PERFORMANCE AND 

ACCOUNTABILITY REPORT

FISCALYEAR 2010
TABLE OF CONTENTS

AGENCY HEAD MESSAGE...........................................................................................................1 ...

MANAGEMENT DISCUSSION AND ANALYSIS...............................................................................2

FINANCIAL SECTION...................................................................................................................

MANAGEMENT REPRESENTATION LETTER.........................................................................11

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

INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL................................................15

INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE WITH LAWS AND REGULATIONS.........16

BALANCE SHEET................................................................................................................17

STATEMENT OF NET COST.................................................................................................18

STATEMENT OF CHANGES IN NET POSITION...........................................................................19

STATEMENT OF BUDGETARY RESOURCES............................................................................20

NOTES TO THE FINANCIAL STATEMENTS..............................................................................21

FEDERAL MINE SAFETY AND HEALTH REVIEW COMMISSION

FISCAL YEAR 2010

PERFORMANCE AND ACCOUNTABILITY REPORT

 
1
Federal Mine Safety and Health Review Commission 

FY 2010 Performance Accountability Report 

Management Discussion and Analysis 

Overview

The Federal Mine Safety and Health Review Commission (FMSHRC, or “Commission”) 

is an independent adjudicatory agency charged with resolving disputes arising from the 

enforcement of occupational 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). 

Mission and Organization Structure 

The Commission’s mission is to provide just, speedy, and articulate 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 Commission carries out its responsibilities through trial-level adjudication by the 

Commission’s Office of Administrative Law Judges (ALJs) and appellate review of ALJ 

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 the alleged safety and health violations occurred, and, if 

so, the appropriate sanctions to be imposed. 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. 

Once a case is filed with the Commission, it is given a docket number and referred to 

the Chief Administrative Law Judge (Chief ALJ). Thereafter, litigants in the case must 

submit additional filings before the case is assigned to an ALJ. To expedite the 

decisional process, the Chief ALJ 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, schedules the case for hearing, holds the hearing, and issues a 

decision based upon the record. An ALJ’s decision that is not reviewed becomes a 

final, non-precedential order of the Commission. 

The 5-member Commission provides administrative appellate review based on the 

record. It may, in its discretion, review decisions issued by ALJ’s when requested by a 

litigant, or it may, on its own initiative, direct cases for review. The Commission’s 

2
decisions are precedential and appeals from the Commission’s decisions are to the 

federal circuit courts of appeals. 

Key Challenges 

Since FY 2006, the number of new cases filed with the Commission has steadily 

increased. From FY 2000 through FY 2005, the average number of cases filed was 192 

per month, or 2,307 per year. However, in FY 2008 and FY 2009, 8,961 and 9,230 new 

cases were filed, respectively. In FY 2010, 11,087 new cases were filed. As of 

September 30, 2010, the Commission had a backlog of 18,167 – nearly eight times the 

normal caseload from FY 1995 through FY 2005. In contrast, the average backlog from 

FY 2000 through FY 2004 was only 1,379. 

H.R. 4899, the “Supplemental Appropriations Act, 2010, (P.L. 111-212), was enacted on 

July 29, 2010. Pursuant to that law, the Commission received $3,800,000, available for 

one year from the date of enactment for the purpose of reducing the backlog. 

Supported by the regular FY 2010 appropriation as well as this supplemental 

appropriation, the Commission took a number of steps during the fiscal year to dispose 

of cases more efficiently and reduce the backlog. Most importantly, the Commission 

hired additional personnel, including six new full time equivalent judges and the staff to 

support their work. In addition, the Commission is exploring information technology 

upgrades that would speed the processing of cases. 

FMSHRC has also engaged in two rulemaking efforts aimed at streamlining the 

adjudicatory process. The first, a Notice of Proposed Rulemaking regarding simplified 

proceedings, was published in the Federal Register on May 20, 2010. See 75 Fed. 

Reg. 28223. FMSHRC anticipates that the simplified proceedings proposed by this rule 

would reduce the amount of time between docketing and dispositions of certain civil 

penalty proceedings. The second, an Interim Rule published on April 27, 2010, 

streamlines penalty settlement procedures. See Fed. Reg. 21987. 

Performance Goals and Results 

In view of the recent and continuing upsurge in its caseload, the Commission must 

continually reassess its strategic goals in light of changing circumstances. Therefore, 

the Commission has established benchmarks as part of its overall strategic plan, but it 

will also revisit and evaluate those benchmarks as part of its annual performance and 

budget planning activity. 

The annual performance plan will clearly explain the role of each Commission activity as 

set forth in the Commission’s budget. The plan’s specific objectives, adjusted to reflect 

policy determinations and resource allocations in the annual budget process, will serve 

as intermediate steps in the Commission’s overall efforts to successfully accomplish the 

goals of this strategic plan. 

