it's the same way in our org. There are hours requirements for rank, but it's a very loose system of measure and one that is easily overridden by someones ability. Despite the hours requirements most dojo's only hold testing once per year at best. Dan testing is only done at summer camp, no exceptions.
Once per year seems rather hard on the 5th and 4th and sometimes even 3rd kyus... Some of them could easily have got their day requirements several times over in one year (especially 5th kyus, since that only requires a minimum of 60 days practice). Let alone the new USAF 6th kyu, which requires only 20 days of practice (there aren't really any 'techniques' per se, it's more things like knowing how to shikko, tenkan, the names of attacks, etc).
I like our system of testing 3 or 4 times a year. Plus it gives a more manageable number of tests each time. We don't all get bogged down watching ten 5th kyu tests in a row or something.