Occupational Safety and Health Review Commission
FY 2004
Performance Report
Management Discussion and Analysis
Overview
The Review Commission is an independent, adjudicatory agency created by the Occupational Safety and Health Act of 1970. Its sole statutory mandate is to serve as an administrative court providing just and expeditious resolution of disputes involving the Department of Labor’s Occupational Safety and Health Administration (OSHA), employers charged with violations of Federal safety and health standards, and employees and/or their representatives. The Review Commission was created by Congress as an agency completely independent of the Department of Labor to ensure that OSHA’s enforcement actions are carried out in accordance with the law, and that all parties are treated consistent with due process when disputes arise with OSHA.
The Occupational Safety and Health Act and the Review Commission’s Rules of Procedure (which by law mirror the federal rules) provide two levels of adjudication when an employer timely contests an OSHA citation for alleged violations of the Act or failure to abate such alleged violations. The first is a hearing level. This level affords an opportunity for a hearing before a Review Commission Administrative Law Judge for employers and affected employees who have filed a timely notice of contest. The judge’s decision becomes final unless the Commission chooses to review the decision. The second level is a discretionary appellate review of the judge’s decision by the Commission members. Both before its judges and the Commissioners, the Review Commission provides fair and impartial adjudication of cases concerning the safety and health of employees’ working conditions in the United States.
Mission and Organizational Structure
The mission of the Occupational Safety and Health Review Commission is to provide an impartial forum for the just and prompt adjudication of workplace safety and health disputes involving the Department of Labor, employers and employees, and/or their representatives under the Occupational Safety and Health Act of 1970.
The Occupational Safety and Health Review Commission has three members, appointed by the President and confirmed by the Senate, who serve six-year terms. One of the members also serves as Chairman of the agency. The Review Commission has three major functions. They are: the Commission function, the Administrative Law Judge function, and the Management and Administration function.
The principal (national) office of the Review Commission is located in Washington, D.C. There are also regional offices in Atlanta and Denver.
OSHRC’s vision is to strive to be:
C A quasi judicial body that is -- and is recognized for being -- objective, fair, prompt, and professional;
C An agency that creates a body of law through decisions that define and explain the rights and responsibilities of employers and employees under the Occupational Safety and Health Act of 1970;
C A model Federal agency with highly effective processes, a highly motivated, qualified and diverse workforce, and modern information management, communications, and administrative systems; and
C An agency that values team work, develops its employees, and strives to improve its performance, service, and value to the American people.
Performance Overview
Consistent with the Government Performance and Results Act (GPRA), the agency targeted specific program service levels, which collectively provide indications of success in achieving planned performance goals. At the trial level, OSHRC exceeded goals. At the Commission level, it met one of two goals, and in doing so issued 14 cases that were two years or more older. In addition, reviews of the agency’s IT operations and a financial audit were completed. The IT audit revealed documentation weaknesses for which corrective action plans have been drafted. The FY 2004 Financial Audit, conducted by Clifton Gunderson LLP, was “unqualified” in all respects.
Challenges and Opportunities
The Review Commission’s ability to meet its case disposition goals depends on a variety of factors. These include: (1) continued presence of a quorum at the Commission level; (2) the magnitude and nature of the cases received; (3) the success of the parties’ settlement negotiations and the Agency’s Settlement Part program in reducing the number of hearings needed; and (4) the number, location, length and complexity of trials held. Although these factors are largely outside the Review Commission’s control, the Review Commission is committed to working within such constraints to improve its service to the public.
The Occupational Safety and Health Act requires a quorum of two Commissioners. By statute cases can only be decided on the affirmative vote of two Commissioners. During periods when the Commission lacks a quorum, no cases can be decided. In addition, with only two Commissioners, it may be more difficult to reach agreement sufficient to dispose of some cases. In cases where such agreement cannot be reached, deadlocks result. As a result, action on important issues may be postponed and issuance of some pending cases will be delayed. The Commission was without a quorum during almost nine months in FY 2002, from December 20, 2001 until late August 2002. From late April 2003 until early September 2003, the Commission operated with only two members. The Commission now has three members that have been confirmed, however, one Commissioner’s term will expire on April 27, 2005, and based upon past experience, the position likely will be vacant for several months.
