FEDERAL MINE SAFETY 

AND HEALTH 

REVIEW COMMISSION 

PERFORMANCE AND 

ACCOUNTABILITY REPORT 

FISCAL YEAR 2019 

NOVEMBER 19, 2019 
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Table of Contents

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

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

Mission and Organizational Structure ........................................................ 3 

Performance Goals ..................................................................................... 5 

Key Challenges ........................................................................................... 5 

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

Management Assurances ............................................................................ 8 

Fraud Reduction Report ............................................................................... 9 

Performance Section ........................................................................................... 11 

Performance Goals and Results ............................................................... 11 

Administrative Law Judges Function ......................................................... 11 

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

Office of Executive Director Function .......................................................... 15 

Enclosure 1: Federal Mine Safety and Health Review Commission Independent 

Auditor’s Report and Financial Statements for the Years Ended 

September 30, 2019 and 2018 

 
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Management Discussion and Analysis

MISSION AND ORGANIZATIONAL STRUCTURE 

The Federal Mine Safety and Health Review Commission (FMSHRC) 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). FMSHRC’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 FMSHRC’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 FMSHRC 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 FMSHRC and its judges with respect to these proceedings 

and FMSHRC has adopted procedural rules to meet these deadlines. 

FMSHRC consists of four organizational elements: 

 Office of the Chairman and Commissioners; 

 Office of the General Counsel; 

 Office of the Administrative Law Judges (OALJ); and 

 Office of the Executive Director. 

The majority of FMSHRC employees are stationed in Washington, DC. The OALJ has 

satellite offices in Pittsburgh, PA, and Denver, CO. 

FMSHRC 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 penalty that should be assessed. 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 FMSHRC, 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 

FMSHRC unless it is accepted for review by FMSHRC’s five-member Commission. 

The Commission 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. A grant of review in either case requires an affirmative 

vote of at least two Commissioners. The Commission’s decisions are precedential, and 

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

appeal. 

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. 
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PERFORMANCE GOALS 

FMSHRC has two strategic goals: 

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

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

information technology systems to ensure a continually improving, 

effective, and efficient organization. 

KEY CHALLENGES

FMSHRC’s overall management priority continues to be the expeditious, fair, and legally 

sound adjudication of cases at the trial and appellate levels. 

FMSHRC’s major challenge is the unpredictability of the workload. The number of 

contests filed by operators or appellate petitions brought to FMSHRC at both the trial 

and appellate levels is not subject to FMSHRC’s control. 

 Most trial level cases that come before FMSHRC involve civil penalties proposed 

by MSHA against mine operators. These cases are the result of mine operators 

contesting those penalties. 

 Most of the cases accepted for review are generated from petitions filed by 

parties adversely affected by a judge’s decision. In addition, the Commission, on 

its own initiative, may decide to review a case. 

 The Commission at the appellate level also considers requests to reopen cases 

in which a mine operator is in default for failing to timely respond to the 

Secretary’s proposed penalty or to a judge’s order (“default cases”). 

Historically, FMSHRC faced a significant challenge when the number of new trial level 

cases filed increased by 170% from FY 2007 to FY 2010. FMSHRC also saw a related 

increase in appellate cases filed, with an increase of 380% from FY 2009 to FY 2011. 

These increases led to substantial trial and appellate level case backlogs. 

Through a combination of reengineered business processes, increased staffing, and a 

decline in the number of new contests filed, FMSHRC has been able to reduce the 

cases on hand. By the end of FY 2018, FMSHRC had essentially eliminated its trial 

case backlog, and was able to begin working to resolve each case as soon as a 

complete set of filings were received from all parties. This is reflected in our average 

time from receipt to disposition (i.e. pendency) of trial level cases dropping from 257 

days in FY 2018 to 188 days in 2019. FMSHRC also significantly reduced its appellate 
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case backlog. FMSHRC is working to ensure systems, procedures, and staffing are 

able to better resolve any future caseload spikes. 

 

A second challenge is that FMSHRC is unable to resolve appellate cases when it does 

not have a quorum of Commissioners. Between August 30, 2018 and March 25, 2019, 

FMSHRC only had two Commissioners of five appointed to the Commission, thus 

lacking a quorum. The prolonged lack of a quorum had an adverse impact on the 

number of cases that were disposed of in FY 2019 and the length of time that cases 

were pending before the Commission. 

ANALYSIS OF FINANCIAL STATEMENTS 

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

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

Act of 2002, FMSHRC began annual audits in FY 2003. FMSHRC has received an 

“unmodified” opinion for each annual review conducted by an independent auditor. 

FMSHRC 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 FMSHRC’s FY 2019 financial statements, 

which include comparative data for FY 2018. The principal financial 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 

FMSHRC’s assets in fiscal year 2019 were $8,362,203 as of September 30, 2019. The 

Fund Balance with Treasury of $8,245,327 represents FMSHRC’s largest asset as of 

September 30, 2019. This is an increase of approximately 19 percent from fiscal year 

2018 and represents approximately 98 percent of the agency’s total assets. Property, 

Equipment, and Software accounts for approximately 1 percent of FMSHRC's total 

assets as of September 30, 2019. The net fixed asset value of $100,982 equals the cost 

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

FMSHRC’s liabilities in fiscal year 2019 totaled $2,605,885 as of September 30, 2019. 

This is a decrease of $115,737 from the fiscal year 2018 balance of $2,721,622. 

Accounts payable balance at September 30, 2019, was $1,163,888 a decrease of 

$156,090 from September 30, 2018. Accrued payroll liabilities, payroll taxes payable, 

and unemployment insurance increased $128,450 in 2019. Unfunded annual leave 

increased $48,132 in 2019 from 2018. Unfunded annual leave represents approximately 

21 percent of total agency liabilities. 

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

position for fiscal year 2019 increased by $1,407,415 from fiscal year 2018. 
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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 FMSHRC’s two major functions, Administrative Law Judges and 

Review Commission. The total net cost of operations in 2019 was $15,976,555, which is 

a decrease of $1,172,715 over the 2018 net cost of operations of $17,149,270, a change 

of approximately 7 percent. 