3
Accordingly, in order to achieve its mission, 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. 

Commission Review Function 

The responsibility for the review of ALJ decisions is set forth in section 113(d)(1) of the 

Mine Act. The Act states that an ALJ’s decision shall become final 40 days after its 

issuance, unless within that period any two Commissioners direct that the decision be 

reviewed. 

Most cases come before the Commission when two or more Commissioners vote to 

grant a petition for discretionary review filed by a party adversely affected or aggrieved 

by the ALJ’s decision. Petitioners may include miners, miners’ representatives, mine 

operators or the Secretary of Labor. The Commission is also charged with the 

responsibility of reviewing disputes arising over the emergency response plans of 

underground coal operators pursuant to the Mine Improvement and New Emergency 

Response Act of 2006 (MINER Act), which amended the Mine Act. 

Two or more Commissioners may also direct any case for review sua sponte (on the 

Commission’s own motion, without the parties filing a petition). Sua sponte review is 

limited to ALJ decisions that are contrary to law or Commission policy, or that present a 

novel question of policy. By law, a quorum of three Commissioners is required to 

consider and decide cases appealed from the Commission’s ALJs. Many of the 

Commission’s cases present issues of first impression under the Mine Act. That is, the 

cases raise issues that have not been resolved by prior decisions of the Commission or 

the courts or the cases involve the interpretation of safety and health standards and 

regulations newly promulgated by MSHA. 

The Commission began FY 2010 with an inventory of 95 undecided cases and received 

213 new cases during the year. One hundred eighty-nine dispositions were made 

during FY 2010, resulting in 119 undecided cases remaining at the end of the fiscal 

year. In FY 2011, the Commission began the year with an inventory of 119 undecided 

cases, and 230 new cases are anticipated for the year. 

Of the 189 cases decided in FY 2010, 7 were substantive decisions, 169 were 

procedural orders in default cases, and 13 were denials of petitions for review. The 

average age of the 92 default cases pending on the Commission’s docket as of 

September 1, 2010 was 5.8 months, and the average age of the 7 substantive decisions 

issued in FY 2010 was 6.6 months. 

During FY 2010, the number of default cases handled by the Commission continued to 

be a major challenge, particularly for the Commission’s Office of General Counsel 

(OGC). The number of default cases received by the Commission increased 

4
dramatically from 68 in FY 2007 to 170 in FY 2010 - a 250 percent increase. The 

increase in default orders has greatly increased the demands on OGC’s attorneys, who 

must analyze each case and prepare a draft order for the Commissioners. Default 

cases typically involve situations where a mine operator has allegedly failed to 

challenge civil penalties proposed by the MSHA within the prescribed 30-day period for 

contesting such proposed penalties. Under the Mine Act, proposed penalties that are 

not contested in a timely manner automatically become final Commission orders. 

Operators may file written requests with the Commission seeking to establish “good 

cause” to re-open the final orders. The Commission has determined that operators may 

file requests seeking to establish good cause to re-open final orders utilizing principles 

adopted by the Federal Courts. 

The following table provides the performance goals and results for the Commission 

Review function for FYs 2007 - 2010. 

COMMISSION REVIEW APPELLATE CASES 

ISSUE OPINION IN A TIMELY MANNER GOAL 

PERFORMANCE GOALS FY 

2007 

FY 

2008 

FY 

2009 

FY 

2010 MET NOT 

MET 

Decide all cases within 18 months of 

receipt. (undecided cases over 18 

months of age) 

1 0 0 2 √

Assign all cases before briefing is 

completed. (cases briefed but 

unassigned) 

0 0 0 6 √

Maintain average age of substantive 

decisions at 12 months of less. 

(average age of substantive decisions) 

5.1 8.9 9.6 6.6 √ 

Administrative Law Judge Function 

The Commission employs Administrative Law Judges to hear and decide contested 

cases at the trial level, as initiated by the Secretary of Labor, mine operators, and 

miners or their representatives. The judges are also responsible for evaluating and 

approving or denying settlement agreements under the Mine Act. 

Administrative Law Judges travel to hearing sites located at or near the mine involved in 

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

participate in the hearing process. 

The Commission believes that the number of new case filings will not decrease in the 

coming years, as operators continue to elect to contest higher civil penalties proposed 

by MSHA and as MSHA increases its utilization of its “pattern of significant and 

substantial violations” sanctions. 

5
The following table provides the performance goals and results for the Administrative 

Law Judge function for FYs 2007 – 2010. 

OFFICE OF ADMINISTRATIVE LAW JUDGES

Ensure Timely Issuance of Decisions GOAL 

PERFORMANCE GOALS FY 

2007

FY 

2008

FY 

2009 

FY 

2010 

MET NOT 

MET 

Issue 65 percent of decisions within 180 

days of receipt of the post-hearing briefs. 69% 60% 86% 82% 

9

Issue 65 percent of settlement decisions 

within 60 days of receipt of settlement 

motions. 

80% 73% 61% 57% 9

Decide 70 percent of cases within 12 

months of assignment. 97% 79% 92% 92% 9

Undecided cases over 365 days of age. 71 687 3,738 7,845 9

Office of the Executive Director Function 

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

the Commission in fulfilling its mission. 

