 

days of the date filed, and in no case more 

than 120 days.

90%/100% 97%/100% Exceeded/ 

Met

Measure 1.3: The percentage of ULP 

complaints issued by the General Counsel 

resolved or decided in the OALJ within 

180 days of the complaint being issued.

90% 95% Exceeded

Measure 1.4: The percentage of ULP 

cases decided within 180 days of 

assignment to an Authority Member.

50% 31% Not Met

Performance Goal 2: Provide timely review and disposition of representation cases.
12

Performance Outcome Measures

FY 2011

Target

FY 2011

Actual Result

Measure 2.1: The percentage of 

representation cases resolved by the OGC 

through withdrawal, election, or issuance 

of a Decision and Order within 120 days of 

the filing of a petition.

60% 60% Met

Measure 2.2: The percentage of 

representation cases in which a decision 

whether to grant review is issued within 60 

days of assignment to an Authority 

Member.

100% 100% Met

Performance Goal 3: Provide timely review and disposition of arbitration cases.

Measure 3.1: The percentage of 

arbitration cases decided within 180 days 

of assignment to an Authority Member.

40% 33% Substantially 

Met

Performance Goal 4: Provide timely review and disposition of negotiability cases.

Measure 4.1: The percentage of 

negotiability cases decided within 180 

days of assignment to an authority Member 

(reflecting reasonable time for a postpetition conference).

45% 29% Not Met

Performance Goal 5: Provide timely review and disposition of bargaining impasse cases.

Measure 5.1: The percentage of 

bargaining impasse cases in which 

jurisdiction is declined closed within 140 

days of the date filed.

90% 64% Not Met

Measure 5.2: The percentage of 

bargaining impasse cases voluntarily 

settled after jurisdiction has been asserted 

within 160 days of the date filed.

80% 79% Substantially 

Met

Measure 5.3: The percentage of 

bargaining impasse cases resolved through 

a final action closed within 200 days of the 

date filed.

80% 65% Not Met

Performance Goal 6: Use collaboration techniques and alternative dispute resolution 

services to minimize and/or resolve labor-management disputes.

Measure 6.1: The percentage of ULP 

cases in the OGC in which an offer of 

ADR services is accepted by the parties 

that are partially or totally resolved.

55% 87% Exceeded
13

Performance Outcome Measures

FY 2011

Target

FY 2011

Actual Result

Measure 6.2: The percentage of ULP 

cases in the OALJ in which an offer of 

Settlement Judge services is accepted by 

the parties that are partially or totally 

resolved.

70% 88% Exceeded

Measure 6.3: The percentage of 

representation cases in the OGC in which 

an offer of ADR services is accepted by 

the parties that are partially or totally 

resolved.

50% 93% Exceeded

Measure 6.4: The percentage of 

arbitration cases in which an offer of ADR 

services is accepted by the parties that are 

partially or totally resolved.

50% 100% Exceeded

Measure 6.5: The percentage of 

negotiability cases in which an offer of 

ADR services is accepted by the parties 

that are partially or totally resolved.

80% 100% Exceeded

Measure 6.6: The percentage of 

bargaining impasse cases in which an offer

of ADR services is accepted by the parties 

that are partially or totally resolved.

30% 29% Substantially 

Met

Measure 6.7: The number of training, 

outreach, and facilitation activities 

conducted.

175 332 Exceeded

Measure 6.8: The number of participants

involved in training, outreach, and 

facilitation activities.

5,000 11,975 Exceeded

Strategic Goal 3: Advance performance through organizational and management excellence.

Performance Goal 7: Modernize agency IT business systems to support and enhance 

program achievement.

Measure 7.1: The percentage of cases 

filed electronically with the FLRA.

To begin 

accepting 

electronic case 

filings.

Completed 

development of

customer 

registration and 

FSIP e-filing

capability.

Not Met

Strategic Goal 4: Develop, empower, and engage FLRA employees to meet program needs 

and improve job satisfaction.

Performance Goal 8: Develop, manage, and utilize FLRA’s human resources to meet 

program needs.
14

Performance Outcome Measures

FY 2011

Target

FY 2011

Actual Result

Measure 8.1: Program managers ensure 

that the right employees are in the right 

place to achieve results.

To conduct a 

training needs 

assessment; to 

create 

individual 

development 

plans (IDPs); to 

implement a 

new 

performance 

management 

system; to 

develop an 

affirmative 

action plan and 

diversity 

outreach 

program; to 

continue 

human capital 

e-initiatives;

and to initiate 

brown-bag 

programs.

Conducted a 

training needs 

assessment, 

which will be 

used to create

IDPs; formed a

workgroup to 

design a new 

performance 

management 

system; began 

work on 

recognizing 

diversity 

through special 

emphasis 

programs; and 

initiated 

brown-bag 

programs and 

an educational 

series. Human 

capital einitiatives 

continued with 

the successful 

implementation 

of USA

Staffing, Data 

Mart, and 

employee 

eOPFs. The 

agency also

purchased 

WebTA, an 

automated

time-tracking 

system.

Substantially 

Met

FINANCIAL ANALYSIS

The FLRA’s principal financial statements have been prepared to report the financial position 

and results of operations of the agency, pursuant to the requirements of 31 U.S.C. 3515(b). 
15

While the statements have been prepared from the books and records of the FLRA in accordance 

with U.S. Generally-Accepted Accounting Principles for Federal entities and the 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. The statements should be read with the realization that they are for a 

component of the U.S. government, a sovereign entity.

Balance Sheet

The Balance Sheet presents the FLRA’s financial position through the identification of agency 

assets, liabilities, and net position. Total assets decreased from $9.1 million at the end of FY 

2010 to $7.1 million at the end of FY 2011. The decrease in assets is largely attributable to the 

cancellation of the FLRA’s FY 2006 expired account, which held $1.7 million in unobligated 

funds. The agency’s fund balance with the U.S. Treasury Department is its largest asset, 

accounting for over 90 percent of total assets in both FY 2010 and FY 2011. The FLRA does not 

maintain any cash in commercial bank accounts or foreign currency balances, nor does it have 

any revolving or trust funds. The agency’s second largest asset is its furniture, fixtures, 

equipment, and IT hardware and software, which is recorded at original acquisition cost and then 

depreciated or amortized using the straight-line method over the estimated useful life of the 

asset.

Assets as of September 30, 2011 2010

Fund balance with Treasury $6,532,013 $8,382,647

General property and equipment, net 525,753 716,672

Accounts receivable 22,264 12,272

Advances and prepayments 11,212 21,659

Total $7,091,242 $9,133,250

Funds held at the Treasury are available to pay agency liabilities. Liabilities represent the 

amount of monies or other resources likely to be paid by the FLRA as a result of transactions or 

events that have already occurred. Agency liabilities totaled $4.4 million at the end of both FY 

2010 and FY 2011. Accrued employee leave, payroll, and benefits costs, along with accrued 

workers’ compensation, accounted for 95 percent of total liabilities at the end of FY 2011.

Liabilities as of September 30, 2011 2010

Unfunded leave $1,513,590 $1,437,695

FECA liability 1,380,317 1,421,178

Accrued payroll and benefits 1,280,740 1,363,566

Accounts payable 232,681 147,492

Custodial liability/other 80 40

Total $4,407,408 $4,369,971
16

The FLRA’s total net position at the end of FY 2011 was $2.7 million, a $2.1 million decrease 

from the previous year.

Statement of Net Cost

The Statement of Net Cost presents the gross cost of operating the FLRA’s three major 

programs, less any exchange revenue earned from those activities. The net cost of operations in 

FY 2011 was $26.8 million, a $400 thousand decrease from the agency’s FY 2010 cost of 

operations. In FY 2011, 57 percent of the agency’s resources were dedicated to the Authority,

which includes central administrative services provided to the entire agency; 40 percent were 

dedicated to the OGC; the remaining three percent were devoted to the FSIP.

Statement of Changes in Net Position

The Statement of Changes in Net Position reflects the changes that occurred within the 

cumulative results of operations and any unexpended appropriations. Unexpended 

appropriations include undelivered orders and unobligated balances. 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 

represent the net results of operations since inception, the cumulative amount of prior-period 

adjustments, the remaining book value of capitalized assets, and future funding requirements.

Statement on Budgetary Resources

The Statement on Budgetary Resources reports the budgetary resources available to the FLRA 

during FY 2010 and FY 2011 to carry out the activities of the agency, as well as the status of 

FY 2011 Financial Obligations by Budget Object Classification

Compensation & benefits (78%)

Rent & utilities (11%)

Other contractual services (7%)

Communications (2%)

Supplies & equipment (1%)

Travel & transportation (1%)
17

those resources at the end of each year. The agency had $28 million in total budgetary resources 

available to it in FY 2011, of which $3.3 million remained unobligated at year-end. The primary 

source of FLRA funding is its annual Salaries and Expenses appropriation from the Congress. 

The agency also receives reimbursements, pursuant to the Economy Act, for travel expenses 

associated with training provided by agency employees on the FLRA Statute, mission, Executive 

Order 13522, etc. The FLRA also recorded net outlays of $24.9 million in FY 2011. Total 

budgetary resources decreased by $1.9 million from FY 2010, while net outlays remained fairly 

constant in FY 2011.

MANAGEMENT ASSURANCES

The Federal Managers Financial Improvement Act (FMFIA) of 1982 requires agencies to 

establish internal control and financial systems that provide reasonable assurance that the 

integrity of Federal programs and operations are protected. The FMFIA also requires the 

Chairman to annually assess and report on the effectiveness of internal controls and to provide an 

annual Statement of Assurance on whether the agency has met this requirement.

Annual FMFIA Statement of Assurance

In accordance with the requirements of OMB Circular A-123, Management’s Responsibility for 

Internal Control, the FLRA conducted an assessment of the effectiveness of the organization’s 

internal controls to support effective and efficient operations, reliable financial reporting, and 

compliance with applicable laws and regulations; and whether the financial management system 

conforms to applicable financial requirements.

Based on the results of this assessment, the FLRA provides reasonable assurance that its internal 

controls over the effectiveness and efficiency of operations, reliable financial reporting, and 

compliance with applicable laws and regulation as of September 30, 2011, were operating 

effectively and that no material weaknesses were found in the design or operation of our internal 

controls.

Further, based on our assessment, we determined that the FLRA financial management system 

conforms to applicable financial systems requirements.

Carol Waller Pope

Chairman

November 15, 2011
18

PERFORMANCE GOALS AND RESULTS

GOAL 1: PROVIDE TIMELY REVIEW AND DISPOSITION OF UNFAIR 

LABOR PRACTICE CASES.

