FEDERAL MINE SAFETY AND HEALTH REVIEW 

COMMISSION

PERFORMANCE AND 

ACCOUNTABILITY REPORT

FISCAL YEAR 2014

NOVEMBER 17, 2014
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Table of Contents

Message from the Acting Chairman ...................................................................1

Management Discussion and Analysis ..............................................................3

Overview ....................................................................................................3

Key Challenges ...........................................................................................6

Analysis of Financial Statements ...............................................................6

Management Assurances ............................................................................9

Performance Section ...........................................................................................10

Administrative Law Judges Function ...........................................................10

Commission Review Function .....................................................................13

Office of Executive Director Function ..........................................................16

Financial Section .................................................................................................17

Letter from Executive Director .....................................................................17

Independent Auditors’ Reports ....................................................................18

Financial Statements and Notes .................................................................22
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Message from the Acting Chairman

November 14, 2014

As Acting Chairman of the Federal Mine Safety and Health Review Commission, I am 

pleased to submit the Performance and Accountability Report for Fiscal Year 2014. This 

report provides performance information in keeping with the requirements of the 

Government Performance and Results Modernization Act of 2010 and includes audited 

financial statements and accompanying documentation as mandated by the 

Accountability of Tax Dollars Act of 2002.

The Commission is an independent adjudicatory agency charged with resolving disputes 

arising from the enforcement of safety and health standards in the nation’s mines. The 

Commission provides administrative trial and appellate review of legal disputes arising 

under the Federal Mine Safety and Health Act of 1977 (Mine Act), as amended.

The Commission carries out its responsibilities through trial-level adjudication by 

administrative law judges and appellate review of judges’ decisions by a five-member 

Commission appointed by the President and confirmed by the Senate. Most cases 

involve civil penalties assessed against mine operators by the Department of Labor and 

address whether or not the alleged safety and health violations occurred and if so, the 

degree of gravity and negligence involved, so that appropriate sanctions may be 

imposed. 

The Commission has set forth the following strategic goals: 

 Strategic Goal 1: Ensure expeditious, fair, and legally sound adjudication of 

cases 

 Strategic Goal 2: Manage the Commission’s human resources, operations, 

facilities, and information technology systems to ensure a continually improving, 

effective and efficient organization

In Fiscal Year 2014, the Commission met or exceeded all performance targets for all 

three trial level goals in the Office of the Administrative Law Judges. Due to a 

concentrated effort by the Office of the Administrative Law Judges, the Commission has 

made great strides in reducing the backlog of trial level cases. The number of cases on 

hand has been reduced significantly from the high point in FY 2010. In addition, this was 

the fourth year that the number of pending trial level cases was reduced from the 

previous year. The Commission met two of the four performance targets at the 
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Commission Review Function. We note that, in recent years, the Commission’s 

appellate review function has seen a dramatic increase in the number of substantive 

cases received.

We are pleased to report the independent auditor’s opinion that the financial statements 

present fairly, in all material aspects, the financial position of the Commission, and that 

no matters involving internal control were noted and that no material internal control 

weaknesses were identified. It is my assessment that the financial and performance data 

in this report is reliable and complete. 

The fiscal year ended with only three of the Commission’s seats filled. In August 2014

two Commissioners’ appointments expired. 

The Commission’s mission is to provide the just, speedy, and legally sound adjudication 

of proceedings authorized under the Mine Act, thereby enhancing compliance with the 

Act and contributing to the improved health and safety of the nation’s miners. We remain 

committed to that mission. 

Patrick K. Nakamura

Acting Chairman
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Management Discussion and Analysis

OVERVIEW

MISSION

The Federal Mine Safety and Health Review Commission is an independent adjudicatory 

agency charged with resolving disputes arising from the enforcement of safety and 

health standards in the nation’s mines. Under its enabling statute, the Federal Mine 

Safety and Health Act of 1977 (Mine Act), as amended, the Commission does not 

regulate the mining industry, nor does it enforce the Mine Act; those functions are 

delegated to the Secretary of Labor acting through the Mine Safety and Health 

Administration (MSHA). The Commission’s mission is to provide just, speedy, and legally 

sound adjudication of proceedings authorized under the Mine Act, thereby enhancing 

compliance with the Act and contributing to the improved health and safety of the 

nation’s miners.