The number of safety and health inspections carried out by OSHA each year, the nature of those inspections, and the rate at which employers choose to contest the citations issued and penalties proposed by OSHA all impact on the number of cases contested before the Review Commission. In addition, OSHA’s emphasis during recent years on more serious workplace hazards, and the consequent increase in proposed penalties, has translated into more complicated cases, and more costly trials. Consequently, the complexity and size of the cases both at the Administrative Law Judge level and at the Commission level has increased steadily in recent years.
The Commission’s inventory of cases includes a number of extremely large and difficult cases. Preparation of each of these cases consumes a huge amount of attorney and Commissioner time. This, in turn, slows work on all other cases. The size and complexity of these cases have impacted the ability of the Office of the General Counsel to prepare and present a steady flow of cases to the Commission for disposition and to prepare the initial drafts of the Commission’s opinions. To address this problem, three team leader positions were established in the Office of the General Counsel to speed preparation, facilitate coordination of issues, and to help assure consistency among cases. Team case preparation has helped to shorten the time to analyze, present, and draft a number of these cases.
OSHA projected that it would conduct 39,000 inspections in FY 2004, slightly fewer than in 2003, but more than the 37,493 conducted in FY 2002. As mentioned earlier, the Review Commission’s caseload is affected not only by the number of inspections but also by OSHA’s focus on the highest hazard workplaces and most serious workplace hazards. These inspections tend to result in more complex cases. These complex cases consume extensive judicial time since the discovery process is lengthy and time consuming, motion practice is expanded, legal research and decision writing time is protracted and, of necessity, the trial process is elongated and complicated.
The Review Commission intends to expedite case processing by easing entry requirements to its E-Z Trial and Settlement Part Programs. These programs grant full due process rights to all parties in adjudicating these cases without bogging them down in legal formalities.
The Settlement Part (Rule 120) requires formal settlement efforts in cases where the proposed aggregate penalty is $200,000, or the Chief Judge finds that the case is appropriate for this part because of its complexity. The Review Commission hopes to expand this program by rule changes to include cases with an aggregate penalty of $100,000 or more, allowing more cases to be assigned to mandatory settlement procedures.
The E-Z Trial process allows parties with relatively simple cases to have their “day in court” unencumbered by the formal rules of procedure and evidence, while assuring that due process requirements will be maintained. Under this process, a business, with or without counsel, can present its case before a Review Commission judge and receive a prompt decision. Most paperwork, including legal filings, has been eliminated so that justice can be rendered swiftly and inexpensively. The process is intended to reduce the time and legal expenses to employers contesting relatively small penalty cases. The process also allows more time for Administrative Law Judges to address the more complex cases. The Review Commission arranged for an outside evaluation of the program in FY 2001. The evaluation showed that program implementation was effective and that the program is generally being implemented in accordance with the goals. The Review Commission hopes to expand this program by revising the eligibility requirements for entry.
Analysis of Financial Statements
The Review Commission had biennial audits of its financial statements from 1996 through 2002. Consistent with the Accountability of Tax Dollars Act of 2002, OSHRC began annual audits in FY 2003, and has received a Aunqualified" opinion for each biennial and annual review by independent auditors.
Since 2002, the Review Commission has contracted with the Treasury Franchise Fund, Administrative Resource Center for accounting services. The Administrative Resources Center prepared the Review Commission’s FY 2004 financial statements. The principal financial statements include the Balance Sheet, Statement of Net Cost, Statement of Net Position, Statement of Budgetary Resources, Statement of Financing, and the Statement of Custodial Activity.
Limitations of the Financial Statements
The principal financial statements have been prepared to report the financial position and results of operations of the Review Commission, pursuant to the requirements of 31 U.S.C. 3515 (b).