The General Counsel has responsibility for the investigation, settlement, and prosecution of 

unfair labor practice (ULP) charges. All ULP proceedings originate with the filing of a charge in 

a Regional Office by an employee, labor organization, or agency. Once a charge has been filed, 

Regional Office staff will investigate the charge to determine if it has merit. If the Regional 

Director determines that the charge has merit, then he or she will, absent settlement, issue and 

prosecute a complaint before an Administrative Law Judge (ALJ). If the Regional Director 

determines that the charge lacks merit, then the charging party is entitled to a written 

explanation, and if not satisfied, may appeal the decision to the General Counsel in Washington, 

DC. If the dismissal is upheld, the case is closed. The Authority has appointed ALJs to hear 

ULP cases prosecuted by the General Counsel. Decisions of the ALJs are transmitted to the 

Authority, and may be affirmed, modified, or reversed in whole or in part. If no exceptions are 

filed, a decision by the ALJ is adopted by the Authority.

OGC FY 2007 FY 2008 FY 2009 FY 2010 FY 2011

Cases pending, start of year 1,705 2,300 1,237 1,587 1,811

Charges filed 4,687 3,572 3,954 4,398 4,094

Total caseload 6,392 5,872 5,191 5,985 5,905

Charges withdrawn/settled 2,920 2,648 2,455 3,141 3,425

Charges dismissed 1,038 1,941 1,075 751 812

Complaints issued 134 46 74 282 215

Total cases closed 4,092 4,635 3,604 4,174 4,452

Cases pending, end of year 2,300 1,237 1,587 1,811 1,453

OALJ FY 2007 FY 2008 FY 2009 FY 2010 FY 2011

Cases pending, start of year 32 25 0 67 54

Cases received from the OGC 134 46 74 282 234

Total caseload 166 71 74 349 288

Settlements before hearing 114 59 7 275 191

Settlements during hearing 0 0 0 0 0

Cases closed by decision 27 12 0 20 25

Total cases closed 141 71 7 295 216

Cases pending, end of year 25 0 67 54 72
19

Authority FY 2007 FY 2008 FY 2009 FY 2010 FY 2011

Cases pending, start of year 24 36 32 14 14

Exceptions filed 25 11 1 18 17

Total caseload 49 47 33 32 31

Cases closed procedurally 13 9 0 9 13

Cases closed based on merits 0 6 19 9 12

Total cases closed 13 15 19 18 25

Cases pending, end of year 36 32 14 14 6

Measure 1.1: The percentage of ULP charges resolved by the OGC by complaint, 

withdrawal, dismissal, or settlement within 120 days of filing of the charge.

FY 2007 FY 2008 FY 2009 FY 2010 FY 2011

Actual Actual Actual Actual Target Actual

63% 48% 71% 49% 55% 54%

Data Source: Case Management System

Target: Substantially Met. The target for FY 2011 was substantially met due to careful 

management of existing staff, and the efforts of those staff to systematically attack the backlog 

of older cases. Because of those efforts, in FY 2011, the total cases closed exceeded the total 

charges filed for the first time since FY 2008.

Measure 1.2: The percentage of decisions on an appeal of a Regional Director’s dismissal of 

a ULP charge issued within 60 days of the date filed, and in no case more than 120 days.

FY 2007 FY 2008 FY 2009 FY 2010 FY 2011

Actual Actual Actual Actual Target Actual

87% 19% 2% 31% 90%100% 97%/100%

Data Source: Case Management System

Target: Exceeded/Met. In FY 2011, an additional target was established for this measure to 

determine the percentage of decisions on appeal issued within 120 days. The General Counsel 

and Deputy General Counsel positions were vacant for 17 months, between March 2008 and 

August 2009, which resulted in a backlog of appeals due to the fact that there was no decisionmaker in place. After the OGC cleared that backlog in FY 2010, the office has been able to 

return to issuing nearly all appeals within 60 days, and to issue those few that do not meet that 

target within 120 days.
20

Measure 1.3: The percentage of ULP complaints issued by the General Counsel resolved or 

decided in the OALJ within 180 days of the complaint being issued.

FY 2007 FY 2008 FY 2009 FY 2010 FY 2011

Actual Actual Actual Actual Target Actual

N/A N/A N/A N/A 90% 95%

Data Source: Case Management System

Target: Exceeded. This measure was established in FY 2011, as a consolidation of two 

previous measures into one of 180 days. A decrease in the number of complaints received 

from the General Counsel and an emphasis upon early resolution of disputes prior to their 

going to hearing resulted in the OALJ achieving its target.

Measure 1.4: The percentage of ULP cases decided within 180 days of assignment to an 

Authority Member.

FY 2007 FY 2008 FY 2009 FY 2010 FY 2011

Actual Actual Actual Actual Target Actual

N/A N/A 5% 18% 50% 31%

Data Source: Case Management System

Target: Not Met. The Authority did not meet this target because the inventory of overage 

cases precluded focus on those cases that are not overage. To improve quality and timeliness, 

the Authority has successfully followed a Corrective Action Plan (CAP) developed in FY 

2009 to eliminate its case backlog by FY 2012. This measure and the target for FY 2011 were 

established in the CAP. Consistent with its CAP, the Authority concentrated in FY 2011 on 

reducing the number of overage cases. As a result of its efforts, the number of pending 

overage ULP cases was reduced by 89 percent, while the inventory of ULP cases pending for 

more than one year was completely eliminated. In addition, the overall inventory of ULP 

cases was reduced by 50 percent. By significantly reducing the number and age of ULP cases, 

the Authority is poised to increase the timeliness of decision making in these cases in FY 

2012.

GOAL 2: PROVIDE TIMELY REVIEW AND DISPOSITION OF 

REPRESENTATION CASES.

The Federal Service Labor-Management Relations Statute (the Statute) sets out a specific 

procedure for employees to petition to be represented by a labor union and to determine which 

employees will be included in a “bargaining unit” that a union represents. Implementing this 

procedure, the FLRA conducts secret-ballot elections for union representation and resolves a 

variety of issues related to questions of union representation of employees. These issues include, 

for example, whether particular employees are managers or “confidential” employees excluded 

from union representation, whether there has been election misconduct on the part of agencies or 

unions, and whether changes in union and agency organizations affect existing bargaining units. 

Representation cases are initiated by the filing in a Regional Office of a petition by an individual, 

labor organization, or agency. After a petition is filed, the Regional Director conducts an 
21

investigation to determine the appropriateness of a unit or other matter related to the petition. 

After concluding such investigation, the Regional Director may issue a Decision and Order 

determining the appropriate unit, directing an election, dismissing the petition, or making other 

disposition of the matter. The Regional Director’s Decision and Order is final unless an 

application for review is filed with the Authority.

OGC FY 2007 FY 2008 FY 2009 FY 2010 FY 2011

Cases pending, start of year 160 156 140 104 102

Petitions filed 297 289 275 278 267

Total caseload 457 445 415 382 369

Petitions withdrawn 136 132 142 113 126

Cases closed based on merits 165 173 169 167 161

Total cases closed 301 305 311 280 287

Cases pending, end of year 156 140 104 102 82

Authority FY 2007 FY 2008 FY 2009 FY 2010 FY 2011

Cases pending, start of year 1 4 3 5 6

Applications for review 13 14 17 15 12

Total caseload 14 18 20 20 18

Cases closed procedurally 0 1 1 1 0

Cases closed based on merits 10 14 14 13 12

Total cases closed 10 15 15 14 12

Cases pending, end of year 4 3 5 6 6

Measure 2.1: The percentage of representation cases resolved by the OGC through 

withdrawal, election, or issuance of a Decision and Order within 120 days of the filing of a 

petition.

FY 2007 FY 2008 FY 2009 FY 2010 FY 2011

Actual Actual Actual Actual Target Actual

N/A N/A 60% 65% 60% 60%

Data Source: Case Management System

Target: Met. This measure was established in FY 2009 to consolidate three previous 

measures. As with ULP cases, through careful management of staff and the hard work of that 

staff, the OGC was able to meet its target in FY 2011.
22

Measure 2.2: The percentage of representation cases in which a decision whether to grant 

review is issued within 60 days of assignment to an Authority Member.

FY 2007 FY 2008 FY 2009 FY 2010 FY 2011

Actual Actual Actual Actual Target Actual

N/A N/A N/A 100% 100% 100%

Data Source: Case Management System

Target: Met. This measure was established in FY 2010 to be consistent with the time 

limitation provided for in the Statute. The Authority continued its performance from FY 2010 

and issued decisions whether to grant review within 60 days of assignment in all 

representation cases.

GOAL 3: PROVIDE TIMELY REVIEW AND DISPOSITION OF 

ARBITRATION CASES.

Either party to grievance arbitration may file with the Authority an exception (or appeal) to an 

arbitrator’s award. The Authority will review an arbitrator’s award to which an exception has 

been filed to determine if the award is deficient because it is contrary to any law, rule, or 

regulation or on the grounds similar to those applied by Federal courts in private-sector, labormanagement relations.

Authority FY 2007 FY 2008 FY 2009 FY 2010 FY 2011

Cases pending, start of year 108 216 298 247 173

Exceptions filed 162 126 157 134 110

Total caseload 270 342 455 381 283

Cases closed procedurally 18 12 43 31 22

Cases closed based on merits 36 32 165 177 195

Total cases closed 54 44 208 208 217

Cases pending, end of year 216 298 247 173 66

Measure 3.1: The percentage of arbitration cases decided within 180 days of assignment to 

an Authority Member.

FY 2007 FY 2008 FY 2009 FY 2010 FY 2011

Actual Actual Actual Actual Target Actual

N/A N/A 22% 30% 40% 33%

Data Source: Case Management System

Target: Substantially Met. This measure and the target for FY 2011 were also established 

in the Authority’s CAP. As stated in connection with ULP cases, the Authority’s focus in FY 

2011 was the reduction of its overage case inventory. Consistent with this focus and the CAP, 

the Authority reduced its inventory of overage arbitration cases in FY 2011 by 85 percent. 
23

The overall inventory of arbitration cases was reduced by 62 percent. This provides the 

Authority the ability to increase the timeliness of its decision making in FY 2012.

GOAL 4: PROVIDE TIMELY REVIEW AND DISPOSITION OF 

NEGOTIABILITY CASES.

For certain types of cases, there is a procedure for resolving disputes over the negotiability of a 

matter proposed to be bargained. A Federal agency bargaining with a union may claim that a 

particular union proposal cannot be bargained because it conflicts with Federal law, a 

government-wide rule or regulation, or an agency regulation for which there is a compelling 

need.

Authority FY 2007 FY 2008 FY 2009 FY 2010 FY 2011

Cases pending, start of year 27 43 51 39 22

Petitions filed 52 38 43 52 39

Total caseload 79 81 94 91 61

Cases closed procedurally 30 22 41 46 33

Cases closed based on merits 6 8 14 23 13

Total cases closed 36 30 55 69 46

Cases pending, end of year 43 51 39 22 15

Measure 4.1: The percentage of negotiability cases decided within 180 days of assignment to 

an Authority Member (reflecting reasonable time for a post-petition conference).

