The accompanying notes are an integral part of these statements.

The accompanying notes are an integral part of these statements.

The accompanying notes are an integral part of these statements.

The accompanying notes are an integral part of these statements.

INTRODUCTION

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). 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.

BACKGROUND

The Commission carries out its responsibilities through trial-level adjudication by the Commission's Office of Administrative Law Judges (ALJs) and appellate review of ALJ decisions by a five-member Commission appointed by the President and confirmed by the Senate.  Most cases involve civil penalties assessed against mine operators by MSHA and address whether the alleged safety and health violations occurred, and, if so, the appropriate sanctions to be imposed.  Other types of cases involve mine operators' contests of mine closure orders, miners’ complaints of safety or health related discrimination, miners' applications for compensation after a mine is idled by a closure order, and review of disputes between MSHA and underground coal mine operators relating to those operators' mine emergency plans.

Once a case is filed with the Commission, it is given a docket number and referred to the Chief Administrative Law Judge (Chief ALJ).  Thereafter, litigants in the case must submit additional filings before the case is assigned to an ALJ.   To expedite the decisional process, the Chief ALJ may rule on certain motions and, where appropriate, issue orders of settlement, dismissal, or default.  Otherwise, once a case is assigned to an individual judge, that judge is responsible for the case and rules upon motions and settlement proposals, schedules the case for hearing, holds the hearing, and issues a decision based upon the record.  An ALJ's decision that is not reviewed becomes a final, non-precedential order of the Commission.

The 5-member Commission provides administrative appellate review based on the record. It may, in its discretion, review decisions issued by ALJs when requested by a litigant, or it may, on its own initiative, direct cases for review.  The Commission's 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 procedural 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 point, however, 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 that 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 MINER Act 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 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 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.  Indeed, the number of cases filed with the Commission has risen from 2440 filed in FY 2005 to 3360 filed in FY 2006. The FY 2006 total was already exceeded by mid-August of FY 2007 (3374 as of August 22), thus indicating that the number of new contests will continue to increase dramatically over the coming years.

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 caseload 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. the Commission undertook a complete review and revision of its procedural rules in an effort to reflect evolving case law and to otherwise clarify and improve the rules.  It can be expected that these changes may engender some litigation activity as new procedures replace old ones, but this activity should be minimal.

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.

MANAGEMENT DISCUSSION AND ANALYSIS

Strategic Goals

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 will establish 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 sets forth the following strategic goals:

I.             Ensure expeditious, fair, and legally sound adjudication of cases at the trial and appellate levels.

               Objective-Ensure Timely Issuance of Decisions

               Performance Goals-Trials:

Manage the case assignment process to assure that initial filings and response time frames are adhered to, resulting in a decisional process that falls within the time frames in the Commission's procedural rules.

Issue decisions on more than 90 percent of the cases in which hearings are held within 120 days of receipt of post-hearing briefs.

Issue more than 95 percent of all settlement decisions within 30 days of receipt of settlement motions.

Decide more than 95 percent of all cases within 270 days of assignment to an ALJ.

Decide, on average, all cases, within 195 days from receipt by the Commission.

               Performance Goals-Appeals:

All Commission cases will be assigned before briefing is completed.

All Commission cases will be decided within 18 months of receipt.

The average age of substantive decisions will be maintained at 12 months or less.

II.             Manage the Commission's human resources, operations, facilities, and systems to ensure a continually improving, effective, and efficient organization.

               Objective-Ensure Organizational and Management Effectiveness

               Performance Goals:

Periodically review and revise the strategic plan through annual performance goals, objectives and performance measures to assure public awareness, and to guide individual and organizational efforts.

               Objective-Provide Effective Information Technology Systems

               Performance Goals:

Maintain and enhance secure electronic information systems for case management, legal research, management operations support, public access to data through the internet, and continuity of government during emergencies.  Ensure that the Commission's IT structure is maintained according to the latest recommendations of the National Institute of Standards and Technology (NIST) with respect to the security of the agency's network.  Move aggressively to a system of "paperless" filing and records management.

               Objective-Sustain a High Performing Workforce

               Performance Goals:

Recruit, train, and retain a diverse workforce of skilled, highly motivated employees to effectively and efficiently accomplish the Commission's mission.

STRATEGIES FOR ACHIEVING GOALS AND OBJECTIVES

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. For example, the Commission now provides same day electronic audio recordings of oral arguments and decisional meetings on its web site.  The Commission anticipates that in the near future such web site access will be provided in real time.  Likewise, the Commission is currently overhauling its case management system so that all case files will be stored electronically.  That 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 identified above:

1. Prioritize the Decisional Process

The Commission will continue to concentrate on its oldest cases at both the trial and appellate levels.  Through the use of enhanced automated case tracking systems, it will identify each case as it proceeds through the decisional process at both the trial and appellate levels.  Periodic review of the status of each case against predetermined time standards will identify those cases that may need additional attention.  Judges and Commissioners can thereby prioritize their work to facilitate the issuance of opinions.