Analysis of the Statement of Changes in Net Position 

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

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

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

increased $1,407,415 in 2019 from 2018, a change of approximately 32 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 2019, FMSHRC had total budgetary resources of 

$21,294,677, which is $233,693 less than in 2018. 

Dollars in Thousands

FY 2019 FY 2018 $ %

Total Financing Sources $16,018 $17,293 ($1,275) ‐7%

Less: Net Cost $15,977 $17,149 ($1,172) ‐7%

Net Change of Cumulative Results of Operations $41 $144 ($103) ‐72%

Assets:

Fund Balance With Treasury $8,245 $6,907 $1,338 19%

Accounts Receivable $16 $17 ($1)    6%

Property, Equipment, and Software $101 $146 ($45) ‐31%

Total Assets $8,362 $7,070 $1,292 18%

Liabilities

Accounts Payable ‐ Intergovernmental $78 $71 $7 9%

Other $1,442 $1,402   $40 3%

Accounts Payable $1,086 $1,249 ($163) ‐13%

Total Liabilities $2,606 $2,722 ($116) ‐4%

Net Position (Assets minus Liabilities) $5,756 $4,348     $1,408 32%

FEDERAL MINE SAFETY AND HEALTH REVIEW COMMISSION

Table of Key Measures

COSTS

NET POSITION

Increase / (Decrease)
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MANAGEMENT ASSURANCES 

Analysis of Systems, Controls, and Legal Compliance 

FMSHRC 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 small independent Federal agency, it is more efficient for 

FMSHRC to leverage servicing agencies for key functions than to build an organic 

capability. Consequently, FMSHRC must rely heavily on the systems and controls 

provided by servicing agencies to meet 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 FMSHRC 

sufficient to ensure that the performance and financial data included in this audit report 

are complete and reliable. 

All financial data reported were obtained from the FY 2019 accounting reports prepared 

by the Department of the Treasury, Bureau of the Fiscal Service, Administrative 

Resource Center, FMSHRC’s accounting servicing provider. 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. 

The Administrative Resource Center has provided assurance that their financial 

management systems comply with Federal financial management system requirements, 

applicable Federal accounting standards, and the USSGL at the transaction level. 

FMSHRC is in compliance with the Federal Managers Financial Integrity Act by 

maintaining effective internal controls to support reliable financial reporting and 

compliance with laws and regulations applicable to FMSHRC. 

There have been no significant deficiencies or material weaknesses in the design or 

operation of internal controls over financial reporting during FY 2019. During the audit of 

the financial statements the independent auditor did not identify any significant 

deficiencies or material weaknesses. The independent auditor has provided an 

unmodified opinion on the financial statements. 

Limitations of the Financial Statements 

The principal financial statements are 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 are prepared from 

FMSHRC’s books and records in accordance with Federal GAAP and the formats 

prescribed by OMB. Reports used to monitor and control budgetary resources 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. 
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FRAUD REDUCTION REPORT 

 

Pursuant to the Fraud Reduction and Data Analytics Act of 2015 (Public Law 114-186, 

32 U.S. Code 3321), FMSHRC is reporting on its fraud reduction efforts for FY 2018 and 

the final quarter of FY 2018 in three key areas: 

1. Implementation of financial and administrative controls 

FMSHRC contracts with a shared service provider for financial, travel, human resources, 

and procurement services through an interagency agreement. FMSHRC’s payroll 

services are managed by another government agency through a shared services 

interagency agreement. This creates a built-in separation of functions for agency 

business, with several checks and balances. Internally, most financial transactions 

involve at least three support staff. 

2. The fraud risk principle in the Standards for Internal Control in the 

Government (the GAO Green Book) 

Annually, FMSHRC completes the independent financial statement auditor’s 

comprehensive Fraud, Waste and Abuse questionnaire. The questionnaire is completed 

and signed by management. Assertions are made that managers are not aware of 

allegations of fraud or suspected fraud, and that they understand risks specific to 

FMSHRC. 

FMSHRC has a low risk of fraud in these areas: 

 Fraudulent financial reporting risk: Financial reporting is provided by an 

authorized shared financial provider. All financial reporting, including financial 

statements and necessary journal entries, is reviewed and approved by 

FMSHRC’s Executive Director, who serves as FMSHRC’s CFO, prior to 

submission to OMB. FMSHRC’s financial statements have been audited annually 

since 2003. 

 Misappropriation of assets: All assets are recorded in the general ledger, 

inventoried and tracked in automated software managed by FMSHRC. Proper 

sign out procedures are incorporated for all equipment and property being 

removed from the property. 
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 Waste of government resources and abuse of authority or position: The nature of 

the FMSHRC mission means most of the commission expenditures are on salary 

and benefits, and related variable expenses (facilities, IT services, etc.). The 

opportunities for fraud or waste are limited, as the commission has very few 

contracts, minimal travel expenses, and doesn’t otherwise expend federal funds 

through grants. FMSHRC has also ensured leadership and staff have required 

whistleblower training, including an understanding of how to report suspected 

wrongdoing to an independent party outside of FMSHRC. 

3. OMB Circular A-123 with respect to leading practices for managing fraud 

risk

FMSHRC utilizes automated time and attendance, procurement, contract payments, and 

travel and purchase card systems located within other agencies. FMSHRC has agency 

points of contact for purchase and travel cards, as does the financial service provider. 

The assigned FMSHRC staff reviews all travel receipts for reimbursement before 

approving travel vouchers, generally entered into the travel system by FMSHRC’s 

travelers and support staff. Travel service provider accountants reconcile FMSHRC’s 

Central Billing Account each month. 

Agency-specified types of vendors allowed for use are established under the 

procurement card program via the use of the Master Contract Codes. All other vendors 

will result in a card decline until the type of procurement is reviewed and approval is 

given temporarily for the purchase. 

   
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Performance Section

PERFORMANCE GOALS AND RESULTS 

FMSHRC has set forth the following strategic goals: 

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

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

information technology 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 function. 

