FEDERAL MINE SAFETY AND
HEALTH REVIEW COMMISSION
FINANCIAL STATEMENTS
AND
INDEPENDENT AUDITOR'S REPORT
FOR THE FISCAL YEARS ENDED
SEPTEMBER 30, 2008 AND 2007
BY
BROWN & COMPANY CPAs, PLLC
NOVEMBER 7,2008
E~~~~~~= BROWN & COMPANY CPAS, PLLC =~~~~~~~
FEDERAL MINE SAFETY AND HEALTH REVIEW COMMISSION
FOR THE FISCAL YEARS ENDED
SEPTEMBER 30, 2008 AND 2007
TABLE OF CONTENTS
INDEPENDENT AUDITOR'S REPORT ON THE FINANCIAL STATEMENTS .. .. ... .. ......... 1
INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL ... ..... ........ .. ......... ........ 2
INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE WITH LAWS AND
REGULATIONS ... .. ....... ..... .. ...... .... ..... ........ ...... ... .... .. .... ..... .... ............... .......... .. ..... ... ... .... ..... ... ..... 4
BALANCE SHEET .. ... .. ... ...... .. ....... .. ... ... .... ....... .... ... .. ..... .... .......... ....... ... .. .. ..... .... ... ...... ... ... ...... .. .... 5
STATEMENT OF NET COST . .... .. .. .. ...... ....... .. .............. .. ... .... ... ...... ................ ............ .......... .. .. .. 6
STATEMENT OF CHANGES IN NET POSITION .. ........ .... .... .. ....... .. .. ..... .................. .... .. .... ... 7
STATEMENT OF BUDGETARY RESOURCES.. .... ....... .... ................... .. .. ............ .... .. ...... .... .... 8
NOTES TO THE FINANCIAL STATEMENTS ..... ........ .............. .... ...... ........ .. .. .. .. ...... .. ... .... ..... 9
MANAGEMENT DISCUSSION AND ANALYSIS .. ...... .. .............. .... .. .............. .. .. .. .... ...... .......... 20
E ============= BROWN & COMPANY CPAS, PLLC =======.~
~~~ ~=========BROWN & COMPANY CPAs, PLLC======~
CERl'IFIED PUBLIC ACCOUNTANTS AND MANAGEMENT CONSULTANTS
INDEPENDENT AUDITOR'S REPORT ON THE FINANCIAL STATEMENTS
Federal Mine Safety and Health Review Commission
Washington, DC
We have audited the accompanying balance sheet of the Federal Mine Safety and Health Review
Commission (FMSHRC) as of September 30, 2008 and 2007, and the related statements of net cost,
changes in net position, and budgetary resources, for the years then ended (collectively referred to as the
financial statements). These financial statements are the responsibility of FMSHRC's management. Our
responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United States of
America and the standards applicable to financial audits contained in U.S. Government Auditing
Standards, issued by the Comptroller General ofthe United States; and Office of Management and Budget
(OMB) Bulletin No. 07-04, Audit Requirements for Federal Financial Statements. Those standards and
OMB Bulletin No. 07-04 require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our audit provides a reasonable
basis for our opinion .
In our opinion, the financial statements referred to above present fairly, in all material respects, the
financial position of the FMSHRC as of September 30, 2008 and 2007 and its net costs, changes in net
position, and budgetary resources for the years then ended in conformity with accounting principles
generally accepted in the United States of America.
In accordance with U.S. Government Auditing Standards and OMB Bulletin No. 07-04, we have also
issued a report dated November 7, 2008 on our consideration of the FMSHRC internal control over
financial reporting and its compliance with provisions of laws and regulations. Those reports are an
integral part of an audit performed in accordance with U.S. Government Auditing Standards and should
be read in conjunction with this report in considering the results of our audit.
The information in "Management's Discussion & Analysis" (MD&A) is presented for the purpose of
additional analysis and is required by OMB Circular No. A-136, revised Financial Reporting
Requirements. The FMSHRC's MD&A contains a wide range of information, some of which is not
directly related to the financial statements. We do not express an opinion on this information. However,
we compared this information for consistency with the financial statements and discussed the methods of
measurement and presentation with FMSHRC officials. Based on this limited work, we found no
material inconsistencies with the financial statements, U.S. generally accepted accounting principles, or
OMB guidance.
This report is intended solely for the information and use of the management of the FMSHRC, OMB and
Congress, and is not intended to be and should not be used by anyone other than these specific parties.
~~~
Largo, Maryland
November 7,2008
LARGO
9200 BASIL COURT, SUITE 400
LARGO, MD 20774
(240) 492-1400 . FAX: (301) 636-6013
mail@brownco-cpas.com
RICHMOND
1504 SANTA ROSA ROAD, SUITE 107
RICHMOND, VA 23229
(804) 288-2006 . FAX: (804) 288-2233
tdavis@brownco-cpas.com
"\4111\ • ~~~~====BROWN & COMPANY CPAs, PLLC======~.
CERI'IFIED PUBLIC ACCOUNTANTS AND MANAGEMENT CONSULTANTS
INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL
Federal Mine Safety and Health Review Commission
Washington, DC
We have audited the financial statements of the Federal Mine Safety and Health Review Commission
(FMSHRC) as of and for the year ended September 30, 2008 and have issued our report thereon dated
November 7, 2008. We conducted our audit in accordance with auditing standards generally accepted in
the United States of America; and the standards applicable to financial audits contained in U.S
Government Auditing Standards, issued by the Comptroller General of the United States; and Office of
Management and Budget (OMB) Bulletin No. 07-04, Audit Requirements for Federal Financial
Statements.
In planning and performing our audit, we considered the FMSHRC's internal control over financial
reporting by obtaining an understanding of the FMSHRC's internal control, determined whether internal
controls had been placed in operation, assessed control ri sk, and performed tests of controls in order to
determine our auditing procedures for the purpose of expressing our opinion on the financial statements.
We limited our internal control testing to those controls necessary to achieve the objectives described in
OMB Bulletin No. 07-04. We did not test all internal controls relevant to operating objectives as broadly
defined by the Federal Managers' Financial Integrity Act of 1982, such as those controls relevant to
ensuring efficient operations. The objective of our audit was not to provide an opinion on internal control
and therefore, we do not express an opinion on internal control.
Our consideration of the intertlal control over financial reporting would not necessarily disclose all
matters in the internal control over financial reporting that might be significant deficiencies. Under
standards issued by the American Institute of Certified Public Accountants and OMB Bulletin No. 07-04,
a significant deficiency is a deficiency in internal control, or a combination of deficiencies, that adversely
affects the entity's ability to initiate, authorize, record, process, or report financial data reliably in
accordance with generally accepted accounting principles such that there is more than a remote likelihood
that a misstatement of the entity's financial statements that is more than inconsequential will not be
prevented or detected. Our consideration of the internal control over financial reporting would not
necessarily disclose all matters in the internal control over financial reporting that might be a material
weakness. A material weakness is a significant deficiency, or combination of significant deficiencies,
that result in a more than remote likelihood that a material misstatement of the financial statements will
not be prevented or detected. Because of inherent limitations in internal controls, misstatements, losses,
or non-compliance may nevertheless occur and not be detected. However, we noted no matters involving
the internal control and its operation that we considered to be significant deficiencies or material
weaknesses as defined above.