The scope of the Commission’s mission was expanded by the passage of the Mine 

Improvement and New Emergency Response Act of 2006, P.L. 109-236 (MINER Act). 

That statute amended the Mine Act and vested the Commission with the responsibility 

for resolving disputes over the contents of mine emergency plans adopted by 

underground coal mine operators and submitted to MSHA for review and approval. The 

MINER Act imposed tight deadlines on the Commission and its judges with respect to 

these proceedings and the Commission has adopted procedural rules to implement 

those deadlines.

FUNCTIONS AND PROCEDURES

The Commission carries out its responsibilities through trial-level adjudication by judges 

and appellate review of judges’ decisions by a five-member Commission appointed by 

the President and confirmed by the Senate. Most cases involve civil penalties assessed 

against mine operators by MSHA, and address whether or not the alleged safety and 

health violations occurred and if so, the degree of gravity and negligence involved. 

Other types of cases involve mine operators’ contests of mine closure orders, miners’ 

complaints of safety or health related discrimination, miners’ applications for 

compensation after a mine is idled by a closure order, and review of disputes between 

MSHA and underground coal mine operators relating to those operators’ mine 

emergency plans.
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Once a case is filed with the Commission, it is referred to the Chief Administrative Law 

Judge (Chief Judge). Thereafter, litigants in the case must submit additional filings 

before the case is assigned to a judge. To expedite the decisional process, the Chief 

Judge may rule on certain motions and, where appropriate, issue orders of settlement, 

dismissal, or default. Otherwise, once a case is assigned to an individual judge, that 

judge is responsible for the case and rules upon motions and settlement proposals. If a 

hearing is necessary, the judge schedules and presides over the hearing, and issues a 

decision based upon the record. A judge’s decision becomes a final, non-precedential 

order of the Commission unless it is accepted for review by the five-member 

Commission.

The Commission also provides administrative appellate review. It may, in its discretion, 

review decisions issued by judges when requested by a litigant, or it may, on its own 

initiative, direct cases for review. The Commission’s decisions are precedential, and 

appeals from the Commission’s decisions are heard in the federal courts of appeals.

The Office of the Executive Director supports the above functions by providing budget 

and financial management, and administrative and technical services, including human 

resources and information technology, procurement and contracting, and facilities 

management.

STRATEGIC GOALS

The Commission has two strategic goals:

Strategic Goal 1: Ensure expeditious, fair, and legally sound adjudication of cases

Strategic Goal 2: Manage the Commission’s human resources, operations, facilities, and 

information technology systems to ensure a continually improving, 

effective, and efficient organization
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ORGANIZATIONAL CHART
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KEY CHALLENGES

The Commission has faced great challenges in recent years, as its trial caseload 

increased dramatically. From FY 2000 through FY 2005, the average number of new 

cases filed was 2,307 per year. However, beginning in FY 2006 the number of new 

cases filed increased and in FY 2014 6,240 new cases were filed. The Commission 

began FY 2014 with an inventory of 7,612 trial-level cases. In contrast, the average triallevel caseload from FY 2000 through FY 2004 was only 1,379. 

The Commission has actively explored the implementation of an electronic case 

management system to increase the speed and efficiency with which cases are 

processed. A new electronic Case Management System procurement was fielded in FY 

2014. This system permits electronic filing, fully electronic case files, electronic 

assignment and distribution of cases, automated notifications to parties, case tracking 

and other utilities. In anticipation of this new system, the Commission had initiated pilot 

projects to increase the use of technology in case handling that helped to identify and 

ameliorate potential barriers to e-filing.

The backlog reduction activities undertaken by the Commission have been highly 

productive. In FY 2014, 7,315 cases were disposed of at the trial level. Timeliness also 

improved, and the performance goals established for the Commission’s Administrative 

Law Judges function were met.

However, as a result of the increasing number of cases disposed of by Commission 

judges, the number of cases appealed to the Commission Review has increased

significantly. The scope of this increase in appeals, and the challenges it presents, are 

detailed later in this report in the discussion of the performance goals and results of the 

Commission Review function.

ANALYSIS OF FINANCIAL STATEMENTS

The Accountability of Tax Dollars Act of 2002 requires that the Commission’s financial 

statements be audited annually. In accordance with the Accountability of Tax Dollars 

Act of 2002, the Commission began annual audits in FY 2003. The Commission has 

received an “unqualified” opinion for each annual review conducted by an independent 

auditor. 

