MEMORANDUM FOR:         LINDA R. ANKU
                                                  Regional Administrator
                                                  Occupational Safety and Health Administration
 

FROM:                                     ROGER B. LANGSDALE
                                                  Regional Inspector General for Audit

SUBJECT:                             Review of OSHA's Fiscal Year 1997 23(g) Enforcement Grant to the
                                                  Commonwealth of Virginia
                                                  Final Letter Report No. 03-98-002-10-105
 
 This final report presents our audit of direct labor charges made by the Commonwealth of Virginia, Department of Labor and Industry (L&I), Occupational Safety and Health Program (VOSH) to the Occupational Safety and Health Administration's (OSHA's) 23(g) enforcement grant. The audit was initiated at your request that we review the direct labor charges for 13 positions that appeared to have responsibilities outside the scope of the grant.

We found three positions that should not have been charged 100 percent to the fiscal year 1997 23(g) enforcement grant. This resulted in overcharges of $12,685 to OSHA. Thus, we recommend that OSHA recover the overcharge and require L&I to maintain appropriate documentation to support the amount of direct time spent on VOSH activities and allocate the direct labor charges accordingly.

BACKGROUND

The Occupational Safety and Health (OSHA) Act of 1970, Public Law 91-596, as amended by Public Law 101-552, Sec 23(g) authorizes the Secretary of Labor to make grants to assist States in administering and enforcing occupational safety and health programs. The Federal share for the grants under this subsection of the Act is not to exceed 50 percent of the program costs. Under the Act, OSHA entered into an agreement with the Virginia Department of Labor and Industry (L&I) to operate a safety and health program in the Commonwealth of Virginia. This is referred to as the Virginia Occupational Safety and Health program (VOSH).
 

L&I's strategies and goals for VOSH as stated in the grant application are:

• Provide effective safety and health enforcement and voluntary compliance and training programs in the private and public sectors of employment;

 
• Encourage employers and employees in their efforts to reduce the number of safety and health hazards and the number of injuries and illnesses resulting from those hazards in their places of employment;

 
• Encourage employers and employees to establish and maintain safety and health programs that will provide safe and healthful working conditions in the workplace;

 
• Develop and promulgate VOSH standards that assure, to the extent feasible, that no employee will suffer material impairment of health or functional capacity because of recognizable workplace hazards; and

 
• Provide appropriate reporting procedures for accident, injury and occupational illness records and reports and other necessary information regarding occupational safety and health problems.

 

 

	Boiler Safety	Inspection of boilers and pressure vessels and issuance of certificates of inspection. This is a State run program.
	Asbestos/Lead	The issuing of permits to contractors which is a  non-VOSH activity, separate from the enforcement of OSHA standards for asbestos and lead in the workplace.
	Training and Consultation	Non-enforcement program to assist employers in establishing effective safety and health programs. OSHA's 7(c)1 consultation grant assists in funding this program.
	State Labor Law Compliance	Ensure employer compliance with State labor laws.

 
 
 

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Our overall objective was to determine whether direct labor charges to the 23(g) enforcement grant reflected time actually spent on VOSH activities approved in the FY 1997 grant agreement. Our audit concentrated on 13 positions that OSHA believed had responsibilities for both VOSH and other L&I functions. The 13 positions, which totaled $580,164 in labor charges (including fringe benefits) to the grant, follow.
 
 

POSITION TITLE	NUMBER OF POSITIONS	PERCENT CHARGED TO GRANT
Director - Occupational Health Compliance	1	100%
Director - Planning and Evaluation	1	100%
Senior Agency Management Analyst	1	100%
Enforcement Compliance Manager	5	100%
Occupational Health Senior Compliance Officer for Asbestos	1	72%
Occupational Health Compliance Officer for Asbestos	4	72%

 
To accomplish our objective, we reviewed job descriptions, time sheets and travel vouchers. Further, we conducted interviews with employees from the L&I Central Office and the Richmond Regional Office. We did not interview employees located outside the Richmond area. We performed audit work at L&I's Central Office in Richmond, Virginia, during the period June 2 to June 11, 1997. The audit was conducted in accordance with Government Auditing Standards as necessary to achieve the above objectives.
 

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The following provides details for the three positions in which the employees charged all of their time to the 23(g) enforcement grant but worked on non-VOSH functions:
 

According to the grant agreement, the Director of Occupational Health Compliance is responsible for managing the health inspection program that assures, as far as possible, safe and healthful workplaces. However, the Director of Occupational Health Compliance performs other activities that are outside the VOSH health inspection program. These other activities include the Director's involvement with the National Emissions Standards for Hazardous Air Pollutants Commission (NESHAP). The NESHAP commission is partly responsible for developing standards for transporting hazardous materials. The Director's involvement in this commission is outside the scope of VOSH because the standards are related to environmental rather than workplace hazards.