LARGO
9200 BASIL COURT, SUITE 400
LARGO, MD 20774
(240) 492-1400 . FAX: (301) 636-6013
mail@brownco-cpas.com
2
RICHMOND
1504 SANTA ROSA ROAD, SUITE 107
RICHMOND, VA 23229
(804) 288-2006 . FAX: (804) 288-2233
tdavis@brownco-cpas.com
This report is intended solely for the information and use of the management of the FMSHRC, OMB and
Congress, and is not intended to be and should not be used by anyone other than these specified parties.
~~~
Largo, Maryland
November 7, 2008
E~~~~~~= BROWN & COMPANY CPAS, PLLC ======= ••
3
~=:li~===BROWN & COMPANY CPAs, PLLC =============~
CERI'IFIED PUBLIC ACCOUNTANTS AND MANAGEMENT CONSULTANTS
INDEPENDENT AUDITOR'S REPORT ON
COMPLIANCE WITH LAWS AND REGULATIONS
Federal Mine Safety and Health Review Commission
Washington, DC
We have audited the financial statements of the Federal Mine Safety and Health Review Commission
(FMSHRC) as of and for the year ended September 30, 2008, and have issued our report thereon dated
November 7, 2008. We conducted our audit in accordance with auditing standards generally accepted in
the United States of America, and the standards applicable to financial audits contained in U.S.
Government Auditing Standards, issued by the Comptroller General of the United States; and Office of
Management and Budget (OMB) Bulletin No. 07-04, Audit Requirements for Federal Financial
Statements.
The management of the FMSHRC is responsible for complying with laws and regulations applicable to
the FMSHRC. As part of obtaining reasonable assurance about whether the FMSHRC's financial
statements are free of material misstatement, we performed tests of its compliance with certain provisions
of laws and regulations, noncompliance with which could have a direct and material effect on the
determination of financial statement amounts, and certain other laws and regulations specified in OMB
Bulletin No. 07-04. We limited our tests of compliance to these provisions and we did not test compliance
with all laws and regulations applicable to the FMSHRC.
The results of our tests of compliance disclosed no reportable instances of noncompliance with other laws
and regulations discussed in the preceding paragraph that are required to be reported under U.S.
Government Auditing Standards or OMB Bulletin No. 07-04.
Providing an opinion on compliance with certain provisions of laws and regulations was not an objective
of our audit, and, accordingly, we do not express such an opinion. However, we noted no noncompliance
with laws and regulations, which could have a direct and material effect on the determination of financial
statement amounts.
This report is intended solely for the information and use of the management of the FMSHRC, OMB and
Congress, and is not intended to be and should not be used by anyone other than these specified parties.
~~~
Largo, Maryland
November 7, 2008
LARGO
9200 BASIL COURT, SUITE 400
LARGO, MD 20774
(240) 492-1400 . FAX: (301) 636-6013
mail@brownco-cpas.com
4
RICHMOND
1504 SANTA ROSA ROAD, SUITE 107
RICHMOND, VA 23229
(804) 288-2006 · FAX: (804) 288-2233
tdavis@brownco-cpas.com
The accompanying notes are an integral part of these statements.
5
2008 2007
Assets:
Intragovernmental:
Fund Balance With Treasury (Note 2) $ 3,798,259 $ 4,699,725
Total Intragovernmental 3,798,259 4,699,725
General Property, Plant and Equipment, Net (Note 3) 81,357 57,723
Total Assets $ 3,879,616 $ 4,757,448
Liabilities:
Intragovernmental:
Accounts Payable $ 2,094 $ -
Other (Note 5) 39,607 27,498
Total Intragovernmental 41,701 27,498
Accounts Payable 150,755 94,082
Other (Note 5) 513,377 415,370
Total liabilities $ 705,833 $ 536,950
Net Position:
Unexpended Appropriations - Other Funds $ 3,392,425 $ 4,427,549
Cumulative Results of Operations - Other Funds ( 218,642) (207,051)
Total Net Position $ 3,173,783 $ 4,220,498
Total Liabilities and Net Position $ 3,879,616 $ 4,757,448
FEDERAL MINE SAFETY AND HEALTH REVIEW COMMISSION
BALANCE SHEET
AS OF SEPTEMBER 30, 2008 AND 2007
(In Dollars)
The accompanying notes are an integral part of these statements.
6
2008 2007
Program Costs:
Commission Review
Gross Costs (Note 7) $ 4,313,028 $ 3,998,486
Net Program Costs $ 4,313,028 $ 3,998,486
Administrative Law Judge Determinations
Gross Costs (Note 7) $ 4,040,188 $ 3,324,910
Net Program Costs $ 4,040,188 $ 3,324,910
Net Cost of Operations $ 8,353,216 $ 7,323,396
FEDERAL MINE SAFETY AND HEALTH REVIEW COMMISSION
STATEMENT OF NET COST
FOR THE YEARS ENDED SEPTEMBER 30, 2008 AND 2007
(In Dollars)
The accompanying notes are an integral part of these statements.
7
2008 2007
Cumulative Results of Operations:
Beginning Balances $ ( 207,051) $ (260,399)
Beginning Balances, as Adjusted $ ( 207,051) $ (260,399)
Budgetary Financing Sources:
Appropriations Used $ 7,936,929 $ 6,989,418
Other Financing Sources (Non-Exchange):
Imputed Financing Sources 404,696 387,326
Total Financing Sources $ 8,341,625 $ 7,376,744
Net Cost of Operations $ 8,353,216 $ 7,323,396
Net Change $ ( 11,591) $ 53,348
Cumulative Results of Operations $ ( 218,642) $ (207,051)
Unexpended Appropriations:
Beginning Balances $ 4,427,549 $ 4,395,086
Beginning Balances, as Adjusted $ 4,427,549 $ 4,395,086
Budgetary Financing Sources:
Appropriations Received $ 8,096,000 $ 7,777,652
Other Adjustments (1,194,195) (755,771)
Appropriations Used ( 7,936,929) (6,989,418)
Total Budgetary Financing Sources $ ( 1,035,124) $ 32,463
Total Unexpended Appropriations $ 3,392,425 $ 4,427,549
Net Position $ 3,173,783 $ 4,220,498
FEDERAL MINE SAFETY AND HEALTH REVIEW COMMISSION
STATEMENT OF CHANGES IN NET POSITION
FOR THE YEARS ENDED SEPTEMBER 30, 2008 AND 2007
(In Dollars)
The accompanying notes are an integral part of these statements.