FY 2007 FY 2008 FY 2009 FY 2010 FY 2011

Actual Actual Actual Actual Target Actual

N/A N/A 6% 17% 45% 29%

Data Source: Case Management System

Target: Not Met. The Authority did not meet this target because the inventory of overage 

cases precluded focus on those cases that are not overage. As stated previously, the Authority 

concentrated its efforts in FY 2011 on reducing the number of overage cases in its inventory. 

As a result, the Authority reduced the inventory of overage negotiability cases by 44 percent 

and the overall inventory of negotiability cases by 32 percent. As with other case types, this 

will permit the Authority to improve the timeliness of its decision making in FY 2012.

GOAL 5: PROVIDE TIMELY REVIEW AND DISPOSITION OF

BARGAINING IMPASSE CASES.

In carrying out the right to bargain collectively, it is not uncommon for a union representative 

and a Federal agency to simply not agree on certain issues and for the bargaining to reach an 

impasse. Several options are available by which the parties may attempt to resolve the impasse. 
24

The parties may: decide, on their own, to use certain techniques to resolve the impasse, but may 

proceed to private binding arbitration only after the Federal Service Impasses Panel (FSIP or the 

Panel) approves the procedure; seek the services and assistance of the Federal Mediation and 

Conciliation Service; or seek the assistance of the Panel in resolving the negotiation impasse, 

only after the previous attempts have failed.

FSIP FY 2007 FY 2008 FY 2009 FY 2010 FY 2011

Cases pending, start of year 34 23 22 69 36

Impasses filed 115 111 136 143 152

Total caseload 149 134 158 212 188

Cases closed 126 112 89 176 135

Cases pending, end of year 23 22 69 36 53

Measure 5.1: The percentage of bargaining impasse cases in which jurisdiction is declined 

closed within 140 days of the date filed.

FY 2007 FY 2008 FY 2009 FY 2010 FY 2011

Actual Actual Actual Actual Target Actual

N/A N/A N/A N/A 90% 64%

Data Source: Case Management System

Target: Not Met. The performance measures for the FSIP were completely revised in FY 

2011 to concisely set forth timeliness targets for the Panel’s three most important categories of 

case disposition. Cases which are closed because the Panel declines jurisdiction normally 

require written statements of position (SOPs) on jurisdictional issues from both sides before 

they can be presented to the Panel for a procedural determination. The tightening of budgets 

throughout the Federal government means that the parties’ representatives, but particularly 

those at agencies, are requesting more time to submit their SOPs, as the agencies the FSIP

services are increasingly understaffed. The result is an increase in processing times, 

particularly in cases where jurisdiction is declined.

Measure 5.2: The percentage of bargaining impasse cases voluntarily settled after jurisdiction 

has been asserted within 160 days of the date filed.

FY 2007 FY 2008 FY 2009 FY 2010 FY 2011

Actual Actual Actual Actual Target Actual

N/A N/A N/A N/A 80% 79%

Data Source: Case Management System

Target: Substantially Met. Impasses that are voluntarily resolved after jurisdiction has been 

asserted normally require less time to investigate because parties are less likely to raise 

significant jurisdictional issues that require the submission of SOPs during the investigation 

phase of case processing. In addition, such cases often involve mid-term changes by agencies 
25

that are time sensitive and would lead to increased costs to the taxpayer if they are not handled 

expeditiously. This same factor motivates the Panel and the parties to promptly schedule the 

procedure used to resolve the dispute which eventually results in a voluntary settlement.

Measure 5.3: The percentage of bargaining impasse cases resolved through a final action 

closed within 200 days of the date filed.

FY 2007 FY 2008 FY 2009 FY 2010 FY 2011

Actual Actual Actual Actual Target Actual

N/A N/A N/A N/A 80% 65%

Data Source: Case Management System

Target: Not Met. Cases resolved through final actions normally require written decisions 

issued by the full Panel or one of its Members imposing terms on the parties. The FSIP was 

unable to meet this target during FY 2011 primarily because of two factors. First, the number 

of cases under this measure that involve complex, multi-issue initial and successor collective 

bargaining agreement impasses has gone up from previous years, resulting in lengthier written 

decisions that require more time for drafting and final review. Second, the Panel required the 

parties to resolve a number of such disputes through a procedure whereby a private fact-finder 

provides additional mediation assistance and, ultimately, a report to the Panel and the parties 

recommending terms for settlement. When the Panel uses this procedure it effectively permits 

the parties to schedule the stages of the process themselves, which often leads to increases in 

processing times.

GOAL 6: USE COLLABORATION TECHNIQUES AND ALTERNATIVE 

DISPUTE RESOLUTION SERVICES TO MINIMIZE AND/OR RESOLVE 

LABOR-MANAGEMENT DISPUTES.

This performance goal is new for FY 2011 and was established to emphasize not only the 

importance of backlog reduction efforts in the Authority, but also using collaboration and 

alternative dispute resolution (ADR) techniques along with other training, outreach, and 

facilitation services to assist parties in minimizing and resolving labor-management disputes. 

The goal encompasses all three FLRA components. The FLRA has integrated ADR and 

consensus decision-making into virtually all of its processes, and significantly expanded its 

training, outreach, and facilitation activities in FY 2011. ADR is an informal process that allows 

parties to discuss and develop their interests in order to resolve the underlying issues and 

problems in their relationship. This includes interest-based conflict resolution and intervention 

services in pending ULP cases, representation cases, arbitration cases, negotiability appeals, and 

impasse bargaining disputes. The agency also provides facilitation, training, and education to 

help labor and management develop collaborative relationships. In FY 2012, many of the 

FLRA’s training programs will also be available as web-based training modules, bringing 

educational tools and resources directly to the agency’s customers at their desks to further assist 

them in resolving labor-management disputes.
26

Measure 6.1: The percentage of ULP cases in the OGC in which an offer of ADR services is 

accepted by the parties that are partially or totally resolved.

FY 2007 FY 2008 FY 2009 FY 2010 FY 2011

Actual Actual Actual Actual Target Actual

N/A N/A N/A N/A 55% 87%

Data Source: Case Management System

Target: Exceeded. The OGC far exceeded its FY 2011 target for this measure, through a 

renewed emphasis on settling ULP cases both before and after the charge was filed, and after a 

complaint has been issued.

Measure 6.2: The percentage of ULP cases in the OALJ in which an offer of Settlement 

Judge services is accepted by the parties that are partially or totally resolved.

FY 2007 FY 2008 FY 2009 FY 2010 FY 2011

Actual Actual Actual Actual Target Actual

N/A N/A N/A N/A 70% 88%

Data Source: Case Management System

Target: Exceeded. The OALJ offers use of its Settlement Judge Program in all ULP cases,

and the voluntary use of the process by the parties demonstrates their desire to resolve the 

dispute without a due process hearing and ALJ decision that decides the matter for them. 

Thus, they are motivated participants rather than unwilling combatants. The Settlement Judge 

mediates the dispute rather than adjudicating it, which allows the parties to work together to 

arrive at a solution that serves all of their interests without the cost of litigation.

Measure 6.3: The percentage of representation cases in the OGC in which an offer of ADR 

services is accepted by the parties that are partially or totally resolved.

FY 2007 FY 2008 FY 2009 FY 2010 FY 2011

Actual Actual Actual Actual Target Actual

N/A N/A N/A N/A 50% 93%

Data Source: Case Management System

Target: Exceeded. The OGC far exceeded its FY 2011 target for this measure, through a 

renewed emphasis on bringing the parties together to work out their differences in 

representation cases, through trainings, pre-petition meetings, post-petition conference calls 

and meetings, and by generally encouraging them to narrow and settle their issues through 

ADR and other means.
27

Measure 6.4: The percentage of arbitration cases in which an offer of ADR services is 

accepted by the parties that are partially or totally resolved.

FY 2007 FY 2008 FY 2009 FY 2010 FY 2011

Actual Actual Actual Actual Target Actual

N/A N/A N/A N/A 50% 100%

Data Source: Case Management System

Target: Exceeded. Due to changes to the FLRA's arbitration regulations, ADR services were 

made available to our parties in arbitration cases for the first time in FY 2011. As a result of 

ADR efforts in cases in which the parties jointly agreed to try to resolve their case, the parties 

substantially narrowed the scope of their dispute, thereby minimizing the issues to be resolved 

by the Authority. The Authority expects to grow on this success with more parties utilizing 

our ADR services in arbitration cases in the coming year.

Measure 6.5: The percentage of negotiability cases in which an offer of ADR services is 

accepted by the parties that are partially or totally resolved.

FY 2007 FY 2008 FY 2009 FY 2010 FY 2011

Actual Actual Actual Actual Target Actual

N/A N/A N/A N/A 80% 87%

Data Source: Case Management System

Target: Exceeded. The FLRA was successful in fully resolving close to 20 pending 

negotiability cases in FY 2011. Through use of ADR services, the cases that would otherwise 

be pending on the Authority's docket, were expeditiously resolved with no further need for 

litigation, getting the parties back to conducting the business of government. Most noteworthy 

are a number of cases that involved complex long-standing disputes that the parties had 

expended resources over for many years and were able to resolve with the assistance of the 

Collaboration and Alternative Dispute Resolution Office (CADRO).

Measure 6.6: The percentage of bargaining impasse cases in which an offer of ADR services 

is accepted by the parties that are partially or totally resolved.

FY 2007 FY 2008 FY 2009 FY 2010 FY 2011

Actual Actual Actual Actual Target Actual

N/A N/A N/A N/A 30% 29%

Data Source: Case Management System

Target: Substantially Met. The Panel’s ability to substantially meet its FY 2011 target is a 

reflection of the superior mediation and facilitation skills of its current Panel Members, all of 

whom have extensive experience in the Federal sector labor relations program, and its three 

professional staff. In addition, the high percentage of cases partially or totally resolved 

without the need for written final actions is consistent with the Panel’s philosophy since 

inception that voluntary settlements are in the best interests of the parties and the public, and 

that the Panel performs its mission best when it serves as a catalyst in helping negotiators 

settle a matter informally on their own terms.
28

Measure 6.7: The number of training, outreach, and facilitation activities conducted.

