Mine Safety and Health Administration
Implementation of the Inflation Adjustment Act Gao ID: GAO-03-288R November 27, 2002The Federal Civil Penalties Inflation Adjustment Act of 1990 went under a governmentwide review by GAO earlier this year. The act required each federal agency to issue a regulation adjusting its covered maximum and minimum civil monetary penalties for inflation by October 23, 1996, and requires them to make necessary adjustments at least once every 4 years thereafter. GAO determined that the Mine Safety and Health Administration within the Department of Labor published its first round of penalty adjustments in April 1998, but has not published a second round of adjustments for at least two eligible penalties.
RecommendationsOur recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.
Director: Team: Phone:GAO-03-288R, Mine Safety and Health Administration: Implementation of the Inflation Adjustment Act
This is the accessible text file for GAO report number GAO-03-288R
entitled 'Mine Safety and Health Administration: Implementation of the
Inflation Adjustment Act' which was released on November 27, 2002.
This text file was formatted by the U.S. Government Accountability
Office (GAO) to be accessible to users with visual impairments, as part
of a longer term project to improve GAO products' accessibility. Every
attempt has been made to maintain the structural and data integrity of
the original printed product. Accessibility features, such as text
descriptions of tables, consecutively numbered footnotes placed at the
end of the file, and the text of agency comment letters, are provided
but may not exactly duplicate the presentation or format of the printed
version. The portable document format (PDF) file is an exact electronic
replica of the printed version. We welcome your feedback. Please E-mail
your comments regarding the contents or accessibility features of this
document to Webmaster@gao.gov.
This is a work of the U.S. government and is not subject to copyright
protection in the United States. It may be reproduced and distributed
in its entirety without further permission from GAO. Because this work
may contain copyrighted images or other material, permission from the
copyright holder may be necessary if you wish to reproduce this
material separately.
United States General Accounting Office:
GAO:
November 27, 2002:
The Honorable Elaine L. Chao:
The Secretary of Labor:
Subject: Mine Safety and Health Administration: Implementation of the
Inflation Adjustment Act:
Dear Madam Secretary:
Earlier this year, we initiated a governmentwide review of the
implementation of the Federal Civil Penalties Inflation Adjustment Act
of 1990, as amended (Inflation Adjustment Act).[Footnote 1]
The Inflation Adjustment Act required each federal agency to issue
a regulation adjusting its covered maximum and minimum civil monetary
penalties for inflation by October 23, 1996, and requires them to make
necessary adjustments at least once every 4 years thereafter. During
our review, we determined that the Mine Safety and Health
Administration (MSHA) within the Department of Labor published its
first round of penalty adjustments in April 1998, but has not published
a second round of adjustments for at least two eligible penalties. This
report is intended to bring this matter to your attention and to
recommend corrective action.
MSHA Has Not Published a Second Round of Adjustments for Eligible
Penalties:
Under the Inflation Adjustment Act, MSHA (like other covered federal
agencies) was required to publish a regulation by October 23, 1996,
adjusting its maximum civil penalties for inflation. The act requires
those inflation adjustments to be based on changes in the Consumer
Price Index (CPI) from June of the calendar year in which the penalties
were last set or adjusted through June of the year prior to the
adjustment. The statute also includes precise rules for rounding
penalty increases. For example, the statute provides that penalty
increases must be rounded to the nearest ’multiple of $1,000 in the
case of penalties greater than $1,000 but less than or equal to
$10,000.“ The statute limited the first adjustments of an agency‘s
penalties to 10 percent of the penalty amounts. It also requires
agencies to examine their penalties at least once every 4 years and, if
necessary, make additional inflation adjustments.
On April 22, 1998, MSHA published a final rule making its first penalty
adjustments under the Inflation Adjustment Act, with the penalty
changes taking effect on June 22, 1998.[Footnote 2] Therefore, MSHA
should have examined its civil penalties and adjusted those penalties
that were eligible under the statute by June 2002. For those penalties
initially adjusted in 1998, MSHA should have used the percentage change
in the CPI that occurred from June 1998 through June 2001 (about 9.2
percent) to determine whether another adjustment was warranted.
We believe that at least two of the agency‘s penalties should be
adjusted as soon as possible: (1) a $5,500 penalty that should be
adjusted to $6,500 and (2) a $55,000 penalty that should be increased
to $60,000. MSHA officials told us during our review that the agency
intends to adjust these penalties. However, as of the date of this
letter, MSHA has not done so.
Recommendation for Executive Action:
We recommend that the Secretary of Labor direct the Assistant Secretary
of Labor for Mine Safety and Health to initiate a regulatory action as
soon as possible to adjust eligible civil penalties in a manner
consistent with the requirements of the Inflation Adjustment Act.
Agency Comments and Our Evaluation:
On November 6, 2002, we provided a draft of this report to the
Secretary of Labor for her review and comment. On November 26, 2002,
the Assistant Secretary of Labor for Mine Safety and Health responded
by letter agreeing that MSHA should have adjusted its civil penalties
again by June 2002. He also said that MSHA was developing a direct
final rule that would make those adjustments.
We are sending copies of this report to the Assistant Secretary of
Labor for Mine Safety and Health and to appropriate congressional
committees. It will also be available at no charge on GAO‘s Web site at
[hyperlink, http://www.gao.gov]. If you or your staff have any
questions on the matters discussed in this letter, you may contact
Curtis Copeland or me at (202) 512-6806. John Tavares was a major
contributor to this report.
Sincerely,
Signed by:
Victor S. Rezendes:
Managing Director:
Strategic Issues:
[End of correspondence]
Footnotes:
[1] The Inflation Adjustment Act is codified at 28 U.S.C. 2461 note.
The 1990 act was amended in 1996 by the Debt Collection Improvement
Act, which added the requirement for agencies to adjust their civil
penalties by regulation (Pub. L. 104-134, Sec. 31001, 110 Stat. 1321-
373).
[2] See 63 Fed. Reg. 20032.
[End of section]