8
2008 2007
Budgetary Resources:
Unobligated Balance Brought Forward, October 1 $ 3,386,498 $ 3,243,153
Recoveries of Prior Year Unpaid Obligations 420,365 706,954
Budget Authority
Appropriation 8,096,000 7,777,652
Permanently Not Available ( 1,194,195) (755,771)
Total Budgetary Resources $ 10,708,668 $ 10,971,988
Status of Budgetary Resources:
Obligations Incurred
Direct $ 7,787,182 $ 7,585,490
Unobligated Balance
Apportioned 358,031 394,618
Unobligated Balance Not Available 2,563,455 2,991,880
Total Status of Budgetary Resources $ 10,708,668 $ 10,971,988
Change in Obligated Balance:
Obligated Balance, Net
Unpaid Obligations, Brought Forward, October 1 $ 1,313,227 $ 1,451,071
Total Unpaid Obligated Balance, Net 1,313,227 1,451,071
Obligations Incurred Net 7,787,182 7,585,490
Less: Gross Outlays 7,803,270 7,016,380
Less: Recoveries of Prior Year Unpaid
Obligations, Actual 420,365 706,954
Obligated Balance, Net, End of Period
Unpaid Obligations $ 876,773 $ 1,313,227
Total, Unpaid Obligated Balance, Net, End of Period $ 876,773 $ 1,313,227
Net Outlays:
Net Outlays:
Gross Outlays $ 7,803,270 $ 7,016,380
Net Outlays $ 7,803,270 $ 7,016,380
FEDERAL MINE SAFETY AND HEALTH REVIEW COMMISSION
STATEMENT OF BUDGETARY RESOURCES
FOR THE YEARS ENDED SEPTEMBER 30, 2008 AND 2007
(In Dollars)
FEDERAL MINE SAFETY AND HEALTH REVIEW COMMISSION
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARS ENDED SEPTEMBER 30, 2008 AND 2007
9
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. Basis of Presentation
The financial statements have been prepared to report the financial position, net cost of operations,
changes in net position, and status and availability of budgetary resources of Federal Mine Safety and
Health Review Commission (MSC). The statements are a requirement of the Chief Financial Officers Act
of 1990, the Government Management Reform Act of 1994, and the Accountability of Tax Dollars Act of
2002. They have been prepared from, and are fully supported by, the books and records of MSC in
accordance with the hierarchy of accounting principles generally accepted in the United States of
America, standards approved by the principals of the Federal Accounting Standards Advisory Board
(FASAB), OMB Circular A-136, Financial Reporting Requirements and MSC accounting policies which
are summarized in this note. These statements, with the exception of the Statement of Budgetary
Resources, are different from financial management reports, which are also prepared pursuant to OMB
directives that are used to monitor and control MSC’s use of budgetary resources.
The statements consist of the Balance Sheet, Statement of Net Cost, Statement of Changes in Net
Position, and the Statement of Budgetary Resources. In accordance with OMB Circular A-136, the
financial statements and associated notes are presented on a comparative basis. Unless specified
otherwise, all amounts are presented in dollars.
B. Reporting Entity
MSC is an independent Federal agency with the mission of providing administrative trial and appellate
review of legal disputes arising under the Federal Mine Safety and Health Amendments Act of 1977,
Public Law 91-173, amended by Public Law 95-164.
MSC has rights and ownership of all assets reported in these financial statements and does not possess
any non-entity assets.
C. Budgets and Budgetary Accounting
Congress enacts appropriations to permit MSC to incur obligations for specified purposes. In fiscal years
2008 and 2007, MSC was accountable for General Fund appropriations. MSC recognizes budgetary
resources as assets when cash (funds held by the U.S. Treasury) is made available through the Department
of Treasury General Fund warrants.
D. Basis of Accounting
Transactions are recorded on both an accrual accounting basis and a budgetary basis. Under the accrual
method, revenues are recognized when earned, and expenses are recognized when a liability is incurred,
without regard to receipt or disbursement of cash. Budgetary accounting facilitates compliance with legal
requirements on the use of federal funds.
FEDERAL MINE SAFETY AND HEALTH REVIEW COMMISSION
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARS ENDED SEPTEMBER 30, 2008 AND 2007
10
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
E. Revenues & Other Financing Sources
Congress enacts annual appropriations to be used, within statutory limits, for operating and capital
expenditures.
Appropriations are recognized as a financing source when expended. Appropriations expensed for
capitalized property and equipment are recognized as expenses when an asset is consumed in operations.
MSC recognizes as an imputed financing source the amount of accrued pension and post-retirement
benefit expenses for current employees paid on our behalf by the Office of Personnel Management
(OPM).
F. Taxes
MSC, as a Federal entity, is not subject to Federal, State, or local income taxes, and, accordingly, no
provision for income taxes has been recorded in the accompanying financial statements.
G. Fund Balance with Treasury
The U.S. Treasury processes cash receipts and disbursements. Funds held at the Treasury are available to
pay agency liabilities. MSC does not maintain cash in commercial bank accounts or foreign currency
balances.
H. Accounts Receivable, Net
Accounts receivable consists of amounts owed to MSC by other federal agencies and the public.
Amounts due from Federal agencies are considered fully collectible. Accounts receivable from the public
include reimbursements from employees. An allowance for uncollectible accounts receivable from the
public is established when either (1) based upon a review of outstanding accounts and the failure of all
collection efforts, management determines that collection is unlikely to occur considering the debtor’s
ability to pay, or (2) an account for which no allowance has been established is submitted to the
Department of the Treasury for collection, which takes place when it becomes 180 days delinquent.
FEDERAL MINE SAFETY AND HEALTH REVIEW COMMISSION
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARS ENDED SEPTEMBER 30, 2008 AND 2007
11
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
I. Property, Plant and Equipment, Net
MSC’s property, plant and equipment is recorded at original acquisition cost and is depreciated using the
straight-line method over the estimated useful life of the asset. Major alterations and renovations are
capitalized, while maintenance and repair costs are charged to expense as incurred. MSC’s capitalization
threshold is $50,000 for individual purchases and $500,000 for bulk purchases. Applicable standard
governmental guidelines regulate the disposal and convertibility of agency property, plant and equipment.
The useful life classifications for capitalized assets are as follows:
Description Useful Life (years)
Office Equipment 5
Leasehold Improvements Period of Lease
J. Advances and Prepaid Charges
Advance payments are generally prohibited by law. There are some exceptions, such as reimbursable
agreements, subscriptions and payments to contractors and employees. Payments made in advance of the
receipt of goods and services are recorded as advances or prepaid charges at the time of prepayment and
recognized as expenses when the related goods and services are received.
K. Liabilities
Liabilities covered by budgetary or other resources are those liabilities for which Congress has
appropriated funds or funding is otherwise available to pay amounts due.