FY 2007 FY 2008 FY 2009 FY 2010 FY 2011

Actual Actual Actual Actual Target Actual

N/A N/A N/A N/A 175 332

Data Source: Case Management System

Target: Exceeded. Throughout all FLRA components, the agency recommitted itself to 

delivering on its leadership role in labor-management relations, providing educational tools, 

training and support to our customers to assist them in resolving their disputes. In addition to 

conducting five Town Hall meetings across the country with representatives of the FSIP, 

Authority, and OGC, the FLRA participated in a number of training conferences offered to 

practitioners. The Authority continued its on-going arbitration initiative, providing additional 

rounds of training on its revised arbitration regulations. The OGC also continued to offer its 

statutory training courses across the country, along with its training on implementing 

Executive Order 13522, which has been repeatedly praised by the National Council on LaborManagement Relations for assisting with the successful implementation of the Executive 

Order. The CADRO continued to educate parties on the Order, interest-based bargaining 

techniques, and consensus decision making, in addition to delivering the Authority's program 

on bargaining over 5 U.S.C. 7106(b)(1) matters.

Measure 6.8: The number of participants involved in training, outreach, and facilitation 

activities.

FY 2007 FY 2008 FY 2009 FY 2010 FY 2011

Actual Actual Actual Actual Target Actual

N/A N/A N/A N/A 5,000 11,975

Data Source: Case Management System

Target: Exceeded.

GOAL 7: MODERNIZE AGENCY INFORMATION TECHNOLOGY 

BUSINESS SYSTEMS TO SUPPORT AND ENHANCE PROGRAM 

ACHIEVEMENT.

The redesign of the Case Management System (CMS) for customers to file their cases online was 

initiated in FY 2009. To date, the case management modules for each component have been 

delivered. In FY 2011, work began on the e-filing portion of the CMS, with the FLRA 

delivering customer registration and FSIP e-filing capability – which is now undergoing quality 

assurance testing. The agency will focus on delivery of e-filing capability for the remaining 

components in FY 2012. While there is still more work to complete on e-filing, the new CMS is 

now in use.
29

Measure 7.1: The percentage of cases filed electronically with the FLRA.

FY 2007 Actual N/A

FY 2008 Actual N/A

FY 2009 Actual Awarded a contract for CMS development using the cloud solution, 

QuickBase.

FY 2010 Actual Implemented the new CMS for all three FLRA components.

FY 2011

Target To begin accepting electronic case filings.

Actual

Began developing an electronic filing solution. Completed 

development of customer registration and FSIP e-filing capability, 

now undergoing quality assurance review.

Data Source: FLRA Information Resources Management Division

Target: Not Met. While the target was not met, significant progress was made. One of the 

four modules required for e-filing, the customer registration process, was completed in 

September 2011. The majority of the second module, e-filing for the FSIP, has been 

developed and is currently in the quality assurance process. The FSIP will be ready to begin 

accepting e-filing submissions by the end of the first quarter of FY 2012. The remaining two 

e-filing modules, for the OGC and the Authority, will be completed by March 2012. Once 

these final modules are implemented, the FLRA will be able to begin accepting electronic 

filings.

GOAL 8: DEVELOP, MANAGE, AND UTILIZE THE FLRA’S HUMAN

CAPITAL TO MEET PROGRAM NEEDS.

The FLRA relies on its employees, supervisors, and managers to develop and implement policies 

and operational processes to achieve its strategic goals. To this end, the agency has partnered 

with its Labor-Management Forum to improve work-life balance, employee recognition, and 

career development programs. In FY 2010, the FLRA established a performance goal regarding 

the use of human capital, and developed and implemented a Human Capital Strategic Plan aimed 

at those areas identified for improvement. Consistent with the Human Capital Strategic Plan, the 

agency strategically recruits and develops its employees to make sure it has the right people with 

the right skills in the right jobs. As of October 31, 2011, approximately 25 percent of the 

FLRA’s employees were eligible for retirement. Consequently, the FLRA expects, beginning in 

FY 2012, a wave of retirements. This highlights the agency’s need to engage in succession 

planning, as well as employee and leadership development, which the agency handles through 

developmental details, student internships, and course offerings.
30

Measure 8.1: Program managers ensure that the right employees are in the right place to 

achieve results.

FY 2007 Actual N/A

FY 2008 Actual N/A

FY 2009 Actual N/A

FY 2010 Actual

Increased staffing levels in each program area; improved employee 

worklife balance through implementation of a robust telework

program and videoconferencing, which reduces travel costs and time 

away from family; implemented an employee leadership 

developmental initiative in the OGC; and implemented a Student 

Temporary Employment Program. Also began human capital einitiatives to: (1) improve hiring through the purchase of USA 

Staffing (an automated hiring system), which engages the hiring 

manager in all aspects of the hiring process, reduces time-to-hire 

metrics, and improves applicants’ Federal hiring experience; and (2) 

gain greater efficiencies in records management through the purchase 

of eOPF, an electronic version of the paper Official Personnel Folder 

(OPF), providing web-enabled access for employees and human 

resources (HR) staff to view personnel and performance documents.

FY 2011 Target

Consistent with the Human Capital Strategic Plan, to conduct an 

agency-wide training needs assessment and create individual 

development plans to address areas needing skills improvement and to 

further increase mission-critical competencies; to implement a new 

performance management system for Senior Executive Service (SES) 

and non-SES employees; to develop an affirmative action plan and 

diversity outreach program; to continue human capital e-initiatives; 

and to initiate brown-bag programs to inform employees of relevant 

HR initiatives.
31

Actual

The FLRA continued to focus on employee engagement in FY 2011. 

Its Labor-Management Forum updated the Alternative Work Schedule 

policy, which increased flexibility within the program, began work on 

recognizing diversity through special emphasis programs, and updated 

employee awards programs. The agency also formed a joint labormanagement workgroup to design a new Performance Management 

System for General Schedule employees for OPM certification, 

approval, and agency implementation; an employee workgroup also 

designed and submitted to OPM for approval a revised Senior 

Executive Service appraisal system. Consistent with the Human 

Capital Strategic Plan, FLRA conducted a training needs assessment, 

which will be used to create individual development plans to address 

areas needing skills improvement and to further increase missioncritical competencies. Additionally, the agency supported employee 

ideas, initiatives, and employee-focused programs, such as “Bring 

Your Child to Work” day, Public Service Recognition Week, a health 

benefits fair, and a blood drive. FLRA also initiated brown-bag 

programs and an educational series to inform and develop employees 

in a casual setting. Human capital e-initiatives continued with the 

successful implementation of USA Staffing, NBC’s Data Mart 

reporting tool, and employee eOPFs. The agency also initiated the 

procurement of Kronos WebTA, an automated employee time 

tracking system.

Data Source: FLRA Human Resources Division

Target: Substantially Met.

VERIFICATION AND VALIDATION OF PERFORMANCE DATA

The FLRA CMS is used by each component to track and manage agency caseload. Each 

component enters information on all cases into the CMS and is accountable for quality control of 

all workload data entered into the system. Data verification and validation was performed under

both the new CMS and the former, soon-to-be retired, system.
32

PRINCIPAL FINANCIAL STATEMENTS

MESSAGE FROM THE CHIEF FINANCIAL OFFICER

The FLRA’s FY 2011 Performance and Accountability Report reflects the correlation between 

the financial and programmatic aspects of the agency’s work. The report bridges these two 

areas, presenting FLRA performance with the financial results of agency operations. The

principal financial statements and notes that follow explain the FLRA’s financial position as of 

September 30, 2011, and how financial resources were expended to achieve performance results. 

For the eighth consecutive year, the FLRA received an unqualified opinion on its financial 

statements. Along with the unqualified opinion, the report of independent auditors found no 

material weaknesses in the design and operation of the agency system of internal controls over 

financial reporting.

While we take pride in our successes, FY 2011 also proved to be a challenging year for financial 

planning for the FLRA. Within the current Federal budget environment, the agency’s FY 2011

funding level was set at a lower level than the previous year. The efforts of the FLRA’s 

dedicated and committed employees, however, continued to produce a high standard of financial 

management at the FLRA. We look to the future with confidence as we continue the strategic 

direction of the agency.

Carol Waller Pope

Chairman and Chief Financial Officer

November 15, 2011
33

Federal Labor Relations Authority

BALANCE SHEET

(in dollars)

As of September 30, 2011 and 2010

2011 2010

Assets:

Intragovernmental:

Fund balance with Treasury (Note 2) $6,532,013 $8,382,647

Accounts receivable (Note 3) 17,021 8,868

Advances and prepayments 11,212 21,659

Total intragovernmental 6,560,246 8,413,174

Accounts receivable from the public, net (Note 3) 5,243 3,404

General property and equipment, net (Note 4) 525,753 716,672

Total Assets $7,091,242 $9,133,250

Liabilities:

Intragovernmental:

Accounts payable $210,917 $30,279

Unfunded FECA liability (Note 5) 239,011 248,274

Accrued payroll and benefits 0 13,170

Custodial liability 76 40

Total intragovernmental 450,004 291,763

Accounts payable 21,764 117,213

FECA actuarial liability (Note 5) 1,141,306 1,172,904

Unfunded leave (Note 5) 1,513,590 1,437,695

Accrued payroll and benefits 1,280,740 1,350,396

Other (Note 6) 4 0

Total Liabilities $4,407,408 $4,369,971

Net Position:

Unexpended appropriations – other funds $5,016,802 $6,901,675

Cumulative results of operations – other funds (2,332,968) (2,138,396)

Total Net Position $2,683,834 $4,763,279

Total Liabilities and Net Position $7,091,242 $9,133,250

The accompanying notes are an integral part of these statements.
34

Federal Labor Relations Authority

STATEMENT OF NET COST

(in dollars)

For the Years Ended September 30, 2011 and 2010

2011 2010

Gross Program Costs:

Authority:

Intragovernmental costs $3,869,249 $4,128,082

Public costs 11,498,999 11,547,207

Total costs 15,368,248 15,675,289

Intragovernmental earned revenue (5,580) (4,413)

Public earned revenue (4,398) (3,467)

Less: Total earned revenue (9,978) (7,880)

Net Program Costs $15,358,270 $15,667,409

Office of the General Counsel:

Intragovernmental costs $60 $420

Public costs 10,809,060 10,854,375

Total costs 10,809,120 10,854,795

Intragovernmental earned revenue (52,461) (40,222)

Public earned revenue (13,924) (10,692)

Less: Total earned revenue (66,385) (50,914)

Net Program Costs $10,742,735 $10,803,881

Federal Service Impasses Panel:

Intragovernmental costs $0 $0

Public costs 689,940 692,832

Total costs 689,940 692,832

Intragovernmental earned revenue (1,527) (1,206)

Public earned revenue (797) (612)

Less: Total earned revenue (2,324) (1,818)

Net Program Costs $687,616 $691,014

Net Cost of Operations $26,788,621 $27,162,304

The accompanying notes are an integral part of these statements.
35

Federal Labor Relations Authority

STATEMENT OF CHANGES IN NET POSITION

(in dollars)

For the Years Ended September 30, 2011 and 2010

2011 2010

Cumulative Results of Operations:

Beginning balance $(2,138,396) $(1,991,129)

Budgetary financing sources:

Appropriations used 24,931,853 25,344,085

Non-exchange revenue (4) 0

Other financing sources (non-exchange):

Transfers in/out without reimbursement (24,675) 0

Imputed financing 1,686,875 1,670,952

Total financing sources 26,594,049 27,015,037

Net cost of operations (26,788,621) (27,162,304)

Net change (194,572) (147,267)

Cumulative Results of Operations $(2,332,968) $(2,138,396)

Unexpended Appropriations:

Beginning balance $6,901,675 $9,048,592

Budgetary financing sources:

Appropriations received 24,773,000 24,773,000

Other adjustments (1,726,020) (1,575,832)

Appropriations used (24,931,853) (25,344,085)

Total budgetary financing sources (1,884,873) (2,146,917)

Total Unexpended Appropriations $5,016,802 $6,901,675

Net Position $2,683,834 $4,763,279

The accompanying notes are an integral part of these statements.
36

Federal Labor Relations Authority

STATEMENT OF BUDGETARY RESOURCES

(in dollars)

For the Years Ended September 30, 2011 and 2010

2011 2010

Budgetary Resources:

Unobligated balance, brought forward, October 1 $4,876,678 $6,481,207

Recoveries of prior year unpaid obligations 46,400 187,003

Budget authority:

Appropriation 24,773,000 24,773,000

Spending authority from offsetting collections

Earned

Collected 81,238 52,146

Change in receivables from Federal sources (2,555) 8,466

Change in unfilled customer orders

Without advance from Federal sources 647 0

Total budget authority 24,852,330 24,833,612

Permanently not available (1,726,020) (1,575,832)

Total Budgetary Resources $28,049,388 $29,925,990

Status of Budgetary Resources:

Obligations incurred:

Direct $24,717,028 $24,988,700

Reimbursable 79,330 60,612

Total obligations incurred 24,796,358 25,049,312

Unobligated balance:

Apportioned 53,918 67,773

Unobligated balance not available 3,199,112 4,808,905

Total Status of Budgetary Resources $28,049,388 $29,925,990

Change in Obligated Balance:

Obligated balance, net:

Unpaid obligations, brought forward, October 1 $3,514,395 $3,675,662

Uncollected customer payments from Federal sources, brought forward, 

October 1 (8,466) 0

Obligations incurred, net (Note 10) 24,796,358 25,049,312

Gross outlays (24,978,891) (25,023,576)

Recoveries of prior year unpaid obligations, actual (46,400) (187,003)

Change in uncollected customer payments from Federal sources 1,908 (8,466)

Total, Unpaid Obligated Balance, Net, End of Period $3,278,904 $3,505,929

Unpaid obligations 3,285,463 3,514,395

Uncollected customer payments from Federal sources (6,559) (8,466)

Total, Unpaid Obligated Balance, Net, End of Period $3,278,904 $3,505,929

Net Outlays:

Gross outlays $24,978,891 $25,023,576

Offsetting collections (81,238) (52,146)

Net Outlays $24,897,653 $24,971,430

The accompanying notes are an integral part of these statements.
37

NOTES TO THE FINANCIAL STATEMENTS

Note 1: Significant Accounting Policies

(a) Reporting Entity – The FLRA is an independent administrative Federal agency created by 

Title VII of the Civil Service Reform Act of 1978, with a mission to carry out five statutory 

responsibilities: (1) determining the appropriateness of units for labor organization 

representation; (2) resolving complaints of unfair labor practices; (3) adjudicating exceptions 

to arbitrators’ awards; (4) adjudicating legal issues relating to duty to bargain; and (5) 

resolving impasses during negotiations. The agency consists of three components: the 

Authority, the Office of the General Counsel, and the Federal Service Impasses Panel.

(b) Basis of Accounting and Presentation – The financial statements have been prepared to 

report the financial position, net cost of operations, changes in net position, and budgetary 

resources of the FLRA in accordance with the Chief Financial Officers Act of 1990, the 

Government Management Reform Act of 1994, and the Accountability of Tax Dollars Act of 

2002. The statements have been prepared from agency financial records in accordance with 

U.S. Generally Accepted Accounting Principles (GAAP), in accordance with guidance issued 

by the Federal Accounting Standards Advisory Board (FASAB) and the Office of 

Management and Budget (OMB), as prescribed in OMB Circular A-136, Financial 

Reporting Requirements, and pursuant to the requirements of 31 U.S.C. 3515(b). These 

financial statements include all funds and accounts under the control of the FLRA.

The accounting structure of Federal agencies is designed to reflect both accrual and 

budgetary accounting transactions. Under the accrual method of accounting, revenues are 

recognized when earned and expenses are recognized when incurred, without regard to the 

receipt or payment of cash. The budgetary accounting principles, on the other hand, are 

designed to recognize the obligation of funds according to legal requirements, which in many 

cases occurs before an accrual-based transaction takes place. The recognition of budgetary 

accounting transactions is essential for compliance with legal constraints and controls over 

the use of Federal funds. The accompanying financial statements are prepared on the accrual 

basis of accounting.

(c) Budget Authority – The Congress passes appropriations annually that provide the FLRA 

with authority to obligate funds for necessary salaries and expenses to carry out mandated 

program activities. These funds are available until expended, subject to OMB apportionment 

and to Congressional restrictions on the expenditure of funds. Also, the FLRA places 

internal restrictions on fund expenditures to ensure the efficient and proper use of all funds.

(d) Fund Balance with Treasury – FLRA receipts and disbursements are processed by the U.S. 

Treasury Department. Fund balances with Treasury consist of appropriated funds that are 

available to pay current liabilities and to finance authorized purchase commitments. No cash 

is held in commercial bank accounts.

(e) Accounts Receivable – Accounts receivable consists of amounts due from other Federal 

entities and from current and former employees and vendors. Amounts due from the public 
38

are stated net of an allowance for uncollectible accounts that is based on an analysis of 

outstanding receivables balances and past collection experience. No allowance is established 

for intragovernmental receivables, as they are considered fully collectible from other Federal

agencies.

(f) General Property and Equipment (P&E) – This category consists of equipment and internal 

use software. The basis for recording purchased P&E is full cost, including all costs incurred 

to bring FLRA P&E to and from a location suitable for its intended use. P&E is depreciated 

using the straight-line method over the estimated useful life of the asset. SFFAS No. 10, 

Accounting for Internal Use Software, provides accounting standards for internal use 

software used by each agency. The standards provide for capitalized property to continue to 

be reported on the Balance Sheet. P&E that are not capitalized because they are under the 

capitalization threshold are expensed in the year of acquisition.

Major alterations and renovations are capitalized, while maintenance and repair costs are 

charged to expense as incurred. Capitalization threshold levels were changed during FY 

2010. FLRA’s capitalization threshold was $3,500 for individual purchases. Bulk purchases 

of similar items which individually were worth less than $3,500, but collectively were worth 

more than $30,000, were also capitalized using the same general P&E categories and useful 

lives as capital acquisitions. Effective in FY 2010, the capitalization threshold for individual 

items changed to $25,000. Bulk purchases of similar items which individually are worth less 

than $25,000, but collectively are worth more than $100,000, are now also capitalized using 

the same general P&E categories and useful lives as capital acquisitions. Also, 

building/leasehold improvements of $25,000 are now capitalized.

General P&E Category Service Life

Software 3 years

Computer equipment 5 years

Office equipment 7 years

Office furniture 15 years

Leasehold improvements Life of lease

(g) Liabilities – Liabilities represent the amount of monies or other resources likely to be paid by 

FLRA as a result of transactions or events that have already occurred. No liability can be 

paid, however, absent an appropriation. Liabilities for which an appropriation has not been 

enacted are, therefore, classified as not covered by budgetary resources, and there is no 

certainty that the appropriation will be enacted. Also, the Federal government, acting in its 

sovereign capacity, can abrogate liabilities other than contracts. Liabilities that are covered 

by budgetary resources consist of intragovernmental and public accounts payable and 

accrued funded payroll. Liabilities not covered by budgetary resources in FY 2010 and FY 

2011 consist of accrued and actuarial Federal Employees Compensation Act (FECA) 

compensation and unfunded employee leave.
39

(h) FECA Liabilities – An accrued FECA liability is recorded for actual and estimated future 

payments to be made for workers’ compensation pursuant to the FECA. The actual costs 

incurred are reflected as a liability because agencies will reimburse the U.S. Department of 

Labor (DOL) two years after the actual payment of expenses. Future revenues will be used 

for their reimbursement to the DOL. The liability consists of: (1) the net present value of 

estimated future payments calculated by the DOL; and (2) the un-reimbursed cost paid by the 

DOL for compensation to recipients under the FECA.

An estimated actuarial liability for future workers’ compensation benefits is included. The 

liability estimate is based on the DOL’s FECA actuarial model that takes the amount of 

benefit payments over the last twelve quarters and calculates the annual average of payments 

for medical expenses and compensation. This average is then multiplied by the liabilities-tobenefits paid ratios for the whole FECA program for FY 2011. The ratios may vary from 

year to year as a result of economic assumptions and other factors, but the model calculates a 

liability approximately eleven times the annual payments.

(i) Annual, Sick and Other Leave – Amounts associated with the payment of annual leave are 

accrued while leave is being earned by employees, and this accrual is reduced as leave is 

taken. Each year the balance in the accrued annual leave account is adjusted to reflect 

current pay rates. To the extent that current or prior year appropriations are not available to 

finance annual leave, future financing sources will be used. Sick leave and other types of 

non-vested leave are expensed as taken. Any liability for sick leave that is accrued but not 

taken by a Civil Service Retirement System (CSRS)-covered employee is transferred to the 

Office of Personnel Management (OPM) upon the retirement of that individual. No credit is 

given for sick leave balances upon the retirement of Federal Employees Retirement System

(FERS)-covered employees.

(j) Accounts Payable and Other Accrued Liabilities – Accounts payable and accrued liabilities 

represent a probable future outflow or other sacrifices of resources as a result of past 

transactions or events. Liabilities are recognized when they are incurred, regardless of 

whether they are covered by available budgetary resources. FLRA liabilities cannot be 

liquidated without legislation that provides resources to do so.

(k) Net Position – The components of net position are unexpended appropriations and 

cumulative results of operations. Unexpended appropriations include undelivered orders and 

unobligated balances. 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 represent the net results of operations since 

inception, the cumulative amount of prior-period adjustments, the remaining book value of 

capitalized assets, and future funding requirements.

(l) Retirement Plans – The FLRA’s employees participate in the CSRS or the FERS. For CSRS 

employees, hired prior to January 1, 1984, the FLRA withholds seven percent of each 

employee’s salary and contributes seven percent of the employee’s basic salary to the CSRS 

Retirement and Disability Fund. These employees may also contribute, on a tax-deferred 

basis, to a defined contribution plan – the Thrift Savings Plan (TSP). In 2010, the regular 
40

IRS limit was $16,500; that limit remained at $16,500 for 2011. The FLRA is not required to 

and does not contribute any matching amounts for CSRS employees.