ADMINISTRATIVE LAW JUDGES FUNCTION 

FMSHRC employs administrative law judges to hear and decide contested cases at the 

trial level. 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. FMSHRC judges are also responsible for evaluating and 

approving or denying settlement agreements proposed by the parties under the Mine 

Act. 

FMSHRC received 3,017 new case filings in FY 2019. The number of new cases was a 

nine percent decrease from the 3,325 received in FY 2018. 

There were 1632 cases pending at the start of FY 2019. In FY 2019 there were 3,406 

dispositions. 

The FY 2019 end-of-year inventory was 1212 undecided cases. This was the ninth 

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

FMSHRC met or substantially met all four performance targets for the Administrative 

Law Judges function, as shown in the Performance Measurement Matrix. 
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ADMINISTRATIVE LAW JUDGES FUNCTION 

PERFORMANCE MEASUREMENT MATRIX 

Performance Metrics ‐ Office of the Administrative Law Judges Function   

Performance Goal FY 2015 FY 2016 FY 2017 FY 2018 FY2019

Average time from receipt to

disposition of all cases

(measured in days)

Target 401 300 300 290 260

Result 425 348 328 257 188

Status SM NM SM M M

Average time from receipt to

disposition of penalty cases

(measured in days)

Target 401 330 330 280 250

Result 387 309 307 257 175

Status M M M M M

Percent of all cases on hand

over 365 days in age

Target 30% 20% 20% 20% 20%

Result 25% 21% 19% 4%   4%

Status M SM M M M

Number of cases pending at

year end Anticipated  ‐‐    4,200

   

3,300  

   

2,429   1,723

Result   

4,452

  

3,058

   

2,592  

   

1,730 1,212

Status    ‐‐  M M   M   M

                    

Status:                  

M ‐ Target met or exceeded                  

SM ‐ Target substantially met ‐ within 10% of

target               

NM ‐ Target not met               

              
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COMMISSION REVIEW FUNCTION 

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

in which a judge has issued a final or interlocutory decision on the merits and the 

Commission has granted a petition for review filed by either party, 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 timely respond to a judge’s order and the operator has filed a motion to 

reopen the final order. 

Because the Commission lacked a quorum of members for half of FY 2019, it had no 

authority to issue substantive decisions or default decisions during that time period. The 

terms of two Commissioners expired by law on August 30, 2018. Because the term of 

another Commissioner had previously expired in FY 2017, as of August 30, 2018, the 

Commission only had two members. Since the Commission is to include five members, 

this meant that a quorum consists of three Commissioners and that, with only two 

Commissioners on board, there was no quorum until the three additional new 

Commissioners were sworn in on March 25, 2019. 

The prolonged lack of a quorum had an adverse impact on the number of cases that 

were disposed of in FY 2019 and the length of time that cases were pending before the 

Commission. In addition, in three instances, the Commission had to send letters to 

parties informing them that it could not grant review of certain petitions of interlocutory 

review because of the lack of a quorum. 

In FY 2019, 16 petitions were filed, and 9 were granted. 

The targets for substantive cases were met with regard to three of the five goals, as 

shown on the following performance measurement matrix. 

The pendency of all substantive cases (date granted to issuance of decision) was 17 

months in FY 2019, versus a goal of 15 months 

The average time from briefing completion to decision issuance was 12 months in FY 

2019, versus a goal of 9 months. 

In FY 2019, 71 default cases remained on hand at the end of the fiscal year. By the end 

of the fiscal year, 14 of the default cases on hand were more than six months old. 

The Commission disposed of 4 substantive cases in FY 2019, ending the year with 14 

substantive cases on hand. The Commission resolved 23 default cases in FY 2019, 

ending the year with 71 on hand. 
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COMMISSION REVIEW FUNCTION 

PERFORMANCE MEASUREMENT MATRIX 

Performance Metrics ‐ Commission Review Function

Performance Goal

FY

2015

FY

2016

FY  

2017

FY

2018

FY

2019

Average time from date granted to

issuance of decision for appellate

cases (measured in months)

Target 31 31 12 15 15

Result 26 22 15   12 17

Status M M NM M NM

Average time from briefing

completion to issuance of decision

for appellate cases (measured in

months)

Target 27 27 9 9 9

Result 24 19 13 9 12

Status M M NM M NM

Percent of appellate cases on hand

over 18 months in age

Target 40% 40% 30% 20% 20%

Result 49% 11% 14% 11% 7%

Status NM M M M M

Percent of default cases on hand

over 6 months in age

Target 12% 12% 30% 30% 25%

Result 59% 57% 56% 0% 23%

Status NM NM NM M M

Number of appellate cases pending

at year end

Anticipated ‐‐  19 18 16 16

Result 39 18 21 9 14

Status  ‐‐  M NM   M M

        

Status:         

M ‐ Target met or exceeded         

SM ‐ Target substantially met ‐ within 10% of target      

NM ‐ Target not met         
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OFFICE OF THE EXECUTIVE DIRECTOR FUNCTION 

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

FMSHRC’s accomplishment of its mission and strategic goals. The primary functions are 

financial management, human resources, procurement and contracting, information 

technology, 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 include maintaining a simplified acquisition 

program for supplies and services, contract implementation and oversight, and 

coordination of services and supplies. 

Information technology entails help-desk functions, network administration, policy 

formulation, 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. 
FEDERAL MINE SAFETY AND HEALTH REVIEW COMMISSION

INDEPENDENT AUDITOR’S REPORT

AND

FINANCIAL STATEMENTS

FOR THE YEARS ENDED

SEPTEMBER 30, 2019 AND 2018

Prepared By

Brown & Company CPAs and Management Consultants, PLLC

November 12, 2019
FEDERAL MINE SAFETY AND HEALTH REVIEW COMMISSION

INDEPENDENT AUDITOR’S REPORT

AND

FINANCIAL STATEMENTS

FOR THE YEARS ENDED

SEPTEMBER 30, 2019 AND 2018

TABLE OF CONTENTS

INDEPENDENT AUDITOR'S REPORT ON THE FINANCIAL STATEMENTS ............. 1

BALANCE SHEET ............................................................................................................... 6

STATEMENT OF NET COST ............................................................................................. 7

STATEMENT OF CHANGES IN NET POSITION............................................................. 8

STATEMENT OF BUDGETARY RESOURCES................................................................ 9

NOTES TO THE FINANCIAL STATEMENTS.................................................................. 10
1

INDEPENDENT AUDITOR’S REPORT 

Federal Mine Safety Health and Review Commission

Washington, D.C.