Liabilities not covered by budgetary or other resources represent amounts owed in excess of available
Congressionally appropriated funds or other amounts. The liquidation of liabilities not covered by
budgetary or other resources is dependent on future Congressional appropriations or other funding.
Intragovernmental liabilities are claims against MSC by other Federal agencies. Liabilities not covered
by budgetary resources on the Balance Sheet are equivalent to amounts reported as Components requiring
or generating resources on the Reconciliation of Net Cost to Budget. Additionally, the Government,
acting in its sovereign capacity, can abrogate liabilities.
L. Accounts Payable
Accounts payable consists of amounts owed to other Federal agencies and the public.
FEDERAL MINE SAFETY AND HEALTH REVIEW COMMISSION
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARS ENDED SEPTEMBER 30, 2008 AND 2007
12
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
M. Annual, Sick, and Other Leave
Annual leave is accrued as it is earned, and the accrual is reduced as leave is taken. The balance in the
accrued leave account is adjusted to reflect current pay rates. Liabilities associated with other types of
vested leave, including compensatory, restored leave, and sick leave in certain circumstances, are accrued
at year-end, based on latest pay rates and unused hours of leave. Funding will be obtained from future
financing sources to the extent that current or prior year appropriations are not available to fund annual
and other types of vested leave earned but not taken. Nonvested leave is expensed when used. Any
liability for sick leave that is accrued but not taken by a Civil Service Retirement System (CSRS)-covered
employee is transferred to the Office of Personnel Management upon the retirement of that individual.
No credit is given for sick leave balances upon the retirement of Federal Employee’s Retirement System
(FERS)-covered employees.
N. Retirement Plans
MSC employees participate in either the CSRS or the FERS. FERS was established by the enactment of
Public Law 99-335. Pursuant to this law, FERS and Social Security automatically cover most employees
hired after December 31, 1983. Employees hired before January 1, 1984 elected to join either FERS and
Social Security or remain in CSRS.
All employees are eligible to contribute to the Thrift Savings Plan (TSP). For those employees
participating in the FERS, a TSP account is automatically established and MSC makes a mandatory 1
percent contribution to this account. In addition, MSC makes matching contributions, ranging from 1 to 4
percent, for FERS eligible employees who contribute to their TSP accounts. Matching contributions are
not made to the TSP accounts established by CSRS employees.
MSC recognizes the imputed cost of pension and other retirement benefits during the employees’ active
years of service. OPM actuaries determine pension cost factors by calculating the value of pension
benefits expected to be paid in the future and communicates these factors to MSC for current period
expense reporting. OPM also provides information regarding the full cost of health and life insurance
benefits. MSC recognized the offsetting revenue as imputed financing sources to the extent these
expenses will be paid by OPM.
MSC does not report on its financial statements information pertaining to the retirement plans covering its
employees. Reporting amounts such as plan assets, accumulated plan benefits, and related unfunded
liabilities, if any, is the responsibility of the OPM.
FEDERAL MINE SAFETY AND HEALTH REVIEW COMMISSION
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARS ENDED SEPTEMBER 30, 2008 AND 2007
13
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
O. Use of Estimates
Management has made certain estimates and assumptions when reporting assets, liabilities, revenue,
expenses, and in the note disclosures. The preparation of financial statements in conformity with
generally accepted accounting principles required management to make assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from these estimates.
P. Imputed Costs/Financing Sources
Federal Government entities often receive goods and services from other Federal Government entities
without reimbursing the providing entity for all the related costs. In addition, Federal Government
entities also incur costs that are paid in total or in part by other entities. An imputed financing source is
recognized by the receiving entity for costs that are paid by other entities. MSC recognized imputed costs
and financing sources in fiscal years 2008 and 2007 to the extent directed by OMB.
Q. Contingencies
Liabilities are deemed contingent when the existence or amount of the liability cannot be determined with
certainty pending the outcome of future events. MSC recognizes contingent liabilities, in the
accompanying balance sheet and statement of net cost, when it is both probable and can be reasonably
estimated. MSC discloses contingent liabilities in the notes to the financial statements when the
conditions for liability recognition are not met or when a loss from the outcome of future events is more
than remote. In some cases, once losses are certain, payments may be made from the Judgment Fund
maintained by the U.S. Treasury rather than from the amounts appropriated to MSC for agency
operations. Payments from the Judgment Fund are recorded as an “Other Financing Source” when made.
There are no contingencies that require disclosure.
R. Expired Accounts and Cancelled Authority
Unless otherwise specified by law, annual authority expires for incurring new obligations at the beginning
of the subsequent fiscal year. The account in which the annual authority is placed is called the expired
account. For five fiscal years, the expired account is available for expenditure to liquidate valid
obligations incurred during the unexpired period. Adjustments are allowed to increase or decrease valid
obligations incurred during the unexpired period but not previously reported. At the end of the fifth
expired year, the expired account is cancelled.
S. Reclassification
Certain fiscal year 2007 balances have been reclassified, retitled, or combined with other financial
statement line items for consistency with current year presentation.
FEDERAL MINE SAFETY AND HEALTH REVIEW COMMISSION
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARS ENDED SEPTEMBER 30, 2008 AND 2007
14
NOTE 2. FUND BALANCE WITH TREASURY
Fund balance with Treasury account balances as of September 30, 2008 and 2007 were:
Fund Balances:
2008 2007
Appropriated Funds $ 3,798,259 $ 4,699,725
Total Fund Balance $ 3,798,259 $ 4,699,725
Status of Fund Balance with Treasury:
2008 2007
Unobligated Balance
Available $ 358,031 $ 394,618
Unavailable 2,563,455 2,991,880
Obligated Balance not yet Disbursed 876,773 1,313,227
Total $ 3,798,259 $ 4,699,725
Restricted unobligated fund balances represent the amount of appropriations for which the period of
availability for obligation has expired. These balances are available for upward adjustments of
obligations incurred only during the period for which the appropriation was available for obligation or for
paying claims attributable to the appropriations.
NOTE 3. GENERAL PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment account balances as of September 30, 2008 and 2007 were as follows:
Schedule of Property, Plant and Equipment as of September 30, 2008
Acquisition Accumulated Net
Cost Depreciation Book Value
Description
Office Equipment $ 99,597 $ (61,793) $ 37,804
Leasehold Improvement 54,441 $ (10,888) 43,553
Total $ 154,038 $ (72,681) $ 81,357
Schedule of Property, Plant and Equipment as of September 30, 2007
Acquisition Accumulated Net
Cost Depreciation Book Value
Description
Office Equipment $ 99,597 $ (41,874) $ 57,723
FEDERAL MINE SAFETY AND HEALTH REVIEW COMMISSION
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARS ENDED SEPTEMBER 30, 2008 AND 2007
15
NOTE 4. LIABILITIES NOT COVERED BY BUDGETARY RESOURCES
The liabilities on MSC’s Balance Sheet as of September 30, 2008 and 2007, include liabilities not
covered by budgetary resources, which are liabilities for which congressional action is needed before
budgetary resources can be provided. Although future appropriations to fund these liabilities are likely
and anticipated, it is not certain that appropriations will be enacted to fund these liabilities. Other
liabilities not covered by budgetary resources consist entirely of unfunded leave liabilities. Unfunded
leave balances are $299,998 and $264,775 as of September 30, 2008 and 2007, respectively.
