Procedures for the Public Financial Disclosure System

 

Procedures for the Public Financial Disclosure System

I.

Who must file the report (Form 278)?

  A. Employees, including special government employees, whose positions are classified above GS-15.
  B. Employees whose rate of basic pay is fixed, other than under the General Schedule, at a rate equal to or greater than 120% of the minimum rate of basic pay for a GS-15 1.
  C. Employees in positions which are excepted from the competitive service by reason of being a confidential or policy-making character (Schedule C).
  D. Administrative Law Judges.
II. General Filing Requirements
  A. Employees occupying designated positions file annually by May 15th.  Reports cover the previous calendar year.
  B. Employees who serve in a covered position for more than 60 days in the calendar year must file an annual report by May 15th of the following year.  If an employee enters a covered position after November 1st and files a new entrant report, he is not required to file an annual report in May of the following year.
  C. New entrants to covered positions must file within 30 days of assuming the position unless the employee already occupies a covered position, and then a copy of the last report should be provided to the new office.
  D. Employees leaving a covered position must complete a termination report within 30 days of termination unless the employee will be assuming another covered position.  In that case, the employee would continue to file annually on May 15th with his new agency.
III. Distribution and Collection of Reports
  A. JMD/DEO or Bureau Personnel Offices notify DDAEOs when reports are due and provide access to blank forms.  DDAEOs distribute links to the blank forms and notify each filer of the filing deadline, the need to request an extension if the deadline cannot be met, and who the filer should contact for assistance in completing the form.
  B. DDAEOs collect and review reports for completeness, technical compliance and conflicts, and sign directly under the filer’s signature as the "other reviewer."
  C. DDAEOs present reports to the head of the component (other than the component head’s report) for review for conflicts and for signature as the "reviewing official."  The original is sent to JMD/DEO, Bureau Personnel, or to another designated repository.
  D. DDAEOs send reports of component heads to the Departmental Ethics Office (DEO) for re-review and transmittal to the Deputy Attorney General or the Associate Attorney General for certification, and transmittal to the repository office and the Office of Government Ethics (OGE), if required.
  E. The component should keep a copy of the report and a copy of the certified report should be sent to the filer.
  F. The report is scanned as a pdf document and uploaded to a public website, currently MAX.gov, within 30 days of collection. 
  G. Delinquent Filers:
DDAEOS must make diligent efforts to collect reports from any delinquent filers, to include not only requests and reminders to the filers of the due date and the late filing fee, but appropriate notification to filers’ supervisors and DEO of the failure to file.  DDAEOs must notify DEO of any filing delinquency which reaches 60 days. 
IV. Reviewing Reports
  A. The reviewer should review the report against the previous year's report to ensure changes on Schedule A (purchases, sales, and/or exchanges) are accounted for through the filer’s submission of Periodic Transaction Reports (Form 278-T) and/or in transactions reported on Schedule B.
  B. The reviewer must review all reports within 60 days, but because the reports must be made available to the public upon request 30 days after receipt (via uploading to the internet), the reviewer should make every attempt to review the report prior to upload. 
  C. If a report is incomplete, the reviewer should contact the filer for additional information.  The reviewer should establish an appropriate time frame so that he can complete the review and certification within 60 days.  Note any additional information provided by the filer on the report, and add a statement under "Comments of Reviewing Official" providing the date the corrections were made pursuant to a conversation with the filer.
  D. If the reviewer discovers a conflict of interest, or any violation of a law, regulation or executive order, she should take appropriate action immediately.  Discuss the course of action to be taken with the filer.  Discuss all possible remedies, including waiver, disqualification or divestiture.
  E. A late filing fee of $200 must be imposed on filers whose reports are received more than 30 days past the deadline, including any extensions.  The component head may grant a 45-day extension for good cause, and may grant a second extension of 45 days for good cause.  Approved extensions should be annotated on the cover page of the 278 report, and the written approval of the extensions must be kept with the filer’s certified report.   In extraordinary circumstances, the filer may request a waiver of the $200 late fee through their DDAEO from the Department’s DAEO.  There is a $50,000 civil penalty for failure to file.
  F. The DEO requests from OGE any exclusions from the filing requirements, including exclusions for reporting certain gifts and for Schedule C employees who do not make policy decisions.
V. Hints for the Reviewer
  A. Cover
    1. Make sure the form is signed, dated, and the filing status is indicated.
  B. Schedule A: Reviewers should look to OGE’s Helpful Resources web page for reference materials on asset/income reporting.
 

