type: other

jurisdiction: US

text: b' OCCUPATIONAL SAFETY AND\n\nU.S. Department of Labor HEALTH ADMINISTRATION\n\n\n Office of Inspector General\xe2\x80\x94Office of Audit\n\n\n\n\n VOLUNTARY PROTECTION PROGRAM:\n CONTROLS ARE NOT SUFFICIENT TO ENSURE\n ONLY WORKSITES WITH EXEMPLARY SAFETY\n AND HEALTH SYSTEMS REMAIN IN THE\n PROGRAM\n\n\n\n\n Date Issued: December 16, 2013\n Report Number: 02-14-201-10-105\n\x0cU.S. Department of Labor December 16, 2013\nOffice of Inspector General\nOffice of Audit\n VOLUNTARY PROTECTION PROGRAM:\n CONTROLS ARE NOT SUFFICIENT TO\n ENSURE ONLY WORKSITES WITH\nBRIEFLY\xe2\x80\xa6 EXEMPLARY SAFETY AND HEALTH SYSTEMS\nHighlights of Report Number 02-14-201-10-105, issued REMAIN IN THE PROGRAM\nto the Assistant Secretary for Occupational Safety and\nHealth. WHAT OIG FOUND\n OSHA did not have sufficient controls to ensure VPP\nWHY READ THE REPORT worksites maintained exemplary occupational safety\nSince 1982, the Occupational Safety and Health and health systems.\nAdministration (OSHA) has used the Voluntary\nProtection Programs (VPP) to establish cooperative \xe2\x80\xa2\t\t 13 percent of participants had injury and illness\nrelationships with businesses and their workers to help rates above industry averages or were cited with\nprevent fatalities, injuries, and illnesses; and to officially violations of safety and health standards, but most\nrecognize worksites with exemplary safety and health of these participants were allowed to remain in the\nmanagement systems. Once approved for VPP, a program. Moreover, OSHA policy allowed\nworksite was exempt from OSHA programmed participants with injury and illness rates above\ninspections as long as it complied with program industry averages to potentially remain in the\nrequirements and maintained exemplary systems. program for up to 6 years, raising serious questions\n as to whether the companies were fully protecting\nTo ensure VPP participants maintained exemplary their workers.\nsystems, OSHA evaluated the systems while selecting,\nreevaluating, and monitoring worksites. First, a worksite \xe2\x80\xa2\t\t 11 percent of participants were not evaluated in a\nsubmitted an application to OSHA describing its timely manner. Policy had timeliness requirements\nsystems and opened itself to agency scrutiny that for onsite evaluations, but OSHA\xe2\x80\x99s existing\nincluded an onsite evaluation by a team of safety and processes did not effectively ensure compliance.\nhealth experts. Second, OSHA conducted periodic\nonsite reevaluations to ensure participants maintained \xe2\x80\xa2\t\t OSHA could not identify the universe of participants\nthe requirements of the program. Third, OSHA or applicants because it tracked VPP data in at\nmonitored the participant between onsite reevaluations least 11 different databases that were not\nby reviewing their annual self-evaluation report, reconciled; and data ranged between 1,743 to\nfollowing up on inspections, and performing other 1,859 for participants, and 19 to 274 for applicants.\noversight activities.\n \xe2\x80\xa2\t\t OSHA used unreliable injury and illness data to\nWHY OIG CONDUCTED THE AUDIT evaluate participants and in reported program\nWe conducted a performance audit of VPP for Fiscal statistics. For a judgmental sample, 60 percent of\nYear (FY) 2012 to answer the following question: reported rates differed significantly (by more than\n half) from source documents.\n\xe2\x80\xa2\t\t Does OSHA have sufficient controls for the\n selection, timely reevaluation, and monitoring of WHAT OIG RECOMMENDED\n VPP participants? The OIG made recommendations to the Assistant\n Secretary for Occupational Safety and Health covering\nREAD THE FULL REPORT policies, controls, and oversight so OSHA can better\nTo view the report, including the scope, methodology, ensure only VPP participants with exemplary safety and\nand full agency response, go to: health systems remain in the program.\nhttp://www.oig.dol.gov/public/reports/oa/2014/02-14\xc2\xad\n201-10-105. OSHA agreed with the recommendations, but stated it\n generally followed its policies and procedures and most\n VPP sites had exemplary safety and health systems.\n\x0c U.S. Department of Labor \xe2\x80\x93 Office of Inspector General\n\n\n\n\nPAGE INTENTIONALLY LEFT BLANK\n\n\n\n\n\n\n OSHA VPP\n Report No. 02-14-201-10-105\n\x0c U.S. Department of Labor \xe2\x80\x93 Office of Inspector General\n\n\n\n\nTable of Contents\n\n\n\nInspector General\xe2\x80\x99s Report ............................................................................................. 1\n\n\n\nResults In Brief .............................................................................................................. 2\n\n\n\nObjective \xe2\x80\x94 Does OSHA have sufficient controls over the selection, timely\n\n\nreevaluation, and monitoring of VPP participants? ................................................... 4\n\n\n VPP\'s evaluation processes and monitoring controls are not sufficient to \n\n ensure only participants with exemplary safety and health systems\n\n\n were in the program. ....................................................................................... 4\n\n\n\n Finding 1 \xe2\x80\x94 Policy allowed participants with injury and illness rates higher\n\n\n than industry averages to remain in VPP for up to 6 years ............................. 5\n\n\n Finding 2 \xe2\x80\x94 Participants with serious violations of safety and health\n\n\n standards remained in VPP............................................................................. 8\n\n\n Finding 3 \xe2\x80\x94 Participants were not evaluated in a timely manner. ...................... 11\n\n\n Finding 4 \xe2\x80\x94 OSHA did not maintain reliable data for applicants and \n\n participants .................................................................................................... 13\n\n\n Finding 5 \xe2\x80\x94 Reported program success in reducing injury and illness\n\n\n rates were not based on reliable data. .......................................................... 15\n\n\n\nRecommendations ...................................................................................................... 17\n\n\n\nExhibits\n Exhibit 1 Application Processing Timeframe and Results................................... 21\n\n\n Exhibit 2 Reevaluation Processing Timeframe and Results ............................... 23\n\n\n\nAppendices\n Appendix A Background ..................................................................................... 27\n\n\n Appendix B Objective, Scope, Methodology, and Criteria .................................. 31\n\n\n Appendix C Acronyms and Abbreviations .......................................................... 35\n\n\n Appendix D OSHA Response to Draft Report .................................................... 37\n\n\n Appendix E Acknowledgements ......................................................................... 43\n\n\n\n\n\n\n OSHA VPP\n Report No. 02-14-201-10-105\n\x0c U.S. Department of Labor \xe2\x80\x93 Office of Inspector General\n\n\n\n\nPAGE INTENTIONALLY LEFT BLANK\n\n\n\n\n\n\n OSHA VPP\n Report No. 02-14-201-10-105\n\x0c U.S. Department of Labor \xe2\x80\x93 Office of Inspector General\n\n\nU.S. Department of Labor Office of Inspector General\n Washington, D.C. 20210\n\n\n\n\nDecember 16, 2013\n\n Inspector General\xe2\x80\x99s Report\n\n\n\nDr. David Michaels\nAssistant Secretary\n for Occupational Safety and Health\nU.S. Department of Labor\n200 Constitution Avenue, NW\nWashington, D.C. 20210\n\nSince 1982, the Occupational Safety and Health Administration (OSHA) has used the\nVoluntary Protection Programs (VPP) to establish cooperative relationships with\nbusinesses and their workers to help prevent fatalities, injuries, and illnesses; and to\nofficially recognize worksites with exemplary safety and health management systems.\nOnce approved for VPP participation, a worksite is exempted from OSHA programmed\ninspections as long as it complies with program requirements and maintains exemplary\nsystems.\n\nTo ensure VPP participants maintain exemplary systems, OSHA evaluates the systems\nwhile selecting, reevaluating, and monitoring worksites. First, a worksite submits an\napplication to OSHA describing its systems and opens itself to agency scrutiny that\nincludes an onsite evaluation by a team of safety and health experts. Second, OSHA\nconducts periodic onsite reevaluations to ensure participants maintain the requirements\nof the program. Third, OSHA monitors the participant between onsite reevaluations by\nreviewing their annual self-evaluation report, following up on inspections, and\nperforming other oversight activities. See Appendix A for additional background\ninformation.\n\nWe conducted a performance audit of VPP for Fiscal Year (FY) 2012 to answer the\nfollowing question:\n\n Does OSHA have sufficient controls for the selection, timely reevaluation, and\n monitoring of VPP participants?\n\nWe reviewed the OSHA Directive Voluntary Protection Programs (VPP): Policies and\nProcedures Manual and related policy memoranda. We conducted interviews at\nOSHA\xe2\x80\x99s National Office and 4 sampled regional offices, and tested compliance with\nprogram requirements. We analyzed FY 2012 data on VPP applications, reevaluations,\nand active participants from OSHA\xe2\x80\x99s National Office and all 10 regional offices. We\n\n\n OSHA VPP\n 1 Report No. 02-14-201-10-105\n\x0c U.S. Department of Labor \xe2\x80\x93 Office of Inspector General\n\n\nstatistically sampled and reviewed documentation at 4 regional offices for 28 initial\napplications and 78 reevaluations. See Appendix B for the complete scope,\nmethodology, and criteria.\n\nWe conducted this performance audit in accordance with generally accepted\ngovernment auditing standards. Those standards require that we plan and perform the\naudit to obtain sufficient, appropriate evidence to provide a reasonable basis for our\nfindings and conclusions based on our audit objective. We believe that the evidence\nobtained provides a reasonable basis for our findings and conclusions based on our\naudit objective.\n\nRESULTS IN BRIEF\n\nThe purpose of VPP is to recognize worksites with exemplary safety and health\nmanagement systems. However, OSHA did not have controls in place to sufficiently\nselect, reevaluate, and monitor VPP participants to ensure their worksites maintained\nexemplary status. As a result, we found approximately 13 percent of VPP participants\nhad injury and illness rates above industry averages or had been cited for violations of\nsafety and health standards. Most of these participants were still allowed to remain in\nthe program. Additionally, OSHA had not reevaluated another 11 percent of VPP\nparticipants timely enough to ensure they maintained exemplary systems. Some\nreevaluations had still not been performed a year past their due dates.\n\nDuring the selection, reevaluation, and monitoring processes, OSHA reviewed\nparticipant injury and illness rates and compared them to industry averages. However,\nOSHA policy allowed participants with rates above industry averages to potentially\nremain in the program for up to 6 years. The fact companies were allowed up to 6 years\nto correct their higher-than-average injury and illness rates raises serious questions\nabout whether or not these companies were fully protecting their workers. Additionally,\nfor participants that had been inspected and cited for serious violations of safety and\nhealth standards, VPP policies did not require OSHA to determine the underlying\ncauses for those serious violations.\n\nFor the selection, reevaluation, and monitoring processes, we found issues regarding\ndata reliability, which impacted VPP entry and exit, participant reevaluations, and\nreported successes. For instance, OSHA could not identify all VPP participants or\napplicants because it tracked VPP data in at least 11 different databases that were not\nreconciled. As a result, OSHA did not have an accurate count of how many worksites\nwere in the program (1,746 to 1,851) or how many applications were awaiting approval\n(20 to 232). Additionally, OSHA used injury and illness data for the reevaluation process\nand to report on overall program successes, however the information was not reliable.\n\nWe made recommendations to the Assistant Secretary for Occupational Safety and\nHealth covering policies, controls, and oversight so OSHA can better ensure only VPP\nparticipants with exemplary safety and health systems remain in the program.