Management Issue 10: Ethics Program Oversight and EnforcementTopics on this Page:
OIG has historically been involved in oversight and enforcement of the Department’s ethics program. OIG’s activities have ranged from evaluating agency ethics programs at selected Operating Divisions (OPDIV) to determine whether they comply with regulations issued by the Office of Government Ethics (OGE) and HHS to investigating allegations of criminal ethics violations by current and former HHS employees. In the past, OIG oversight has primarily focused on ethical issues related to scientific research and grants management. OIG’s efforts related to ethics issues have steadily increased as a result of congressional hearings, Government Accountability Office (GAO) reviews, press reports, and investigative activity. Since 2005, ethics program oversight has been acknowledged within the Department’s top management challenges in the context of both grants management and research and regulatory oversight management challenges. Congress established OGE in 1978 to assist the executive branch in preventing and resolving conflicts of interest by Government employees. In partnership with executive branch agencies, OGE fosters high ethical standards to strengthen the public’s confidence that the Government’s business is conducted with impartiality and integrity. The Secretary of HHS has delegated responsibility for the day-to-day administration of the ethics program to the Designated Agency Ethics Official (DAEO). The DAEO appoints Deputy Ethics Counselors (DECs) to serve as ethics advisers in the OPDIVs and Staff Divisions. In addition, Congress has imposed prohibitions to help ensure that Federal employees are not compromised by conflicts of interest when performing their official duties. For example, the criminal conflicts-of-interest statute, 18 U.S.C. § 208, prohibits employees from participating in official matters where they and certain others (such as spouses) have a financial interest. Although the DAEO is responsible for administering the Department’s ethics program, OIG is responsible for enforcement of the criminal ethics statutes. Within OIG, the Special Investigations Unit (SIU) provides a central point for the DAEO and DECs to refer potential criminal violations and to discuss matters to determine whether referral is appropriate. Federal regulations and the Department’s “General Administration Manual” require HHS employees or supervisors to report nonfrivolous allegations of “criminal offenses” (including conflict of interest) to OIG. Allegations of improper conduct with no criminal potential may be handled by agency management through administrative remedies. Oversight In late 2003, widespread press reports described apparent improprieties in the private consulting activities of some scientists at the National Institutes of Health (NIH). OIG undertook a study of the NIH outside activity process, culminating in a July 2005 report. This evaluation reviewed all outside activity requests for senior-level employees at NIH between January 1, 2001, and December 31, 2003. OIG identified several vulnerabilities that inhibited NIH’s ability to effectively review outside activities. For example, some approved outside activities were not disclosed on the annual financial disclosure forms as required of senior employees by regulation, and frequently the approved outside activities did not have complete documentation or supervisory signatures confirming approval of the requests. In addition, there were several problems with the review process itself, such as approvals after the start date, limited use of written recusals, and inadequate followup regarding ongoing outside activities. To address these vulnerabilities, OIG recommended that NIH improve the quality and extent of information it receives for outside activity requests and address inadequacies in the review process for outside activities. OIG also undertook a study of possible conflict-of-interest actions by employees of the Food and Drug Administration (FDA). Released in February 2006, this report identified a variety of vulnerabilities in the FDA process for review and approval of outside activities between CYs 2000 and 2003. Most of these outside activities involved teaching, lecturing, speechwriting, and presenting. OIG found that FDA employees submitted limited information regarding outside activities. OIG also identified several problems in the review process itself, such as approvals after the start date, multiple activities listed on a single activity request, and inadequate followup for ongoing outside activities. To address these vulnerabilities, OIG recommended that FDA improve the quality and extent of information it receives from its employees for outside activities and address inadequacies in the review process for outside activities. In addition, in late 2006, OIG issued a memorandum to the HHS General Counsel outlining vulnerabilities in the Department’s issuance of conflict-of-interest waivers. These vulnerabilities were identified through an inquiry conducted by OIG regarding a conflict-of-interest waiver granted to a former Administrator of CMS. OIG identified four vulnerabilities. These included use of boilerplate language, insufficient oversight processes, absence of time limits on waivers, and lack of monitoring mechanisms. OIG provided four recommendations to eliminate the vulnerabilities. First, waivers should be improved by a more detailed discussion of the individual circumstances of the requester. Second, the Department should adopt additional safeguards for the issuance of waivers which might include a policy requiring consultation with OGE on the issuance of ethics waivers covering negotiations for future employment. Third, appropriate time limits should be incorporated into the waivers. And fourth, the Department should monitor the continued appropriateness of such waivers by requiring employees who have received waivers to report periodically on the status of their employment negotiations. OIG’s ongoing work at selected OPDIVs reflects continued attention to ensuring effectiveness in the administration of the Department’s ethics program. In a review similar to the NIH and FDA outside activity reviews, OIG will examine the procedures used by CDC officials to review possible conflicts of interest related to certain categories of employees. Compliance with the ethics statutes and standards of ethical conduct is of particular concern with CDC employees because their research results and regulatory decisions affect the Nation’s public health security. Additionally, in an April 2007 report, GAO concluded that the lack of clear recusal policies for senior employees at NIH is a vulnerability in NIH’s conflict-of-interest policies. GAO recommended that NIH expeditiously clarify its policies with regard to written recusals and supervisory notification related to senior employees’ use of recusal