Additional Hints:

    1. Review Schedule A to ensure there is a check in each block entitled "Valuation of Assets," "Type of Income," and "Amount of Income."  (If income is less than $201, the filer need not report the type of income.)
    2. If the type of income does not fit into one of the categories, the type should be described under "Other" with the exact amount reported under “Actual Amount.”  Examples are salary and general partnership income.
    3. The threshold for reporting filer’s income is $201 (but for spouses – the income threshold rises to $1001) and the threshold for reporting assets is $1001.
    4. In assessing the potential for conflict with a pension plan, it's useful to know if the plan is a defined benefit plan or a defined contribution plan.
      a. Under a defined benefit plan, an employer agrees to pay the employee a fixed benefit at a certain age.  This kind of plan indicates a continuing financial interest in the employer which would require disqualification from a matter that would have a direct and predictable effect on the former employer’s ability to pay the employee’s pension benefits.  If the filer is not yet receiving income from the defined benefit plan, he should report the formula under which his benefit will be calculated.  Example: a monthly payment equal to 5% of the high three years’ salary based on years of service. 
      b. A defined contribution plan is one where the filer's interest is in the plan's assets, not in the former employer, such as a 401(k) plan.  The benefit is dependent on the amount contributed and the performance of the investments.  Generally, the assets of a defined contribution plan must be listed separately on the report with a report of the income accrued from each asset.  The filer need not  report assets separately if the plan is actually a fund created by the plan’s manager for the employees.  Most such funds meet the test of an excepted investment fund because they generally are widely held; widely diversified; and independently managed.
    5. If an asset was sold in total and a capital gain was realized, it should be reported on Schedule A by marking the box "None or less than $1001" under "Valuation of Assets" and reporting the amount of any capital gain under "Income" if above the threshold.  The filer also may need to report dividends realized before the asset was sold.  If the transaction exceeded $1,000, a Form 278-T would have been due within 30 days of the sale or notification of the sale, no later than 45 days after the sale itself.  Review of incumbent and termination reports will require reconciliation with Form 278-Ts submitted by the filer. 
    6. The filer need not disclose the underlying assets of a widely-held, and publicly-traded or widely-diversified fund, where he does not control the  investments such as a mutual fund.  The filer may check the block marked "Excepted Investment Fund" as the type of income.
    7. The filer must report each asset and its income separately for a brokerage account, IRA, pension plan or other investment fund that does not meet the above tests 2 .
    8. The filer must report the exact amount of an honorarium received by a spouse, although the amount of other earned income of a spouse need not be reported.  Be sure to ask if spouse has a pension plan if a source of earned income is reported.
    9. The filer does not need to report his federal salary and federal retirement plans including an interest in the Thrift Savings Plan.
    10. Bank accounts aggregated at $5,000 or less in any one financial institution need not be reported.
    11. A capital account, or any money owed from a former employer, is considered to be an asset and must be reported in Block B.  Any payout received over the past year must also be reported in actual amount as income.
    12. The nature or business of any closely held corporation or partnership should be reported.  If the partnership holds assets such as stocks and bonds, the assets and the income attributed to each asset must be reported if the partnership is not publicly traded.
    13. Filers must report the assets, income and transactions for each holding of an investment club.  They may either report the amount of their share or report the value of each of the club’s holdings and note the percentage they own.  The threshold for reporting applies to the total of the filer’s investment, not the amount of their share in each asset.
    14. Filers must report the holdings and income of a trust or estate from which they, their spouse or dependent children receive income or in which they have a vested beneficial interest.  An interest is vested when there is no uncertainty as to whether someone is entitled to the property even though it may be uncertain as to when he will receive it.  A trustee or an executor for an estate also must report the trust or estate assets.  Someone who is named in the will of a living person does not have a vested interest and need not report the assets.