\n\n\n OSHA VPP\n 2 Report No. 02-14-201-10-105\n\x0c U.S. Department of Labor \xe2\x80\x93 Office of Inspector General\n\n\nOSHA\xe2\x80\x99S RESPONSE\n\nOSHA acknowledged some deficiencies and inconsistencies remain in the management\nof the VPP program and agreed to take action on the report recommendations.\nHowever, OSHA questions the assumption that its policies for oversight of VPP\nparticipants \xe2\x80\x93 such as allowing up to 4 years of higher than industry average injury and\nillness rates, and an additional 2 years to reduce rates before voluntary withdrawal or\ntermination \xe2\x80\x93 do not fully protect workers. Injury and illness rates are only one of many\nfactors used to evaluate participants and OSHA does not believe that every participant\nthat exceeds the industry average is necessarily failing to fully protect its workers.\nOSHA believed it was generally following its policies and procedures for implementing\nVPP and that the vast majority of the sites in the program have exemplary safety and\nhealth management systems. The Assistant Secretary\xe2\x80\x99s entire response is contained in\nAppendix D.\n\nOIG\xe2\x80\x99S CONCLUSION\n\nThe VPP manual states that VPP participants are models of safety and health\nexcellence with systems to effectively prevent and control hazards so that worker\ninjuries and illnesses are prevented. The audit raised serious concerns regarding OSHA\npolicies based on indicators (higher than industry average injury and illness rates, and\ninspections citing serious violations of OSHA standards) that some VPP participants\nwere not effectively preventing and controlling hazards.\n\nWith few exceptions, OSHA followed its policy for participants with higher than average\ninjury and illness rates. OSHA\xe2\x80\x99s policy requires using 3-year average rates as the\nbenchmark, waiting up to 4 years before taking action on participants with higher than\nindustry average rates, and then waiting another 2 years before termination or\nrequesting voluntary withdrawal from VPP. OSHA provided documentation to support\nthe use of the 3-year average rates as the benchmark, but has not justified the waiting\nperiods \xe2\x80\x93 up to 4 years before initial corrective actions and another 2 years before final\nactions. Since VPP participants are supposed to model safety and health excellence\nand prevent worker injury and illnesses, we question the appropriateness of OSHA\xe2\x80\x99s\npolicy to delay actions on participants with higher than industry average rates.\n\n\n\n\n OSHA VPP\n 3 Report No. 02-14-201-10-105\n\x0c U.S. Department of Labor \xe2\x80\x93 Office of Inspector General\n\n\nRESULTS AND FINDINGS\n\nObjective \xe2\x80\x94 Does OSHA have sufficient controls over the selection, timely\n reevaluation, and monitoring of VPP participants?\n\n VPP\'s evaluation processes and monitoring controls are not sufficient to\n ensure only participants with exemplary safety and health systems were in\n the program.\n\nFor selecting, reevaluating, and monitoring VPP participants, OSHA did not have\nsufficient controls to ensure the worksites maintained exemplary occupational safety\nand health systems. We found approximately 13 percent of participants did not have\nsystems that fully protected their employees\xe2\x80\x99 safety and health. Most of these were still\nallowed to remain in the program. Additionally, 11 percent of participants were not\nevaluated timely to ensure they maintained exemplary systems \xe2\x80\x93 some of which were\nstill not performed a year past the reevaluation due date.\n\nThe purpose of VPP is to recognize worksites with exemplary safety and health\nmanagement systems. OSHA established policies and procedures to ensure VPP\nparticipants had and maintained exemplary systems during the selection, reevaluation,\nand monitoring of worksites. During selection, OSHA reviews the worksite\xe2\x80\x99s application\nand conducts an onsite evaluation to determine whether the applicant worksite has\nestablished exemplary systems. After approval for the program, OSHA conducts\nperiodic on-site reevaluations and monitoring (review of participant\xe2\x80\x99s annual\nself-evaluation and other oversight) to determine the participant\xe2\x80\x99s continuing eligibility\nfor the program. These policies and procedures are explained further in Appendix A.\n\nHowever OSHA\xe2\x80\x99s system of internal controls had weaknesses where it did not meet the\nfollowing Federal standards for control activities, information and communication, and\nmonitoring the effectiveness of controls. OMB Circular A-123, Management\xe2\x80\x99s\nResponsibility for Internal Control, states \xe2\x80\x9cEffective internal control is a key factor in\nachieving agency missions and program results through improved accountability.\xe2\x80\x9d The\nCircular also states:\n\n Control activities should include policies, procedures and mechanisms to\n help ensure that agency objectives are met and that data is valid and\n complete.\n\n Relevant, reliable and timely information should be communicated to\n relevant personnel within an organization and with outside organizations.\n\n Monitoring the effectiveness of controls should occur in the normal course\n of business. Periodic reviews, reconciliations or comparisons of data\n should be included as part of the regular assigned duties of personnel.\n\n\n\n OSHA VPP\n 4 Report No. 02-14-201-10-105\n\x0c U.S. Department of Labor \xe2\x80\x93 Office of Inspector General\n\n\nAs a result, 236 of 1,834 participants 1 (13 percent) did not fully protect their employees,\nand most were allowed to remain in the program. Specifically, 157 participants\n(9 percent) had injury and illness rates above industry averages and, according to\npolicy, were allowed to remain in VPP for up to 6 years before voluntary withdrawal or\ntermination (Finding 1). Another 79 (4 percent) were inspected because of fatalities,\ncatastrophic injuries, complaints, or referrals, and were allowed to remain in VPP even\nthough they were cited for serious, willful, and/or repeat violations of safety and health\nstandards (Finding 2). Also, 200 participants (11 percent) were not evaluated timely to\nensure they maintained exemplary systems and some of the evaluations had still not\nbeen performed a year past the reevaluation due date (Finding 3).\n\nMoreover, OSHA had data reliability issues that impacted tracking the entry into and exit\nfrom the program, as well as reevaluations. OSHA could not identify the universe of\nparticipants or applicants because it tracked VPP data in at least 11 different databases\nthat were not reconciled; and data ranged between 1,743 to 1,859 for participants, and\n19 to 274 for applicants (Finding 4). OSHA used injury and illness data for the\nreevaluation process and to report on overall program successes, but did not ensure the\ninformation was reliable. For a judgmental sample of 63 onsite evaluations,\n38 (60 percent) reported injury and illness rates that differed significantly (more than\n50 percent) from data based on employers annual self-assessment reports (Finding 5).\n\nIn 2009, GAO issued a report on VPP entitled: OSHA\xe2\x80\x99s Voluntary Protection Programs\nImproved Oversight and Controls Would Better Ensure Program Quality (report number\nGAO-09-395, May 20, 2009). GAO reported OSHA\xe2\x80\x99s internal controls were not sufficient\nto ensure that only qualified worksites participate in the VPP. While OSHA has taken\nsteps to address GAO\xe2\x80\x99s recommendations, the VPP control processes need additional\nimprovements to ensure participants maintain exemplary occupational safety and health\nsystems that fully protect employees from injury and illness. The areas needing\nadditional improvements are discussed in detail in the findings below.\n\nFinding 1 \xe2\x80\x94 Policy allowed participants with injury and illness rates higher than\n industry averages to remain in VPP for up to 6 years\n\nVPP policy allowed participants to remain in the program for up to 6 years, even though\nthey did not fully protect employees from work-related injuries and illnesses. The VPP\nmanual allows OSHA 3 to 4 years 2 before requiring program managers to take action on\nparticipants with injury and illness rates higher than industry averages, and then another\n2 years for the rate reduction plan. OSHA did not provide justification for waiting 3 years\nto take action on participants with rates higher than industry averages and allowing\nparticipants to remain in the program for up to 6 years before withdrawal or termination.\nMoreover, OSHA did not have adequate controls to ensure that participants with high\nrates were remediated as required.\n\n1\n See Finding 4 for our reconciliation of OSHA data to determine the total number of participants.\n\n\n2\n The condition of \xe2\x80\x9chigh injury and illness rates\xe2\x80\x9d is determined using a 3 year rate comparison. The rates are from 3 \n\nconsecutive years for larger participants, or the 3 lowest rates from 4 consecutive years for smaller participants. \n\nTherefore, it could take 3 to 4 years to determine whether a participant has high injury and illness rates.\n\n\n\n OSHA VPP\n 5 Report No. 02-14-201-10-105\n\x0c U.S. Department of Labor \xe2\x80\x93 Office of Inspector General\n\n\n\nFor FY 2012, we found 9 percent of participants (157 of 1,834) had injury and illness\nrates higher than the averages for their industries. Of 157 participants with high rates,\n108 had rates higher than their industry averages for the most recent 3 years, while\nanother 49 had higher rates for the most recent 2 years. Generally, OSHA followed\npolicy by taking action on participants with high rates for 3 years and no action on those\nwith high rates for 2 years. However, OSHA could not justify how its policy (no action for\n3 years and allowing high-rate participants to remain in the program up to 6 years)\ncorresponds with VPP\xe2\x80\x99s purpose \xe2\x80\x93 to recognize worksites with exemplary safety and\nhealth management systems. Moreover, the actions required under the policy were not\nalways taken because offices did not comply with the requirements or because\ninconsistencies in data between the National Office and regional offices were not\naddressed.\n\nAlthough OSHA explained why it is using a 3-year average (discussed below), it did not\ndemonstrate how this is consistent with the purpose of the program. OSHA uses the\naverage industry injury and illness rates as the benchmark to judge how well a worksite\nis protecting its employees. Trends of increasing rates, particularly those above industry\naverages, are signs that participants are not maintaining VPP-quality systems.\nHowever, OSHA policy allows worksites to keep the VPP designation and benefits, such\nas exemption from programmed inspections for up to 6 years, even though they may\nnot be maintaining VPP-quality systems.\n\nOSHA\xe2\x80\x99s policy and participants with high rates are discussed in the two sections below.\nInconsistencies in data between National Office and regional offices are discussed in\nFinding 5.\n\n VPP Policy\n\n According to the VPP manual, OSHA reviews the participant\xe2\x80\x99s injury and illness\n rates during selection, reevaluation, and monitoring through the review of the\n VPP Participant Annual Self-Evaluation. If the VPP Manager notices a significant\n increase or decrease in the rates, they may request an explanation from the\n participant, but the manual does not require remediation actions until the\n participant\xe2\x80\x99s 3-year average rates exceed industry averages.\n\n The 3-year rate comparison has been in place since 2003 when OSHA changed\n the benchmark injury and illness rate comparison due to substantial fluctuations\n from year to year in industry rates that may not fairly represent the injury and\n illness situation in an industry. OSHA also explored other ways to address this\n situation before deciding to change the injury and illness rate comparison. OSHA\n acknowledged that this change might have the effect of reducing somewhat the\n weight assigned to injury and illness rates in VPP, but believed that it will have\n the greatest impact on those industries that show significant injury and illness\n rate variation year to year. OSHA officials noted that the use of a three-year\n\n\n OSHA VPP\n 6 Report No. 02-14-201-10-105\n\x0c U.S. Department of Labor \xe2\x80\x93 Office of Inspector General\n\n\n average in evaluating a worksite\xe2\x80\x99s injury and illness rates is included in other\n agency policies and procedures outside of VPP.