Also, the Director is responsible for operating Virginia's lead and asbestos contractor permit program. Contractors are issued permits by L&I based on the quality of their work. This is a state program separate from workplace inspections.

Through interviews and record reviews (position description, time sheets, and travel vouchers), we determined that 15 percent of the Director of Occupational Health Compliance's time was spent on activities outside the scope of VOSH. As a result, only 85 percent of direct labor costs for the Director of Occupational Health Compliance should be charged to the FY 1997 23(g) enforcement grant.

According to the position description, the Director of the Office of Planning and Evaluation is responsible for developing policies and procedures for the VOSH program and preparing written responses to proposed regulatory action by OSHA. However, the Director is also responsible for strategic planning and organizational and operational studies for L&I divisions that are not involved with VOSH activities.

Through interviews and record reviews we determined that 16 percent of the Director's time was spent on activities outside the scope of VOSH. As a result, only 84 percent of direct labor costs for the Director of the Office of Planning and Evaluation should be charged to the FY 1997 23(g) enforcement grant.

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The Senior Agency Management Analyst is the primary full-time assistant to the Director of Office of Planning and Evaluation. This position performs functions that support the responsibilities of the Director. Thus, we concluded that the Senior Agency Management Analyst also performed non-VOSH activities.

Through interviews and record reviews we determined that 16 percent of the Senior Agency Management Analyst's time was spent on non-VOSH activities. As a result, only 84 percent of direct labor costs for the Senior Agency Management Analyst should be charged to the FY 1997 23(g) enforcement grant.

We concluded that L&I did not comply with the above requirements of OMB Circular A-87 in that it did not properly document time spent on non-VOSH functions nor accurately allocate direct labor charges to the VOSH grant. Moreover, L&I did not consider the non-VOSH functions of the above positions when preparing the grant budget. In response to OSHA's request for clarification about utilization of employees in grant-funded positions, L&I stated that they considered the tasks associated with the non-VOSH functions to be a negligible proportion of the total time spent by the individual employees and are not readily distinguishable from VOSH related activities. Therefore, it was L&I's position that it would be inefficient to maintain appropriate documentation to support the amount of direct time spent on VOSH and non-VOSH activities.

As a result, we estimate that the cost for the 23(g) enforcement program was overstated by $25,370 which resulted in overcharges of $12,685 to the OSHA's 23(g) enforcement grant.
 
 

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*Totals in this column have been rounded.

Recommendations

We recommend that the Regional Administrator for Occupational Safety and Health:

1.  Direct L&I to comply with the provisions of OMB Circular A-87 by maintaining appropriate documentation to support the amount of direct time spent on VOSH activities and allocating the direct labor charges to the 23(g) enforcement grant accordingly.
2.  Recover from L&I the $12,685 in overcharges for the FY 1997 23(g) enforcement grant.

The Regional Administrator for Occupational Safety and Health agreed with the report findings

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Auditor's Conclusion

To resolve the recommendations, the Regional Administrator for Occupational Safety and Health should issue a Final Management Decision/Determination to L&I which notifies them of the report findings and recommendations and establishes a debt owed for the disallowed costs. The Final Management Decision/Determination should clearly state whether or not the audit finding is sustained, the reasons for the decision, and the expected auditee action to repay the disallowed costs, make financial adjustments, or take other action. If the auditee has not completed corrective action, a timetable for follow-up should be given.
 

Your written response to the draft report has been incorporated into this final report and attached in its entirety. You should be aware that the final report, including your written comments, is subject to disclosure under the Freedom of Information Act and/or as part of discovery.

Even though there was agreement with the report recommendations, the Department of Labor Manual Series (DLMS) 8, Chapter 500, "Audit Resolution and Followup" requires that a Final Management Decision/Determination be issued to resolve the report recommendations. Please provide us a copy of the Final Management Decision/Determination within 60 days after receipt of this final report.

Also attached is a customer survey form to solicit your comments on the usefulness of the report, our responsiveness to your comments and how well our auditors communicated with your staff during the audit. Please complete this form and return it to us at your earliest convenience. Your comments will help us serve you better in the future.

We appreciate the assistance provided to us by your staff and the Virginia Department of Labor and Industry during the audit. If you have any questions, please contact Michael Hill, Assistant Regional Inspector General for Audit or Daniel Pompilii, Team Leader, at (215) 596-6331.
 
 

Attachments

cc:   Charles N. Jeffress
        Assistant Secretary for Occupational Safety and Health
        John J. Getek
        Assistant Inspector General for Audit

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