NOTE 5. OTHER LIABILITIES
The accrued liabilities for MSC are comprised of program expense accruals, payroll accruals, and
unfunded annual leave earned by employees. Program expense accruals represent expenses that were
incurred prior to year-end but were not paid. Similarly, payroll accruals represent payroll expenses that
were incurred prior to year-end but were not paid.
2008 2007
Intragovernmental
Payroll Taxes Payable $ 39,607 $ 27,498
Total Intragovernmental $ 39,607 $ 27,498
Unfunded Leave 299,998 264,775
Accrued Funded Payroll 206,706 147,028
Payroll Taxes Payable 6,673 3,567
Total Nongovernmental $ 513,377 $ 415,370
Total Other Liabilities $ 552,984 $ 442,868
All liabilities are current liabilities.
FEDERAL MINE SAFETY AND HEALTH REVIEW COMMISSION
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARS ENDED SEPTEMBER 30, 2008 AND 2007
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NOTE 6. LEASES
MSC occupies office space under a lease agreement that is accounted for as an operating lease. The lease
term began on October 1, 2002 and expires on October 1, 2012. Lease payments are increased annually
based on the adjustments for operating cost and real estate tax escalations.
Schedule of Future Minimum Lease Payments
2009 $ 1,286,027
2010 1,311,542
2011 1,337,542
2012 1,364,040
Total Future Payments $ 5,299,151
The operating lease amount does not include estimated payments for leases with annual renewal options.
NOTE 7. INTRAGOVERNMENTAL COSTS AND EXCHANGE REVENUE
Intragovernmental costs and intragovernmental exchanges revenue represent goods and services exchange
transactions made between two reporting entities within the Federal government, and are in contrast to
those with non-federal entities (the public). Such costs and revenue are summarized as follows:
2008 2007
Commission Review
Intragovernmental Costs $ 1,580,222 $ 1,497,832
Public Costs 2,732,806 2,500,654
Total Program Costs $ 4,313,028 $ 3,998,486
Administrative Law Judge Determinations
Intragovernmental Costs $ 1,508,721 $ 1,318,076
Public Costs 2,531,467 2,006,834
Total Program Costs $ 4,040,188 $ 3,324,910
Total Intragovernmental Costs $ 3,088,943 $ 2,815,908
Total Public Costs 5,264,273 4,507,488
Total Net Cost $ 8,353,216 $ 7,323,396
FEDERAL MINE SAFETY AND HEALTH REVIEW COMMISSION
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARS ENDED SEPTEMBER 30, 2008 AND 2007
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NOTE 8. OPERATING/PROGRAM COSTS
Costs by major budgetary object classification as of September 30, 2008 and 2007 are as follows:
Budgetary Object Classifications 2008 2007
Personnel & Benefits $ 5,661,831 $ 5,039,721
Benefits to former employees (3,970) 10,432
Travel and Transportation 71,954 62,520
Rents, Communication & Utilities 1,413,630 1,362,910
Printing 15,158 12,435
Other Services 1,027,521 642,640
Supplies and Materials 90,670 82,822
Equipment, Land & Structures 76,422 109,916
Total $ 8,353,216 $ 7,323,396
NOTE 9. IMPUTED FINANCING SOURCES
MSC recognizes as imputed financing the amount of accrued pension and post-retirement benefit
expenses for current employees. The assets and liabilities associated with such benefits are the
responsibility of the administering agency, the Office of Personnel Management (OPM). For the fiscal
years ended September 30, 2008 and 2007, respectively, imputed financing was $404,696 and $387,326,
respectively.
NOTE 10. EXPLANATION OF DIFFERENCES BETWEEN THE STATEMENT OF
BUDGETARY RESOURCES AND THE BUDGET OF THE UNITED STATES GOVERNMENT
Statement of Federal Financial Accounting Standards No. 7, Accounting for Revenue and Other
Financing Sources and Concepts for Reconciling Budgetary and Financial Accounting, calls for
explanations of material differences between amounts reported in the Statement of Budgetary Resources
and the actual balances published in the Budget of the United States Government (President’s Budget).
However, the President’s Budget that will include fiscal year 2008 actual budgetary execution
information has not yet been published. The President’s Budget is scheduled for publication in February
2009 and can be found at the OMB web site: http://www.whitehouse.gov/omb. The 2009 Budget of the
United States Government, with the Actual Column completed for 2007, has been reconciled to the
Statement of Budgetary Resources and there were no material differences.
FEDERAL MINE SAFETY AND HEALTH REVIEW COMMISSION
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARS ENDED SEPTEMBER 30, 2008 AND 2007
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NOTE 11. UNDELIVERED ORDERS AT THE END OF THE PERIOD
Statement of Federal Financial Accounting Standards No. 7, Accounting for Revenue and Other
Financing Sources and Concepts for Reconciling Budgetary and Financial Accounting, states that the
amount of budgetary resources obligated for undelivered orders at the end of the period should be
disclosed. MSC’s budgetary resources obligated for undelivered orders are $470,938 and $1,041,052 for
the years ended September 30, 2008 and 2007, respectively.
NOTE 12. CUSTODIAL ACTIVITY
MSC’s custodial collection primarily consists of Freedom of Information Act requests. While these
collections are considered custodial, they are not primary to the mission of MSC nor material to the
overall financial statements. MSC’s total custodial collections are $21 and $59 for the years ended
September 30, 2008, and 2007, respectively.
FEDERAL MINE SAFETY AND HEALTH REVIEW COMMISSION
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARS ENDED SEPTEMBER 30, 2008 AND 2007
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NOTE 13. RECONCILIATION OF NET COST OF OPERATIONS TO BUDGET
MSC has reconciled its budgetary obligations and non-budgetary resources available to its net cost of
operations.