    15. Annuities are generally obtained through life insurance companies.  A fixed annuity offers a specified rate of return and constitutes an interest in the insurance company.  A variable annuity offers investors options in which they can invest, usually mutual funds.  The filer should report the name of the insurance company, whether it is fixed or variable (with the options selected), the annuity’s value and the type and category of accrued income. 
    16. Loans owed to the filer, spouse, or dependent child by a spouse, child, parent, or sibling need not be reported.
    17. The filer must report the investment portion of a cash value insurance policy only. A term insurance policy need not be reported. 
  C. Schedule B - Transactions
    1. The amount of a transaction reported in Part I is the gross amount of the sale, not just the capital gain.
    2. Sales of assets made pursuant to a certificate of divestiture must be so annotated on the form.
    3. When a bond matures, this is not a transaction and need not be reported as one although if any reportable income was realized, it should appear on Schedule A.
    4. Transactions within mutual funds are not reportable, but purchases or sales of shares of a mutual fund exceeding $1000 must be reported.  If purchases and sales are made during the year involving the same fund, they may be reported on one line as “various purchases” or “various sales” made throughout the year and valued in total.
    5. Transactions reported on Periodic Transaction Reports (Form 278-T) do not necessarily have to be duplicated on Schedule B of an annual or termination Form 278, although for clarity and completeness the filer may wish to disclose all transactions exceeding $1000 even if they have previously been disclosed on a Form 278-T.
  D. Schedule B - Gifts, Reimbursements and Travel Expenses
    1. The threshold for reporting all gifts from one source is $375 and gifts of $150 or less need not be included in determining the threshold.
    2. Travel expenses accepted from a state or local government and travel expenses accepted from a non-federal source under 31 U.S.C. § 1353, need not be reported.
    3. Food and beverages not consumed in connection with travel need not be reported.  This includes in-town meals in restaurants, but meals over $20 still may not be accepted if from a prohibited source or if given because of the employee’s official position.
    4. Gifts and reimbursements received by either a spouse or dependent child need not be disclosed if they were received totally independent of their relationship to the filer.
  E. Schedule C - Liabilities
    1. A mortgage or a home equity loan on real property which is a personal residence or a residence not held for the production of income, need not be reported, unless the filer is a Presidential appointee subject to Senate confirmation.
    2. Loans backed by personal property (cars, boats, furniture) need not be reported.
    3. Liabilities owed by the filer, spouse, or dependent child to a spouse, parent, sibling or child need not be reported.
  F. Schedule C - Agreements or Arrangements
    1. If an interest in a former employer such as a capital account; pension or other benefit plan; severance payment; or a partnership distribution from a former employer is reported on Schedule A, the agreement for any continuation of the interest or payments must be reported on Part II of Schedule C.
    2. Any agreement for future employment, leave of absence, or current outside employment must be reported in this Part.
  G. Schedule D - Positions Held Outside U.S. Government
    1. Positions held outside the government during the past two years, except those of a religious, social, fraternal, political, or honorary nature, must be reported.
    2. The reviewer should analyze each position reported carefully with an eye toward conflicts. 
  H. Schedule D - Compensation in Excess of $5000 Paid by One Source
    1. This Part is only completed by first-time filers and covers the previous two years.
    2. If the nature of the services provided is in regard to a matter that has not been made public and reporting the name of the client would harm the attorney-client relationship, the filer should simply describe the nature of the services provided to each client with as much detail as may be provided.

Footnotes:

1Non-supervisory Assistant U.S. Attorneys are not required to file a report because they are in a pay range where the basic rate of pay is lower than 120% of a GS 15, Step 1, even though those at the top of the range because of their qualifications are paid a salary in excess of that amount. Back.

2Prior to 2012, it was permissible for filers to attach brokerage statements to report the underlying assets of accounts in lieu of entering the data directly on the form.  This was the case as long as all required information was clearly and concisely reflected, and it was not necessary for a reviewer to perform extensive mathematical calculations to ascertain reportable information. However, filers’ submittal of their brokerage statements to comply with public financial disclosure requirements is STRONGLY DISCOURAGED. To protect against over-disclosing personal financial information in reports that are ultimately available to the public upon request, filers are strongly encouraged to enter all required information on the form itself for submittal, and to not use attachments. Back.