December 13, 1995
DO-95-043
MEMORANDUM
TO: Designated Agency Ethics Officials
FROM: Stephen D. Potts
Director
SUBJECT: Financial disclosure guidance
This memorandum offers guidance on several recent questions
about the public and confidential financial disclosure systems.
Use of Attachments in Lieu of Entering Data Directly on Forms
Some filers have questioned why they are not being allowed to
attach account statements or other printed information in lieu of
recopying the data onto the disclosure form. The Office of
Government Ethics (OGE) has advised them that the regulation at
5 C.F.R. § 2634.311(c) specifically allows disclosure in that
manner, so long as the material clearly and concisely reports all
information required by the relevant part of the form. This
applies to both the confidential and the public systems. They must
also sign in the designated box on the form's cover sheet, by which
they certify the accuracy of information on the form "and all
attached statements."
Use of Official Time to Complete Financial Disclosure Reports
Some filers have complained that they are not permitted to
prepare their financial disclosure reports on official time. While
the regulation does not speak to this issue, we have advised them
that, because completion of the SF 450 or SF 278 is a requirement
of their Government position, they should be allowed to use
reasonable periods of official time, in amounts to be determined by
their agency.
Use of Standard Forms by Persons Who are Not Government Employees
Some agencies have inquired about using the standard
confidential financial disclosure form (SF 450) to collect
information from persons who are not Government employees, such as
outside contractors or members of advisory committees who are
appointed to represent outside interests. After consulting with
agencies responsible for administering Governmentwide forms and the
Freedom of Information/Privacy Acts, we have determined that the
SF 450 should only be used by persons who are current or
prospective Government employees. Use by others would exceed the
Privacy Act and paperwork reduction purposes stated on the form.
Also, such use would be outside the authority of the relevant
Privacy Act system of records, the Ethics in Government Act, and
Executive Order 12674.
Superseded Regulations
Agency regulations on the confidential financial disclosure
system administered by OGE were superseded as of October 1992, by
the new uniform regulation (5 C.F.R. part 2634). Because those
agency regulations became ineffective at that time, agencies should
have taken steps to remove them from the Code of Federal
Regulations. See OGE's DAEOgrams dated April 9, June 25, and
August 25, 1992, and the uniform regulation's preamble. We are
discovering that some agencies have not yet revoked their
superseded regulations, thereby creating confusion for employees.
Revocation will require a submission to the Federal Register,
which, as indicated in our DAEOgram of June 25, 1992, does not need
prior OGE approval.
If an agency wishes to retain a superseded regulation or a
portion thereof, that will require prior OGE approval. Criteria in
5 C.F.R. § 2634.103 allow such regulations only in special or
unique circumstances. In most instances, an agency's internal
written procedures pursuant to 5 U.S.C. app. § 402(d)(1) will be
sufficient, without a supplemental regulation.
Enforcement Against Delinquent Filers
A number of agencies have asked for guidance on how to compel
filers to submit disclosure reports when due. The regulation at
subpart G of 5 C.F.R. part 2634 details the appropriate enforcement
methods specified at 5 U.S.C. app. § 104. In addition to the civil
remedy and late filing fee for the public system, agencies may take
disciplinary action (such as reprimand, suspension, demotion, or
removal) in accordance with personnel laws and regulations, against
any individual for failing to file public or confidential reports
or for filing such reports late.
Agencies may approach these delinquencies just as they would
any other misconduct (such as insubordination or failure of
employees to carry out the requirements of their Government
position). This Office has not attempted to prescribe a table of
recommended disciplinary actions, nor would it be appropriate for
us to do so. Each case is unique and should be resolved under
existing personnel rules.
Determining Who Files Public Reports
There is some confusion as to what positions meet the pay
equivalency criteria for filing public financial disclosure
reports. The statute and implementing regulation specify that the
filing requirements apply to those whose positions are classified
above GS-15 or for which the rate of basic pay (excluding locality
pay) outside the General Schedule is fixed at or above 120% of the
amount authorized for a GS-15, Step 1. See 5 U.S.C. app. § 101 and
5 C.F.R. § 2634.202(c). Our interpretation of that language, based
on legislative history, has long been that a position's rate of
basic pay (the triggering threshold) is the amount authorized for
the lowest step of the position's pay grade. See page 2-2 of
Public Financial Disclosure: A Reviewer's Reference, published by
OGE last year, and OGE informal advisory letter 81 x 22.
It is the level of responsibility, as represented by the pay
grade, not an individual employee's step or amount of pay within
that grade, that controls. In the General Schedule, employees paid
at GS-15, Steps 7 through 10, actually receive more pay than the
threshold amount for filing, but they are not required to file
because the rate of basic pay (lowest step) for the GS-15 pay scale
does not meet that threshold. Similarly, in a pay system outside
the General Schedule, only those employees for whom the lowest step
of their position's grade meets the threshold must file. For
positions that are not compensated as part of a grade for which
there is a range of pay steps or similar pay levels, the actual
rate of pay for the position controls.
Public Access to SF 278s
The statute and implementing regulation require that,
beginning 30 days after receipt, agencies permit inspection or
furnish a copy of SF 278 reports to persons requesting such
inspection or copy. Some agencies have attempted to restrict
access by permitting inspection only, instead of providing copies.
This is contrary to the statute's provisions, which permit the
public to request either inspection or a copy. Members of the
public anywhere in the world should be able to request copies of
reports, so long as they sign the required certification. Agencies
may collect reasonable copying fees, in accordance with agency
regulations. See 5 U.S.C. app. § 105 and 5 C.F.R. § 2634.603.