2008 2007
Resources Used to Finance Activities:
Budgetary Resources Obligated
Obligations incurred $ 7,787,182 $ 7,585,490
Less: Spending Authority From Offsetting Collections and Recoveries 420,365 706,954
Obligations Net of Offsetting Collections and Recoveries 7,366,817 6,878,536
Net Obligations 7,366,817 6,878,536
Other Resources
Imputed Financing From Costs Absorbed By Others 404,696 387,326
Net Other Resources Used to Finance Activities 404,696 387,326
Total Resources Used to Finance Activities $ 7,771,513 $ 7,265,862
Resources Used to Finance Items Not Part of the Net Cost of Operations
Change In Budgetary Resources Obligated For Goods,
Services and Benefits Ordered But Not Yet Provided $ (570,113) $ ( 110,882)
Resources That Fund Expenses Recognized In Prior Periods - 73,267
Resources That Finance the Acquisition of Assets 54,441 -
Total Resources Used to Finance Items Not Part of Net Cost of Operations (515,672) (37,615)
Total Resources Used to Finance the Net Cost of Operations $ 8,287,185 $ 7,303,477
Components of the Net Cost of Operations That Will Not Require or
Generate Resources in the Current Period
Components Requiring or Generating Resources in Future Periods
Increase In Annual Leave Liability $ 35,223 $ -
Total Components of Net Cost of Operations That Will Require or
Generate Resources In Future Periods 35,223 -
Components Not Requiring or Generating Resources:
Depreciation and Amortization 30,808 19,919
Total Components of Net Cost of Operations That Will Not Require or
Generate Resources 30,808 19,919
Total Components of Net Cost of Operations That Will Not Require or
Generate Resources In The Current Period $ 66,031 $ 19,919
Net Cost of Operations $ 8,353,216 $ 7,323,396
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Federal Mine Safety and Health Review Commission
FY 2008 Performance Accountability Report
Management Discussion and Analysis
Overview
The Federal Mine Safety and Health Review Commission ("Commission") is an
independent adjudicatory agency charged with resolving disputes ariSing from the
enforcement of occupational safety and health standards in the nation's mines. Under
its enabling statute, the Federal Mine Safety and Health Act of 1977 ("Mine Act"), as
amended, the Commission does not regulate the mining industry, nor does it enforce
the Mine Act; those functions are delegated to the Secretary of Labor acting through the
Mine Safety and Health Administration (MSHA).
Mission and Organization Structure
The Commission's mission is to provide just, speedy, and articulate adjudication of
proceedings authorized under the Mine Act, thereby enhancing compliance with the Act
and contributing to the improved health and safety of the nation's miners.
The Commission carries out its responsibilities through trial-level adjudication by the
Commission's Office of Administrative Law Judges (ALJs) and appellate review of ALJ
decisions by a 5-member Commission appointed by the President and confirmed by the
Senate. Most cases involve civil penalties assessed against mine operators by MSHA
and address whether the alleged safety and health violations occurred, and, if so, the
appropriate sanctions to be imposed. Other types of cases involve mine operators'
contests of mine closure orders, miners' complaints of safety or health related
discrimination, miners' applications for compensation after a mine is idled by a closure
order, and review of disputes between MSHA and underground coal mine operators
relating to those operators' mine emergency plans.
Once a case is filed with the Commission, it is given a docket number and referred to
the Chief Administrative Law Judge (Chief ALJ). Thereafter, litigants in the case must
submit additional filings before the case is assigned to an ALJ. To expedite the
decisional process, the Chief ALJ may rule on certain motions and, where appropriate,
issue orders of settlement, dismissal, or default. Otherwise, once a case is assigned to
an individual judge, that judge is responsible for the case and rules upon motions and
settlement proposals, schedules the case for hearing, holds the hearing, and issues a
decision based upon the record. An ALJ's decision that is not reviewed becomes a
final, non-precedential order of the Commission.
The 5-member Commission provides administrative appellate review based on the
record. It may, in its discretion, review decisions issued by ALJs when requested by a
litigant, or it may, on its own initiative, direct cases for review. The Commission's
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decisions are precedential and appeals from the Commission's decisions are to the
federal circuit courts of appeals.
Key Challenges
As an adjudicatory agency, the Commission's fulfillment of its mission is in large part
influenced by the prerogatives of the parties that practice before it. This circumstance
arises from the unique procedurai structures created by the Mine Act itself. For
example, the Mine Act provides that a mine operator may challenge an enforcement
action, e.g., a citation or closure order, within 30 days of receipt thereof. At that juncture,
however, the Mine Safety and Health Administration (MSHA) will not have had time to
propose an appropriate civil penalty as a sanction for the citation or order. That process
may take weeks or months following the initial enforcement action. Consequently, the
Mine Act also allows the mine operator to defer challenging the citation or order until it
has been assigned a proposed penalty assessment by MSHA. At this point, the case
can then proceed on the issue of whether the alleged violation occurred and, if so, the
appropriate civil penalty to be assessed for that violation.
Nevertheless, operators often file the initial contest even though they intend to wait until
the proposed civil penalty is issued. At that point, the two proceedings are consolidated
and the matter proceeds to settlement or trial. The operator's initial contest, however,
has historically been carried on the Commission's docket as a pending unresolved
case. That practice obviously leads to confusion regarding the Commission's
productivity with respect to the disposition of cases at the ALJ level. For this reason,
the Commission has determined that, unless the operator seeks to proceed with the
litigation before a proposed penalty is issued, the Chief ALJ should defer the
assignment of an operator contest to an ALJ until such time as MSHA arrives at a
proposed civil penalty, the operator notifies MSHA that it intends to contest the penalty,
and MSHA in turn notifies the Commission of that fact. This change in the
Commission's docket record keeping more accurately represents the status of pending
cases and allows the Commission's ALJs to focus their efforts on those matters wherein
all relevant issues have been fully joined.
The scope of the Commission's mission has been significantly expanded by the
passage of the Mine Improvement and New Emergency Response Act of (MINER Act)
2006, P.L. 109-236 in June of 2006. That statute amends the Mine Act and vests the
Commission with the responsibility for resolving disputes over the contents of mine
emergency plans adopted by underground coal mine operators and submitted to MSHA
for review and approval. The MINER Act imposes tight deadlines on the Commission
and its judges with respect to these proceedings, and the Commission has expeditiously
adopted procedural rules for carrying out Congressional intent. Nevertheless, this new
jurisdiction will tax the resources of the Commission's Office of ALJs. Moreover, given
the structure of the MINER Act, the Commission's responsibilities in this area will not
necessarily dissipate once the initial round of emergency plans are developed,
reviewed, and, if necessary, litigated. The statute calls for the periodic updating, review,
and approval of mine emergency plans and the adoption of new technologies in
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underground communications and disaster response. As this process evolves, the
Commission anticipates that its role as arbiter in the plan adoption and approval
process will be a significant and ongoing responsibility.
The MINER Act also establishes new and stronger civil sanctions for violations of the
Mine Act, including minimum penalties for an operator's unwarrantable failure to comply
with the statute or the mandatory safety and health standards, and a new penalty for
conduct deemed "flagrant." In response to the MINER Act, MSHA has revised its civil
penalty regulations, which will result in significant increases in the amount of civil
penalties proposed by the agency. MSHA has also indicated that it will increase the
exercise of its authority to issue closure orders at mines that have demonstrated a
"pattern" of "significant and substantial" violations of the Act and the mandatory safety
and health standards. These statutory and regulatory initiatives are expected to
increase the number of operator contests filed with the Commission and may affect the
number of cases that go to hearing rather than to settlement.