OED provides strategic planning and operational management for the organization. 

OED also includes administrative services, financial, human resources, procurement, 

technology management, and computer and information security. The day-to-day tasks 

performed under the direction of the Executive Director include: 

• Providing support agency-wide in the areas of human resources, procurement, 

budget, finance, equal opportunity, and general administrative services; 

• Providing personnel, payroll, benefits, hearing coordination, and travel 

coordination to agency employees; 

• Procuring goods and services, maintenance and needed repairs of equipment, 

training, reference materials, and supplies and office space; 

• Supporting the implementation and development of effective and efficient case 

management and administrative systems through information technology 

hardware and software; 

• Maintaining and enhancing a website to provide the public with user friendly 

access to Commission information; and 

• Enhancing telecommunications and improving technology efficiency and 

effectiveness. 

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 this law, the Commission began 

annual audits in FY 2003. The Commission has received an “unqualified” opinion for 

each annual review conducted by an independent auditor. 

6
The Commission has contracted with the Bureau of Public Debt’s Administrative 

Resource Center for accounting services since 1998. The Administrative Resource 

Center prepared the Commission’s FY 2010 financial statements, which include 

comparative data for FY 2009. 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 

 

The Commission’s assets in fiscal year 2010 were $6,960,427 as of September 30, 

2010. The Fund Balance with Treasury of $6,898,231 represents the Commission’s 

largest asset as of September 30, 2010. This is an increase of approximately 128 

percent from fiscal year 2009 and represents approximately 99 percent of the agency’s 

total assets. Property, Equipment, and Software accounts for approximately 1 percent 

of the Commission's total assets as of September 30, 2010. The net fixed asset value 

of $62,196 equals the cost less accumulated depreciation and represents the current 

book value of those assets. 

 

The Commission’s liabilities in fiscal year 2010 totaled $948,754 as of September 30, 

2010. This is an increase of $299,316 from the fiscal year 2009 balance of $649,438. 

Accounts payable balance at September 30, 2010, was $131,162, an increase of 

$49,961 from September 30, 2009. Accrued payroll liabilities, payroll taxes payable, 

and unemployment insurance increased $133,506 in 2010. Unfunded annual leave 

increased $96,977 in 2010 from 2009. Unfunded annual leave represents 

approximately 39 percent of total agency liabilities. 

 

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

position for fiscal year 2010 increased by $3,530,451 from fiscal year 2009. 

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 Commissions two major programs, Administrative Law Judge 

and Commission. The total net cost of operations in 2010 was $10,416,388, an increase 

of $1,523,340, or 17 percent, over the 2009 net cost of operations of 8,893,048. 

 

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 $3,530,451 in 2010 from 2009, a change of approximately 142 percent. 

 

Analysis of the Statement of Budgetary Resources 

 

7
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. For fiscal year 2010, the Commission had total budgetary resources of 

$15,492,670, which is $4,798,460 more than in 2009. 

 

Management Assurances 

Systems, Controls, and Legal Compliance 

Financial Data and Accounting: 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 small 

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 2010 accounting reports prepared 

by the Bureau of Public Debt, 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. 

Commission managers are pleased to certify, with reasonable assurance, that the 

Commission’s systems of internal controls and the systems of accounting used by the 

Bureau of Public Debt are in compliance with the Federal Managers Financial Integrity 

Act. 

Equal Employment Opportunity Program: The EEO Office of the Commission directs 

and manages a comprehensive EEO program assuring compliance with all Federal antidiscrimination laws and regulations. It provides policy and legal guidance to the 

Chairman and other senior level managers, ensuring that the agency is kept abreast of 

all critical developments in the law. The EEO office oversees the EEO counseling, 

alternative dispute resolution (“ADR”) and complaint procedures. It develops, manages 

and implements the agency’s EEO policies and procedures. The office coordinates and 

conducts the required EEO agency-wide trainings for all personnel. The EEO office 

prepares and submits agency reports in compliance with the statutory and Equal 

Employment Opportunity Commission (“EEOC”) reporting requirements (e.g., the 

Congressional submission under the No FEAR Act, EEOC Management Directive 715, 

and the Annual Federal EEO Statistical Report of Discrimination Complaints). It works 

with senior managers to promote equal opportunity in recruitment, training, benefits, and 

promotion. 

8
During FY 2010, the EEO Office incurred a number of expenses as part of its mission. 

It purchased on-line training for all supervisors to review the requirements of Preventing 

Harassment in the Workplace. In order to comply with No FEAR Act training 

requirements for new employees within 90 days of hire and for current employees every 

two years, the Commission purchased additional No FEAR Act training. The EEO 

Director and staff also attend conferences and training, in order to stay current with 

developments in EEO law and requirements. The EEO Office anticipates the need for 

additional training and compliance activities as not only did the Commission’s staff 

increase considerably in FY 2010, but the Commission is also opening field offices and 

has expanded its staff. 

