PROCEDURES FOR THE CONFIDENTIAL FINANCIAL DISCLOSURE SYSTEM


I. Purpose of the System - to ensure the confidence of citizens in the integrity of the government by
   detecting potential or actual conflicts of interest on the part of certain employees.

    A. Filing of reports - certain employees, whose positions have been designated, are required to
         report their financial interests and certain outside activities on OGE form 450 annually.

    B. Review of reports - Reports must be reviewed carefully for completeness and for actual and
        potential conflicts of interest.

II. Covered Positions

    Filers are designated when they occupy a position, classified at GS-15 or below (or its equivalent),
    where their duties and responsibilities require them to participate personally and substantially through
    decision or the exercise of significant judgement in taking a government action regarding:

    A. Contracting or procurement;

    Example: All contracting officers in the Justice Management Division and other employees regularly
    involved in procurement must file.

    B. Administering or monitoring a grant;

    Example: Grant-making personnel in the Office of Justice Programs must file.

    C. Regulating or auditing any non-federal entity;

    Example: Auditors in the Office of the Inspector General must file because they audit contracts and
    grants.

    D. Other activities in which the final decision or action will have a direct and substantial economic
         effect on the interests of any non-federal entity.

    Example: Supervisory attorneys and most line attorneys in the litigating divisions file because their
    decisions affect non-federal entities.

    E. Special government employees, serving with or without compensation, including those who serve
        on federal advisory committees, who are not serving as a representative of an industry or another
        entity or who are not already Federal employees, are covered.

III. Exclusions from Filing

    Notwithstanding the filing requirements listed in II, an employee may be excluded from filing if:

    A. The duties of the position make remote the possibility of a conflict.

    Example: Generally, non-supervisory DEA agents are excluded from filing because their investigations
    almost always involve individuals and therefore, the possibility of conflict is remote.

    B. The duties involve such a low level of responsibility because:

        1. There is a substantial degree of supervision and review; or

        2. The effect of any conflict on the integrity of the government would be insubstantial.

        Example A: Most clerical personnel who order office supplies are excluded from filing.

        Example B: U.S. Marshals Service employees responsible for transporting prisoners are excluded
        from the filing requirement.

        3. An alternative procedure is used.

        Example A: In several litigating divisions and U.S. Attorneys' Offices, attorneys certify to no
        conflict of interest in each case they are assigned. This is an efficient way to detect conflicts
        and can be managed through the case assignment process.

        Example B: Employees who serve as Contracting Officer's Technical Representatives (COTRs)
        certify when they become COTRs that they have no conflict with any competing contractor.
        These certifications are collected by the contracting officer.

IV. General Filing Requirements

    A. Employees occupying designated positions file annually by February 15th. Reports cover the previous calendar year.

    B. Employees acting in a covered position for more than 60 days in the previous calendar year must file by February 15th.

    C. New entrants to covered positions must file within 30 days of assuming the position unless they
         already occupy a covered position, and then a copy of their last report should be given to the new
         office.

    D. Filers may request and receive filing extensions from their component heads for good cause of up
         to 90 days after the filing deadline. Administrative and/or disciplinary action should be pursued if
         an employee does not file a report as required.

V. Report Contents

    The following items held by the filer, his spouse, and dependent child must be reported on OGE Form
    450. (Amounts need not be reported.)

    A. Interests in property over $1000

    Examples: Stocks, bonds, real property (other than a personal residence), futures contracts, sector mutual
    funds, pensions and annuities (excluding an interest in any federal retirement system), IRA assets,
    beneficial interests in trusts and estates, accounts receivable, partnership interests, and any other
    property held for the production of income, except deposits in banks, money market funds and
    accounts and U.S. government obligations and securities.
 

    Note: Interests in Diversified Mutual Funds need not be disclosed. A mutual fund is diversified
    if it does not have a stated policy of concentrating its investments in one industry, business, or single
    country other than states. Sector Mutual Funds must be disclosed. A mutual fund is a sector fund
    if it concentrates its investments in an industry, business, single country other than the United States,
    or bonds of a single state within the United States.
 

    B. Income from any source other than the government amounting to more than $200
        for the filer or $1,000 for a spouse in the case of earned income.

    Examples: Income from a sector mutual fund, pension plan or other investment pool, outside earned income
    of the filer, and earned income of a spouse, but not of a dependent child. Excluded is income from U.S. government
    securities and obligations, from bank deposits, and money market accounts or funds.

    C. Liabilities over $10,000 of the filer, his spouse, and dependent child, other than a loan from a financial
    institution or business entity granted on terms made available to the general public.