As a result of these legislative and regulatory changes, the Commission has
experienced a dramatic rise in the number of contest cases filed by mine operators.
At the appellate level, the Commission's workload is determined predominately by the
number of appeals filed by the parties. Although acceptance of an appeal is
discretionary, the percentage of cases denied review has not varied significantly. In
addition, while the number of appeals may vary, the Commission has not been able to
discern a clear relationship between the trial case load and the number of petitions for
appellate review it receives. It should be noted that recent Mine Act jurisprudence
adopted by the D.C. Circuit Court of Appeals that circumscribes the Commission's
scope of review of MSHA policy may also affect the Commission's review docket.
Nevertheless, the Commission expects that its workload will increase significantly from
prior years, thus making it more challenging to attain the Commission's goal of timely
adjudication at the trial and appellate levels.
Finally, the tragic events of September 11, 2001, and recent natural disasters
underscore the need for a government agency to assure that its records are secure and
replicable in the event that physical files are destroyed or become otherwise
inaccessible. The Commission must therefore establish an electronic data system that
stores all key documents away from the Commission's offices in such a way as to allow
Commission personnel to access those documents in order to carry out the
Commission's mission.
To meet these anticipated challenges, the Commission must streamline its case
handling procedures, redirect its financial and human resources, and encourage
efficiency and timeliness among the parties who practice before it. Accordingly, the
Commission has adopted a set of goals for the next five years that, if achieved, will
ensure that the Commission continues to carry out its mission in a just, efficient, open,
and credible manner.
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Performance Goals and Results
In view of the recent and continuing upsurge in its caseload, the Commission must
continually reassess its strategic goals in light of changing circumstances. Therefore,
the Commission has established benchmarks as part of its overall strategic plan, but it
will also revisit and evaluate those benchmarks as part of its annual performance and
budget planning activity.
The annual performance plan will clearly explain the role of each Commission activity as
set forth in the Commission's budget. The plan's specific objectives, adjusted to reflect
policy determinations and resource allocations in the annual budget process, will serve
as intermediate steps in the Commission's overall efforts to successfully accomplish the
goals of this strategic plan.
Accordingly, in order to achieve its mission, the Commission has set forth the following
strateoic ooals: 1) to ensure expeditious, fair and legally sound adjudication of cases at
the trial and appeilate levels, an"d 2) manage the Comm"ission's human resources,
operations, facilities, and systems to ensure a continually improving, effective and
efficient organization.
Commission Function
The responsibility for the review of ALJ decisions is set forth in section 113(d)(1) of the
Act. The Act states that an ALJ's decision shall become final 40 days after its issuance,
unless within that period any two Commissioners direct that the decision be reviewed.
Most cases come before the Commission when two or more Commissioners vote to
grant a petition for discretionary review filed by a party adversely affected or aggrieved
by the ALJ's decision. Petitioners may include miners, miners' representatives, mine
operators or the Secretary of Labor. The Commission is also charged with the
responsibility of reviewing disputes arising over the emergency response plans of
underground coal operators pursuant to the Miner Act.
Two or more Commissioners may also direct any case for review sua sponte (on the
Commission's own motion, without the parties filing a petition). Sua sponte review is
limited to ALJ decisions that are contrary to law or Commission policy, or that present a
novel question of policy. By law, a quorum of three Commissioners is required to
consider and decide cases appealed from the Commission's ALJs. Many of the
Commission's cases present issues of first impression under the Mine Act. That is, the
cases raise issues that have not been resolved by prior decisions of the Commission or
the courts or the cases involve the interpretation of safety and health standards and
regulations newly promulgated by MSHA.
During FY2008, the number of default cases handled by the Commission created a
major challenge, particularly for the Commission's Office of the General Council (OGC).
Default cases typically involve situations where a mine operator has allegedly failed to
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challenge civil penalties proposed by the MSHA within the prescribed 30-day period for
contesting such proposed penalties. Under the Mine Act, proposed penalties that are
not timely contested automatically become final Commission orders. Operators may file
written requests with the Commission seeking to establish "good cause" to re-open the
final orders.
The number of default cases received by the Commission increased dramatically from
68 in FY2007 to 177 in FY2008 - a 2.5 fold increase. This increase in the number of
default cases being filed was presumably due to statutory changes and changes in
MSHA's enforcement policy that resulted in many more penalty proposals being issued
and for much larger amounts. This situation created more opportunities for default
orders and increased the incentives for operators to re-open default orders. The huge
increase in default orders has greatly increased the demands on OGC's attorneys, who
must analyze each case and prepare a draft order for the Commissioners. OGC's task
was made even more difficult by the fact that for part of FY2008 the Commission lacked
a quorum and was not able to rule on any re-opening requests, thereby creating a larger
backlog.
The following table provides the performance goals and results for this function for
FY2008.
COMMISSION REVIEW APPELLATE CASES
FY 2008 FY 2008 Goals
Estimate Actual Met Not Met
Undecided cases beginning-of-year 12 16 .;'
Cases decided 86 101 .;'
Undecided cases end-of-vear 12 103 .;'
Administrative Law Judge Function
The Commission employs administrative law judges to hear and decide contested
cases at the trial level, as initiated by the Secretary of Labor, mine operators, and
miners or their representatives. The judges are also responsible for evaluating and
approving or denying settlement agreements under the Mine Act.
The ALJs travel to hearing sites located at or near the mine involved in order to afford
mine operators, miners and their representatives the full opportunity to participate in the
hearing process.
The Commission has established its law clerkship program to provide research and
drafting assistance to its ALJs and assist in the efficient management of each judge's
docket. The Commission hired four law clerks and increased the docket office staff by
(1) FTE in order to assist with the processing of new cases received.
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The Office of Administrative Law Judges has faced several challenges due to the
greater than 400% increase in caseload over historical levels in FY2008. Benchmarks
were based upon a projected estimated backlog by the end of FY2008 of 7,000 cases.
Actual cases received were 8,956 resulting in a backlog of 9,737. Cases decided
during FY2008 were 3,316. An estimated total of 6,000 new cases were anticipated for
2008.
The following table provides the performance goals and results for this function for FYs
2005 -2008.
OFFICE OF ADMINISTRATIVE LAW JUDGES
Ensure Timely Issuance of Decisions GOAL
FY FY FY FY NOT
PERFORMANCE GOALS 2005 2006 2007 2008 MET MET
I~~IIO an nort"ont nf rfo,.i~inn~ within an rf!:ll\/~ nf • __ w""" v_ t'_.--.. 1110 -, -----,_ •• - ••• ,,', ••• -- --1--- 96% 88% 69% 60% ./
receipt of the post-hearing briefs.