Ethics: During FY 2010, Commission employees received ethics training on-line at a 

website managed by the BPD. In creating the training, the Commission identified 

various subjects relating to ethics that are relevant to Commission employees. For 

each subject, the Commission’s ethics officials drafted background material and 

questions and answers that specifically relate to issues likely to be faced by 

Commission employees. Employees read the material, answered the questions, and 

read further information provided in the answers. An automatic certificate of completion 

is then generated for record-keeping purposes. More specifically, Commission 

employees have been receiving ethics training in the areas of misuse of position, 

seeking new employment, and post-employment restrictions. 

In addition, during FY 2010, the Commission’s ethics officials provided initial ethics 

orientation to the agency’s new employees in a slightly different format. Previously, the 

Commission’s ethics officials provided new employees with written ethics materials and 

information required by 5 C.F.R. § 2638.703. During FY 2010, in addition to providing 

such materials and information, the Commission’s ethics officials provided a general 

overview of ethics regulations through videotape and a verbal summary. 

Freedom of Information Act (FOIA): During the 2010 fiscal year, the Commission 

received 92 FOIA requests. This was double the number of requests the agency 

received and processed in the 2009 fiscal year. The majority of these requests were for 

case-related materials. A significant number of requests were related to the tragic mine 

explosion in April 2010 involving the Upper Big Branch mine operated by a Massey 

Energy subsidiary. These requests were large in scale and complicated in nature, 

involving significant staff time. Where the Commission was in possession of documents 

and information that was responsive to the FOIA request, the Commission granted the 

request and provided the information within the 20-day statutory time period, except in 

three instances. In two of these requests, the information was not available until 

beyond the 20-day period. The third request involved information related to the Upper 

Big Branch mine and was an extremely broad request involving a significant number of 

agency records. The documents were provided to the requester in stages as the 

request was processed and was ultimately completed just beyond the 20-day period. 

For nine requests, the Commission did not possess records responsive to the requests 

made. Two requests were withdrawn by the requesters. No requests were denied in 

part or in whole. The Commission collected $826.05 in fees. 

9
The Commission has a Chief FOIA Officer and a FOIA Public Liaison who administer its 

FOIA program. In August 2010, the Commission designated an additional staff member 

to serve as Assistant FOIA Officer to aid in the increased volume of FOIA requests. 

During FY 2010, the Chief FOIA Officer expended on average a total of 12.5% of her 

work time administering the Commission’s FOIA program. Other agency employees 

participated in responding to certain FOIA requests on an as-needed basis. Overall, in 

FY 2010, the FOIA program involved approximately 2% of the Commission’s overall 

work load and cost approximately $26,665 in expenses, including personnel time. 

Security of Information Technology Systems: The Commission continues to devote a 

major portion of its information technology efforts to network security. The Commission 

has implemented proactive measures to protect the network’s core infrastructure as well 

as end user computers. Symantec End Point Protection Suite and deployment of the 

Symantec Mail Security module for exchange have added additional security from 

internal and external threats against the core infrastructure and end users. 

Performance Data Verification 

The adjudicative and managerial goals and objectives set forth above can be achieved 

through an integrated set of strategies that build on current Commission programs and 

initiatives. Working from the premise that fair and expeditious decision-making and 

efficient agency management go hand in hand, the Commission adopts the following 

strategies to implement the strategic goals and objectives: 1) prioritize the decisional 

process; 2) maintain and enhance an information technology program; 3) improve 

human resources management; and 4) promote employee accountability. 

The Commission will evaluate its progress towards accomplishing its strategic goals, 

through analysis of the results of its performance measures and through a continual 

reassessment of its workload and the needs of the parties that it serves. Program 

strengths and weakness will be assessed to determine alternative courses of action. 

The Commission will use the results of these evaluations to develop the annual 

performance goals and objectives which will focus the Commission's activities for the 

year. 

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 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. 

10
11
12
13
14
15
16
The accompanying notes are an integral part of these financial statements.

17 

2010 2009

Assets:

Intragovernmental

Fund Balance With Treasury (Note 2) 6,898,231 $ 3,019,141 $ 

Total Intragovernmental 6,898,231 3,019,141 

Accounts Receivable, Net (Note 3) - 340 

Property, Equipment, and Software, Net (Note 4) 62,196 111,179 

Total Assets 6,960,427 $ 3,130,660 $ 

Liabilities:

Intragovernmental

Accounts Payable 3,176 $ - $ 

Other (Note 6) 66,065 47,193 

Total Intragovernmental 69,241 47,193 

Accounts Payable 127,986 81,201 

Other (Note 6) 751,527 521,044 

Total Liabilities 948,754 $ 649,438 $ 

Net Position:

Unexpended Appropriations - Other Funds 6,319,787 $ 2,645,321 $ 

Cumulative Results of Operations - Other Funds (308,114) (164,099) 