to resolve conflicts of interest. Despite changes in the operation of the NIH ethics program, the program remains decentralized and comprised of various offices. OIG is conducting a review of how these various NIH offices interact and manage allegations of employee conflicts of interest. Although intramural research undertaken within the Department is vital and therefore the professional ethics of agency employees is of paramount concern, the bulk of the Department’s research funding goes to the private sector, primarily to research universities that undertake work pursuant to contracts and grants. As a result, administration of the Department’s ethics program also encompasses potential conflicts of interest relating to members of advisory panels and grantees. For this reason, OIG is reviewing NIH monitoring of extramural conflicts of interest. This review will identify the number and nature of financial conflicts of interest that are reported by grantee institutions to NIH and determine the extent to which NIH oversees grantee institutions’ financial conflicts of interest. In addition, OIG will be initiating an assessment of the nature of financial interests disclosed by clinical investigators to FDA; the extent to which drug, biologic, and device applicants monitor their clinical investigators for conflicting financial interests; and the extent to which FDA monitors the financial interests disclosed by clinical investigators. OIG’s work also reflects congressional concern and related mandates associated with identification of conflicts of interest associated with experts and consultants at NIH and advisory committees and panels at FDA. Under the recent reauthorization of NIH (H.R. 6164, Public Law 109-482), the Director of NIH is required to submit annual reports to the Inspector General of HHS, the Secretary, and relevant congressional committees. The report must identify the number of experts and consultants whose services were obtained by NIH or its agencies and describe the qualifications of and the need for hiring such experts and consultants. The report will also include the income, gifts, assets and liabilities disclosed to NIH. Similar to the NIH reporting requirement, FDA is also required (H.R. 2744, section 795(c), Public Law 109-97) to submit a quarterly report to OIG and relevant congressional committees on the efforts made to identify qualified persons with minimal or no potential conflicts of interest for appointment to an advisory committee or panel of the FDA. Enforcement In addition to performing systemic reviews identifying vulnerabilities in the administration of the Department’s ethics program, on the enforcement side, OIG has managed a significant caseload of conflict-of-interest matters. The caseload of the OIG SIU continues to increase, with the number of cases involving potential conflict of interest under investigation by this unit tripling between 2005 and 2006. As a recent example, an SIU investigation focused on the former FDA Commissioner’s false reporting that he had sold stock in companies regulated by FDA when in fact he continued to hold shares in those firms. He entered guilty pleas to two criminal charges for false writings and conflict of interest and was fined approximately $90,000, received 3 years of supervised probation, and was ordered to perform 50 hours of community service. In another example, OIG handled a case involving an NIH senior scientist. The Chief of the Geriatric Psychiatry Branch at NIH pled guilty in December 2006, to conflict-of-interest charges relating to his alleged acceptance of $285,000 in consulting fees and additional travel expenses from a drug company without the required approval of and disclosure to NIH officials. A third example is the SIU review of NIH’s handling of 103 cases that potentially revealed conflicts of interest by NIH employees identified in the files of the NIH Office of Management Assessment (OMA). The SIU and OIG ethics attorneys examined these 103 cases and have made determinations regarding those cases in which additional investigation is warranted. In order to improve the efficiency of the referral process, the SIU created a new, comprehensive form for the DAEO and the DECs to use to refer conflict of interest cases to OIG for investigation. In May 2007, OIG hosted a 1-day Conflict of Interest and Ethics Summit and invited HHS ethics officials as well as officials from all other Federal Departments and agencies. Attended by approximately 200 Federal officials, the goal of the Summit was to establish an ongoing dialogue between the oversight, enforcement, and ethics policy communities regarding ethics and conflict-of-interest issues. OGE plans to incorporate many of the themes raised at the Summit as it develops best practices as part of an ongoing Leadership Initiative. Actions have been taken to address ethics issues identified by OIG. While the OIG study of outside activities at NIH was progressing, other reviews were being conducted by OGE and the Secretary’s Office. NIH itself convened a Blue Ribbon Panel appointed by the NIH Director. The heightened focus on ethics in the Department brought about significant changes. The Department’s Supplemental Standards of Ethical Conduct were revised in 2005, adding prohibitions on outside activities and financial holdings for certain employees at NIH. The revised Supplemental Standards also imposed a more detailed process for reviewing outside activity requests departmentwide. The staff of the DAEO, housed in the OGC Ethics Division, was expanded, nearly tripling its size. In March 2007, FDA posted procedures on the FDA web site for the completion and review of outside activity forms (Form 520) at FDA. FDA prepared two documents: (1) a guide on how to complete the Form 520 (useful to employees), and (2) a guide on how to review the Form 520 (useful to ethics reviewers). The DAEO is also taking steps to tighten up the waiver process. The DAEO recently issued guidance to all DECs reminding them of their responsibility to (1) send copies of all 18 U.S.C. § 208(b)(1) and (b)(3) waivers granted to Department employees to the DAEO, along with data regarding the number of waivers issued; (2) establish a reliable tracking system for waivers; and (3) consult with an Ethics Division attorney prior to granting any 18 U.S.C. § 208 (b) (1) waiver and when granting 18 U.S.C. § 208 (b)(3) waivers if there are unique fact patterns, special circumstances, or unusual situations. In addition, ethics staff in the DAEO’s office are reaching out on a monthly basis to ethics contacts for each OPDIV and Staff Division to inquire about the operation of the divisions’ ethics programs, including the review of waivers. The DAEO is also planning to issue a package with waiver guidance and information regarding which officials in the Department have the delegated authority to issue waivers.
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