In our audits of the fiscal years 2019 and 2018 financial statements of the Federal Mine Safety Health and 

Review Commission (“Commission”), we found

• the Commission’s financial statements as of and for the fiscal years ended September 30,

2019, and 2018, are presented fairly, in all material respects, in accordance with U.S. generally

accepted accounting principles;

• no material weaknesses in internal control over financial reporting based on the limited

procedures we performed; and

• no reportable noncompliance for fiscal year 2019 with provisions of applicable laws,

regulations, contracts, and grant agreements we tested.

The following sections discuss in more detail (1) our report on the financial statements, which includes 

requiredsupplementary information(RSI) andotherinformationincluded withthefinancialstatements;

(2) our report on internal control over financial reporting; and (3) our report on compliance with laws,

regulations, contracts, and grant agreements.

Report on the Financial Statements

In accordance with the provisions of Accountability of Tax Dollars Act of 2002 (ATDA) (Pub. L. No. 107-

289), we have audited the Commission’s financial statements. The Commission’s financial statements

comprise the balance sheets as of September 30, 2019, and 2018; the related statements of net cost,

changesinnetposition, and budgetary resourcesforthe fiscal yearsthen ended; andtherelatednotestothe

financialstatements.

We conducted our audits in accordance with U.S. generally accepted government auditing standards and the 

provisions of OMB Bulletin No.19-03, Audit Requirements for Federal Financial Statements. We believe

that the audit evidence we obtained issufficient and appropriate to provide a basisfor our audit opinions.

Management’sResponsibility

Commission’s management is responsible for (1) the preparation and fair presentation of these financial

statements inaccordance with U.S. generally accepted accounting principles; (2) preparing, measuring, and

presenting the RSI in accordance with U.S. generally accepted accounting principles; (3) preparing and

presenting other information included in documents containing the audited financial statements and

auditor’s report, and ensuring the consistency of that information with the audited financial statements and

the RSI; and (4) maintaining effective internal control over financial reporting, including the design,

implementation, and maintenance of internal control relevant to the preparation and fair presentation of

financial statements that are free from material misstatement, whether due to fraud or error.
2

Auditor’s Responsibility

Our responsibility isto express an opinion on these financial statements based on our audits. U.S. generally

accepted government auditing standards require that we plan and perform the audit to obtain reasonable

assurance about whether the financial statements are free from material misstatement. We are also

responsible for applying certain limited procedures to RSI and other information includedwith the financial

statements.

An audit offinancial statements involves performing proceduresto obtain audit evidence about the amounts

and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment,

including the auditor’s assessment ofthe risks of material misstatement ofthe financial statements, whether

due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to

the entity’s preparation and fair presentation of the financial statements in order to design audit procedures

that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the

effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit offinancial

statements also involves evaluating the appropriateness of the accounting policies used and the

reasonableness ofsignificant accounting estimates made by management, as well as evaluating the overall 

presentation of the financial statements. Our audits also included performing such other procedures as we

considered necessary in the circumstances.

Opinion on Financial Statements

In our opinion, t h e Commission’s financial statements present fairly, in all material respects, th e 

Commission’s financial position as of September 30, 2019, and 2018, and its net cost of operations,

changes in net position, and budgetary resources for the fiscal years then ended in accordance with U.S.

generally accepted accounting principles.

Other Matters

RequiredSupplementary Information

U.S. generally accepted accounting principles issued by the Federal Accounting Standards

Advisory Board (FASAB) require that the RSI be presented to supplement the financial

statements. Although the RSI is not a part of the financial statements, FASAB considers this

information to be an essential part of financial reporting for placing the financial statements in

appropriate operational, economic, or historical context. We have applied certain limited

procedures to the RSI in accordance with U.S. generally accepted government auditing

standards, which consisted of inquiries of management about the methods of preparing the RSI

and comparing the information for consistency with management’s responses to the auditor's

inquiries, the financial statements, and other knowledge we obtained during the audit of the

financial statements, in order to report omissions or material departures from FASAB

guidelines, if any, identified by these limited procedures. We did not audit and we do not

express an opinion or provide any assurance on the RSI because the limited procedures we

applied do not provide sufficient evidence to express an opinion or provide any assurance.
3

Other Information

The Commission’s other information contains a wide range of information, some of which is

not directly related to the financial statements. This information is presented for purposes of

additional analysis and is not a required part of the financial statements or the RSI. We read the

other information included with the financial statements in order to identify material

inconsistencies, if any, with the audited financial statements. Our audit was conducted for the

purpose of forming an opinion on the Commission’s financial statements. We did not audit and

do not express an opinion or provide any assurance on the other information.

Report on Internal Control over Financial Reporting

In connection with our audits of the Commission’s financial statements, we considered the 

Commission’s internal control over financial reporting, consistent with our auditor's responsibility

discussed below. We performed our procedures related to the Commission’s internal control over

financial reporting in accordance with U.S. generally accepted government auditing standards.

Management’s Responsibility

The Commission’s management isresponsible for maintaining effective internal control over financial

reporting, including the design, implementation, and maintenance of internal control relevant to the

preparation and fair presentation of financial statements that are free from material misstatement,

whether due to fraud or error.