The Commission has contracted with the Department of the Treasury, Bureau of the 

Fiscal Service, Administrative Resource Center, for accounting services since 1998. 

The Administrative Resource Center prepared the Commission’s FY 2014 financial 

statements, which include comparative data for FY 2013. The principal financial 
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statements include the Balance Sheet, Statement of Net Cost, Statement of Changes in 

Net Position, and Statement of Budgetary Resources. 

Analysis of the Balance Sheet 

The Commission’s assets in fiscal year 2014 were $6,848,106 as of September 30, 

2014. The Fund Balance with Treasury of $5,912,465 represents the Commission’s 

largest asset as of September 30, 2014. This is an increase of approximately 5 percent 

from fiscal year 2013 and represents approximately 86 percent of the agency’s total 

assets. Property, Equipment, and Software accounts for approximately 14 percent of 

the Commission's total assets as of September 30, 2014. The net fixed asset value of 

$933,065 equals the cost less accumulated depreciation and represents the current 

book value of those assets. 

The Commission’s liabilities in fiscal year 2014 totaled $3,859,741 as of September 30, 

2014. This is an increase of $1,004,384 from the fiscal year 2013 balance of 

$2,855,357. Accounts payable balance at September 30, 2014, was $1,957,937, an 

increase of $673,536 from September 30, 2013. Accrued payroll liabilities, payroll taxes 

payable, and unemployment insurance increased $18,622 in 2014. Unfunded annual 

leave decreased $4,975 in 2014 from 2013. Unfunded annual leave represents 

approximately 14 percent of total agency liabilities. 

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

position for fiscal year 2014 decreased by $796,756 from fiscal year 2013. 

Analysis of Statement of Net Cost

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

broken out between the Commission’s two major functions, Administrative Law Judges 

and Review Commission. The total net cost of operations in 2014 was $17,775,765, 

which is an increase of $33,317, or less than 1 percent, over the 2013 net cost of 

operations of $17,742,448. 

Analysis of the Statement of Changes in Net Position

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

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

unexpended appropriations and the cumulative results of operations. The Net Position 

decreased $796,756 in 2014 from 2013, a change of approximately 21 percent. 

Analysis of the Statement of Budgetary Resources

The Statement of Budgetary Resources presents how the budgetary resources were 

made available and the status of the budgetary resources at the end of the reporting 

period. The total budgetary resources must always equal the total status of budgetary 

resources. For fiscal year 2014, the Commission had total budgetary resources of 

$19,835,761, which is $1,600,586 more than in 2013.
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Dollars in Thousands Increase / (Decrease)

FY 2014 FY 2013 $ %

Total Financing Sources $ 17,407 $ 16,750 $ 657 4%

Less: Net Cost of Operations $ 17,776 $ 17,742 $ 34 0.19%

Net Change $ (369) $ (992) $ 623 63%

Assets:

Fund Balance With Treasury $ 5,912 $ 5,621 $ 291 5%

Accounts Receivable $ 3 $ 2 $ 1 50%

Property, Equipment, and Software $ 933 $ 1,017 $ (84) -8%

Total Assets $ 6,848 $ 6,640 $ 208 3%

Liabilities

Accounts Payable - Intergovernmental $ 882 $ 870 $ 12 1%

Other $ 1,902 $ 1,571 $ 331 21%

Accounts Payable $ 1,076 $ 414 $ 662 160%

Total Liabilities $ 3,860 $ 2,855 $ 1,005 35%

Net Position (Assets minus Liabilities) $ 2,988 $ 3,785 $ (797) -21%

1

 Source: Statement of Net Cost and Statement of Changes in Net Position

2

 Source: Balance Sheet

FEDERAL MINE SAFETY AND HEALTH REVIEW COMMISSION

Table of Key Measures

COSTS1

NET POSITION2
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MANAGEMENT ASSURANCES

Systems, Controls, and Legal Compliance

The Commission is responsible for establishing and maintaining effective internal control 

over financial reporting, which includes safeguarding assets and complying with 

applicable laws and regulations. As a micro independent agency, the Commission must 

rely heavily on the systems and controls provided by servicing agencies to meet the 

OMB’s guidelines and the requirements of law with respect to financial management, 

accounting systems, and financial reporting. These services are supplemented by 

internal control procedures within the Commission sufficient to assure that the 

performance and financial data included in this audit report are complete and reliable.