Total Net Position 6,011,673 $ 2,481,222 $ 

Total Liabilities and Net Position 6,960,427 $ 3,130,660 $ 

FEDERAL MINE SAFETY AND HEALTH REVIEW COMMISSION

BALANCE SHEET

AS OF SEPTEMBER 30, 2010 AND 2009

(In Dollars)

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

18 

2010 2009

Program Costs:

Commission Review:

Gross Costs (Note 8) 4,777,479 $ 4,733,967 $ 

Net Program Costs 4,777,479 $ 4,733,967 $ 

Administrative Law Judge Determinations:

Gross Costs (Note 8) 5,638,909 $ 4,159,081 $ 

Net Program Costs 5,638,909 $ 4,159,081 $ 

Net Cost of Operations 10,416,388 $ 8,893,048 $ 

FEDERAL MINE SAFETY AND HEALTH REVIEW COMMISSION

STATEMENT OF NET COST

FOR THE YEARS ENDED SEPTEMBER 30, 2010 AND 2009

(In Dollars)

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

19 

2010 2009

Cumulative Results of Operations:

Beginning Balances (164,099) $ (218,642) $ 

Budgetary Financing Sources:

Appropriations Used 9,710,896 8,495,515 

Other Financing Sources (Non-Exchange):

Imputed Financing Sources (Note 9) 561,477 452,076 

Total Financing Sources 10,272,373 8,947,591 

Net Cost of Operations (10,416,388) (8,893,048) 

Net Change (144,015) 54,543 

Cumulative Results of Operations (308,114) $ (164,099) $ 

Unexpended Appropriations:

Beginning Balances 2,645,321 $ 3,392,425 $ 

Budgetary Financing Sources:

Appropriations Received 14,158,000 8,653,000 

Other Adjustments (772,638) (904,589) 

Appropriations Used (9,710,896) (8,495,515) 

Total Budgetary Financing Sources 3, (747,104) 674,466 

Total Unexpended Appropriations 6,319,787 $ 2,645,321 $ 

Net Position 6,011,673 $ 2,481,222 $ 

FEDERAL MINE SAFETY AND HEALTH REVIEW COMMISSION

STATEMENT OF CHANGES IN NET POSITION

FOR THE YEARS ENDED SEPTEMBER 30, 2010 AND 2009

(In Dollars)

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

20 

2010 2009

Budgetary Resources:

Unobligated Balance:

Unobligated Balance Brought Forward, October 1 1,934,246 $ 2,921,486 $ 

Recoveries of Prior Year Unpaid Obligations 173,062 24,313 

Budget Authority

Appropriation 14,158,000 8,653,000 

Permanently Not Available (772,638) (904,589) 

Total Budgetary Resources 15,492,670 $ 10,694,210 $ 

Status of Budgetary Resources:

Obligations Incurred (Note 11)

Direct $ 8,759,964 10,385,674 $ 

Unobligated Balance

Apportioned 1,957,414 25,615 

Unobligated Balance Not Available 3,149,582 1,908,631 

Total Status of Budgetary Resources 15,492,670 $ 10,694,210 $ 

Change in Obligated Balance:

Obligated Balance, Net

Unpaid Obligations, Brought Forward, October 1 1,084,895 $ 876,773 $ 

Obligations Incurred Net 10,385,674 8,759,964 

Gross Outlays (9,506,272) (8,527,529) 

Recoveries of Prior Year Unpaid

Obligations, Actual (173,062) (24,313) 

Total, Unpaid Obligated Balance, Net, End of Period 1,791,235 $ 1,084,895 $ 

Net Outlays:

Gross Outlays 9,506,272 $ 8,527,529 $ 

Net Outlays 9,506,272 $ 8,527,529 $ 

FEDERAL MINE SAFETY AND HEALTH REVIEW COMMISSION

STATEMENT OF BUDGETARY RESOURCES

FOR THE YEARS ENDED SEPTEMBER 30, 2010 AND 2009

(In Dollars)
FEDERAL MINE SAFETY AND HEALTH REVIEW COMMISSION 

NOTES TO THE FINANCIAL STATEMENTS 

21 

NOTE 1. SUMMARY OF SIGNIFICANT 

ACCOUNTING POLICIES 

A. Reporting Entity 

The Federal Mine Safety and Health Review 

Commission (MSC) 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 MSC reporting entity is 

comprised of General Funds and General 

Miscellaneous Receipts. 

General Funds are accounts used to record 

financial transactions arising under 

congressional appropriations or other 

authorizations to spend general revenues. 

General Fund Miscellaneous Receipts are 

accounts established for receipts of nonrecurring activity, such as fines, penalties, fees 

and other miscellaneous receipts for services 

and benefits. 

MSC has rights and ownership of all assets 

reported in these financial statements. MSC 

does not possess any non-entity assets. 

