More than 40,000 small busnesses will be exempted from Occupational Safety and Health Administration reporting requirements, according to the Office of Management and Budget.

OMB Director James McIntyre is scheduled to tell a Senate Governmental Affairs subcommittee today that the Dapartment of Labor has agreed to cut its annual survey sampling from 110.000 small busnesses to about 65,000 or 70,000. the survey requires logging of all accident and illness records. About 200,000 large busnesses will still be required to fill out the reports.

According to sources at the OMB, the firms cut from the survey will be predominantly financial, service, real estate and other industries with less than 11 employees that use little equipment have low accident rates.

McIntyre will testify about 19 just completed OMB evalution of the administration's effort to cut down federal paperwork.

That report states that paperwork caused by the federal government has been reduced 10 percent since reduction efforts last year.

The OSHA reporting system has been a constant target for critics of burdensome paperwork. When OSHA was founded, Congress ordered it to keep statistics on occupational accidents and disease in order to detect trends and the results of federal regulation in that area.

Last year OSHA cut out practically all of the nation's 3.5 million small busnesses from such reporting, making only a selected 110,000 continue to fill out reports for the annual suvrey.