\n\n The manual requires that the participant\xe2\x80\x99s 3-year Total Case Incident Rate\n (TCIR) or Days Away, Restricted and Transferred (DART) rate must be below at\n least 1 of the 3 most recent years of specific industry national averages as\n published by the Bureau of Labor Statistics (BLS). An alternative rate calculation\n may be used for eligible smaller participants3 using their lowest 3 of the most\n recent 4 years of injury and illness rates. The TCIR represents the number of\n recordable injuries and illness cases and DART, a subset of TCIR, represents\n the number of cases resulting in days away from work, restricted work activity, or\n job transfer. Both rates are compared to the highest BLS rates from the most\n recent 3 years.\n\n When a participant\xe2\x80\x99s 3-year TCIR or DART rate exceeds the BLS rates, the\n participant is placed on a 2-year rate reduction plan if the rates can statistically\n and realistically be reduced below the industry average. If the rates cannot be\n reduced below industry averages, or after 2 years on a rate reduction plan the\n rates have not decreased below BLS averages, the participant will be asked to\n withdraw or will be terminated from the program. Therefore, a participant may\n remain in the program for up to 6 years even though its rates exceed the BLS\n average \xe2\x80\x93 3 years for larger participants or 4 years for smaller participants before\n action is taken, and then 2 years under a rate reduction plan.\n\n Participants with Injury and Illness Rates Higher Than the Average for Their\n Industries\n\n Based on OSHA\xe2\x80\x99s data compilation, 108 participants had 3-year TCIR or DART\n injury and illness rates above the averages for their industries for Calendar Years\n 2009 through 2011. After 3 years of higher than industry average injury and\n illness rates, 75 of these participants were placed on 2-year rate-reduction plans4\n and 5 withdrew from VPP. For 80 participants, OSHA complied with VPP policy.\n Also according to policy, 75 of the 80 participants could have rates higher than\n industry averages and remain in the program for up to 6 years.\n\n However, for the remaining 28 participants, either OSHA did not document that\n any actions were taken or it acknowledged the participants with rates higher than\n industry averages were not placed on rate-reduction plans as required. For 22 of\n these participants, inconsistencies in data between the National Office and\n regional offices were not addressed. When presented with the National Office\n data, the sampled regional offices stated that they disagreed with the data, while\n the National Office affirmed that the data was correct. With the regions not\n\n3\n The manual defines smaller participants as those with less than 250 employees at the worksite and under 500 \n\nemployees companywide.\n\n\n4\n Another 3 participants were placed on rate-reduction plans in March 2013, when the 2012 injury and illness rates\n\n\nwere reported. OSHA allowed the participants 4 years before action was taken.\n\n\n\n OSHA VPP\n 7 Report No. 02-14-201-10-105\n\x0c U.S. Department of Labor \xe2\x80\x93 Office of Inspector General\n\n\n complying with VPP policy and data inconsistencies, OSHA does not have\n sufficient controls to ensure that the regions were taking the required actions on\n participants with rates above industry averages. As a result, some participants\n that did not meet a key requirement of the VPP have remained in the program.\n (See Finding 5 of this report for more information on the reliability of the injury\n and illness data.)\n\n Moreover, another 49 participants had 2-year TCIR and/or DART injury and\n illness rates above the averages for their industries for Calendar Years 2010 and\n 2011. According to the VPP manual, the regions are not required to take any\n action until a participant\xe2\x80\x99s 3-year rate is above the industry average. However,\n regions may take action if they notice any unusual trends in injury and illness\n rates as reported in the annual participant self-evaluations.\n\nOMB Circular A-123 states that control activities should include policies, procedures,\nand mechanisms to help ensure that agency objectives are met. We believe that OSHA\nhas not demonstrated that its policies help to ensure that the objectives of the VPP\nprogram are met. The fact that companies are allowed up to 6 years to correct their\nhigher rates raises serious questions as to whether these companies are fully protecting\ntheir workers. Further, OSHA\xe2\x80\x99s controls did not ensure that the appropriate actions were\ntaken to address participants with high rates or that reevaluation and monitoring were\nsufficient to ensure only participants with exemplary systems that fully protect their\nemployees are in the program.\n\nFinding 2 \xe2\x80\x94 Participants with serious violations of safety and health standards\n remained in VPP\n\nWhen participants are inspected, policy requires VPP managers in the regional offices\nto keep informed on the inspection status and to follow up with participants after the\ninspection is closed. Once inspections are completed, the policy allows regional office\ndiscretion in determining the type and extent of follow-up actions to take. However, VPP\npolicy does not require OSHA to determine the underlying causes for why participants\xe2\x80\x99\nsystems did not protect employees, and whether OSHA\xe2\x80\x99s reevaluation processes could\nhave, but did not identify deficiencies in the participant\xe2\x80\x99s systems. As a result, OSHA did\nnot utilize this opportunity for \xe2\x80\x9clessons learned\xe2\x80\x9d to ensure the program was operating as\nintended, its processes were effective, and it continuously improved.\n\nBetween October 2008 and September 2012, 4 percent of participants (79 of 1,834)\nwere inspected by OSHA and cited with serious violations of safety and health\nstandards after incidents involving fatalities or catastrophic injuries, or due to complaints\nor referrals. Once the inspections were closed, VPP managers generally followed up\nwith participants as required by policy, but the extent of follow-up varied significantly\nwith onsite visits conducted at only 34 percent of participants. As of April 2013, 55 of 79\nparticipants (70 percent) remained in VPP with no change in status. However, follow-up\ndid not include analyzing whether OSHA\xe2\x80\x99s evaluation processes should be improved or\nrequirements for participants\xe2\x80\x99 health and safety systems should be enhanced.\n\n OSHA VPP\n 8 Report No. 02-14-201-10-105\n\x0c U.S. Department of Labor \xe2\x80\x93 Office of Inspector General\n\n\n\nParticipant follow-up and analysis for continuous improvement are discussed in the two\nsections below.\n\n Follow-up on Participants with Inspections\n\n OSHA provided the following information and comments on the 79 participants\n inspected and cited with serious violations after incidents involving fatalities or\n catastrophic injuries or due to complaints or referrals.\n\n \xe2\x80\xa2\t\t For 38 participants, the regions reviewed case files, placed phone calls, or\n interviewed Area Directors who conducted the inspections. As a result, 12\n participants withdrew or were terminated from VPP, and 26 continued in\n VPP with no change in status.\n\n \xe2\x80\xa2\t\t For 27 participants, the regions conducted or planned to conduct site\n visits, conducted inspections, or placed the participants on conditional\n status. As a result, 3 participants withdrew from VPP, 2 were placed on\n conditional status, and 22 continued in VPP with no change in status.\n\n \xe2\x80\xa2\t\t For 14 participants, OSHA did not provide information on the specific\n follow-up performed, but indicated that 7 of these participants withdrew or\n termination was pending. Therefore, 7 participants continued in VPP with\n no change in status.\n\n In total, 55 participants remained in VPP with no status change, while\n 22 withdrew, were terminated, or were pending termination, and 2 were placed\n on conditional VPP status.\n\n According to the VPP manual, participants are exempt from program inspections,\n but an inspection is conducted when OSHA is notified of fatalities, catastrophes,\n or other events such as complaints and referrals. The National Office and\n program managers are notified when inspections are performed. When the\n inspection is closed, the VPP Manager and Regional Administrator must assess\n whether deficiencies in the participant\xe2\x80\x99s safety and health management system\n led to the event, and use their professional judgment to determine which course\n of action to pursue. These actions include placing phone calls to the participants\n to obtain assurances that management is committed to and still qualified to\n remain in VPP, conducting an onsite evaluation, or withdrawal or termination\n proceedings if the participant no longer meets the requirements of VPP.\n\n Subsequent to the audit period, OSHA issued additional guidance regarding\n inspections at participants \xe2\x80\x93 VPP Policy Memorandum #7: Further Improvements\n to the Voluntary Protection Programs (VPP), effective May 29, 2013. OSHA\n officials said, \xe2\x80\x9c\xe2\x80\xa6implementation of this new policy will identify and address\n enforcement issues at VPP sites in a more timely and consistent fashion.\xe2\x80\x9d The\n\n OSHA VPP\n 9 Report No. 02-14-201-10-105\n\x0c U.S. Department of Labor \xe2\x80\x93 Office of Inspector General\n\n\n Policy stipulates when a fatality or catastrophe triggers an inspection, the\n participant\xe2\x80\x99s VPP status will be changed within 10 days to "Inactive Pending\n Fatality/Catastrophe Inspection,\xe2\x80\x9d and will be reflected in all print and electronic\n materials, including OSHA\xe2\x80\x99s website and tracking systems.\n\n Analyzing Participants with Inspections to Improve VPP\n\n According to OSHA, the principle of continuous improvement is well-established\n within VPP. As described above, OSHA followed up on participants with\n inspections to ensure hazards were abated and they remained committed to\n VPP. However, the National Office did not determine the underlying causes why\n the participants\xe2\x80\x99 health and safety systems did not fully protect employees and\n whether OSHA\xe2\x80\x99s evaluation processes should have, but did not identify timely the\n deficiencies in the systems. OSHA could utilize the \xe2\x80\x9clessons learned\xe2\x80\x9d to improve\n the quality of participants\xe2\x80\x99 health and safety systems, and OSHA\xe2\x80\x99s reevaluation\n process.\n\n In the 2009 Federal Register notice on revisions to VPP, OSHA provided the\n following:\n\n Continuous improvement is a well-established principle of VPP.\n Participants strive to make ongoing gains in performance and\n protective systems, and OSHA strives to improve the VPP, its\n policies and procedures, and its impact on workplaces throughout\n the United States. 5\n\n According to the VPP manual, \xe2\x80\x9c\xe2\x80\xa6approval into VPP is OSHA\xe2\x80\x99s official\n recognition of the outstanding efforts of employers and employees who have\n created exemplary worksite safety and health management systems.\xe2\x80\x9d However,\n at some point, the systems may have failed \xe2\x80\x93 resulting in fatalities, injuries,\n complaints and referrals that triggered the inspections. Moreover, the participants\n were cited with serious violations of standards such as process safety\n management of highly hazardous chemicals, respiratory protections,\n safeguarding personal protections, and/or the general duty clause of the\n Occupational Safety and Health Act (OSH Act). Section 5 of the OSH Act (the\n general duty clause) requires employers to follow OSH Act standards and\n maintain places of employment which are free from recognized hazards that\n cause or are likely to cause death or serious physical harm to employees.\n\n While OSHA followed up on the specific circumstances of the inspections, it did\n not use the opportunity to identify potential weaknesses in VPP operations and\n policies such as issues with the quality or frequency of onsite evaluations. If the\n worksites with the best safety and health management systems experienced\n\n\n5\n Federal Register, Volume 74, Number 6, Friday, January 9, 2009, Notices, page 927.