B. Basis of Presentation 

The financial statements have been prepared to 

report the financial position, net cost of 

operations, changes in net position, and the 

status and availability of budgetary resources 

of MSC. The statements are a requirement of 

the Chief Financial Officers Act of 1990, the 

Government Management Reform Act of 1994 

and the Accountability of Tax Dollars Act of 

2002. They have been prepared from, and are 

fully supported by, the books and records of 

MSC in accordance with the hierarchy of 

accounting principles generally accepted in the 

United States of America, standards approved 

by the Federal Accounting Standards Advisory 

Board (FASAB), OMB Circular A-136, 

Financial Reporting Requirements and MSC 

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 

MSC’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. Budgets and Budgetary Accounting 

Congress usually enacts appropriations to 

permit MSC to incur obligations for specified 

purposes. In fiscal years 2010 and 2009, MSC 

was accountable for General Fund 

appropriations. MSC recognizes budgetary 

resources as assets when cash (funds held by 

the U.S. Treasury) is made available through 

the Department of Treasury General Fund 

warrants. 

D. Basis of Accounting 

Transactions are recorded on both an accrual 

accounting basis and a budgetary basis. Under 

the accrual method, revenues are recognized 

when earned, and expenses are recognized 

when a liability is incurred, without regard to 

receipt or payment of cash. Budgetary 

accounting facilitates compliance with legal 

requirements on the use of federal funds. 

E. Revenues & Other Financing Sources 

Congress enacts annual appropriations to be 

used, within statutory limits, for operating and 
22 

capital expenditures. Appropriations are 

recognized as a financing source when 

expended. 

MSC recognizes as an imputed financing 

source the amount of accrued pension and 

post-retirement benefit expenses for current 

employees paid on MSC's behalf by the Office 

of Personnel Management (OPM). 

F. Taxes 

MSC, as a Federal entity, is not subject to 

Federal, State, or local income taxes, and, 

accordingly, no provision for income taxes has 

been recorded in the accompanying financial 

statements. 

G. Fund Balance with Treasury 

The U.S. Treasury processes cash receipts and 

disbursements. Funds held at the Treasury are 

available to pay agency liabilities. MSC does 

not maintain cash in commercial bank 

accounts or foreign currency balances. 

Foreign currency payments are made either by 

Treasury or the Department of State and are 

reported by MSC in the U.S. dollar 

equivalents. 

H. Accounts Receivable 

Accounts receivable consists of amounts owed 

to MSC by other Federal agencies and the 

general public. Amounts due from Federal 

agencies are considered fully collectible. 

Accounts receivable from the public include 

reimbursements from employees. An 

allowance for uncollectible accounts 

receivable from the public is established when, 

based upon a review of outstanding accounts 

and the failure of all collection efforts, 

management determines that collection is 

unlikely to occur considering the debtor’s 

ability to pay. 

I. Property, Equipment, and Software 

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. MSC's capitalization 

threshold is $50,000 for individual purchases 

and $500,000 for bulk purchases. Applicable 

standard governmental guidelines regulate the 

disposal and convertibility of agency property, 

equipment, and software. The useful life 

classifications for capitalized assets are as 

follows: Leasehold Improvements is the 

period of the lease, and Furniture & Equipment 

is 5 years. 

J. Advances and Prepaid Charges 

Advance payments are generally prohibited by 

law. There are some exceptions, such as 

reimbursable agreements, subscriptions and 

payments to contractors and employees. 

Payments made in advance of the receipt of 

goods and services are recorded as advances or 

prepaid charges at the time of prepayment and 

recognized as expenses when the related goods 

and services are received. 

K. Liabilities

Liabilities represent the amount of monies or 

other resources likely to be paid by MSC as a 

result of transactions or events that have 

already occurred. No liability can be paid, 

however, absent an appropriation or other 

funding. Liabilities for which an appropriation 

has not been enacted or other funds received 

are, therefore, classified as not covered by 

budgetary resources. There is no certainty that 

the appropriation will be enacted. 

Additionally, the Government, acting in its 

sovereign capacity, can abrogate liabilities. 

L. Accounts Payable 

Accounts payable consists primarily of 

amounts owed to other Federal agencies and 

the public for contracts for goods or services, 
23 

such as leases, utilities, telecommunications 

and consulting and support services. 

M. Annual, Sick, and Other Leave 

Annual leave is accrued as it is earned, and the 

accrual is reduced as leave is taken. The 

balance in the accrued leave account is 

adjusted to reflect current pay rates. Liabilities 

associated with other types of vested leave, 

including compensatory, restored leave, and 

sick leave in certain circumstances, are accrued 

at year-end, based on latest pay rates and 

unused hours of leave. Funding will be 

obtained from future financing sources to the 

extent that current or prior year appropriations 

are not available to fund annual and other 

types of vested leave earned but not taken. 

Nonvested leave is expensed when used. Any 

liability for sick leave that is accrued but not 

taken by a Civil Service Retirement System 

(CSRS)-covered employee is transferred to 

OPM upon the retirement of that individual. 

Credit is given for sick leave balances in the 

computation of annuities upon the retirement 

of Federal Employees Retirement System 

(FERS)-covered employees effective at 50% 

beginning FY2010 and 100% in 2014. 