The statements have been prepared from the books and records of the Review Commission in accordance with generally accepted accounting principles (GAAP) for Federal entities and formats prescribed by the Office of Management and Budget (OMB). The statements are in addition to the financial reports used to monitor and control budgetary resources, which are prepared from the same books and records. These statements should be read with the realization that they are for a component of the United States Government, a sovereign entity.
Systems, Controls, and Legal Compliance
The Occupational Safety and Health Review Commission is a small agency and does not have a separate Inspector General Office. Therefore, the Review Commission’s management team assumes the responsibility for assessing or overseeing the assessment of the Agency’s internal operations and determining if there are any weaknesses that need correction.
In FY 2004, two program reviews took place: an audit of FY 2004 financial statements, and an audit of computer and information security. The FY 2004 financial audit was “unqualified.”
The Agency contracted for an FY 2004 independent audit of its computer and information security, consistent with the Federal Information Security Management Act (December 17, 2002) signed into law as part of the E-Government Act (Public Law 107-347). This independent evaluation revealed that there were documentation weaknesses in policies and procedures, specifically in Certification and Accreditation, IT Contingency Planning, and Life Cycle Management
The system of internal control of this Agency is functioning well. It provides reasonable assurance as to the efficiency and effectiveness of programs and operations, reliability of financial and performance information, and compliance with laws and regulations. These controls satisfy the requirements of the Federal Managers' Financial Integrity Act. As previously mentioned, the Review Commission has had biennial, and more recently, annual audits of its financial statements, including reviews of the adequacy of the Review Commission’s internal control systems. The Review Commission has received an unqualified opinion for each audit conducted.
The Review Commission has contracted with the Treasury Franchise Fund, Administrative Resource Center, [Bureau of Public Debt (BPD)], for accounting, disbursement, and travel services and with the National Finance Center for payroll and personnel services. In addition to the Agency’s internal controls and procedures that safeguard assets and ensure that obligations and disbursements are made consistent with management’s direction, the BPD and the National Finance Center have established practices and procedures that assure appropriate internal controls. The two agencies’ internal control systems are evaluated independently.
Performance Goals and Results
The Review Commission’s strategic goal is to provide fair, just, and expeditious adjudication of disputes brought before the Commission and its judges. To this end, the Review Commission’s Strategic Plan and associated Performance Goals for the period FY 2003 through FY 2008 reflect objectives for the Commission and Administrative law functions.
Commission Function
The function of the Commissioners is to review and decide cases contested under the Act, following an initial decision by an Administrative Law Judge. This higher level of review must be prompt, fair, and protective of the parties’ rights. Overall, this is our public service goal. The following table lists the performance goals and results for this function in FY 2004.
The Review Commission met most of its case production goals for fiscal 2004 and reduced its backlog to 54 cases, but the Commission fell short of its goal for cases that were at least two years old. At the beginning of fiscal 2004, there were 33 cases before the Commission that were at least two years old. A good number of these cases were very lengthy and complex, with huge records and a multitude of items. The Commission made substantial efforts to issue decisions in these difficult cases as well as in cases that were more than two years old, but not as lengthy or complex. In the end, the Commission diverted resources to enable it to issue 14 decisions (42% of the total), in cases that were more than 2 years old.
The Commission will redouble its efforts to meet the goal of issuing decisions in all the over two year-old cases. First, the Commission will concentrate its efforts on only those very complex cases that it will be able to issue by April 27, 2005. This is the date one of the Commission members' terms will expire. Based on past experience, the number of items and issues presented in these complex cases, and the critical nature of some of the issues, a two-member Commission is extremely unlikely to find sufficient common ground to issue decisions in those complex cases. Second, having identified the very complex cases that can be issued, the Commission will devote the rest of its resources to issuing the remainder of the cases in the two-year category. This approach will allow the Commission to optimize its resources and issue as many of the old complex cases as it can and still make a significant dent in the total number of over two-year old cases. The Commission will also issue decisions in newer cases, but until the two-year case goal is met these will be limited to high-priority cases such as those requiring remand to a Commission judge for reconsideration.