\n\n OSHA VPP\n 10 Report No. 02-14-201-10-105\n\x0c U.S. Department of Labor \xe2\x80\x93 Office of Inspector General\n\n\n problems that result in enforcement actions, then determining why and how VPP\n could be improved could have significant impact on other workplaces.\n\nFinding 3 \xe2\x80\x94 Participants were not evaluated in a timely manner.\n\nOSHA\xe2\x80\x99s processes did not adequately ensure it performed onsite visits timely enough to\ndetermine the continuing eligibility of participants for the program, and to identify and\nremediate unqualified participants. The VPP manual established guidelines with specific\ntimeframes for the application and reevaluation processes. OSHA stated it was aware of\nthe backlog on performing reevaluations, emphasized clearing the backlog to the\nregions, and believed it was making substantial progress. However, OSHA\xe2\x80\x99s existing\nprocesses did not effectively ensure the timeliness of onsite visits. As a result, OSHA\xe2\x80\x99s\ncontrols to ensure the continuing eligibility of participants were weakened and the\nprogram was not operating consistently.\n\nBased on the VPP manual, there were nine key milestones for application processing\nand five for reevaluations. The manual established specific timeframes for achieving\nhalf the milestones, but did not establish timeframes for the other milestones or an\noverall timeframe. Using the specific timeframes and in consultation with National Office\nstaff, we estimated that it could take a year from the time an application is accepted until\nit is given final approval, and 6 months from the time a reevaluation starts at the\nopening conference to the final decision whether the participant remains suitable for\nVPP. 6 OSHA officials agreed that the estimates of 1-year (applications) and 6-months\n(reevaluations) were reasonable, and indicators of timely and appropriate processing of\napplications and reevaluations.\n\nFor FY 2012, applications and reevaluations were generally processed within the\ntimeframes allowed by the VPP manual. 7 However, significant delays were noted in\nscheduling onsite visits. These results are discussed in the following two sections.\n\n Application Process\n\n Most applications were processed within the 1-year timeframe. However,\n one sampled regional office had applications that took an average of 503 days to\n process through the transmission of their reports to the National Office. The table\n in Exhibit 1 shows application processing timeframe for each key milestone, and\n results from the sampled applications and data analysis for all applications\n processed for FY 2012.\n\n Accepting the applications is the first milestone with a specific timeframe.\n However, the average application waited for 3 months before it was accepted for\n processing. During this \xe2\x80\x9cwait\xe2\x80\x9d time, the application may be read, returned for\n edits and changes, and the applicant contacted. Considering that wait time, the\n\n6\n Estimated processing time was rounded up to 12 months (1-year) for application processing and 6 months for\n\n\nreevaluations to allow for completion of milestones without specific timeframes.\n\n\n7\n Conclusion based on data analysis and documentation for a sample of 28 applications and 78 evaluations.\n\n\n\n OSHA VPP\n 11 Report No. 02-14-201-10-105\n\x0c U.S. Department of Labor \xe2\x80\x93 Office of Inspector General\n\n\naverage application processing was completed 14 months after the application\nwas received by OSHA. One sampled region had a significant backlog of\napplications resulting in an average wait time of 687 days before processing.\n\nOSHA officials stated that the timeliness of application processing continues to\nbe of concern. OSHA began implementing a variety of possible solutions to\nbetter target its limited resources, such as increasing the number of Special\nGovernment Employees used during onsite visits. However, OSHA has not\nconsidered establishing a specific timeframe between the receipt and acceptance\nof an application because timeframes may vary by region based on the number\nof applications received, the size and complexity of the worksite and application,\nand the regional resources available to review the application.\n\nReevaluation Process\n\nReevaluations were generally processed within the 6-month timeframe. However,\n26 reevaluations (12 percent) took longer: 14 took between 6 and 9 months, and\n12 took between 9 and 15 months. The table in Exhibit 2 shows reevaluation\nprocessing time for each key milestone.\n\nNational data showed 200 active participants (11 percent) that should have been\nevaluated before September 30, 2012, but there was no record of an onsite\nevaluation or that the participant had withdrawn from VPP. The VPP manual\nestablished specific timeframes (ranging from 12 to 60 months) for when onsite\nreevaluations should be scheduled based on type and duration of VPP\nparticipation. These onsite visits were potentially overdue by an average of\n449 days. Of the 200 active VPP participants, OSHA\xe2\x80\x99s National data showed that\n138 (8 percent) were overdue by at least 6 months and 91 (5 percent) were\noverdue by at least 1 year. However, in response, OSHA provided additional\ninformation that was not captured in its National data:\n\n \xe2\x80\xa2\t\t 74 participants were either evaluated after the due date and/or have\n "issues/holds" for a specific reason as allowed by policy.\n \xe2\x80\xa2\t\t 11 participants withdrew or were terminated from VPP.\n \xe2\x80\xa2\t\t 6 participants\xe2\x80\x99 onsite evaluations were completed before the due date, but\n the evaluation report was not issued until after the due date.\n\nBased on our review of this information, 11 participants were either reevaluated\ntimely or withdrew from VPP prior to the reevaluation due date, and therefore\nOSHA complied with its policy. As previously noted, this information was not\nreflected in the National data for FY 2012. This is consistent with the other data\nreliability issues cited in the report. However, even after making adjustments to\nthe National data, this still leaves 127 (7 percent) that were overdue by at least 6\nmonths.\n\n\n\n OSHA VPP\n 12 Report No. 02-14-201-10-105\n\x0c U.S. Department of Labor \xe2\x80\x93 Office of Inspector General\n\n\nOSHA stated that in FY 2013, it made significant strides in addressing the backlog of\nVPP reevaluations and reapproved more than 250 sites, but resource limitations and\nsequestration have negatively impacted this effort. Delays in scheduling reevaluations\nand backlogs of applications are likely to worsen due to sequestration and other budget\nconstraints. OSHA officials commented that VPP travel was limited to local travel for\nhalf of FY 2013 and a number of onsite visits were postponed, and that budget\nconstraints may result in additional processing delays in FY 2014 and onward.\n\nFinding 4 \xe2\x80\x94 OSHA did not maintain reliable data for applicants and participants\n\nTo track and monitor VPP participants and applications, OSHA used at least 11 different\ndatabases \xe2\x80\x93 one for the National Office and one in each of 10 regional offices \xe2\x80\x93 but did\nnot reconcile the data. 8 The national database is the official database for VPP and was\nused primarily to report program results and respond to information requests from\nCongress, the media, and individuals under the Freedom of Information Act. Regional\noffices maintained their own data because they asserted the national database did not\ncontain all data fields necessary for their program management, and was subject to\nerrors and significant lags in updating essential data. Through our audit testing, we\nverified the regional offices\xe2\x80\x99 assertions about the national database, but also found that\nregional databases had similar issues. The 11 databases also had differences in the\nfields collected, different interpretations for the same date fields, and timing differences\non when the data was entered in the systems. As a result, OSHA could not ensure that\nVPP data was valid and complete. Without quality data, OSHA cannot ensure all\nparticipants are monitored and reevaluated timely.\n\nSpecific results on data quality for active participants and applications are discussed in\nthe following two sections.\n\n Active Participants 9\n\n For FY 2012, national data showed 1,820 participants were active in the program\n while regional data identified 1,779 participants. Based on our reconciliation\n summarized below, total active participants for FY 2012 were estimated at 1,834.\n Both national and regional data were missing records of active participants and\n included invalid records where the participants had been misidentified as active.\n\n\n\n\n8\n Some area offices also maintained data separately, but this audit did not include those systems.\n\n\n9\n Active participants included all participants with VPP status at any point of FY 2012 including new approvals, and \n\nterminations or withdrawals during the year.\n\n\n\n OSHA VPP\n 13 Report No. 02-14-201-10-105\n\x0c U.S. Department of Labor \xe2\x80\x93 Office of Inspector General\n\n\n Reconciliation of Active Participants from\n National and Regional Data for FY 2012\n National Regional\n Description Data Data\n Records provided 1,820 1,779\n Missing records +28 +59\n Invalid records -14 -4\n Active VPP participants 1,834 1,834\n\n In total, 87 participants (5 percent) had missing records \xe2\x80\x93 28 from national data\n and 59 from regional data. Another 18 participants (1 percent) had invalid\n records \xe2\x80\x93 14 from national data and 4 from regional data. Weak controls over this\n data could lead to participants not being properly monitored or inappropriately\n exempted from program inspections.\n\n Applicants\n\n National data listed 141 potential VPP participants with applications in inventory\n at any point of FY 2012, while regional data listed 152 applicants. Although the\n totals vary by 7 percent, the differences are more extensive to the point that the\n number of applications in inventory could not be reasonably estimated. Only\n 19 applicants were in both national and regional data, while combined data listed\n 232 applicants.\n\n Applications in Inventory at Any Point of FY 2012\n from National and Regional Data\n National Regional In Both\n 10\n Description Data Data Data Sets\n All Applications 141 152 19\n Disposition at Year End\n In Inventory 130 50 3\n Withdrawn by Applicant 2 34 6\n Accepted by OSHA 9 68 10\n\n We also noted the following issues that could have been identified through\n management review and data reconciliation:\n\n \xe2\x80\xa2\t\t National data included 52 applicants that had been approved for VPP\n participation prior to FY 2012, and should no longer have applications in\n inventory. Almost all of these participants were identified using national\n data by comparing applications and active participants.\n\n \xe2\x80\xa2\t\t National data contained 59 applicants pending approval whose\n applications were received in FY 2010 or earlier. Although OSHA had not\n established an overall timeframe for processing applications, officials\n\n10\n For counts of applicants in both data sets, regional data was used to identify the disposition category in which to\ncount the applicant \xe2\x80\x93 \xe2\x80\x9cIn Inventory,\xe2\x80\x9d \xe2\x80\x9cWithdrawn by Applicant,\xe2\x80\x9d or \xe2\x80\x9cAccepted by OSHA.\xe2\x80\x9d\n\n OSHA VPP\n 14 Report No. 02-14-201-10-105\n\x0c U.S. Department of Labor \xe2\x80\x93 Office of Inspector General\n\n\n stated that one year would be a reasonable estimate for processing time.\n Based on national and regional data, OSHA generally processed\n applications within 14 months from the time the application was received\n through final decision on participation. Therefore, these applications\n probably should not still be in inventory after 2 years or more, but the\n national data did not have any information on the disposition of these\n applications.\n\n \xe2\x80\xa2\t\t Most participants were not initially tracked as applicants. For all years\n contained in the database, national data listed a total of 3,604 participant\n records, but only 745 applicant records.\n\n Weak controls over this data could lead to concerns regarding the timeliness of\n application processing or lack of follow-up on applications that remain in\n inventory for more than two years. Officials stated that effective October 2012\n (FY 2013), the National Office reiterated the VPP policy for regions to submit a\n VPP Monthly Activity Log. The log contains information on all applications in the\n region, application status and significant dates such as received, read, and\n accepted. Officials stated that the national office data has been updated based\n on application information on the FY 2013 activity logs.