The FERS was established by enactment of Public Law 99-335. Pursuant to this law, the 

FERS and Social Security automatically cover most employees hired after December 31, 

1983. Employees hired before January 1, 1984 elected either to join the FERS and Social 

Security or to remain in the CSRS. For FERS employees, the FLRA withholds 6.2 percent in

old age survivors and disability insurance up to a specified wage ceiling and 0.8 percent of an 

employee’s gross earnings for retirement. In FY 2011, the FLRA matched the retirement 

withholdings with a contribution equal to 11.2 percent of the employee’s taxable salary.

All employees are eligible to contribute to the TSP. For employees under the FERS, a TSP 

account is automatically established. The FLRA is required to make a mandatory 

contribution of one percent of the base salary for each employee under the FERS. The 

agency is required to match the employee’s contribution up to a maximum of five percent of 

his or her salary. Matching contributions are not made to the TSP accounts established by 

CSRS employees. The FLRA 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.

FERS employees and certain CSRS reinstatement employees are eligible to participate in the 

Social Security program after retirement. CSRS employees who are 65 or older are eligible 

for Social Security payments (even if they have not retired). In these instances, the FLRA 

remits the employer’s share of the required contribution.

(m) Imputed Financing from Costs Absorbed by Others – The FASAB’s SFFAS Number 5, 

Accounting for Liabilities of the Federal Government, requires that employer agencies 

recognize the full cost of pensions, health, and life insurance benefits, during their 

employees’ active years of service. The OPM, as administrator of the CSRS and FERS 

plans, the Federal Employees Health Benefits Program, and the Federal Employees Group 

Life Insurance Program, must provide the “cost factors” that adjust the agency contribution 

rate to the full cost for the applicable benefit programs. An imputed financing source and 

corresponding imputed personnel cost is reflected in the Statement of Changes in Net 

Position and the Statement of Net Cost, respectively. 

(n) Revenue and Other Financing Sources – The FLRA’s revenues are derived from 

reimbursable agreements (exchange) and direct, annual appropriation (financing source). 

The FLRA recognizes reimbursable work agreement revenue when earned, i.e., goods that 

have been delivered or services that have been rendered. Each reimbursable work 

agreement specifies the dollar value of the agreement and is based on estimated resources 

needed to perform the specified services, whether it is personnel services to include base 

pay, overtime and benefits, or travel and per diem. 

The agency receives an annual Salaries and Expenses appropriation from the Congress. 

Annual appropriations are used, within statutory limits, for salaries and administrative 
41

expenses and for operating and capital expenditures for essential personal property. 

Appropriations are recognized as non-exchange 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. The annual 

appropriation for both FY 2010 and FY 2011 was $24,773,000. The appropriation for FY 

2011, however, was reduced by $49,546 pursuant to a 0.2 percent across-the-board 

rescission included in Public Law 112-10.

(o) 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 into 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 and any remaining 

money is returned to the Treasury.

(p) Transactions with Related Parties – In the course of its operations, the FLRA has 

relationships and conducts financial transactions with numerous Federal agencies. The most 

prominent of these relationships are with the Treasury, the U.S. Department of Health and 

Human Services, the U.S. Department of the Interior’s National Business Center, and the 

General Services Administration.

(q) Contingencies – A contingency is an existing condition, situation, or set of circumstances 

involving uncertainty as to possible gain or loss to the agency. The uncertainty will 

ultimately be resolved when one or more future events occur or fail to occur. With the 

exception of pending, threatened, or potential litigation, a contingent liability is recognized 

when a past transaction or event has occurred, a future outflow or other sacrifice of 

resources is more likely than not, and the related future outflow or sacrifice of resources is 

measurable. For pending, threatened, or potential litigation, a liability is recognized when a 

past transaction or event has occurred, a future outflow or other sacrifice of resources is 

likely, and the related future outflow or sacrifice of resources is measurable.

(r) Use of Estimates – The preparation of financial statements in conformity with GAAP 

requires management to make estimates and assumptions that affect the reported amounts of 

assets and liabilities and disclosure of contingent liabilities at the date of the financial 

statements as well as the reported amounts of revenues and expenses during the reporting 

period. Actual results could differ from those estimates.

(s) Advances and Prepayments – 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 prepayments at the time of the prepayments and recognized as 

expenses when the related goods and services are received.
42

Note 2: Fund Balance with Treasury

U.S. government cash is accounted for on an overall consolidated basis by the Treasury. The 

amounts shown on the Balance Sheet represent the FLRA’s right to draw on the Treasury for 

valid expenditures. The fund balance as shown on the FLRA records is reconciled monthly with

records from the Treasury.

Fund Balance with Treasury

As of September 30, 2011 2010

General funds $6,531,934 $8,382,607

Other fund types 79 40

Total $6,532,013 $8,382,647

Status of Fund Balance with Treasury

As of September 30, 2011 2010

Unobligated balance available $53,918 $67,773

Unobligated balance unavailable 3,199,112 4,808,905

Obligated balance not yet distributed 3,278,904 3,505,929

Non-budgetary fund balance with Treasury 79 40

Total $6,532,013 $8,382,647

Note 3: Accounts Receivable, Net

The reported amount for accounts receivable consists of amounts owed to the FLRA by other 

Federal agencies (intragovernmental) and the public.

Accounts Receivable, Net

As of September 30, 2011 2010

From Federal agencies, net $17,021 $8,868

From the public, net 5,243 3,404

Total $22,264 $12,272
43

Amounts Due from Other Federal Agencies

As of September 30, 2011 2010

Department of Agriculture $0 $2,236

Department of Defense 1,123 1,451

Department of Energy 0 754

Department of Homeland Security 0 850

Department of Justice 407 632

Department of Transportation 0 291

Department of Veterans Affairs 0 2,654

Environmental Protection Agency 1,096 0

United States Postal Service 14,395 0

Total $17,021 $8,868

Note 4: General Property and Equipment, Net

Category

Service 

Life

Acquisition 

Value

Accumulated 

Depreciation

2011 Net 

Book 

Value

2010 Net 

Book 

Value

Software 3 years $258,957 $(258,957) $0 $0

Computer equipment 5 years 497,616 (398,817) 98,799 100,035

Office equipment 7 years 541,272 (368,620) 172,652 245,681

Office furniture 15 years 526,039 (378,133) 147,906 223,015

Leasehold improvements Life of lease 428,172 (321,776) 106,396 147,941

Total $2,252,056 $(1,726,303) $525,753 $716,672

Note 5: Liabilities Not Covered By Budgetary Resources

Unfunded FECA liabilities consists of workers’ compensation claims payable to the DOL, which 

will be funded in a future period, and an unfunded estimated liability for future workers’ 

compensation claims based on data provided from the DOL. The actuarial calculation is based 

on benefit payments made over twelve quarters, and calculates the annual average of payments. 

For medical expenses and compensation, this average is then multiplied by the liability-tobenefit paid ratio for the whole FECA program.

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

year-end, the balance in the unfunded leave account is adjusted to reflect the liability at current 

pay rates and leave balances. Unfunded 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. All other liabilities are considered to be covered by budgetary resources.
44

Liabilities Not Covered By Budgetary Resources

For the Years ended September 30, 2011 2010

Intragovernmental – Unfunded FECA liabilities $239,011 $248,274

Federal employee benefits – FECA actuarial liability 1,141,306 1,172,904

Unfunded leave 1,513,590 1,437,695

Total $2,883,907 $2,858,873

Note 6: Other Liabilities

Other liabilities in FY 2011 include interest payment from a customer agency for reimbursable 

travel. Payment was deposited into the Treasury’s General Fund Interest Account.

Note 7: Leases

The FLRA has operating leases for rental of office space and office equipment. As a Federal 

agency, the FLRA is not liable for any lease terms beyond one year. The agency anticipates that 

space levels consistent with FY 2011 will be required for the next five years.

Future Minimum Lease Payments

FY Equipment Building Total

2012 $15,869 $2,254,907 $2,270,776

2013 15,869 2,363,781 2,379,650

2014 15,869 2,461,114 2,476,983

2015 6,086 2,407,314 2,413,400

2016 0 2,329,077 2,329,077

Thereafter 0 14,971,777 14,971,777

Total $53,693 $26,787,970 $26,841,663

Note 8: Commitments and Contingencies

The FLRA is a party in various administrative proceedings, legal actions, and claims brought by 

or against the agency. In the opinion of FLRA management, the ultimate resolution of 

proceedings, actions, and claims, will not materially affect financial position or results of 

operations of the FLRA. The agency has examined its obligations related to cancelled FY 2006

authority and believes that it will not have outstanding commitments that will require future 

resources.
45

Note 9: Intragovernmental Costs and Exchange Revenue

The classification of revenue or cost defined as "intragovernmental" or "with the public" is 

defined on a transaction by transaction basis. Preceding transactions in the lifecycle of a product

will not have an impact on subsequent transactions. If the FLRA purchases goods or services 

from another Federal entity, capitalizes them into inventory, and later resells them to the public, 

the cost of the original purchase of resale assets from the other Federal entity will be classified as 

"intragovernmental" at the time of the purchase. At ultimate sale to the end user, the resulting 

cost of goods will be classified as "with the public." The purpose of this classification is to 

enable the Federal government to provide consolidated financial statements, and not to match 

public and intragovernmental revenue with costs that are incurred to produce public and 

intragovernmental revenue.

Note 10: Apportionment Categories of Obligations Incurred: Direct Versus 

Reimbursable Obligations

Obligations Incurred

For the Years Ended September 30, 2011 2010

Direct obligations – Category A $24,717,028 $24,988,700

Reimbursable obligations – Category A 79,330 60,612

Total $24,796,358 $25,049,312

Note 11: Undelivered Orders at the End of the Period

The amount of budgetary resources obligated for undelivered orders at the end of September 30, 

2011 and 2010 is $1,772,040 and $2,003,337, respectively.

Note 12: Explanation of Differences between the SBR and the Budget of the 

U.S. Government

SFFAS No. 7, Accounting for Revenue and Other Financing Sources and Concepts for 

Reconciling Budgetary and Financial Accounting, calls for explanation of material differences 

between amounts reported in the Statement of Budgetary Resources and the actual balances 

published in the Budget of the U.S. Government (the President’s Budget). The FY 2012 

President’s Budget, with actual amounts for FY 2010, has been reconciled to the Statement of 

Budgetary Resources. The FY 2013 President’s Budget, with actual amounts for FY 2011, will 

not be published until February 2012.