Auditor’s Responsibility

In planning and performing our audit of the Commission’s financial statements as of and for the year

ended September 30, 2019, in accordance with U.S. generally accepted government auditing standards,

we considered the Commission’s internal control over financial reporting as a basisfor designing audit

procedures that are appropriate in the circumstances for the purpose of expressing our opinion on the

financial statements, but not for the purpose of expressing an opinion on the effectiveness of the 

Commission’s internal control over financial reporting. Accordingly, we do not express an opinion on

the Commission’s internal control over financial reporting. We are required to report all deficiencies

that are considered to be significant deficiencies or material weaknesses. We did not consider all

internal controls relevant to operating objectives, such as those controls relevant to preparing

performance information and ensuring efficient operations.

A deficiency in internal control 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 and correct, 

misstatements on a timely basis. A material weakness is a deficiency or combination of deficiencies in 

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

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

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

material weakness, yet important enough to merit attention by those charged with governance.
4

Definition and Inherent Limitations of Internal Control over Financial Reporting

An entity’s internal control over financial reporting is a process effected by those charged with

governance, management, and other personnel, the objectives of which are to provide reasonable

assurance that (1) transactions are properly recorded, processed, and summarized to permit the

preparation of financial statements in accordance with U.S. generally accepted accounting principles,

and assets are safeguarded against loss from unauthorized acquisition, use, or disposition, and (2)

transactions are executed in accordance with provisions of applicable laws, including those governing

the use of budget authority, regulations, contracts, and grant agreements, noncompliance with which

could have a material effect on the financial statements.

Because of itsinherent limitations, internal control over financial reporting may not prevent, or detect

and correct, misstatements due to fraud or error.

Results of Our Consideration of Internal Control over Financial Reporting

Our consideration of internal control was for the limited purpose described above, and was not

designed to identify all deficiencies in internal control that might be material weaknesses and

significant deficiencies or to express an opinion on the effectiveness of the Commission’s internal 

control over financial reporting. Given these limitations, during our audit, we did not identify any

deficiencies in internal control over financial reporting that we consider to be material weaknesses.

However, material weaknesses may exist that have not been identified.

Intended Purpose of Report on Internal Control over Financial Reporting

The purpose of this report is solely to describe the scope of our consideration of the Commission’s 

internal control over financial reporting and the results of our procedures, and not to provide an

opinion on the effectiveness ofthe Commission’s internal control over financial reporting. This report

is an integral part of an audit performed in accordance with U.S. generally accepted government

auditing standards in considering internal control over financial reporting. Accordingly, this report on

internal control over financial reporting is not suitable for any other purpose.

Report on Compliance with Laws, Regulations, Contracts, and Grant Agreements

In connection with our audits of the Commission’s financial statements, we tested compliance with

selected provisions of applicable laws, regulations, contracts, and grant agreements consistent with

our auditor’s responsibility discussed below. We caution that noncompliance may occur and not be

detected by these tests. We performed our tests of compliance in accordance with U.S. generally

accepted government auditing standards.

Management’s Responsibility

The Commission’s management is responsible for complying with laws, regulations, contracts, and

grant agreements applicable to the Commission.
5

Auditor’s Responsibility

Our responsibility is to test compliance with selected provisions of applicable laws, regulations,

contracts, and grant agreements applicable to the Commission that have a direct effect on the

determination of material amounts and disclosures in the Commission’s financial statements, and 

perform certain other limited procedures. Accordingly, we did not test compliance with all laws,

regulations, contracts, and grant agreements applicable to the Commission.

Results of Our Testsfor Compliance with Laws, Regulations, Contracts, and Grant Agreements

Our tests for compliance with selected provisions of applicable laws, regulations, contracts, and grant

agreements disclosed no instances of noncompliance for fiscal year 2019 that would be reportable

under U.S. generally accepted government auditing standards. However, the objective of our tests was

not to provide an opinion on compliance with laws, regulations, contracts, and grant agreements 

applicable to the Commission. Accordingly, we do not express such an opinion.

Intended Purpose of Report on Compliance with Laws, Regulations, Contracts, and Grant Agreements

The purpose of this report is solely to describe the scope of our testing of compliance with selected

provisions of applicable laws, regulations, contracts, and grant agreements, and the results of that

testing, and not to provide an opinion on compliance. This report is an integral part of an audit

performed in accordance with U.S. generally accepted government auditing standards in considering

compliance. Accordingly, this report on compliance with laws, regulations, contracts, and grant

agreements is notsuitable for any other purpose.

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

and the U.S. Congress, and is not intended to be, and should not be, used by anyone other than these 

specified parties.

Greenbelt, Maryland

November 12, 2019
The accompanying notes are an integral part of these financial statements. 

6

2019 2018

Assets:

Intragovernmental

Fund Balance With Treasury (Note 2) $ 8,245,327 $ 6,906,613

Total Intragovernmental 8,245,327 6,906,613

Accounts Receivable, Net (Note 3) 15,894 17,457

Property, Equipment, and Software, Net (Note 4) 100,982 146,455

Total Assets $ 8,362,203 $ 7,070,525

Liabilities:

Intragovernmental

Accounts Payable $ 77,667 $ 70,955

Other (Note 6) 509,421 617,363

Total Intragovernmental 587,088 688,318

Accounts Payable 1,086,221 1,249,023

Other (Note 6) 932,576 784,281

Total Liabilities (Note 5) $ 2,605,885 $ 2,721,622

Net Position:

Unexpended Appropriations - Other Funds $ 6,572,294 $ 5,205,942

Cumulative Results of Operations - Other Funds (815,976) (857,039)

Total Net Position $ 5,756,318 $ 4,348,903

Total Liabilities and Net Position $ 8,362,203 $ 7,070,525

BALANCE SHEET

AS OF SEPTEMBER 30, 2019 AND 2018

(In Dollars)

FEDERAL MINE SAFETY AND HEALTH REVIEW COMMISSION
The accompanying notes are an integral part of these financial statements. 

7

2019 2018

Gross Program Costs:

Commission Review:

Gross Costs $ 6,607,011 $ 7,659,628

Net Program Costs $ 6,607,011 $ 7,659,628

Administrative Law Judge:

Gross Costs $ 9,369,544 $ 9,489,642

Net Program Costs $ 9,369,544 $ 9,489,642

Net Cost of Operations $ 15,976,555 $ 17,149,270

FEDERAL MINE SAFETY AND HEALTH REVIEW COMMISSION

STATEMENT OF NET COST

FOR THE YEARS ENDED SEPTEMBER 30, 2019 AND 2018

(In Dollars)
The accompanying notes are an integral part of these financial statements. 