All financial data reported was obtained from the FY 2014 accounting reports prepared 

by the Bureau of Fiscal Service, the Commission’s accounting servicing provider, and 

the performance data on case intake and dispositions has been verified by Commission 

managers. There are no material inadequacies or non-conformance in either the 

completeness or reliability of the data reported. 

Limitations of the Financial Statements

The principal financial statements have been prepared to report the financial position 

and results of operations of the Federal Mine Safety and Health Review Commission, 

pursuant to the requirements of 31 U.S.C. § 3515 (b).

The statements have been prepared from the books and records of the Commission in 

accordance with Generally Accepted Accounting Principles (GAAP) for Federal entities 

and the formats prescribed by 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. 
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Performance Section

PERFORMANCE GOALS AND RESULTS

The Commission has set forth the following strategic goals: 1) to ensure expeditious, 

fair and legally sound adjudication of cases at the trial and appellate levels, and 2) to 

manage the Commission’s human resources, operations, facilities, and systems to 

ensure a continually improving, effective and efficient organization.

The first strategic goal is accomplished through the Administrative Law Judges function

at the trial level, and the Commission Review function at the appellate level. The second 

strategic goal is accomplished through the Office of the Executive Director functions.

ADMINISTRATIVE LAW JUDGES FUNCTION

The Commission employs administrative law judges to hear and decide contested cases 

at the trial level. The judges travel to hearing sites located at or near the mine involved 

in order to afford mine operators, miners and their representatives a full opportunity to 

participate in the hearing process. Commission judges are also responsible for 

evaluating and approving or denying settlement agreements proposed by the parties 

under the Mine Act.

The Commission received 6,240 new case filings in FY 2014. There were 7,612 cases 

pending at the start of FY 2014. 

In FY 2014 there were 7,315 dispositions. The number of new cases was a 10 percent 

decrease from FY 2013. 

The FY 2014 end-of-year inventory was 6,278 undecided cases. This was the fourth

consecutive year that the number of pending cases was reduced by the end of the year.

The Commission met all three performance targets for the Administrative Law Judges

function, as shown in the Performance Measurement Matrix. 
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OFFICE OF ADMINISTRATIVE LAW JUDGES

CASE WORKLOAD
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Performance Goal FY 2010 FY 2011 FY 2012 FY 2013 Target Actual Status

Average time from receipt to 

disposition of all cases 517 days 546 days 541 days 463 days 458 days 459 days Met

Average time from receipt to 

disposition of penalty cases 499 days 524 days 525 days 433 days 425 days 429 days Met

Percent of all cases on hand over 

365 days in age 42% 45% 38% 43% 40% 28% Met

Performance Metrics - Office of the Administrative Law Judges Function

FY 2014

OFFICE OF ADMINISTRATIVE LAW JUDGES

PERFORMANCE MEASUREMENT MATRIX
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COMMISSION REVIEW FUNCTION

The Commission decides two principal types of cases: (1) substantive cases, which are 

cases where a judge has issued a decision on the merits and either a party has filed a 

petition for review with the Commission or at least two Commissioners have decided to 

grant review on their own initiative; and (2) default cases, which are cases where an 

operator has failed to timely contest a proposed penalty or to respond to the Secretary’s 

penalty petition and the operator has filed a motion to reopen the final order.

In recent years, the Commission has seen a dramatic increase in the number of filings of 

both default and substantive cases. The trend of an increased number of petitions being 

filed for substantive review is likely to continue for the foreseeable future. In FY 2008, 8 

petitions for review of judges’ decisions were filed, and 4 petitions were granted. In FY 

2014, 32 petitions were filed, and 19 were granted.

The increase in petitions filed by parties and granted by the Commission has had a 

significant impact on the Office of General Counsel (OGC), which is responsible for 

conducting the initial research in substantive cases and preparing draft opinions for the 

Commissioners. 

The targets for substantive cases were met with regard to two of the four goals. Not met 

were the percentage of cases on hand over 18 months in age, and the percentage of 

default cases aged over six months at decision. During FY 2014, substantive cases were 

not processed using the general approach of deciding the oldest cases first. Because 

two Commissioners’ appointments expired in August 2014, cases were processed in 

large part based upon whether they involved high priority or difficult issues where the 

participation of all five Commissioners was desirable. For the same period, resources 

were diverted from default cases to substantive cases decisions, resulting in an 

increased number of default cases over six months in age. 