N. Retirement Plans 

MSC employees participate in either the CSRS 

or the FERS. The employees who participate 

in CSRS are beneficiaries of MSC 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 FERS and Social Security. 

Employees hired as of January 1, 1987 are 

automatically covered by the FERS program. 

FERS offers a savings plan to which MSC 

automatically contributes one percent of pay 

and matches any employee contribution up to 

an additional four percent of pay. For FERS 

participants, MSC 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, MSC remits the 

employer’s share of the required contribution. 

MSC 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 MSC for current 

period expense reporting. OPM also provides 

information regarding the full cost of health 

and life insurance benefits. MSC recognized 

the offsetting revenue as imputed financing 

sources to the extent these expenses will be 

paid by OPM. 

MSC 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. 

O. Other Post-Employment Benefits 

MSC 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 MSC 

with certain cost factors that estimate the true 

cost of providing the post-retirement benefit to 

current employees. MSC 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 MSC through the 

recognition of an imputed financing source.

P. Use of Estimates 

The preparation of the accompanying financial 

statements in accordance with generally 
24 

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. 

Q. Imputed Costs/Financing Sources 

Federal Government entities often receive 

goods and services from other Federal 

Government entities without reimbursing the 

providing entity for all the related costs. In 

addition, Federal Government entities also 

incur costs that are paid in total or in part by 

other entities. An imputed financing source is 

recognized by the receiving entity for costs 

that are paid by other entities. MSC 

recognized imputed costs and financing 

sources in fiscal years 2010 and 2009 to the 

extent directed by OMB. 

R. Expired Accounts and Cancelled 

Authority 

Unless otherwise specified by law, annual 

authority expires for incurring new obligations 

at the beginning of the subsequent fiscal year. 

The account in which the annual authority is 

placed is called the expired account. For five 

fiscal years, the expired account is available 

for expenditure to liquidate valid obligations 

incurred during the unexpired period. 

Adjustments are allowed to increase or 

decrease valid obligations incurred during the 

unexpired period but not previously reported. 

At the end of the fifth expired year, the expired 

account is cancelled. 

NOTE 2. FUND BALANCE WITH TREASURY

Fund balance with Treasury account balances as of September 30, 2010 and 2009, were as 

follows: 

2010 2009

Fund Balances:

Appropriated Funds $ 6,898,231 $ 3,019,141 

Total $ 6,898,231 $ 3,019,141 

Status of Fund Balance with Treasury:

Unobligated Balance

 Available $ 1,957,414 $ 25,615 

 Unavailable 3,149,582 1,908,631 

Obligated Balance Not Yet Disbursed 1,791,235 1,084,895 

Total $ 6,898,231 $ 3,019,141 

 
25 

NOTE 3. ACCOUNTS RECEIVABLE 

Accounts receivable balances as of September 30, 2010 and 2009, were as follows: 

2010 2009

With the Public

Accounts Receivable - Employee $ 340 - $ 

Total Accounts Receivable $ 340 - $ 

Historical experience has indicated that the majority of the receivables are collectible. There are 

no material uncollectible accounts as of September 30, 2010 and 2009. 

NOTE 4. PROPERTY, EQUIPMENT, AND SOFTWARE 

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

Major Class

Acquisition 

Cost

Accumulated 

Amortization/

Depreciation

Net Book 

Value

Leasehold Improvements 120,123 $ 57,927 $ 62,196 $ 

Furniture & Equipment 99,597 99,597 - 

Total 219,720 $ 157,524 $ 62,196 $ 

Schedule of Property, Equipment, and Software as of September 30, 2009 

Major Class

Acquisition 

Cost

Accumulated 

Amortization/

Depreciation

Net Book 

Value

Leasehold Improvements 120,123 $ 26,829 $ 93,294 $ 

Furniture & Equipment 99,597 81,712 17,885 

Total 219,720 $ 108,541 $ 111,179 $ 

NOTE 5. LIABILITIES NOT COVERED BY BUDGETARY RESOURCES

The liabilities for MSC as of September 30, 2010 and 2009, 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. 
26 

2010 2009

Intragovernmental – Unemployment Insurance (2,286) $ - $ 

Unfunded Leave 372,595 275,618 

Total Liabilities Not Covered by Budgetary Resources 370,309 $ 275,618 $ 

Total Liabilities Covered by Budgetary Resources 578,445 373,820 

Total Liabilities 948,754 $ 649,438 $ 

Unemployment Insurance liability represents the unfunded liability for actual unemployment 

benefits paid on MSC's behalf and payable to the Department of Labor (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. 

NOTE 6. OTHER LIABILITIES

All other liabilities are considered current liabilities. 