8

2019 2018

Unexpended Appropriations:

Beginning Balances $ 5,205,942 $ 6,808,524

Budgetary Financing Sources:

Appropriations Received 17,184,000 17,184,000

Other Adjustments (578,631) (2,255,255)

Appropriations Used (15,239,017) (16,531,327)

Total Budgetary Financing Sources 1,366,352 (1,602,582)

Total Unexpended Appropriations $ 6,572,294 $ 5,205,942

Cumulative Results of Operations:

Beginning Balances $ (857,039) $ (1,000,358)

Budgetary Financing Sources:

Appropriations Used 15,239,017 16,531,327

Other Financing Sources (Non-Exchange):

Imputed Financing Sources (Note 13) 778,601 761,262

Total Financing Sources 16,017,618 17,292,589

Net Cost of Operations (15,976,555) (17,149,270)

Net Change 41,063 143,319

Cumulative Results of Operations $ (815,976) $ (857,039)

Net Position $ 5,756,318 $ 4,348,903

FEDERAL MINE SAFETY AND HEALTH REVIEW COMMISSION

STATEMENT OF CHANGES IN NET POSITION

FOR THE YEARS ENDED SEPTEMBER 30, 2019 AND 2018

(In Dollars)
The accompanying notes are an integral part of these financial statements. 

9

2019 2018

Budgetary Resources:

Unobligated balance from prior year budget authority, net $ 4,110,677 $ 3,876,984

Appropriations 17,184,000 17,184,000

Total Budgetary Resources $ 21,294,677 $ 21,060,984

Status of Budgetary Resources:

New obligations and upward adjustments (total) (Note 9) $ 15,194,016 $ 16,397,882

Unobligated balance, end of year:

 Apportioned, unexpired account (Note 2) 2,025,893 812,119

Expired unobligated balance, end of year (Note 2) 4,074,768 3,850,983

Unobligated balance, end of year (total) 6,100,661 4,663,102

Total Budgetary Resources $ 21,294,677 $ 21,060,984

Outlays, net:

Outlays, net, (total) $ 15,266,654 $ 15,621,094

Distributed Offsetting Receipts (1,759) (959)

Agency outlays, net $ 15,264,895 $ 15,620,135

FEDERAL MINE SAFETY AND HEALTH REVIEW COMMISSION

STATEMENT OF BUDGETARY RESOURCES

FOR THE YEARS ENDED SEPTEMBER 30, 2019 AND 2018

(In Dollars)
FEDERAL MINE SAFETY AND HEALTH REVIEW COMMISSION 

NOTES TO THE FINANCIAL STATEMENTS

10

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A. Reporting Entity

The Federal Mine Safety and Health Review Commission (“the Commission”) is an independent 

Federal agency with the mission of providing administrative trial and appellate review of legal 

disputes arising under the Federal Mine Safety and Health Amendments Act of 1977, Public Law 

91-173, amended by Public Law 95-164. 

The Commission reporting entity is comprised of General Funds and General Fund Miscellaneous 

Receipts. General Funds are accounts used to record financial transactions arising under 

congressional appropriations or other authorizations to spend general revenues. General Fund 

Miscellaneous Receipts are accounts established for receipts of non-recurring activity, such as 

fines, penalties, fees and other miscellaneous receipts for services and benefits.

The Commission has rights and ownership of all assets reported in these financial statements. The 

Commission does not possess any non-entity assets.

B. Basis of Presentation

The financial statements have been prepared to report the financial position and results of 

operations of the Commission. The Balance Sheet presents the financial position of the agency. 

The Statement of Net Cost presents the agency’s operating results; the Statement of Changes in Net 

Position displays the changes in the agency’s equity accounts. The Statement of Budgetary 

Resources presents the sources, status, and uses of the agency’s resources and follows the rules for 

the Budget of the United States Government.

The statements are a requirement of the Chief Financial Officers Act of 1990 and the Government 

Management Reform Act of 1994. They have been prepared from, and are fully supported by, the 

books and records of the Commission in accordance with the hierarchy of accounting principles 

generally accepted in the United States of America, standards issued by the Federal Accounting 

Standards Advisory Board (FASAB), Office of Management and Budget (OMB) Circular A-136, 

Financial Reporting Requirements, as amended, and the Commission accounting policies which 

are summarized in this note. These statements, with the exception of the Statement of Budgetary 

Resources, are different from financial management reports, which are also prepared pursuant to 

OMB directives that are used to monitor and control the Commission’s use of budgetary resources. 

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

specified otherwise, all amounts are presented in dollars.

C. Basis of Accounting

Transactions are recorded on both an accrual accounting basis and a budgetary basis. Under the 

accrual method, revenues are recognized when earned, and expenses are recognized when a liability 
11

is incurred, without regard to receipt or payment of cash. Budgetary accounting facilitates 

compliance with legal requirements on the use of Federal funds.

D. Fund Balance with Treasury

Fund Balance with Treasury is the aggregate amount of the Commission’s funds with Treasury in 

expenditure and receipt fund accounts. Appropriated funds recorded in expenditure accounts are 

available to pay current liabilities and finance authorized purchases. 

The Commission does not maintain bank accounts of its own, has no disbursing authority, and does 

not maintain cash held outside of Treasury. Treasury disburses funds for the agency on demand.

E. Accounts Receivable

Accounts receivable consists of amounts owed to The Commission by other Federal agencies and 

the general public. Amounts due from Federal agencies are considered fully collectible. Accounts 

receivable from the public include reimbursements from employees. An allowance for 

uncollectible accounts receivable from the public is established when, based upon a review of 

outstanding accounts and the failure of all collection efforts, management determines that collection 

is unlikely to occur considering the debtor’s ability to pay.