The Commission will also continue to review at the trial and appellate levels new cases that may be susceptible of quick resolution.  Through early identification in the adjudicatory process, these cases are most often disposed of by the Chief ALJ at the trial level and through expedited drafting and decisional procedures at the appellate level.  Additionally, the Commission plans to promulgate regulations governing case settlement procedures and anticipate establishing a corps of retired ALJs who, on a contract basis, will supervise settlement negotiations in those cases determined to be likely candidates for settlement.

The Commission will reestablish 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 will continue at the trial level to use "calendar calling" where cases involving an individual company are grouped together.  Pre-hearing initiatives such as conference calls with the parties will continue to be utilized to settle or narrow issues.

2. Maintain and Enhance an Information Technology Program

Integral to achieving its objectives, the Commission decision makers and support personnel must have a modern computerized information technology system.  This system is necessary to produce Commission decisions, to ascertain immediately the status of any case on the Commission's docket, to research issues electronically from various legal data bases and to provide public access to the Commission's decisions and procedures.  The system must also assure that appropriate Commission personnel have ready access to all data necessary to carry out their responsibilities during emergencies.

The Commission's strategy for improving its information technology is to:

Continue to maintain and enhance the case tracking system.

Increase the availability of new Commission decisions by electronically distributing its decisions and immediately posting them on the Commission's website.

Maintain a secure website, accessible to the disabled, containing Commission policies, procedures, and a researchable database of Commission decisions dating back to the Commission's inception.

Provide a secure computer network infrastructure with up-to-date hardware and software to facilitate the Commission's electronic data processing needs.

Arrange for offsite electronic storage of the Commission's database according to a Continuity of Operation Plan (COOP) and provide access to material in that database, as appropriate, by authorized Commission personnel.

Aggressively move toward the electronic filing of documents by those parties appearing before the Commission with the goal of establishing a "paperless" adjudicative system.

3. Improve Human Resources Management

The Commission's strategy for improving its human resources management is to:

Conduct a human resources management program to assure that a diverse, highly qualified workforce is adequately trained and accountable in performing the mission and objectives of the agency.

Reestablish the Commission's law clerkship program beginning in FY 2008 with the hiring of four full-time law clerks for terms of two years each, and expanding the program so that by FY 2009, each ALJ will be assigned a law clerk.

Utilize retired ALJs as settlement judges on a contract basis to facilitate the resolution of cases that can be disposed of short of a full trial-type hearing.

• Promote Employee Accountability

Employee accountability in an adjudicative agency presents unique challenges in that ALJs and Commissioners are not subject to individual performance standards.  Nevertheless, the Commission will strive to achieve the goals of its strategic plan and annual performance plan by:

Providing all employees with copies of the strategic plan, annual performance plans, and annual accomplishment reports.

Including accountable goals in individual performance standards where appropriate.

Appropriately monitoring individual performance, adjusting individual workloads, and assisting with work assignments as appropriate.

Disseminating to employees monthly reports on the progress in achieving the Commission's goals and objectives.

PROGRAM EVALUATION

The Commission will evaluate its progress toward 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 weaknesses 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.

FISCAL YEAR 2007 ACCOMPLISHMENTS

The following table displays Commission accomplishments in deciding trial and appellate cases.

The Commission's ALJs had an inventory of 2,756 with 4,000 new cases expected to be received during the year.  Case dispositions for the year were 2,900, resulting in an end-of-year inventory of 3,856 undecided cases.  The number of new trial cases received is 40 percent higher than FY 2005 and was received at a rate not experienced in the past 10 years.  As a result, the inventory of undecided cases as of September 30, 2006 represents a workload of 15 months. The Commission Judges' disposition rate increased 20% in FY 2007 with 97% of these dispositions within 270 days.  However, the increase volume of cases has affected the performance goals for FY 2007.

The Commission developed the following performance objectives associated with its FY 2007 budget.  These objectives and accomplishments during the year were:

Objective  -   Issue opinions in a timely manner

Performance Goals for FY 2007:

         •   Manage the case assignment process to assure that initial filings and response time frames are adhered to, resulting in case assignment averages that are less than the time frames in the Commission's procedural rules.

Accomplishments:   The average time for cases to be assigned to an ALJ was 65 days, well within the goal of 71 days. Penalty cases were assigned within 89 days on average in FY 2007, due in part to the delays in receiving penalty assessments from DOL.

         •   Issue 90 percent of decisions involving hearings within 90 days of receipt of post-hearing briefs. 