Although not all targets were met, the Commission disposed of a significant number of 

substantive cases in FY 2014, with 44 dispositions. 
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COMMISSION REVIEW FUNCTION

CASE WORKLOAD - SUBSTANTIVE CASES
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15 Performance Goal FY 2010 FY 2011 FY 2012 FY 2013 Target Actual Status

Average time to issuance of decision 

for appellate cases - -

17.8 

months

18.9 

months

24.2 

months

28 

months

27.3 

months Met

Average time from briefing 

completion to issuance of decision 

for appellate cases

- -

12.4 

months

14.7 

months

21.1 

months

24 

months

24.2 

months Met

Percent of appellate cases on hand 

over 18 months in age 7% 10% 26% 43% 40% 49% Not met

Percent of default cases on hand 

over 6 months in age 38% 24% 40% 13% 13% 54% Not met

Performance Metrics - Commission Review Function

FY 2014

COMMISSION REVIEW FUNCTION

PERFORMANCE MEASUREMENT MATRIX
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OFFICE OF THE EXECUTIVE DIRECTOR FUNCTION

The Office of the Executive Director (OED) provides administrative services to support 

the Commission in fulfilling its mission and strategic goals. The primary functions are 

financial management, human resources, procurement and contracting, information 

technology (IT), facilities management, and general administrative service support. 

The financial management services function includes the areas of budget and 

accounting, such as budget formulation, budget execution, funds control, financial 

reporting, and vendor payments.

Human resources services cover the areas of recruitment and placement, classification 

and pay administration, performance management and incentive awards, employee 

benefits and retirement, personnel security, coordination of employee training programs, 

and wellness and employee assistance programs. 

Procurement and contracting services cover maintaining a simplified acquisition program 

for supplies and services, contract implementation and oversight, and coordination of 

services and supplies.

IT entails help-desk functions, network administration, policy formulation for IT, and 

telecommunication.

Facilities management services cover property and space management, organization 

management, and physical security.

Other general administrative services provided by OED include the administration of 

employee travel authorizations and reimbursements and the Metro subsidy program. 
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FINANCIAL SECTION

LETTER FROM THE EXECUTIVE DIRECTOR

As the Executive Director of the Federal Mine Safety and Health Review Commission, I 

am responsible for the overall financial management of the Agency. I am pleased to join 

the Acting Chairman in presenting the Performance Accountability Report for Fiscal Year 

2014. This report provides information on the Commission’s performance, financial 

integrity, systems, and internal controls. We are responsible for the fair presentation of 

the financial statements in conformity with the U.S. Government Standard General 

Ledger and ensuring the financial statements are fairly presented in conformity with the 

U.S. Generally Accepted Accounting Principles. 

The Accountability of Tax Dollars Act of 2002 requires that the Commission’s financial 

statements are audited annually. In accordance with the Accountability of Tax Dollars 

Act of 2002, the Commission began annual audits in FY 2003. The Commission has 

received an unmodified opinion for each annual review conducted by an independent 

auditor. I am pleased to report that, for fiscal year 2014, the Commission once again 

received an unmodified audit opinion on its financial statements. This marks the twelfth

straight year that we have received such an opinion with no identified material 

weaknesses in financial reporting. The Commission remains committed to continuous 

vigilance and improvement in financial management and internal controls, even with the 

receipt of an unmodified audit opinion. 

During FY 2014, we continued to monitor and evaluate the implementation and 

effectiveness of the financial management practices developed over the past few years. 

All intra-governmental transactions and activities have been appropriately identified, 

recorded and disclosed in the financial statements. We have acknowledged our 

responsibility for the design and implementation of programs and controls to prevent and 

detect fraud. We have complied with all aspects of contractual agreements that would 

have a material effect on the financial statements in the event of noncompliance. The 

auditors’ report on Compliance with Laws and Regulations for this year does not contain 

any compliance issues, or any related recommendations for actions. 

While we are pleased with our FY 2014 accomplishments, we will continue striving to 

improve all aspects of our financial management while efficiently working to support the 

Commission’s mission.

Lisa M. Boyd 

Executive Director

November 10, 2014
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