F. Property, Equipment, and Software

Property, equipment and software represent furniture, fixtures, equipment, and information 

technology hardware and software which are recorded at original acquisition cost and are 

depreciated or amortized using the straight-line method over their estimated useful lives. Major 

alterations and renovations are capitalized, while maintenance and repair costs are expensed as 

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

$500,000 for bulk purchases. Property, equipment, and software acquisitions that do not meet the 

capitalization criteria are expensed upon receipt. Applicable standard governmental guidelines 

regulate the disposal and convertibility of agency property, equipment, and software. The useful 

life classifications for capitalized assets are as follows:

Description Useful Life (years)

Leasehold Improvements Period of Lease

Office Equipment 5

G. Advances and Prepaid Charges

Advance payments are generally prohibited by law. There are some exceptions, such as 

reimbursable agreements, subscriptions and payments to contractors and employees. Payments 

made in advance of the receipt of goods and services are recorded as advances or prepaid charges 

at the time of prepayment and recognized as expenses when the related goods and services are 

received.

H. Liabilities

Liabilities represent the amount of funds likely to be paid by the Commission as a result of 

transactions or events that have already occurred.

The Commission reports its liabilities under two categories, Intragovernmental and With the Public. 

Intragovernmental liabilities represent funds owed to another government agency. Liabilities with 
12

the Public represent funds owed to any entity or person that is not a Federal agency, including 

private sector firms and Federal employees. Each of these categories may include liabilities that 

are covered by budgetary resources and liabilities not covered by budgetary resources.

Liabilities covered by budgetary resources are liabilities funded by a current appropriation or other 

funding source. These consist of accounts payable and accrued payroll and benefits. Accounts 

payable represent amounts owed to another entity for goods ordered and received and for services 

rendered except for employees. Accrued payroll and benefits represent payroll costs earned by 

employees during the fiscal year which are not paid until the next fiscal year.

Liabilities not covered by budgetary resources are liabilities that are not funded by any current 

appropriation or other funding source. These liabilities consist of accrued annual leave, deferred 

rent, and the amounts due to Treasury for collection and accounts receivable of civil penalties and 

FOIA request fees. Deferred rent is the difference at year-end between the sum of monthly cash 

disbursements paid to date for rent and the sum of the average monthly rent calculated based on 

the term of the lease. 

I. Annual, Sick, and Other Leave

Annual leave is accrued as it is earned, and the accrual is reduced as leave is taken. The balance in 

the accrued leave account is adjusted to reflect current pay rates. Liabilities associated with other 

types of vested leave, including compensatory, restored leave, and sick leave in certain 

circumstances, are accrued at year-end, based on latest pay rates and unused hours of leave. 

Funding will be obtained from future financing sources to the extent that current or prior year 

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

Nonvested leave is expensed when used. Any liability for sick leave that is accrued but not taken 

by a Civil Service Retirement System (CSRS)-covered employee is transferred to the Office of 

Personnel Management (OPM) upon the retirement of that individual. Full credit is given for sick 

leave balances in the computation of annuities upon the retirement of Federal Employees 

Retirement System (FERS)-covered employees effective at 100%.

J. Accrued and Actuarial Workers’ Compensation

The Federal Employees' Compensation Act (FECA) administered by the U.S. Department of Labor 

(DOL) addresses all claims brought by the Commission employees for on-the-job injuries. The 

DOL bills each agency annually as its claims are paid, but payment of these bills is deferred for 

two years to allow for funding through the budget process. Similarly, employees that the 

Commission terminates without cause may receive unemployment compensation benefits under 

the unemployment insurance program also administered by the DOL, which bills each agency 

quarterly for paid claims. Future appropriations will be used for the reimbursement to DOL. The 

liability consists of the unreimbursed cost paid by DOL for compensation to recipients under the 

FECA.

K. Retirement Plans

The Commission employees participate in either the CSRS or the FERS. The employees who 

participate in CSRS are beneficiaries of the Commission matching contribution, equal to seven 

percent of pay, distributed to their annuity account in the Civil Service Retirement and Disability 

Fund.

Prior to December 31, 1983, all employees were covered under the CSRS program. From January 

1, 1984 through December 31, 1986, employees had the option of remaining under CSRS or joining 
13

FERS and Social Security. Employees hired as of January 1, 1987 are automatically covered by 

the FERS program. Both CSRS and FERS employees may participate in the Federal Thrift Savings 

Plan (TSP). FERS employees receive an automatic agency contribution equal to one percent of 

pay and the Commission matches any employee contribution up to an additional four percent of 

pay. For FERS participants, the Commission also contributes the employer’s matching share of 

Social Security.

FERS employees and certain CSRS reinstatement employees are eligible to participate in the Social 

Security program after retirement. In these instances, the Commission remits the employer’s share 

of the required contribution.

The Commission recognizes the imputed cost of pension and other retirement benefits during the 

employees’ active years of service. OPM actuaries determine pension cost factors by calculating 

the value of pension benefits expected to be paid in the future and communicate these factors to the 

Commission for current period expense reporting. OPM also provides information regarding the 

full cost of health and life insurance benefits. The Commission recognized the offsetting revenue 

as imputed financing sources to the extent these expenses will be paid by OPM.

The Commission does not report on its financial statements information pertaining to the retirement 

plans covering its employees. Reporting amounts such as plan assets, accumulated plan benefits, 

and related unfunded liabilities, if any, is the responsibility of the OPM, as the administrator.

L. Other Post-Employment Benefits

The Commission employees eligible to participate in the Federal Employees' Health Benefits Plan 

(FEHBP) and the Federal Employees' Group Life Insurance Program (FEGLIP) may continue to 

participate in these programs after their retirement. The OPM has provided the Commission with 

certain cost factors that estimate the true cost of providing the post-retirement benefit to current 

employees. The Commission recognizes a current cost for these and Other Retirement Benefits 

(ORB) at the time the employee's services are rendered. The ORB expense is financed by OPM, 

and offset by the Commission through the recognition of an imputed financing source. 