Accomplishments:  This goal was not achieved in FY 2007 due to the steady increase in the caseloads of each of the Commission judges, combined with a large volume of cases requiring decisions within overlapping 90-day periods. The goal is measured in dockets rather that the number of hearings held and decisions issued. Multiple dockets are sometimes consolidated for hearing. For example, in FY 2007, two decisions which exceeded the 90 day goal accounted for 17 docketed cases, thereby skewing the results for this goal.

         •   Issue 95 percent of settlement dispositions within 30 days of receipt of settlement motion.

Accomplishments: Due to a 65% overall caseload increase since FY 2004, including a steady increase since FY 2006, this goal is not being met.  Through August 31, 2007, the Commission has issued more settlements (1,261) than it did in FY 2006 through August 31, 2006 (1,213). The increased volume of settlements will result in 20% of settlement decisions being issued outside the 30-day goal.

         •   Decide 90 percent of cases within 270 days of assignment.

Accomplishments: This goal exceeded the FY 2007 goal of 90%; 97% of the cases were decided within 270 days.

         •   Decide all cases within an average of 195 days from receipt by the Commission. 

Accomplishments: This goal was exceeded in FY 2007. On average the Commission Judges disposed of the increased volume of cases in 128 days, substantially below the target of 195 days.

The Commission began FY 2007 with an inventory of 16 undecided cases and received 87 new cases during the year.  Eighty-seven dispositions are being made during FY 2007, resulting in 16 undecided cases remaining at the end of the fiscal year.

Of the 87 cases decided in FY 2007, 15 were substantive decisions, 70 were procedural orders, and 2 were denials of petitions for review.  The average age of the 16 matters pending on the Commission's docket as of September 1, 2007 was 2.1 months, and the average age of the 15 substantive decisions issued in FY 2007 is expected to be 5.1 months.

During FY 2007, the Commission completed, with the January 18, 2007 publication of a final rule, the promulgation of regulations implementing the MINER Act, i.e., procedures for resolving disputes in connection with underground coal operators' emergency response plans. The rule making process began with the July 18, 2006 issuance of our interim rule upon which public comment was requested. Comments were received from the Department of Labor and representatives of operators and miners.

The Commission developed the following performance objectives associated with its FY 2007 budget.  The objectives and accomplishments achieved during the year were:

             Objective 1 -             Issue opinions in a timely manner

Performance Goals for FY 2007:

         •   All Commission cases will be assigned when briefing is completed

Accomplishments:  This goal was met.  All cases were assigned before briefing was completed.

         •   The Commission will have decided all cases that are 18 months or older.

Accomplishments:  This goal was met.  As of September 30, 2007, no case that is 18 months or older will be pending before the Commission.

         •   The average age of substantive decisions will be maintained at 12 months or less. 

Accomplishments:  This goal was met.  As of September 30, 2007, the average age of the substantive dispositions is expected to be 5.1 months.  This low figure is largely due to the fact that seven related cases were all disposed of within one month.  However, even if these cases were disregarded entirely, the average disposition time would be 8.8 months.

Objective 2 -       MINER Act Rules
                     
Performance Goals for FY 2007

         •   Complete the rulemaking by January 2007.

Accomplishments:  This goal was met.  The Commission published an interim rule on July 18, 2006, and after receipt of public comment, published a final rule on January 18, 2007.

ANALYSIS OF FINANCIAL STATEMENTS

            The main categories of costs for the Commission are in three categories; salaries and benefits, rent and contractual services.  As a micro agency with a budget of 44 FTE, the Commission must rely heavily on other Federal agencies to provide the necessary support services required as an independent agency.  Personnel, payroll, and accounting, and website posting support is obtained through the Bureau of Public Debt.  Space is obtained through the General Services Administration and the majority of building security services are provided by the Federal Trade Commission.  Website hosting is provided by the Government Printing Office but will be moved to the Bureau of Public Debt in FY 2006.  Utilizing the services of other agencies on a contract basis afford the Commission essential services at an economy of scale cost not obtained in-house.  A distribution of costs (obligations) for the two fiscal years covered by the audit is as follows:

            The majority of the resources returned is the result of the Commission not achieving its full staffing level in FY 2007 including the 5-member Commission having only three members the entire year.

LIMITATIONS ON FINANCIAL STATEMENTS

            The financial statements have been reviewed by the Commission’s contract auditors, Brown and Company to assure accurate reporting of 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. 3513. While the statements have been prepared from the books and records of the Commission as maintained by the Bureau of Public Debt in accordance with the formats provided by the Office of Management and Budget, the statements are in addition to the financial reports submitted to the Office of Management and Budget and the Department of Treasury for use in monitoring and controlling budgetary resources, which are prepared from the same books and records.