Note 13: Reconciliation of Net Cost to Budget

Details of the relationship between budgetary resources obligated and the net costs of operations 

for the fiscal years ended September 30, 2011 and 2010 are shown in the table on the following 

page.
46

Reconciliation of Net Cost to Budget

For the Years Ended September 30, 2011 2010

Resources Used to Finance Activities:

 Obligations incurred $24,796,358 $25,049,312

 Spending authority from offsetting collections:

 Collected (81,238) (52,146)

 Change in receivable from Federal sources (647) (8,466)

 Recoveries of prior year unpaid obligations (46,400) (187,003)

Transfers in/out without reimbursement (24,675) 0

 Imputed financing sources 1,686,875 1,670,952

Other (4) 0

Total Resources Used to Finance Activity $26,330,269 $26,472,649

Resources Used That Do Not Fund Net Cost of Operations:

Change in unfilled customer orders $647 $0

 Change in undelivered orders 241,745 535,181

Current-year capitalized purchases (29,789) 0

Other resources/adjustments that do not affect net cost of

operations 0 (278,891)

Components of the Net Cost of Operations Which Do Not 

Generate or Use Resources in the Reporting Period:

 Change in receivables (9,992) 8,466

 Other financing sources not in the budget (1,686,875) (1,670,952)

 Depreciation and amortization 220,707 215,297

 Future funded expenses 66,632 142,654

 Imputed costs 1,686,875 1,670,952

 Other expenses not requiring budgetary resources (31,598) 66,948

Net Cost of Operations $26,788,621 $27,162,304
47

Chairman Pope: 

We have audited the accompanying balance sheet of the Federal Labor Relations Authority 

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

in net position, and statement of budgetary resources, for the year then ended. In our audit of the 

Federal Labor Relations Authority for the fiscal year September 30, 2011, we found 

• the financial statements are presented fairly, in all material respects, in conformity with U.S. 

generally accepted accounting principles,

• no material weaknesses or significant deficiencies in internal control over financial reporting 

(including safeguarding assets),

• no reportable noncompliance with laws and regulations we tested. 

The following sections discuss in more detail (1) these conclusions, (2) our conclusions on 

Management's Discussion and Analysis (MD&A) and other accompanying information, and (3) 

our audit objectives, scope, and methodology.

Opinion on Financial Statements 

In our opinion, the financial statements including the accompanying notes present fairly, in all 

material respects, in conformity with U.S. generally accepted accounting principles, the Federal 

Labor Relations Authority's assets, liabilities, and net position as of September 30, 2011; and net 

costs; changes in net position; and budgetary resources for the year then ended. 

The financial statements of the Federal Labor Relations Authority as of September 30, 2010 

were audited by other auditors whose report dated November 15, 2010, expressed an unqualified 

opinion on those statements.

Consideration of Internal Control 

In planning and performing our audit, we considered the Federal Labor Relations Authority's 

internal control over financial reporting as a basis for designing our auditing procedures and to 

comply with the Office of Management and Budget (OMB) audit guidance for the purpose of 

expressing our opinion on the financial statements, but not for the purpose of expressing an 

opinion on internal control and compliance or on management’s assertion on internal control 
48

included in MD&A. Accordingly, we do not express an opinion on internal control over 

financial reporting and compliance or on management’s assertion on the effectiveness of the 

entity’s internal control over financial reporting or on management’s assertion on internal control 

included in the MD&A.

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

described in the preceding paragraph and would not necessarily identify all deficiencies in 

internal control over financial reporting that might be significant deficiencies or material 

weaknesses. 

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 

entity'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 entity's internal control. 

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

described in the first paragraph of this section and would not necessarily disclose all deficiencies 

in the internal control that might be material weaknesses or significant deficiencies. We did not 

identify any deficiencies in internal control over financial reporting that we consider to be 

material weaknesses or significant deficiencies, as defined above. 

We noted other non-reportable matters involving internal control and its operation that we will 

communicate in a separate management letter to FLRA management. 

Compliance With Laws and Regulations 

Our tests of the Federal Labor Relations Authority's compliance with selected provisions of laws 

and regulations for fiscal year 2011 disclosed no instances of noncompliance that would be 

reportable under U.S. generally accepted government auditing standards or OMB audit guidance. 

However, the objective of our audit was not to provide an opinion on overall compliance with 

laws and regulations. Accordingly, we do not express such an opinion. 

Consistency of Other Information

The information in the Management's Discussion and Analysis is not a required part of the 

financial statements, but is supplementary information required by U.S. generally accepted
49

accounting principles. We have applied certain limited procedures, which consisted principally 

of inquiries of management regarding the methods of measurement and presentation of this 

information. However, we did not audit this information and, accordingly, we express no 

opinion on it.

The information in the Chairman's Message, Performance Section, and Other Accompanying 

Information is presented for purposes of additional analysis and is not required as part of the 

financial statements. This information has not been subjected to auditing procedures and, 

accordingly, we express no opinion on it. 

Objectives, Scope, and Methodology 

The Federal Labor Relations Authority's management is responsible for (1) preparing the 

financial statements in conformity with U.S. generally accepted accounting principles, (2) 

establishing, maintaining, and assessing internal control to provide reasonable assurance that the 

broad control objectives of the Federal Managers' Financial Integrity Act are met, and (3) 

complying with applicable laws and regulations. 

We are responsible for obtaining reasonable assurance about whether the financial statements are 

presented fairly, in all material respects, in conformity with U.S. generally accepted accounting 

principles. We are also responsible for (1) obtaining a sufficient understanding of internal 

control over financial reporting and compliance to plan the audit, (2) testing compliance with 

selected provisions of laws and regulations that have a direct and material effect on the financial 

statements and laws for which OMB audit guidance requires testing, and (3) performing limited 

procedures with respect to certain other information appearing with the Annual Financial 

Statements. 

In order to fulfill these responsibilities, we

• examined, on a test basis, evidence supporting the amounts and disclosures in the financial 

statements;

• assessed the accounting principles used and significant estimates made by management;

• evaluated the overall presentation of the financial statements;

• obtained an understanding of the FLRA and its operations, including its internal control related 

to financial reporting (including safeguarding assets), and compliance with laws and 

regulations (including execution of transactions in accordance with budget authority);

• tested relevant internal controls over financial reporting and compliance, and evaluated the 

design and operating effectiveness of internal control;
50

• considered the design of the process for evaluating and reporting on internal control and 

financial management systems under the Federal Managers' Financial Integrity Act; and

• tested compliance with selected provisions of laws and regulations.

We did not evaluate all internal controls relevant to operating objectives as broadly defined by 

the Federal Managers' Financial Integrity Act, such as those controls relevant to preparing 

statistical reports and ensuring efficient operations. We limited our internal control testing to 

controls over financial reporting and compliance. Because of inherent limitations in internal 

control, misstatements due to error or fraud, losses, or noncompliance may nevertheless occur 

and not be detected. We also caution that projecting our evaluation to future periods is subject to 

the risk that controls may become inadequate because of changes in conditions or that the degree 

of compliance with controls may deteriorate. In addition, we caution that our internal control 

testing may not be sufficient for other purposes. 

We did not test compliance with all laws and regulations applicable to the Federal Labor 

Relations Authority. We limited our tests of compliance to selected provisions of laws and 

regulations that have a direct and material effect on the financial statements and those required 

by OMB audit guidance that we deemed applicable to the Federal Labor Relations Authority's 

financial statements for the fiscal year ended September 30, 2011. We caution that 

noncompliance may occur and not be detected by these tests and that such testing may not be 

sufficient for other purposes. 

We performed our audit in accordance auditing standards generally accepted in the United 

States; the standards applicable to the financial audits contained in Government Auditing 

Standards, issued by the Comptroller General of the United States; and OMB guidance.

Rockville, Maryland

November 15, 2011
51

OTHER ACCOMPANYING INFORMATION

SUMMARY OF FINANCIAL STATEMENT AUDIT

Audit Opinion: Unqualified

Restatement: No

Beginning 

Balance New Resolved Consolidated

Ending 

Balance

Material weaknesses 0 0 0 0 0

SUMMARY OF MANAGEMENT ASSURANCES

Effectiveness of Internal Control over Financial Reporting (FMFIA § 2)

Statement of Assurance: Unqualified

Beginning 

Balance New Resolved Consolidated Reassessed

Ending 

Balance

Material weaknesses 0 0 0 0 0 0

Effectiveness of Internal Control over Operations (FMFIA § 2)

Statement of Assurance: Unqualified

Beginning 

Balance New Resolved Consolidated Reassessed

Ending 

Balance

Material weaknesses 0 0 0 0 0 0

Conformance with Financial Management System Requirements (FMFIA § 4)

Statement of Assurance: Systems conform

Beginning 

Balance New Resolved Consolidated Reassessed

Ending 

Balance

Non-conformances 0 0 0 0 0 0
52

 

MEMORANDUM

DATE: October 14, 2011

TO: Carol Waller Pope

Chairman

Thomas Beck

Member

Ernest DuBester

Member

FROM: Dana Rooney-Fisher 

Inspector General

SUBJECT: Inspector General Identified Management Challenges

This memorandum transmits the key management and performance challenges facing the Federal 

Labor Relations Authority (FLRA) as identified by the Inspector General (lG).

The FLRA is required to prepare an annual "Performance and Accountability Report" (PAR) 

which must be submitted to the President, the Office of Management and Budget, and to 

appropriate committees and subcommittees of Congress within 45 days of the end of the 

fiscal year (FY). The Reports Consolidation Act of 2000, Public Law 106-531, requires the 

IG to provide the agency head with a statement that summarizes the most serious 

management and performance challenges facing the agency and briefly assesses the agency's 

progress in addressing those challenges. This statement should be included in the PAR.

Accordingly, the attached document describes the most serious management and performance 

challenges facing the FLRA along with a brief assessment of management's progress in 

addressing them. These ongoing challenges include: resource shortages; FLRA physical and

information technology security; proper handling of records; and succession planning.

The above challenges were also noted in the agency's FY 2010 PAR. The agency has made 

substantial progress in addressing these challenges as further described in the attachment. 

Further, management has taken sufficient action to effectively mitigate several of the IG 

identified challenges that were contained in the FY 2009 PAR, which the Office of the 

Inspector General (OIG) no longer considers to be serious challenges. We appreciate 

management's strong commitment in addressing these challenges and welcome comments to 

our assessment.