\n\nOfficials acknowledged that the national database needed improvements, but OSHA\nhad not dedicated the necessary resources to improve the data as the system was to be\nreplaced by OIS, the new OSHA Information System. Officials agreed that absent the\nreplacement of the national system, more rigorous and routine reconciliation of national\nand regional data would be required. Officials stated that the National Office would work\nwith the regions to develop protocols to improve the completeness of the national data\nand would implement these protocols, effective October 1, 2013 (FY 2014).\n\nFinding 5 \xe2\x80\x94 Reported program success in reducing injury and illness rates were\n not based on reliable data.\n\nOSHA used injury and illness data to monitor participants and report on program\nsuccesses, but did not ensure the information was reliable. For example, in\ncongressional testimony as well as on its webpage, OSHA included the statistic that the\naverage VPP participant had injury and illness rates that were 52 percent below the\naverage for its industry. 11 However, we found significant differences between the rates\nused to develop the statistics, and the injury and illness rates for the same period as\nreported on the participants\xe2\x80\x99 annual self-assessments and OSHA\xe2\x80\x99s onsite reevaluations.\nOSHA compiled the statistic from employers\xe2\x80\x99 annual self-assessment reports but did not\nreconcile the information with onsite evaluation results. As a result, OSHA\xe2\x80\x99s data was\nnot reliable and could not be used to support performance results.\n\n11\n Statistics can be found on OSHA\xe2\x80\x99s website at https://www.osha.gov/dcsp/vpp/success_stories.htm. Also, the\nstatistics were included in the Deputy Assistant Secretary\xe2\x80\x99s testimony at the June 28, 2012, hearing \xe2\x80\x9cPromoting Safe\nWorkplaces through Voluntary Protection Programs\xe2\x80\x9d before the U.S. House of Representatives, Subcommittee on\nWorkforce Protections, Committee on Education and the Workforce.\n\n OSHA VPP\n 15 Report No. 02-14-201-10-105\n\x0c U.S. Department of Labor \xe2\x80\x93 Office of Inspector General\n\n\n\nGAO\xe2\x80\x99s 2009 report on VPP criticized OSHA for not making sufficient use of the injury\nand illness information because it was mostly maintained in the regional offices, and not\nsent to the National Office. Also, GAO reviewed injury and illness rates for Calendar\nYears 2003 through 2007 and found discrepancies for 35 percent of sampled\nparticipants between the rates on the participants\xe2\x80\x99 annual self-assessment reports and\nrates noted in OSHA\xe2\x80\x99s onsite reevaluation reports for the same time periods. 12\n\nSubsequent to GAO\xe2\x80\x99s report, OSHA\xe2\x80\x99s National Office started compiling injury and\nillness rate information from employer self-assessment annual submissions to the\nregional offices. Regional offices enter the injury and illness rates from the self-\nassessments into spreadsheets which are consolidated by the National Office into their\ncompilation. According to OSHA officials, the results of this compilation were used in a\nvariety of OSHA presentations throughout the year. However, the officials stated there\nwere no written policies for evaluating the injury and illness information in the\ncompilation.\n\nAlthough the National Office affirmed the data on the compilation was correct, regional\noffices disagreed with some rates in the compilation and we found differences when\ncomparing the compilation rates to other documents. As discussed in Finding 1, the\nregional offices disagreed with the compilation data for 22 of 28 participants where\neither OSHA did not document any actions were taken or it acknowledged the high-rate\nparticipants were not placed on rate-reduction plans as required. For a judgmental\nsample of 78 participants with reevaluations, 77 had data on the National Office\ncompilations for Calendar Years 2010 and 2011. For the 77 participants, we compared\nthe compilations\xe2\x80\x99 injury and illness rates to the participants\xe2\x80\x99 self-assessment annual\nsubmissions and to OSHA onsite reevaluation reports and found the following.\n\n \xe2\x80\xa2\t\t For 63 participants, OSHA\xe2\x80\x99s onsite evaluation reports were available. We\n compared the information in the compilation to the data contained in OSHA\xe2\x80\x99s\n onsite evaluation reports and found the rates were different for 43 participants\n (68 percent), and for 38 participants (60 percent), the rates differed by 50 percent\n or more.\n\n \xe2\x80\xa2\t\t For 69 participants, their annual self-assessment reports were available. We\n compared the information in the compilation to data on the self-assessment\n reports and found the rates were different for 55 participants (80 percent), and for\n 31 participants (45 percent), the rates differed by 50 percent or more.\n\nOfficials explained that some differences may be due to timing. When regional offices\nsubmit the onsite reevaluation reports, the National Office reviews the reports and\nupdates data in the compilation if differences in the rates are identified. However, the\nreported statistic is not recalculated.\n\n\n12\n GAO Report #GAO-09-395.\n\n OSHA VPP\n 16 Report No. 02-14-201-10-105\n\x0c U.S. Department of Labor \xe2\x80\x93 Office of Inspector General\n\n\nCollectively, these differences may impact the \xe2\x80\x9c52 percent below average\xe2\x80\x9d statistic\nreported by OSHA. Moreover, as discussed in Finding 1, these differences affect\noperations as OSHA cannot be sure the regions were taking the required actions on\nparticipants with rates higher than industry averages. Therefore, weak controls over\ninjury and illness data bring into question the reliability of reported program successes\nand effectiveness of program operations.\n\nRECOMMENDATIONS\n\nWe recommend that the Assistant Secretary for Occupational Safety and Health:\n\n 1. Reevaluate the policy of allowing worksites with high injury and illness rates to\n stay in VPP for up to 6 years to ensure that only employers who operate systems\n which meet the objective of the VPP program are allowed to participate.\n\n 2. Improve data reliability by using one database with appropriate information\n controls, or implement processes ensuring reconciliations of VPP databases are\n conducted regularly and before reports on VPP statistics are generated.\n\n 3. Monitor implementation of VPP Memorandum #7 to ensure sites with fatalities\n and enforcement actions are addressed consistently and timely.\n\n 4. Establish a system to analyze inspection information for continuous improvement\n of VPP.\n\n 5. Establish a control to monitor whether sites with higher than industry average\n injury and illness rates are consistently and timely addressed within VPP.\n\n 6. Develop and implement processes and priorities that will ensure participants are\n evaluated timely for continuing eligibility for VPP. In developing these processes\n and priorities, OSHA should evaluate all viable options to ensure that the integrity\n of the program is maintained given the constraints of its available resources.\n\n 7. Ensure reliable injury and illness data are used to report VPP successes tied with\n injury and illness statistics.\n\nWe appreciate the cooperation and courtesies that OSHA personnel extended to the\nOffice of Inspector General during this audit. OIG personnel who made major\ncontributions to this report are listed in Appendix E.\n\n\n\n\nElliot P. Lewis\nAssistant Inspector General for Audit\n\n\n OSHA VPP\n 17 Report No. 02-14-201-10-105\n\x0c U.S. Department of Labor \xe2\x80\x93 Office of Inspector General\n\n\n\n\nPAGE INTENTIONALLY LEFT BLANK\n\n\n\n\n\n\n OSHA VPP\n 18 Report No. 02-14-201-10-105\n\x0c U.S. Department of Labor \xe2\x80\x93 Office of Inspector General\n\n\n\n\nExhibits\n\n\n\n\n\n\n OSHA VPP\n 19 Report No. 02-14-201-10-105\n\x0c U.S. Department of Labor \xe2\x80\x93 Office of Inspector General\n\n\n\n\nPAGE INTENTIONALLY LEFT BLANK\n\n\n\n\n\n\n OSHA VPP\n 20 Report No. 02-14-201-10-105\n\x0c U.S. Department of Labor \xe2\x80\x93 Office of Inspector General\n\n\n Exhibit 1\nApplication Processing Timeframe and Results\n\nThe following table shows the application processing timeframe and results for the\nnumber of elapsed days to reach the next key milestone in the application process. For\nexample, there was no specified timeframe for the number of days between the date the\napplication was received and it was accepted for processing, but actual results for\nFY 2012 were an average of 76 days (according to sample results) and 105 days\n(according to universe of data). Regional data was used for milestones between the\ndate the application was received (\xe2\x80\x9cApplication Received\xe2\x80\x9d) through to the date of the\nRegional Recommendation. National data was used for the National Office review and\nthe Assistant Secretary approval of the participant for VPP status (\xe2\x80\x9cApproval\xe2\x80\x9d).\n\n\n Key Milestones in Timeline for Timeframe per Actual Results Actual Results\n Application Processing VPP Manual for Sample for Universe\n Application Received\n Not specified 76 days 105 days\n Application Accepted\n 180 days 118 days 97 days\n Onsite Opening\n Not specified 3 days 3 days\n Onsite Closing\n 90 days 533 days 107 days\n 90-day Items Cleared\n Not specified N/A 4 days\n Report Completion\n 30 days 15 days 26 days\n Regional Recommendation\n 10 days 52 days 83 days\n National Office Review\n Not specified 5 days 4 days\n Approval\n 310 days 802 days 429 days\n Total Processing rounded up to or about or about\n 12 months 27 months 14 months\n\n\n\nThe timeframe was developed in consultation with OSHA officials from VPP manual\ncriteria. While some milestones had specific timeframes specified, others did not as\nwere noted in the above exhibit. Officials agreed that the overall estimated timeframe of\n1-year for application processing was reasonable, and an indicator of timely and\nappropriate processing. For consistency of presentation, the timeframes were converted\nfrom months to days by multiplying by 30.\n\n\n\n\n OSHA VPP\n 21 Report No. 02-14-201-10-105\n\x0c U.S. Department of Labor \xe2\x80\x93 Office of Inspector General\n\n\n\n\nPAGE INTENTIONALLY LEFT BLANK\n\n\n\n\n\n\n OSHA VPP\n 22 Report No. 02-14-201-10-105\n\x0c U.S. Department of Labor \xe2\x80\x93 Office of Inspector General\n\n\n Exhibit 2\nReevaluation Processing Timeframe and Results\n\nThe following table shows reevaluation processing timeframe and results for the number\nof elapsed days to reach the next key milestone in the reevaluation process from the\nonsite opening conference (\xe2\x80\x9cOnsite Opening\xe2\x80\x9d) through to the regional report with the\ndecision on VPP status (\xe2\x80\x9cRegional Report with Decision\xe2\x80\x9d). For example, there was no\nspecified timeframe for the number of days between the onsite opening and closing\nconferences, but actual results for FY 2012 were an average of 4 days (according to\nsample results) and 7 days (according to the universe). Regional office data was used\nfor all actual results.\n\n\n Key Milestones in Timeline for Timeframe per Actual Results Actual Results\n Reevaluation Processing VPP Manual for Sample for Universe\n Onsite Opening\n Not specified 4 days 7 days\n Onsite Closing\n 90 days 94 days 77 days\n 90-day Items Cleared\n 30 days 60 days 41 days\n Report Completion\n Not specified 119 days 53 days\n Regional Report with Decision\n 120 days 277 days 178 days\n Total Processing rounded up to or about or about\n 6 months 9 months 6 months\n\n\n\nThe timeframe was developed in consultation with OSHA officials from VPP manual\ncriteria. While some milestones had specific timeframes specified, others did not as\nwere noted in the above exhibit. Officials agreed that the overall estimated timeframe of\n6-months for reevaluation processing was reasonable, and an indicator of timely and\nappropriate processing. For consistency of presentation, the timeframes were converted\nfrom months to days by multiplying by 30.