2010 2009

Intragovernmental Liabilities

Unemployment Insurance (2,286) $ - $ 

Payroll Taxes Payable 68,351 47,193 

Total Intragovernmental Liabilities 66,065 $ 47,193 $ 

With the Public

 Payroll Taxes Payable 12,950 $ 12,547 $ 

 Accrued Funded Payroll and Leave 365,982 232,879 

 Unfunded Leave 372,595 275,618 

Total Public Liabilities 751,527 $ 521,044 $ 

NOTE 7. LEASES

Operating Leases

MSC occupies office space under a lease agreement that is accounted for as an operating lease. 

The lease term begins on October 1, 2002 and expires on October 1, 2012. Lease payments are 

increased annually based on the adjustments for operating cost and real estate tax escalations. 

The total operating lease expense year to date for Fiscal Years 2010 and 2009 were $1,345,462 

and $1,262,434, respectively. Below is a schedule of future payments for the term of the lease: 
27 

Fiscal Year Building

2011 $ 1,337,542 

2012 1,364,040 

Total Future Payments $ 2,701,582 

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

options. 

NOTE 8. INTRAGOVERNMENTAL COSTS AND EXCHANGE REVENUE 

Intragovernmental costs and intragovernmental exchange revenue represent goods and services 

exchange transactions made between two reporting entities within the Federal government, and 

are in contrast to those with non-federal entities (the public). Such costs and revenue are 

summarized as follows: 

2010 2009

Commission Review

 Intragovernmental Costs 1,608,341 $ 1,787,463 $ 

 Public Costs 3,169,138 2,946,504 

 Net Program Costs 4,777,479 $ 4,733,967 $ 

Administrative Law Judge Determinations

 Intragovernmental Costs 1,928,036 $ 1,560,562 $ 

 Public Costs 3,710,873 2,598,519 

 Net Program Costs 5,638,909 $ 4,159,081 $ 

Total Intragovernmental costs 3,536,377 $ 3,348,025 $ 

Total Public costs 6,880,011 5,545,023 

Total Net Cost 10,416,388 $ 8,893,048 $ 

NOTE 9. IMPUTED FINANCING SOURCES 

MSC recognizes as imputed financing the amount of accrued pension and post-retirement benefit 

expenses for current employees. The assets and liabilities associated with such benefits are the 

responsibility of the administering agency, OPM. For the fiscal years ended September 30, 2010 

and 2009, respectively, imputed financing was as follows: 

2010 2009

Office of Personnel Management $ 561,477 $ 452,076 

Total Imputed Financing Sources $ 561,477 $ 452,076 

 
28 

NOTE 10. BUDGETARY RESOURCE COMPARISONS TO THE BUDGET OF THE 

UNITED STATES GOVERNMENT 

The President’s Budget that will include FY10 actual budgetary execution information has not yet 

been published. The President’s Budget is scheduled for publication in February 2011 and can be 

found at the OMB Web site: http://www.whitehouse.gov/omb/. The 2011 Budget of the United 

States Government, with the "Actual" column completed for 2009, has been reconciled to the 

Statement of Budgetary Resources and there were no material differences. 

NOTE 11. APPORTIONMENT CATEGORIES OF OBLIGATIONS INCURRED 

Obligations incurred and reported in the Statement of Budgetary Resources in 2010 and 2009 

consisted of the following: 

2010 2009

Direct Obligations, Category A 10,385,674 $ 8,759,964 $ 

Total Obligations Incurred 10,385,674 $ 8,759,964 $ 

Category A apportionments distribute budgetary resources by fiscal quarters.

NOTE 12. UNDELIVERED ORDERS AT THE END OF THE PERIOD 

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

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

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

should be disclosed. For the fiscal years ended September 30, 2010 and 2009, undelivered orders 

amounted to $1,212,790 and $711,074 respectively. 

NOTE 13. CUSTODIAL ACTIVITY 

MSC’s custodial collection primarily consists of Freedom of Information Act requests. While 

these collections are considered custodial, they are neither primary to the mission of MSC nor 

material to the overall financial statements. MSC’s total custodial collections are $89 and $115 

for the fiscal years ended September 30, 2010, and 2009, respectively. 

 
29 

NOTE 14. RECONCILIATION OF NET COST OF OPERATIONS TO BUDGET 

MSC has reconciled its budgetary obligations and non-budgetary resources available to its net 

cost of operations. 

2010 2009

Resources Used to Finance Activities:

Budgetary Resources Obligated

Obligations Incurred 10,385,674 $ 8,759,964 $ 

Spending Authority From Offsetting Collections and Recoveries (173,062) (24,313) 

Net Obligations 10,212,612 8,735,651 

Other Resources

Imputed Financing From Costs Absorbed By Others 561,477 452,076 

Net Other Resources Used to Finance Activities 561,477 452,076 

Total Resources Used to Finance Activities 10,774,089 9,187,727 

Resources Used to Finance Items Not Part of the Net Cost of Operations: (503,661) (330,199) 

Total Resources Used to Finance the Net Cost of Operations 10,270,428 8,857,528 

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

Generate Resources in the Current Period: 145,960 35,520 

Net Cost of Operations 10,416,388 $ 8,893,048 $