Attachment

 

 UNITED STATES OF AMERICA

 FEDERAL LABOR RELATIONS AUTHORITY

 WASHINGTON, D.C. 20424-0001
53

Office of the Inspector General

Federal Labor Relations Authority

Top Management and Performance Challenges

During the past decade, overall, the Federal Labor Relations Authority (FLRA) has conducted its 

operations with a diminishing amount of full-time equivalents (FTE). For example, in Fiscal 

Year (FY) 2001, the staffing level was about 200 FTE, but by FY 2011 the total actual FTE used 

was approximately 35 percent lower. Although the entire Federal Government faces the prospect 

of doing more with less, this decline in human resources continues to pose a risk that the agency 

will be handicapped in effectively performing its mission. Having substantially fewer resources 

will cause management, by necessity, to strategically fill positions and thereby accept higher 

degree of risk in areas deemed less critical, though still important to agency operations. My 

office first reported this issue as a challenge in my statement that was included in the FLRA's FY 

2009 PAR and again in FY 2010 as well.

Challenge: Human Resources Shortage

Progress made:

The FLRA has proactively addressed this challenge in several ways. First, the agency requested 

additional resources in its FY 2011 Congressional Budget Justification, but the request was not 

fully funded. Additionally, in FY 2011 when the FLRA was funded at less than the FY 2010 

level, it implemented cost savings measures including reducing funding for discretionary items 

such as travel, training and other initiatives to help minimize the impact on human resources. 

Finally, with input from senior management and the Union of Authority Employees, the FLRA 

continued to assess available resources and redirect them to ensure key positions were filled, 

which may have not been filled otherwise. The agency was able to redirect its resources in a 

manner which enabled it to substantially meet its performance goals for the fiscal year.

Challenge Ahead:

Although management is proactively addressing this challenge by reallocating its existing 

resources, reallocating the same level of resources may detract from the agency's ability to 

perform functions previously staffed at higher levels. Accordingly, the ongoing challenge is to 

obtain the sufficient human resources for optimal performance, while also considering 

efficiency. In addition, flat-lined budgets will make it increasingly difficult to realign existing 

resources while also absorbing cost increases such as inflation. The Inspector General (IG) 

noted the agency's FY 2012 Congressional Budget Justification included a request for an 

increase in funding to support an additional three FTE.

While technological advances enable increases in efficiency, they also can pose additional 

vulnerabilities and threats to agency operations. The agency must remain vigilant in establishing 

a control environment that incorporates monitoring potential information technology (IT) risks, 

threats and vulnerabilities and in mitigating them.

Challenge: Information Technology Security

Progress made:

In response to a non-public report issued in FY 2011, which was based on an independent 

evaluation of the quality and compliance of the agency's security program, management has
54

Office of the Inspector General

Federal Labor Relations Authority

Top Management and Performance Challenges

proactively taken a number of steps to address findings contained in the report. Management 

developed a Plan of Action and Milestones and successfully addressed 75 percent of the open 

issues noted in prior reports. However, several issues still remained open as of the end of FY 

2011 and at least one additional item was identified.

Challenge Ahead:

Maintaining a capability to proactively assess and mitigate risks that result from advances in IT 

is a challenge facing not only FLRA but also the Government as a whole. This challenge could 

become more prominent if adequate attention and resources are not vested in the IT program. 

While Federal requirements continue to change in an attempt to better secure the Federal IT 

infrastructure, complying with evolving mandatory IT security requirements will pose an 

ongoing challenge to the agency.

It is essential to have adequately documented policies, procedures and processes that address the

proper handling of all hard copy and electronic records. In prior statements, including FY 2010, 

my office has noted that although certain types of records (hard copy and electronic) do not have 

legal retention requirements, agency policies, processes and procedures should clearly and 

specifically instruct staff on the proper handling. The need to develop and maintain such policies 

continues. However, even more crucial, is the need for adequate controls to safeguard 

individually identifiable information (III) and personally identifiable information (PII) which the 

agency maintains so that only staff who have a legitimate need have access to such information. 

We noted that the agency controls and procedures pertaining to the monitoring which systems 

maintain III and PII could be improved as well as its practices pertaining to performing Privacy 

Impact Assessments as required by the Office of Management and Budget (OMB).

Challenge: Proper Handling of and Access to Agency Records

Progress made:

The FLRA is currently developing a case management infrastructure that supports electronic 

files, and will further agency efforts to properly handle agency case file records. Additionally, 

management plans to develop policies, processes and procedures that provide staff with clear 

guidance for handling records. The FLRA has also automated many of its systems – accounting, 

procurement, time and attendance.

Challenge Ahead:

The FLRA should ensure that its policies, processes and procedures address the unique 

requirements pertaining to safeguarding III and PII and should address related requirements such 

as those specified by the White House in the OMB Memorandum M-03-22, "OMB Guidance for 

Implementing the Privacy Provisions of the E-Government Act of 2002".

Maintaining an adequate number of skilled staff in light of the aging national workforce is a 

challenge that the Federal Government as a whole faces moving forward into the next decade.

Challenge: Succession Planning
55

Office of the Inspector General

Federal Labor Relations Authority

Top Management and Performance Challenges

As the number of qualified and skilled workers available to fill positions declines, agencies must 

proactively plan in advance for ensuring key leadership positions do not go unfilled for extended

periods. Accordingly, the FLRA faces the same challenges as other Federal agencies do in this 

area.

Progress made:

In October 2010, the FLRA embarked on its first collaborative strategic planning effort in nearly 

10 years. In addition, in both FY 2010 and FY 2011, the FLRA identified succession planning as 

priority, setting forth such planning as one of the agency's performance goals. In FY 2010, the 

agency began offering developmental details to supervisory positions in the Office of the 

General Counsel. Work to address the agency's succession planning needs is on-going and 

continuous.

Challenge Ahead:

The agency must maintain its current focus on ensuring that its transition plans are kept current 

to address the external changes in the workforce landscape and changes that may impact tools 

that are available for managing staff (e.g., changes to Government-wide policy made by the U.S. 

Office of Personnel Management). The IG will continue to monitor agency progress in 

addressing this challenge.
56

MANAGEMENT’S RESPONSE

Over the last two years, the FLRA has engaged in a thorough review of agency programs and 

performance. Efforts were focused on budget-related matters and the development of 

management initiatives to improve the FLRA’s performance of its statutory mission. In addition 

to program performance, the review included information technology (IT) investments, human 

resources (HR), case processing, and financial management. As a result, in recent years, the 

FLRA has made substantial progress in addressing and resolving deficiencies and challenges 

identified.

It is useful each year to take stock of the progress achieved toward eliminating remaining 

deficiencies and challenges identified by the IG. Many prior-year challenges have been 

addressed and eliminated. The remaining, ongoing challenges identified by the IG include

resource shortages, FLRA physical and IT security, proper handling of records, and succession 

planning. With respect to these ongoing challenges, management has made, and continues to 

make, progress toward elimination of most of the challenges identified. 

Human Resources Shortage

The IG identified a risk that the agency will be handicapped in effectively performing its mission 

due to a shortage of HR. The FLRA has mitigated some of that risk by strategically reallocating 

resources to critical positions, shifting the risk from critical to less critical areas, and by 

requesting additional resources in subsequent budget years. Management has and will continue 

to balance agency HR levels against acceptable performance and program outcomes. 

We are pleased to report that re-allocating resources has in part resulted in the FLRA meeting or 

substantially meeting its organizational performance goals for the last two fiscal years. As 

reduced funding levels become the norm within the Federal government, the FLRA will continue 

to assess the status of resources throughout the agency, and strategically re-allocate resources to 

maximize organizational and program performance.

Information Technology Security

The IG identified a concern that the agency must remain vigilant in establishing a control 

environment that incorporates monitoring potential IT risks, threats, and vulnerabilities, and 

mitigating them. Management agrees with the IG and has made it a priority to focus on IT 

security, closing over 75 of the prior year’s open items in FY 2011. Over the past year, the 

FLRA invested the resources necessary to mitigate security risks, threats, and vulnerabilities,

with the goal of closing the remaining 25 open items over the next fiscal year. 

Proper Handling of and Access to Agency Records

The IG suggests that the FLRA could improve controls, procedures, and Privacy Impact 

Assessment (PIA) practices pertaining to monitoring systems that maintain III and PII. 

Management agrees that it is important to protect vulnerable III and PII and, as a result, has 

implemented a policy on protection of PII. The policy instruction establishes rules of behavior to 
57

ensure that safeguards are in place to protect all FLRA systems containing PII and provides 

procedures for reporting and responding to breaches of PII. The Instruction is based on OMB 

Memorandum M-03-22, OMB Guidance for Implementing the Privacy Provisions of the EGovernment Act of 2002. The FLRA has prepared, but yet to issue, draft PIAs for information 

systems. The FLRA Information Resources Management Division is currently compiling a list 

of agency information systems that may contain PII, so that PIAs can be written and posted on 

the FLRA intranet.

Succession Planning

The IG noted that the FLRA, like the rest of the Federal government, will face the challenge of 

maintaining an adequate number of skilled staff in light of the aging national workforce, and 

recommends that the agency proactively plan in advance to ensure that key leadership positions 

do not go unfilled. The agency strongly believes succession planning is critical and has included

it as a human capital goal within the FLRA Strategic Plan. In FY 2011, the FLRA began work 

on the foundational aspects of workforce and succession planning, developing core competencies 

for critical positions. Using these competencies, the FLRA conducted a training needs 

assessment. The resulting data will form targeted Individual Development Plans and employee 

development programs and training. The agency believes succession planning will be an ongoing effort required to meet program performance and mission needs. 

Over the last year, the agency continued to offer developmental details to supervisory positions 

in the OGC. In addition, the agency dedicated resources in FY 2010 and FY 2011 to executive 

development training for Authority and OGC staff to prepare for positions of leadership. The 

agency recently conducted a new employee orientation session using seasoned staff to train new 

employees on best agency practices. Work to address the agency’s succession planning needs is 

on-going and continuous, as reflected in the agency’s goals for FY 2012 to enhance 

developmental offerings such as career advancement programs.

Moving forward, the FLRA will continue to take steps necessary to effectively manage agency 

resources and staff to better accomplish its important mission of providing guidance in resolving 

labor-management disputes in the Federal sector. The agency recognizes that a renewed and 

revitalized FLRA depends on not only funding but also creativity in using existing resources as 

well as vigorous dedication to improving program performance, agency management, and 

employee morale and satisfaction.

IMPROPER PAYMENTS ELIMINATION AND RECOVERY

The Improper Payments Information Act of 2002, as amended by the Improper Payments 

Elimination and Recovery Act of 2010 (IPERA), requires agencies to annually report 

information on improper payments. The FLRA has reviewed all of its programs and determined 

that none are susceptible to significant improper payment. The IPERA also requires agencies to 

conduct payment recapture audits for each program that expends $1 million or more annually, if 

conducting such audits would be cost-effective. Based on the criteria set forth in Appendix C of 

Office of Management and Budget Circular A-123, the agency has also determined that it would 

not be cost-effective to establish a recovery audit program for its programs that expend more 
58

than $1 million. Recoveries are not expected to be greater than the costs incurred to identify any 

overpayments.

FEDERAL LABOR RELATIONS AUTHORITY

1400 K Street, N.W.

Washington, DC 20424

www.flra.gov