\n\n\n\n\n OSHA VPP\n 23 Report No. 02-14-201-10-105\n\x0c U.S. Department of Labor \xe2\x80\x93 Office of Inspector General\n\n\n\n\nPAGE INTENTIONALLY LEFT BLANK\n\n\n\n\n\n\n OSHA VPP\n 24 Report No. 02-14-201-10-105\n\x0c U.S. Department of Labor \xe2\x80\x93 Office of Inspector General\n\n\n\n\nAppendices\n\n\n\n\n\n\n OSHA VPP\n 25 Report No. 02-14-201-10-105\n\x0c U.S. Department of Labor \xe2\x80\x93 Office of Inspector General\n\n\n\n\nPAGE INTENTIONALLY LEFT BLANK\n\n\n\n\n\n\n OSHA VPP\n 26 Report No. 02-14-201-10-105\n\x0c U.S. Department of Labor \xe2\x80\x93 Office of Inspector General\n\n\n Appendix A\nBackground\n\nOSHA offers cooperative programs, such as VPP, to allow businesses, labor groups,\nand other organizations to work with OSHA to help prevent fatalities, injuries, and\nillnesses in the workplace. For VPP, the applicant submits information to OSHA on its\nsafety and health management system and opens itself to agency review. OSHA\xe2\x80\x99s\nverification includes an application review and onsite evaluation by a team of safety and\nhealth experts to assess the applicant\xe2\x80\x99s compliance with performance-based criteria for\na managed safety and health system. Approval into VPP is OSHA\xe2\x80\x99s official recognition\nof the outstanding efforts of employers and employees who have achieved exemplary\noccupational safety and health.\n\nOSHA formally announced the VPP and approved the first site in 1982 and allowed\nFederal worksites to be eligible in 1998. OSHA approves qualified participants to one of\n3 program levels:\n\n 1.\t\t Star: Demonstrated exemplary achievement in the prevention and control of\n occupational safety and health hazards through the development,\n implementation, and continuous improvement of their safety and health\n management systems.\n\n 2.\t\t Merit: Developed and implemented good safety and health management\n systems, but who must take additional steps to reach Star quality.\n\n 3.\t\t Demonstration: Operated effective safety and health management systems\n that differ from current VPP requirements. This program enables OSHA to\n test the efficacy of different approaches.\n\nOnce approved for VPP participation, a worksite is exempted from OSHA programmed\ninspections as long as it complies with program requirements and maintains exemplary\nsystems. To ensure participants maintain exemplary systems, OSHA evaluates\nworksites during the selection, reevaluation and monitoring processes. These three\nprocesses are described in detail below.\n\n Selection Process\n\n OSHA accepts applications from owners and officials who control site operations\n and have ultimate responsibility for assuring safe and healthful working\n conditions. Applications are accepted from private sector general industry,\n maritime and construction employers, and from Federal agencies. Applications\n may be site-based (specific for one location) or within a specific designated\n geographic area for mobile workforce (employees move from location to location\n or are resident contractors at multiple locations) and corporate (large\n organizations with multiple facilities).\n\n\n OSHA VPP\n 27 Report No. 02-14-201-10-105\n\x0c U.S. Department of Labor \xe2\x80\x93 Office of Inspector General\n\n\nApplicants must meet a number of requirements, such as having an active safety\nand health management system which includes four essential elements \xe2\x80\x93\nmanagement leadership and employee involvement, worksite analysis, hazard\nprevention and control, and safety and health training. This system covers all\nemployees, contractors, and sub-contractors while on site. Additionally,\napplicants must have injury and illness rates that are below industry averages\n(Star) or establish goals for lowering the rates to below industry averages (Merit)\nwithin two years. Once the application is accepted for processing, an onsite\nreview is conducted to: ensure the applicant\xe2\x80\x99s safety and health management\nsystem has the four elements in place, determine how well the system is\nworking, verify injury and illness rates, interview employees and management,\nand walk through the facilities. The application process is summarized below.\n\n1.\t\t Application Received: Regional offices receive applications and review the\n documents for completeness. Applicants are notified about missing items,\n and then may withdraw the application or provide additional information.\n There is no standard timeframe for this part of the process.\n\n2.\t\t Application Accepted: Once an application is considered complete, the VPP\n Manager performs a technical review of the document for VPP requirements,\n officially \xe2\x80\x9caccepts\xe2\x80\x9d the application, and schedules an onsite evaluation. This\n step must be completed within six months of the date the application was\n accepted.\n\n3.\t\t Onsite Evaluation: The Evaluation Team is comprised of trained safety and\n health professionals from OSHA and VPP participants (Special Government\n Employees). Team composition varies depending on the size and complexity\n of the applicant\xe2\x80\x99s worksite, and the availability of qualified team members.\n During the onsite evaluation, the team conducts walkthroughs of operations,\n interviews management and employees, reviews employee medical records,\n and recalculates injury and illness rates. The team evaluates the\n comprehensive safety and health management system to ensure that each\n element and sub-element is in place and active. A process safety review is\n also required at all worksites producing or using highly hazardous chemicals.\n The applicant is given 90 days to correct any hazards identified by the team\n (\xe2\x80\x9c90-Day Items\xe2\x80\x9d). If the applicant does not meet VPP requirements, the team\n recommends withdrawal.\n\n4.\t\t Evaluation Report: The Evaluation Team Leader (usually the VPP Manager)\n ensures that \xe2\x80\x9c90-Day Items\xe2\x80\x9d are corrected and prepares the VPP Evaluation\n Report recommending the applicant for Star, Merit, or Demonstration\n participation. The report must be prepared within 90 days of the closing\n conference of onsite evaluation. The Assistant Regional Administrator and/or\n Regional Administrator must review the completed report and send it to\n OSHA\xe2\x80\x99s National Office within 30 days. The National Office performs a\n technical and editorial review of the report, notifies VPP Manager if changes\n\n OSHA VPP\n 28 Report No. 02-14-201-10-105\n\x0c U.S. Department of Labor \xe2\x80\x93 Office of Inspector General\n\n\n are needed, and prepares the final recommendation package for Assistant\n Secretary.\n\n5.\t\t Final Approval: The Assistant Secretary grants the final approval and signs a\n Congratulatory Letter which is mailed with the VPP report to the newly\n approved participant. To recognize initial achievement, OSHA awards a\n plaque and flag to new participants which may be presented at a formal\n award ceremony.\n\nReevaluation Process\n\nAfter approval, participants must be reapproved at specific intervals to ensure\nthey maintain the requirements of the program: Star (every 3 to 5 years), Merit\n(every 18 to 24 months), and Demonstration (every 12 to 18 months).\nReevaluations are conducted based on prior approval level of VPP participation\nand the duration at that level. The following table summarizes frequency of\nreevaluations based on program type:\n\n VPP Participation Level and Starting point for Allowed Months\n Duration measurement to Next Onsite\n Star - First reevaluation prior onsite approval 30 to 42\n Star - Subsequent reevaluation prior onsite done 60\n Star Conditional prior onsite approval 15\n Merit - First reevaluation prior onsite approval 18 to 24\n Merit - Subsequent reevaluation first approved at merit 36\n Star Demonstration prior onsite done 12 to 18\n\nConducting the onsite evaluation and preparing the report are similar to steps in\nthe application process. In addition, the evaluation team reviews the most recent\nparticipant self-evaluation report and verifies the accuracy of the reported data by\nrecalculating injury and illness rates.\n\nThe Regional Administrator is responsible for re-approving Star and Merit\nparticipants and placing Star participants on 1-Year Conditional status. The\nregional office mails re-approval letter to participants, but the VPP Manual does\nnot specify the timeframe for mailing these letters. The Assistant Secretary is\nresponsible for all other decisions such as lifting the 1-Year Conditional status,\nMerit to Star level, and withdrawals.\n\nMonitoring Process\n\nMonitoring processes include review of the participant\xe2\x80\x99s annual self-evaluation,\nfollow up on participants with inspections, and other oversight activities to\ndetermine whether the participant continues to be eligible for the program\nbetween onsite reevaluation visits. These three areas are discussed below.\n\n\n\n OSHA VPP\n 29 Report No. 02-14-201-10-105\n\x0c U.S. Department of Labor \xe2\x80\x93 Office of Inspector General\n\n\n1.\t\t Annual Self-Evaluation: The participant prepares and submits by\n February 15 an annual self-evaluation report on their VPP program and\n identifies program successes, areas needing improvement, and progress\n towards Merit or 1-Year Conditional goals (if applicable). The report includes\n injury and illness rates for the participant and its contractors which are\n compared to their industry\xe2\x80\x99s National average rates published by the Bureau\n of Labor Statistics (BLS). OSHA regional offices review the reports for\n indications of system weaknesses, and trends in injury and illness rates.\n Regional offices also compile data from the reports and submit it to the\n National Office for the injury and illness rate compilation.\n\n2.\t\t Participants with Inspections. The National Office and program managers\n are notified when an inspection is conducted due to fatalities, catastrophes, or\n other events such as complaints and referrals. When the inspection is closed,\n the VPP Manager and Regional Administrator must assess whether\n deficiencies in the participant\xe2\x80\x99s safety and health management system led to\n the event, and use their professional judgment to determine which course of\n action to pursue. These actions include placing phone calls to the participants\n to obtain assurances that management is committed to and still qualified to\n remain in VPP, conducting an onsite evaluation, or withdrawal or termination\n proceedings if the participant no longer meets the requirements of VPP.\n\n3.\t\t Other Oversight Activities. Regional offices also perform other oversight\n activities to identify participants with potential health and safety issues or for\n changes in management. These monitoring activities are generally ad hoc\n and informal. These activities include use of news agencies, social media,\n emergency alerts and informal dialogs with participants and with enforcement\n and whistleblower investigators.\n\n\n\n\n OSHA VPP\n 30 Report No. 02-14-201-10-105\n\x0c U.S. Department of Labor \xe2\x80\x93 Office of Inspector General\n\n\n Appendix B\nObjective, Scope, Methodology, and Criteria\n\nObjective\n\nDoes OSHA have sufficient controls over the selection, timely reevaluation, and\nmonitoring of VPP participants?\n\nScope\n\nThe audit examined Federal OSHA\xe2\x80\x99s VPP for FY 2012 (October 1, 2011, through\nSeptember 30, 2012), including all participants in the program and applications in\ninventory at any point of that period. Fieldwork was conducted at OSHA\xe2\x80\x99s National\nOffice in Washington, DC, and at a statistical random sample of four regional offices\n(New York, NY; Chicago, IL; Kansas City, MO; and Dallas, TX).\n\nThe audit did not include applicants and participants in VPP programs operated by\nstates with OSHA-approved state plans, or an assessment of the data related to those\nstate programs.\n\nWe conducted this performance audit in accordance with generally accepted\ngovernment auditing standards. Those standards require that we plan and perform the\naudit to obtain sufficient, appropriate, evidence to provide a reasonable basis for our\nfindings and conclusions based on our audit objective. We believe that the evidence\nobtained provides a reasonable basis for our findings and conclusions based on our\naudit objective.