Performance Goals
Performance Indicators
FY 2002
Actual
(Target)
FY 2003
Actual
(Target)
FY 2004
Target
FY 2004
Actual
$
Reduce the length of time to resolve Commission-level cases
Percent of cases over 2 years old disposed of at the Commission level
New for FY 04
New for FY 04
100%
42%
Target not met.
$
Reduce the length of time to resolve prioritycases
Percent of priority cases disposed of within 6 months
New for
FY 04
New for FY 04
100%
Target met
1.5
Increase the percent of Commission-level dispositions issued within 325days
Percent of cases that are disposed of within 325 days
43% (55%)
35% (57%)
This goal was replaced with the goals above
This goal was replaced with the goals above
1.6
Reduce the number of cases pending Commission-level disposition for more than two years
Reduce by a percent the number of cases pending for more than 2 years
22% (30%)
38%
(32%)
This goal was replaced with the goals above
This goal was replaced with the goals above
Administrative Law Judge Function
The function of the Review Commission’s Administrative Law Judge Division is to conduct formal hearings and related proceedings in a fair, just, and expeditious manner. The function is directly related to the public service goal. The following table lists the performance goals and results for this function in FY 2004.
Performance Goals
Performance Indicators
FY 2002
Actual
(Target)
FY 2003
Actual
(Target)
FY 2004
Target
FY 2004
Actual
$
Increase the percent of non-complex cases at the ALJ level that are resolved in less than one year
Percent within 365 days
New for
FY 04
New for
FY 04
93%
98%
Target Exceeded
$
Increase the percent of complex cases at the ALJ level that are resolved within 18 months
Percent within 540 days
New for
FY 04
New for
FY 04
93%
98%
Target exceeded
1.
Increase the percent of non-complex cases disposed of with hearing that are disposed of within 325 days
Percent within 325 days
77%
(75%)
within 325 days
82% (78%) within 325 days
This goal was replaced with the goals above
This goal was replaced with the goals above
1.2
Increase the percent of complex cases disposed of with hearing that are disposed of within 18 months
Percent within 540 days
92%
(75%) within 540 days
81%
(80%) within 540 days
This goal was replaced with the goals above
This goal was replaced with the goals above
1.3
Increase the percent of cases that are disposed of without a hearing that are disposed of within six months
Percent within 180 days
77%
(75%) within 180 days
80%
(76%) within 180 days
This goal was replaced with the goals above
This goal was replaced with the goals above
1.4
Increase the percent of cases that are disposed of without a hearing that are disposed of in less than one year
Percent within 365 days
98%
(99%) within 365 days
98%
(99%) within 365 days
This goal was replaced with the goals above
This goal was replaced with the goals above
Management and Administration Function
The function of Management and Administration is to provide executive management and administrative support services for the Review Commission, to assure its success in fulfilling its mission.
The Review Commission updated its strategic plan for the period FY 2003 through FY 2008. As part of the update two strategic goals have been eliminated, the external communications and the organizational goals. However, while the goals have been deleted from the Strategic Plan, they will continue to be a priority within the Agency and will be monitored for effectiveness.
Performance Data Verification
For each strategic goal and its related objectives, the Review Commission formulated performance measures and numerical annual targets, whenever possible. A few measures are necessarily qualitative in nature. Case processing and adjudication measurements are used for several objectives contained in our Public Service Goal. Most of the data related to the Public Service Goal resides in the Review Commission’s case management/tracking system. In FY 2004, each of the more than 2200 new cases filed with the agency was entered into the case management system, and progress on all cases was tracked. In order to assure the quality of the data, management periodically reviews the information in the case management/tracking system. The agency conducts test runs of the data to ensure that information is entered and updated on a timely basis. Semi-annual and annual reviews are conducted by the appropriate managers to ensure the accuracy of the data, to monitor performance goals and progress, and produce reports. The reports are used to assess workload and make workload adjustments, when necessary. At the end of the year, this data is used by the offices to measure performance related to the goal and improve management.