    Examples: Personal loans, margin accounts

    D. Outside positions held by the filer except with religious, social, fraternal, or political entities, or
         those of an honorary nature, or any positions held as part of filers official duties (with approval).

    Examples: Positions of director, officer, trustee, employee, general partner, proprietor, representative,
    or consultant.

    E. Agreements or arrangements of the filer with future, former, or present employers other than the
        United States Government.

    Examples: Promises of a job, leaves of absence, payment of a severance payment, or participation in
    an employee benefit plan of a former employer.

    F. Gifts and travel reimbursements received from one source amounting to $375 or more received by
        the filer, his spouse, or dependent children.

    Examples: Wedding presents, travel accepted from outside sources, including travel to job interviews,
    but not reimbursement accepted by the Department for travel to meetings and similar functions under 31 U.S.C.
    § 1353. Exclude gifts of $150 or less from one source in aggregating for purposes of the $375
    threshold, gifts from relatives, and gifts received by a spouse and dependent children independent from
    the filer.

VI. Reporting Process

    A. Designation of filers

        1. The component head designates positions that are required to file in accordance with the criteria
            stated above in II and the exclusions in III. Designations must be reviewed every year.

        2. An employee may file a complaint with the Designated Agency Ethics Official (DAEO) when he
            believes his position has been improperly designated, but the decision of the DAEO is final.

    B. Notification of filers

    The component head, or his delegates, must ensure that all designated filers are notified of their
    obligation to file and provided with a blank reporting form in time to fulfill that obligation. Filers
    should also be advised who they should contact for assistance in completing the form.

    C. Reviewing officials

        1. The component head designates employees, generally supervisors, to collect, review, and
            sign reports. These reviewing officials must have first-hand knowledge of the employees'
            assignments.

        2. The reviewing official must compile a list of filers whose reports he reviews and provide the
            DDAEO for his component with a copy of that list. The list should be updated when changes
            occur. The DDAEO should keep a comprehensive list of all filers in the component.

    D. Review and retention of reports

        1. Every effort should be made to review reports within 30 days of receipt. Each report should
            be reviewed to ensure that it is complete and that there is no conflict with the employee's
            official duties. (The employee's assignments should be reviewed at this time.) If a report is
            incomplete or raises a conflict of interest issue, the filer should be contacted and asked to
            provide additional information. Every effort should be made to work with the filer to resolve
            any conflicts of interest. Any additional information provided by the filer should be noted on
            the report with a statement that the corrections were made pursuant to a conversation with
            the filer.

        2. The following are examples of potential or actual conflicts that may be detected in a review:

            a. An employee who is frequently involved in procurement actions reports ownership of stock in
                a local software designer that has competed for DOJ contracts in the past. The reviewer
                should counsel the employee against working on a procurement where this firm is likely to
                be a bidder.

            b. An employee who is an attorney reports that her spouse is an associate with a large law firm in
                town. The reviewer should counsel the attorney that if she is assigned a case where her
                husband's law firm is representing another party, she should disclose this information to her
                supervisor so that she may either be disqualified or obtain approval to work on the case.

            c. An employee who approves grant applications reports that he is on the board of a nonprofit
                organization that has received grants from the agency in the past. If the employee is allowed
                to remain on the board, the person responsible for his assignments should ensure that no
                application from this organization is assigned to the employee.

            d. A telecommunications specialist reports that her husband holds stock through a family trust
                in a firm that provides telecommunications services to the Department. The reviewer should
                either ensure that the employee does not work on matters affecting the telecommunications
                firm, or if that is not possible, see the ethics official about obtaining a waiver for her under
                the conflict of interest law.

            e. A management analyst reports that she earns income on weekends from a consulting firm that
                is presently conducting a study ordered by her office under a contract. The reviewer should
                make sure she does no work on the contract and that she has approval to engage in outside
                employment with the contractor.

            f. An employee who has let it be known in his office that he will be joining a private firm soon,
               reports no agreements or arrangements on his annual report. The reviewer should ask the
               employee if he has any agreement with a future employer, and if so, to report it on the form.

            g. An employee reports having received a set of golf clubs from someone and he does not note
                the donor's affiliation, nor his relationship to him. The reviewer must inquire about the
                relationship between the employee and the donor of the gift.

        3. The reviewing official should notify the DDAEO for his component that all required annual
             reports and any reports filed by new entrants have been collected and reviewed.

        4. The reviewing official should retain the reports in a secure area for six years and consider their
            contents when making assignments.

Last Updated:
September 11, 2008