\n\nMethodology\n\nIn performing the audit, we reviewed OSHA\xe2\x80\x99s policies and procedures, and prior GAO\nand OIG reports to gain an understanding of internal controls considered significant to\nthe audit objectives and testing compliance with Federal standards. In planning and\nperforming our audit, we considered if internal controls significant to the audit objectives\nwere properly designed and placed in operation. This included reviewing OSHA\xe2\x80\x99s\npolicies and procedures for approving and reapproving VPP participants. We confirmed\nour understanding of these controls and procedures by conducting interviews and\nreviewing documentation.\n\nWe assessed the reliability of data for active participants, applicants, reevaluations, and\ninjury and illness rates to ensure they were appropriate for testing.\n\n \xe2\x80\xa2\t\t For active participants, we considered the completeness and reliability of the\n national and regional data by performing edit/logic checks. National data was\n compared to data reported on OSHA\xe2\x80\x99s webpage and then compared to regional\n data. Differences noted in the edit/logic checks and in comparison data sets were\n discussed with officials in the National Office and 10 regional offices, and issues\n\n OSHA VPP\n 31 Report No. 02-14-201-10-105\n\x0c U.S. Department of Labor \xe2\x80\x93 Office of Inspector General\n\n\n were resolved. We reconciled the data, and then concluded the reconciled data\n was sufficiently reliable for testing and this report. The reconciliation process for\n active participants is reported under Finding 4 of this report.\n\n \xe2\x80\xa2\t\t For applicants, we considered the completeness and reliability of the data by\n performing edit/logic checks on regional and national data. National data was\n compared to regional data and significant differences were found. Differences\n were discussed with officials in the National Office and 4 sampled regional\n offices, but we were unable to reconcile data or ensure it was substantially\n complete. For a statistical sample of applications from the regional database, we\n validated data accuracy by comparing the data to source documentation. While\n the data could not be reconciled, the data in the regional databases was\n substantially accurate. Therefore, we concluded that the regional data on\n applicants was sufficiently reliable to be used for the milestone analysis\n summarized in Exhibit 1. However, the deficiencies with the completeness of the\n application data are reported under Finding 4 of this report.\n\n \xe2\x80\xa2\t\t For reevaluations, we considered the reliability and completeness of the national\n and regional data. For completeness, we measured the time since the most\n recent onsite evaluation and compared it to time allowed under the VPP manual.\n We performed edit/logic checks for all reevaluations, and compared completed\n reevaluations listed in both data sets. Differences were discussed with officials in\n the National Office and 10 regional offices, and the data found to be substantially\n complete even though the national data only contained the completed\n reevaluations. For a statistical sample of reevaluations, we validated regional\n data accuracy by comparing it to source documentation and found it to be\n substantially accurate. Therefore, regional data on reevaluations was sufficiently\n reliable to be used for the milestone analysis summarized in Exhibit 2.\n Discussion of the overdue reevaluations can be found in Finding 3.\n\n \xe2\x80\xa2\t\t For injury and illness rates, we considered the completeness and reliability of the\n information contained in the National Office\xe2\x80\x99s compilation. For completeness, we\n compared participants on the compilation to active participant lists. For reliability,\n we used the statistical sample of reevaluations and traced data to source\n documentation (participant annual self-evaluation report) and to injury and illness\n data in the reevaluation report. We found significant differences and concluded\n the data was not sufficiently reliable. Deficiencies with the injury and illness data\n are reported in Findings 1 and 5.\n\nIn assessing the effectiveness of controls, we reviewed the VPP manual, documentation\nprovided by the National Office and sampled regional offices, and interviewed national\nand regional officials on the application and reevaluation processes, and any processes\nto monitor active participants between formal reevaluations to ensure the participants\nmaintain exemplary safety and health systems.\n\n\n\n OSHA VPP\n 32 Report No. 02-14-201-10-105\n\x0c U.S. Department of Labor \xe2\x80\x93 Office of Inspector General\n\n\n \xe2\x80\xa2\t\t We reviewed OSHA\xe2\x80\x99s policy related to injury and illness rates and obtained\n documentation regarding usage of a 3-year comparison as the benchmark before\n taking any action against VPP participants. We analyzed injury and illness data\n for participants with 2 or 3 consecutive years of high rates and followed up with\n the National Office and sampled regional offices on remediation actions taken.\n\n \xe2\x80\xa2\t\t We tested compliance with controls to conduct regular onsite reevaluations of\n participants by calculating the interval since the most recent reevaluation date\n and following up with national office officials regarding overdue reevaluations.\n\n \xe2\x80\xa2\t\t We researched participants\xe2\x80\x99 inspection histories from FY 2008 through FY 2012\n using OSHA\xe2\x80\x99s online inspection data to determine if participants had recent\n inspections with citations. We confirmed the results with national and regional\n offices, and requested information on follow-up remediation actions taken by the\n regions.\n\nWe used a stratified two-stage random sampling plan for sample selection to identify\nregional officials to interview (stage 1) and applications and reevaluations to review\n(stage 2). Stage 1 \xe2\x80\x93 4 regional offices (Chicago, Dallas, Kansas City, and New York)\nwere randomly selected out of 10 regions after stratification into 2 sampling pools using\nthe number of active VPP participants. Stage 2 \xe2\x80\x93 for each sampled region, we randomly\nselected a combined sample of applications and reevaluations. In total, 106 case files\n(28 applications and 78 reevaluations) were selected and tested for the accuracy of\nnational and regional data. The testing results were not projected due to the number of\nerrors and concerns regarding data reliability. We confirmed the sample results with\nregional officials and used the validated data for Exhibit 1 and Exhibit 2.\n\n Applications, Reevaluations and Combined for All Regions, and\n the 4 Sampled Regions (Stage 1) \xe2\x80\x93 Universe and Sample\n Description Applications Reevaluations Combined\n Universe \xe2\x80\x93 All Regions 137 335 472\n\n Universe \xe2\x80\x93 4 Sampled Regions\n Chicago 19 75 94\n Dallas 21 75 96\n Kansas City 7 22 29\n New York 29 33 62\n Total 4 Sampled Regions 76 205 281\n\n Sampled Case Files\n Chicago 4 31 35\n Dallas 9 27 36\n Kansas City 4 7 11\n New York 11 13 24\n Total 4 Sampled Regions 28 78 106\n\nFrom the random sample of applications and reevaluations, we judgmentally used the\n78 reevaluations to analyze injury and illness data. Out of 78 sampled, 1 participant was\n\n OSHA VPP\n 33 Report No. 02-14-201-10-105\n\x0c U.S. Department of Labor \xe2\x80\x93 Office of Inspector General\n\n\nnot included on the injury and illness data compilation, 14 onsite evaluation reports and\n8 participant annual self-assessment reports were not available. Results for the\n63 reevaluations with onsite evaluations reports and 69 reevaluations with\nself-assessment reports are presented in the report under Finding 5.\n\nCriteria\n\n \xe2\x80\xa2\t\t Occupational Safety and Health Act of 1970\n\n \xe2\x80\xa2\t\t OSHA Directive CSP 03-01-003, Voluntary Protection Programs (VPP): Policies\n and Procedures Manual, and related policy memoranda\n\n \xe2\x80\xa2\t\t OMB Circular A-123, Management\xe2\x80\x99s Responsibility for Internal Control\n\n\n\n\n OSHA VPP\n 34 Report No. 02-14-201-10-105\n\x0c U.S. Department of Labor \xe2\x80\x93 Office of Inspector General\n\n\n Appendix C\nAcronyms and Abbreviations\n\nBLS Bureau of Labor Statistics\n\nDART Days Away, Restricted, or Transferred\n\nOMB Office of Management and Budget\n\nOSH Act Occupational Safety and Health Act of 1970\n\nOSHA Occupational Safety and Health Administration\n\nTCIR Total Case Incident Rate\n\nVPP Voluntary Protection Programs\n\n\n\n\n OSHA VPP\n 35 Report No. 02-14-201-10-105\n\x0c U.S. Department of Labor \xe2\x80\x93 Office of Inspector General\n\n\n\n\nPAGE INTENTIONALLY LEFT BLANK\n\n\n\n\n\n\n OSHA VPP\n 36 Report No. 02-14-201-10-105\n\x0c U.S. Department of Labor \xe2\x80\x93 Office of Inspector General\n\n\n Appendix D\nOSHA Response to Draft Report\n\n\n\n\n U.S. Department of Labor Assistant Secretary for ,~\xc2\xb7" ..,\n Occupational Safety and Health ./ "\';.\n Washington, D.C. 20210 - -\n ~\n - .,,,, .. ~\n ~\n\n\n\n\n OCT 2 4 2013\n\n MEMORANDUM FOR: ELLIOT P. LEWIS\n Assistant Inspector General for Audit\n\n\n FROM: r1.:;1~hD, MPH\n\n SUBJECT: Response to OTG\'s Draft Audit Report No. 02-1 3-203-10-1 05\n "The Voluntary Protection Program: Controls Are Not Sufficient\n to Ensure Only Worksites with Exemplary Safety and Health\n Systems are in the Program"\n\n This memorandum is in response to your September 13,2013, transmittal of the Oflice of the\n Inspector General (OTG) Audit Report No. No. 02-13-203-10-105, The Voluntary Protection\n Program: Controls Are Not Sufficient to Ensure Only Worksiles with Exemplary Safety and\n Health Systems are in the Program. Thank you for the opportunity to comment on your draft\n report and for addressing some of our concerns with the discussion draft.\n\n While we acknowledge that there remain some deficiencies and inconsistencies in the\n management of the VPP program, we believe that OSHA is generally following its policies and\n procedures for implementing VPP and that the vast majority of the sites in the program have\n exemplary safety and health management systems. Most of the deficiencies identified in the\n report have been recognized by OSHA and identified in previous evaluations, including the GAO\n Report OSHA\'s Voluntmy Protection Programs: Improved Oversight and Controls Would Better\n Ensure Program Quality (GA0-09-395, 2009) and OSHA\'s own internal review completed in\n 2011.\n\n The report makes clear that some deficiencies continue to impact the program. However, the\n agency has made a substantial effort to address them over the last four years, and has\n significantly improved its management of the program. OSHA\'s most recent action, issuance of\n VPP Memo # 7 (May 20 13), designed to better define immediate and required actions following\n fatalities, catastrophes, and enforcement actions, was noted in the report. The agency issued six\n previous memos and enhanced other areas of its program management beginning in 2009 to\n address inconsistencies and issues raised in the internal and GAO reports.\n\n OSHA disagrees with a central statistic presented in the report. OIG repeatedly states that 13\n percent of sites did not have systems that fully protected employees\' safety and health. This\n includes 4 percent that were cited for serious violations and 9 percent with injury and illness\n rates above their respective industry averages. The vast majority of sites were addressed in\n accordance with OSHA policy. As a result, we believe that OIG\'s statement about these sites is\n\n\n\n\n OSHA VPP \n\n 37 Report No. 02-14-201-10-105\n\x0c U.S. Department of Labor \xe2\x80\x93 Office of Inspector General\n\n\n\n\n 2\n\nmisleading because it is based on the questionable assumption that OSHA policy does not fully\nprotect workers.\n\nFirst, by issuing VPP Memo# 7 in May 2013, OSHA has addressed the 4 percent of sites that\nwere cited for serious violations of OSHA standards. VPP Memo #7 eliminates the referenced\nvariation in agency action following enforcement activity that was allowable under its previous\npolicy.\n\nSecond, with regard to the remaining 9 percent, OSHA takes issue with OIG\'s presumption that\nsimply having average injury and ill ness rates above industry rates, whether for two or three\nyears, results in VPP participant programs that are not fully protective.\n\nOSHA does not believe that every participant that exceeds the industry average is necessarily\nfailing to fully protect its workers. OSHA provided its reasoning tor using the 3-year average,\nwhich is included in the report. OSHA believes that given the sensitivity and variation of injury\nand illness rates, especially for small businesses, it is better to average rates over a specified\ntimeframe and provide companies a designated period to correct conditions leading to higher\nrates. OSHA policy provides an opportunity for employers with higher rates to address these\ninstances through the rate reduction plan.\n\nFurthermore, injury and illness rates are only one of many factors that OSHA evaluates during\nthe approval and reapproval processes, and when reviewing the annual evaluations. VPP sites\nhave programs and procedures in place that promote employee involvement and assure\nnotification of hazards and issues in the workplace. While we agree that generally this should\nlead to rates that are lower than industry averages, this may not always be the case. In addition,\ninjury and illness rates are lagging indicators that provide only a partial impression of an overall\nprogram. As a result, we do not agree U1at the review of injury and illness rates alone provides\nenough data to support OIG\'s conclusion that participants with higher than industry average\ninjury and illness rates do not have systems that fully protect employees. OIG may disagree with\nOSHA\'s policies, and we will review the policies, but OSHA does not believe that it is clear that\nthe current policy necessarily results in the retention ofVPP participants that do not provide a\nfully protective workplace.\n\nOSHA does agree that data integrity and timeliness are issues that we must continue to address.\nAs noted in our response below, we plan to take the additional steps to improve the program.\nOSHA takes seriously fue VPP principle of continuous improvement, which we expect of both\nparticipants and ourselves.\n\nIn response to the draft report, please find OSHA\'s responses to the recommendations.\n\n1. R eevaluate the policy of allowing worksites with high injury and illness rates to stay in\n VPP for up to 6 years.\n\n OSHA response: OSHA believes that it evaluated the policy when it was adopted in 2003\n but will reevaluate the policy as recommended. OSHA established a 3-year rate comparison\n (4 years for smaller participants) in 2003 due to substantial fluctuations from year to year in\n\n\n\n\n OSHA VPP\n 38 Report No. 02-14-201-10-105\n\x0c U.S. Department of Labor \xe2\x80\x93 Office of Inspector General\n\n\n\n\n 3\n\n\n industry rates that may not fairly represent the injury and illness situation in an industry. The\n use of a 3-year average in evaluating a worksite\'s injury and illness rates is included in other\n agency policies and procedures outside of the VPP program. While participants with higher\n than industry average rates after the 3 or 4 year period are not removed from the program,\n they are put on 2-year rate reduction plans during which the participants address the issues\n that led to the higher than average rates.\n\n It is important to note that this policy impacts only a small number ofVPP participants\xc2\xad\n only 6 percent ofVPP participants (107 of 1,834) had 3-year rates above the industry\n average. Of those participants, OSHA followed its policy in most cases (80 of 107), and\n placed these sites on a rate reduction plan. As a result, injury and illness rates at these sites\n were addressed within 3-4 years. OSHA also uses other mechanisms (e.g., participant\'s\n annual self- evaluation and quarterly reports to the Region) to ensure participants\' are\n monitored appropriately while rates are being addressed.\n\n We believe that the statements about sites with 2-year averages that exceed BLS rates are not\n relevant to the overall discussion. The VPP manual does not require the Regions to take any\n action until a participant\'s 3-year rate is above the industry average and the OIG has\n presented no evidence that two years of exceeding the BLS rates necessarily indicates that\n workers are not fully protected. Nevertheless, as stated above, OSHA will examine this\n policy to determine if adjustments would improve the program.\n\n2. Improve data reliability by using one database with appropriate information controls,\n or implement processes ensuring reconciliations of VPP databases arc conducted\n regularly and before reports on VPP statistics are generated.\n\n OSHA response: OSHA agrees that more effective processes should be established to\n ensure that the national VPP database is reconciled with the Regional VPP databases. OIG\n notes that the OSHA Information System (OIS) was the planned replacement for the ll\n databases currently used (one national and ten regional). At present, OSHA has determined\n that OIS will not be expanded to include a module for VPP users. OSHA will pursue other\n steps to improve data reliability, including National Office coordination with the Regional\n Offices to conduct data integrity checks on a regular basis.\n\n3. Monitor implementation of VPP Memorandum #1 to ensure sites with fatalities and\n enforcement actions a r e addressed consistently and timely.\n\n OSHA r esponse: OSHA agrees with this recommendation. OSHA is evaluating several\n options for improving notification and tracking of actions following fatalities and\n enforcement actions. OSHA currently requires that Regions notify the National Office of\n fatalities/catastrophes at VPP sites. Relevant information is tracked in a VPP fatality\n tracking database, which is being updated to improve tracking of the steps taken following an\n event. This system may be expanded to track\xc2\xb7other enforcement actions. OSHA is also .\n exploring the addition of a VPP code in OIS to ensure that any investigation initiated at a\n VPP site is coded as such. If implemented, this will improve the notification and tracking of\n\n\n\n\n OSHA VPP\n 39 Report No. 02-14-201-10-105\n\x0c U.S. Department of Labor \xe2\x80\x93 Office of Inspector General\n\n\n\n\n 4\n\n sites where enforcement activities are ongoing and will reinforce the integrity of the existing\n VPP fatal ity database.\n\n Updating the database and adding the code to OIS will allow OSHA the ability to consistently\n and timely address these sites. While these events are setious and require robust action on the\n patt of the agency, we again wou ld like to emphasize that they occum:d at only 4 percent of\n VPP participants between FY 2009 and 2012.\n\n4. Establish a system to analyze ins pection information for continuous imp1\xc2\xb7ovement of\n VPP.\n\n OSHA \xe2\x80\xa2\xc2\xb7esponse: OSHA agrees with this recommendation, but it will likely lake some time\n and thoughtful consideration to decide how best to address it. As noted, this recommendation\n addresses a very small subset of the VPP sites in the program. OSHA will look at ways that it\n can coordinate more effectively with the Regions in reviewing fatality/ enforcement cases and\n identifying areas for improving both the quality of participants\' safety and health management\n systems and OSI-IA\'s evaluation process. TI1e fatality database discussed above in\n recommendation 3 will facilitate the review of these fatality/enforcement cases.\n\n OSHA cun-ently uses success stories posted on its public web page to highlight VPP\n participants who have achieved outstanding results in protecting workers and improving\n safety and health management systems. Similarly, OSHA could gather inspection infom1ation\n from affected VPP sites and deve lop "lessons learned" summaries that could be shared\n internally and possibly with otl1er VPP participants.\n\n5. Establish a cont1\xe2\x80\xa2ol to monitor whet.he\xe2\x80\xa2\xc2\xb7 sites with high er tha n indust\xe2\x80\xa2\xc2\xb7y ave1\xc2\xb7age injm\xc2\xb7y\n and illness r ates a1\xc2\xb7e consistently and timely addressed within VPP.\n\n OSHA \xe2\x80\xa2\xc2\xb7esponse: OSHA has taken measures to address this recommendation but agrees that\n additional controls should be implemented.\n\n OSHA clarified its controls for addressing participants with higher than industry average\n injury and illness rates in VPP Policy Memo #1 (Aug. 3, 2009). The Policy Memo lays out\n the steps that Regions must take when a VPP patticipant\'s 3-year rates exceed industry\n averages, including reviewing the rates during reapprovals and upon receiving annual self\xc2\xad\n evaluation reports, and documenting this review in the pa1ticipant file. The Policy Memo\n also include.~ procedures for the Nationa.l Office to ensure the Regions are complying with\n the evaluation timeframes.\n\n In addition to documenting tl1e procedure.~ in Memo #1, tl1e National Office conduct~ mmual\n comprehensive reviews of Regional VPP participant files. This fi le review allows the\n National Office to monitor whether the Regions are following procedures and meeting\n deadlines. OSHA has also added categ01ies to tl1e annual data t-epotts tl1at the Regions\n submit to the National Office. The new categories document when a p111ticipant has been\n placed on a rate reduction plan, ! -year conditional status, and the dates the action was\n\n\n\n\n OSHA VPP\n 40 Report No. 02-14-201-10-105\n\x0c U.S. Department of Labor \xe2\x80\x93 Office of Inspector General\n\n\n\n\n 5\n\n implemented and completed. This level of tracking enables the National Office to monitor\n pat1icipa nt~\n whose rates or safety and health management systems need improvement.\n\n Improvements in data integrity made to address in response to Recommendation 2 will also\n help assure that the Region and National Office have similar data regarding sites for which\n action should and has been taken. Review of the data for these sites on a routine basis is\n central to the program and can be f01malized in internal operating practices to address this\n recommendation.\n\n6. Develop and implement pt\xc2\xb7ocesses and priorities that will ensm\xc2\xb7e participants at\xc2\xb7e evaluated\n timely f\'ot\xc2\xb7 continuing eligibility for VPI>. In developing these processes and pl"iorities, OSHA\n shotdd evaluate all viable options to ensm\xc2\xb7e t hat the integl"it)\xe2\x80\xa2 of the progntm is maintained\n given the constmints of its available t\xc2\xb7esout\xc2\xb7ces.\n\n OSHA r\xc2\xb7esponse: OSHA agrees with this recommendation. OSHA will continue to refine its\n processes and priorities to more efficiently match its resources to the need for onsite visits and\n ensure that participants are timely evaluated for continuing eligibility. OSHA made substantial\n progress in addressing the backlog of overdue VPP reevaluations in FY 2012 and\n 2013. However, OSHA\'s efforts to eliminate the backlog were hindered by resource\n limitations and sequestration, which reshicted travel for onsite visits . OSHA is aware ofthe\n budget uncertainty, but will continue to look at all possible options to address the backlog while\n still processing new applications. OSHA is working with the Regions to develop a rational\n approach LO prioritizing pending and overdue reapprovals. In addition, OSHA will implement\n ways to ensure greater Regional adherence to evaluation timeframes by providing periodic\n reports of overdue evaluations to the Regions.\n\n OSHA has no plans to develop an alternative to the onsite evaluations. We believe that\n onsite evaluations are a critical patt of the process tor evaluating a participant\'s continuing\n eligibility for VPP.\n\n7. Ensure reliable injm\xc2\xb7y and illness data at\xc2\xb7e used to repor-t VPP successes tied with\n injury and illness statistics.\n\n OSHA r\xc2\xb7esponse: OST-IA agrees with the recommendation and will continue to work with\n the Regions to improve the process for collecting injury and illness data.\n\n\n\n\n OSHA VPP\n 41 Report No. 02-14-201-10-105\n\x0c U.S. Department of Labor \xe2\x80\x93 Office of Inspector General\n\n\n\n\nPAGE INTENTIONALLY LEFT BLANK\n\n\n\n\n\n\n OSHA VPP\n 42 Report No. 02-14-201-10-105\n\x0c U.S. Department of Labor \xe2\x80\x93 Office of Inspector General\n\n\n Appendix E\nAcknowledgements\n\nKey contributors to this report were Mark Schwartz, Rebecca Bowen, Sean Ally, Cassie\nGalang, Nadeem Afzal, Mary Lou Casazza, and Ajit Buttar.\n\n\n\n\n OSHA VPP\n 43 Report No. 02-14-201-10-105\n\x0c U.S. Department of Labor \xe2\x80\x93 Office of Inspector General\n\n\n\n\nPAGE INTENTIONALLY LEFT BLANK\n\n\n\n\n\n\n OSHA VPP\n 44 Report No. 02-14-201-10-105\n\x0c\x0cTO REPORT FRAUD, WASTE OR ABUSE, PLEASE CONTACT:\n\nOnline: http://www.oig.dol.gov/hotlineform.htm\nEmail: hotline@oig.dol.gov\n\nTelephone: 1-800-347-3756\n 202-693-6999\n\nFax: 202-693-7020\n\nAddress: Office of Inspector General\n U.S. Department of Labor\n 200 Constitution Avenue, N.W.\n Room S-5506\n Washington, D.C. 20210\n\x0c'