Issue 95 percent of settlement decisions within 30 90% 96% 80% 73% ./
days of receipt of settlement motions.
Decide all cases within an average of 195 days
121 N/A 128 291 ./
from receipt by the Commission
Decide 90 percent of cases within 270 days of 97% 98% 97% 79% ./
assignment.
Undecided cases over 270 days of age. 18 5 71 687 ./
Office of the Executive Director Function
The Office of the Executive Director (OED) provides administrative services to support
the Commission in fulfilling its mission.
OED provides strategic planning and operational management for the organization.
OED also includes administrative services, financial, human resources, procurement,
technology management, and computer and information security. The day-to-day tasks
performed under the direction of the Executive Director include:
• Supporting the development and implementation of the Commission's strategic
goal;
• Supporting the implementation and development of effective and efficient case
management and administrative systems through information technology
hardware and software;
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• Maintaining and enhancing a website to provide the public with user friendly
access to Commission information;
• Enhancing telecommunications and improving technology efficiency and
effectiveness;
• Providing support Commission-wide in the areas of human resources,
procurement, budget, finance, equal opportunity, and general administrative
services;
• Providing personnel, payroll, benefits, hearing coordination, and travel
coordination to Commission employees; and
• Procuring goods and services, maintenance and needed repairs of equipment,
training, reference materials, and supplies and office space.
Analysis of Financial Statements
In accordance with the Accountability of Tax Dollars Act of 2002, the Commission
began annual audits in FY 2003. The Commission has received an "unqualified"
opinion for each annual review conducted by an independent auditor.
Since 1998, the Commission has contracted with the Bureau of Public Debt, Treasury
Franchise Fund, Administrative Resource Center, for accounting services. The
Administrative Resource Center prepared the Commission's FY 2008 financial
statements, which include comparative data for FY 2007. The principal financial
statements include the Balance Sheet, Statement of Net Cost, Statement of Net
Position and Statement of Budgetary Resources. The Statement of Financing is now
part of the Notes to the financial statements.
The changes described in the analyses below generally indicate that the Commission
has been more efficient in the obligation of the funds available. This is due to higher
payroll cost and filing critical positions, as well as higher costs for goods and services to
maintain operations and accomplish our mission.
Analysis of the Balance Sheet
The Commission's assets in FY2008 were $3,879,616 as of September 30,2008. This
represents a decrease of $877,832 from FY2007. The Fund Balance with Treasury of
$3,798,259 represents the Commission's largest asset as of September 30, 2008. This
is a decrease of approximately 19 percent from FY2007 and represents approximately
98 percent of the Commission's totai assets. Generai Property, Piant and Equipment
accounts for approximately 2 percent of the Commission total assets as of September
30,2008. The net fixed asset value of $81,357 equals the cost less accumulated
depreciation and represents the current book value of those assets.
The Commission's liabilities in FY2008 totaled $705,833 as of September 30,2008.
This is an increase of $168,883 over the FY2007 balance of $536,950. Accounts
payable balance at September 30,2008, was $152,849, an increase of $58,767 from
September 30,2007. Accrued liabilities and payroll taxes payable increased slightly in
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2008. Unfunded annual leave increased $35,223 in 2008 from 2007. Unfunded annual
leave represents approximately 43 percent of total Commission liabilities.
Net position is the difference between total assets and total liabilities. The total net
position for FY2008 decreased by $1,046,715 from FY2007.
Analysis of Statement of Net Cost
The statement of Net Cost shows the net cost of operations for the Commission, and it
is broken out between the Commissions two major programs, Administrative Law Judge
and Commission. The total net cost of operations in 2008 was $8,353,216, an increase
of $1 ,029,820, or 14 percent, over the 2007 net cost of operations of $7,323,396.
Analysis of the Statement of Changes in Net Position
The Statement of Changes in Net Position reports the change in the Commission's net
position during the reporting period. The net position consists of two components, the
unexpended appropriations and the cumulative results of operations. The Net Position
decreased $1,046,715 in 2008 from 2007, a change of approximately 25 percent.
Analysis of the Statement of Budgetary Resources
The Statement of Budgetary Resources presents how the budgetary resources were
made available and the status of the budgetary resources at the end of the reporting
period. The total budgetary resources must always equal the total status of budgetary
resources. For FY2008, the Commission had total budgetary resources of $10,708,668,
which is $263,320 less than in 2007.
Management Assurances
Systems, Controls, and Legal Compliance
The Commission's is responsible for establishing and maintaining effective internal
control over financial reporting which includes safeguarding assets and complying with
applicable laws and regulations. As a micro independent agency, the Commission must
rely heavily on the systems and controls provided by servicing agencies to meet the
OMB's guidelines and the requirements of law with respect to financial management,
accounting systems, and financial reporting. These services are supplemented by
internal control procedures within the Commission sufficient to assure that the
performance and financial data included in this audit report are complete and reliable.
All financial data reported was obtained from the FY 2008 accounting reports prepared
by the Bureau of Public Debt, the Commission's accounting servicing provider, and the
performance data on case intake and dispositions has been verified by Commission
program managers. There are no material inadequacies or non-conformance in either
the completeness or reliability of the data reported.
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In addition, I am pleased to certify, with reasonable assurance, that the Commission's
systems of internal controls and the systems of accounting used by the Bureau of Public
Debt are in compliance with the Federal Managers Financial Integrity Act.
Performance Data Verification
The adjudicative and managerial goals and objectives set forth above can be achieved
through an integrated set of strategies that build on current Commission programs and
initiatives. The Commission now provides same day electronic recordings of oral
arguments and decisional meetings on its web site. The Commission's Performance
Data and Verification web site access is provided in real time. The Commission has
implemented a new case management system so that all case files will be stored
electronically. The system will ultimately allow parties to file all documents electronically
as well.
Working from the premise that fair and expeditious decision-making and efficient
agency management go hand in hand, the Commission adopts the following strategies
to implement the strategic goals and objectives: 1) prioritize the decisional process; 2)
maintain and enhance an information technology program; 3) improve human resources
management; and 4) promote employee accountability.
The Commission will evaluate its progress towards accomplishing its strategic goals,
through analysis of the results of its performance measures and through a continual
reassessment of its workload and the needs of the parties that it serves. Program
strengths and weakness will be assessed to determine alternative courses of action.
The Commission will use the results of these evaluations to develop the annual
performance goals and objectives which will focus the Commission's activities for the
year.
Limitations of the Financial Statements
The principal financial statements have been prepared to report the financial position
and results of operations of the Federal Mine Safety and Health Review Commission,
pursuant to the requirements of 31 U.S.C. 3515 (b).
The statements have been prepared from the books and records of the Commission in
accordance with GAAP for Federal entities and the formats prescribed by OMB, the
statements aie in addition to the financial ieports used to monitoi and contiOl budgetary
resources, which are prepared from the same books and records.
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