M. Use of Estimates

The preparation of the accompanying financial statements in accordance with generally accepted 

accounting principles requires management to make certain estimates and assumptions that affect 

the reported amounts of assets, liabilities, revenues, and expenses. Actual results could differ from 

those estimates.

N. Classified Activities

Accounting standards require all reporting entities to disclose that accounting standards allow 

certain presentations and disclosures to be modified, if needed, to prevent the disclosure of 

classified information.
14

NOTE 2. FUND BALANCE WITH TREASURY

Fund balance with Treasury account balances as of September 30, 2019 and 2018, were as follows:

No discrepancies exist between the Fund Balance reflected on the Balance Sheet and the balances 

in the Treasury accounts.

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

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

unavailable balance as described in the following paragraph.

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

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

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

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

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

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

fund balance on hand (see also Note 10).

NOTE 3. ACCOUNTS RECEIVABLE

Accounts receivable balances as of September 30, 2019 and 2018, were as follows:

The accounts receivable is made up of employee receivables. Historical experience has indicated 

that the majority of the receivables are collectible. There are no material uncollectible accounts as 

of September 30, 2019 and 2018.
15

NOTE 4. PROPERTY, EQUIPMENT, AND SOFTWARE

Schedule of Property, Equipment, and Software as of September 30, 2019:

Schedule of Property, Equipment, and Software as of September 30, 2018:

NOTE 5. LIABILITIES NOT COVERED BY BUDGETARY RESOURCES

The liabilities for Commission as of September 30, 2019 and 2018, include liabilities not covered 

by budgetary resources. Congressional action is needed before budgetary resources can be 

provided. Although future appropriations to fund these liabilities are likely and anticipated, it is 

not certain that appropriations will be enacted to fund these liabilities. 

FECA and the Unemployment Insurance liabilities represent the unfunded liability for actual 

workers compensation claims and unemployment benefits paid on the Commission’s behalf and 

payable to the DOL. 

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

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

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

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

resources. Sick and other leave is expensed as taken. 

The deferred lease liability amount represents the difference at year end between the sum of 

monthly cash disbursements paid to date for base rent and the sum of the average monthly rent 
16

calculated based on the term of the lease. This was due to a lease agreement entered into at 1331 

Pennsylvania Avenue that had rent abatement provisions. 

NOTE 6. OTHER LIABILITIES

Other liabilities account balances as of September 30, 2019 were as follows:

Other liabilities account balances as of September 30, 2018 were as follows:
17

NOTE 7. LEASES

Operating Leases

The Commission occupies office space at 721 19th St, Denver, CO under a lease agreement that is 

accounted for as an operating lease. The lease term began on June 1, 2019 and expires on May 31, 

2029. Below is an estimated schedule of future payments, including estimated real estate taxes and 

operating expenses which are subject to annual adjustments.

The Commission occupies office space at 875 Greentree Rd, Pittsburgh, PA under a lease 

agreement that is accounted for as an operating lease. The lease term began September 13, 2010 

and expires on September 30, 2023. Below is a schedule of future payments for the term of the 

lease, including estimated real estate taxes and operating expenses which are subject to annual 

adjustments. 

The Commission occupies office space at 1331 Pennsylvania Avenue, Washington, DC under a 

lease agreement that is accounted for as an operating lease. The lease term began on August 23, 

2012 and expires on August 22, 2022. This lease has deferred rent in the amount of $11,225 per 

month. Below is a schedule of future payments for the term of the lease, including estimated real 

estate taxes and operating expenses which are subject to annual adjustments.

The operating lease amounts do not include estimated payments for leases with annual renewal 

options.
18

NOTE 8. EXPLANATION OF DIFFERENCES BETWEEN THE SBR AND THE 

BUDGET OF THE U.S. GOVERNMENT

The President’s Budget that will include fiscal year 2019 actual budgetary execution information 

has not yet been published. The President’s Budget is scheduled for publication in February 2020 

and can be found at the OMB Web site: http://www.whitehouse.gov/omb/. The 2020 Budget of the 

United States Government, with the "Actual" column completed for 2018, has been reconciled to 

the Statement of Budgetary Resources and there were no material differences. 

In Millions

NOTE 9. APPORTIONMENT CATEGORIES OF OBLIGATIONS INCURRED

Obligations incurred and reported in the Statement of Budgetary Resources in 2019 and 2018

consisted of the following:

Category A apportionments distribute budgetary resources by fiscal quarters.

NOTE 10. UNDELIVERED ORDERS AT THE END OF THE PERIOD

As of September 30, 2019 budgetary resources obligated for undelivered orders were as follows:

As of September 30, 2018, budgetary resources obligated for undelivered orders were as follows:

NOTE 11. CUSTODIAL ACTIVITY

The Commission’s custodial activity primarily consists of collection of Nonfederal receivables, 

fines, penalties, as well as Freedom of Information Act requests. While these collections are 

considered custodial, they are neither primary to the mission of the Commission nor material to the 

overall financial statements. The Commission’s total custodial collections are $2,436 and $1,034 

for the years ending September 30, 2019, and 2018, respectively. 
19

NOTE 12. RECONCILIATION OF NET COST TO NET OUTLAYS

The reconciliation of net outlays, presented on a budgetary basis, and the net cost, presented on an 

accrual basis, provides an explanation of the relationship between budgetary and financial 

accounting information.

NOTE 13. INTER-ENTITY COSTS

The Commission recognizes certain inter-entity costs for goods and services that are received from 

other Federal entities at no cost or at a cost less than the full cost. Certain costs of the providing 

entity that are not fully reimbursed are recognized as imputed cost and are offset by imputed 

revenue. Such imputed costs and revenues relate to employee benefits, and claims to be settled by 

the Treasury Judgement Fund. The Commission recognizes as inter-entity costs the amount of 

accrued pension and post-retirement benefit expenses for current employees. The assets and 

liabilities associated with such benefits are the responsibility of the administering agency, OPM. 

For the periods ended September 30, 2019 and 2018, respectively, inter-entity costs were as 

follows: