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212 FW
2
Financial Reporting
Requirements
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FWM#:
419 (Supersedes 212 FW 2, 06/12/95, FWM 193)
Date:
March 4, 2003
Series:
General Administration
Part
212: Ethics
Originating
Office:Division
of Human Resources
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PDF Version
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2.1
What is the purpose of this chapter? This chapter provides the
requirements and procedures for financial disclosure reporting by certain
employees of the Service.
2.2
To whom does this chapter apply? This chapter applies to Service employees
specifically designated under paragraphs 2.7, 2.8, 2.9 and 2.10.
2.3
What authorities govern financial disclosure reporting?
A. Title I of the Ethics
in Government Act of 1978 (Public Law 95-521, as amended).
B. Ethics Reform Act of
1989 (P.L. 101-194, as amended).
C. Section 201(d) of
Executive Order 12674 (as modified by E.O. 12731).
D. 5 CFR 2634.
2.4
What is the Service's policy for financial disclosure reporting? To ensure confidence
in the integrity of the Federal Government by demonstrating that they are able
to carry out their duties and responsibilities without compromising the
public's trust, certain high-level officials and employees excepted from the
competitive service because of their confidential or policymaking character
must publicly disclose their personal financial interests. Additionally,
certain less senior officials and other designated employees must disclose
their financial interests in a confidential nature to facilitate an internal
conflict of interest review. Public and confidential financial disclosure
serves to prevent conflicts of interest and to identify potential conflicts by
providing for a systematic review of the financial interests of both current
and prospective employees. These reports assist the Department and the Service
in administering their ethics programs and providing conflict of interest
counseling to employees.
2.5
What are the definitions of terms used in this chapter?
A.
Appearance of a conflict of interest. The appearance of a conflict of
interest arises when an employee is involved in an official duty capacity with
specific outside parties and there are circumstances that would cause a
reasonable person with knowledge of the relevant facts to question the
employee's impartiality in the official matter.
B.
Confidential filer. An employee required to file the OGE Form 450 (Executive
Branch Confidential Financial Disclosure Report) or OGE 450A, (Certificate of
No New Interests). See paragraph 2.9 for a description of
employees designated as confidential filers.
C.
Covered position. Positions that have been listed as designated positions
which require the incumbent to file an OGE 450 based on specific
criteria and guidelines published in 5 CFR 2634.904 and statutorily-specified
positions which require the incumbent to file an Executive Branch Personnel
Public Financial Disclosure Report (SF 278)
based on 5 CFR 2634.202.
D.
Days. Calendar
days.
E.
Dependent child. Any individual who is a son, daughter, stepson, or
stepdaughter and who:
(1) Is unmarried, under
age 21, and living in the household of the reporting individual.
(2) Is a dependent of the
reporting individual within the meaning of section 152 of the Internal Revenue
Code of 1986, 26 U.S.C. 152.
F.
Excepted investment fund. A mutual fund, common trust fund of a bank,
pension, or deferred compensation plan, or any other investment fund that is:
(1) Widely held.
(2) Publicly traded (or
available) or widely diversified. A fund is widely diversified when it holds no
more than 5 percent of the value of its portfolio in the securities of any one
issuer (other than the U.S. Government) and no more than 20 percent of any
particular economic or geographic sector.
(3) One in which an
individual neither exercises control over/nor has the ability to exercise
control over the financial interests held by the fund.
G.
Excepted trust.
A trust that was not created by the reporting individual, his/her spouse, or
dependent child, and the holdings or sources of income of which the reporting
individual, his/her spouse, and dependent child have no past or present
knowledge.
H.
Filer. Refers
to a confidential filer, public filer, or both.
I.
Gift. A
payment, advance, forbearance, rendering, or deposit of money, or anything of
value, unless consideration of equal or greater value is received by the donor,
but does not include:
(1) Bequests and other
forms of inheritance.
(2) Suitable mementos of
a function honoring the reporting individual.
(3) Food, lodging,
transportation, and entertainment provided by a foreign government, within a
foreign country, or by the United States Government, the District of Columbia,
or a State or local government or political subdivision thereof.
(4) Food and beverages
that are not consumed in connection with a gift of overnight lodging.
(5) Communications to the
offices of a reporting individual, including subscriptions to newspapers and
periodicals.
J.
Honorarium. A
payment of money or anything of value to the reporting individual or his/her
spouse for an appearance, speech, or article, excluding necessary travel
expenses. Also included are payments to charities in lieu of payment to the
reporting individual or his/her spouse.
K.
Income.
Income means "gross income." All income from whatever source derived.
It includes, but is not limited to, earned income such as compensation for
services, fees, commissions, salaries, wages, and similar items; gross income
derived from business (and net income if the reporting individual elects to
include it); gains derived from dealings in property including capital gains;
interest; rents; royalties; dividends; annuities; income from the investment
portion of life insurance and endowment contracts; pensions, income from
discharge of indebtedness; a distributive share of partnership income; and
income from an interest in an estate or trust. The term includes all income
items, regardless of whether or not they are taxable for Federal income tax
purposes, such as interest on municipal bonds.
L.
Personal hospitality of any individual. Hospitality extended for a
nonbusiness purpose by an individual, not a corporation or organization, at the
personal residence of, or on property or facilities owned by, that individual
or his/her family.
M.
Personal residence. Any real property used exclusively as a private dwelling
by the reporting individual or his/her spouse that is not rented out during any
portion of the reporting period. The term is not limited to one's domicile.
There may be more than one personal residence; i.e., a vacation home.
N.
Personal savings account. Includes a certificate of deposit, a money
market account, a savings account, an interest-bearing checking account, or any
other form of deposit in a bank, savings and loan association, credit union, or
similar financial institution. Additionally, any money market mutual fund
holding is treated as the equivalent of a personal savings account.
O.
Public filer. An
individual required to file the SF 278. See paragraph 2.7 for description of
individuals designated as public filers.
P.
Qualified trust.
A trust specifically certified by the Office of Government Ethics.
Q.
Recusal. An
ethics agreement in which an employee disqualifies him/herself from acting in
official matters involving entities that present a financial conflict of
interest for him/her.
R.
Relative.
An individual who is related to the reporting individual as father, mother,
son, daughter, brother, sister, uncle, aunt, great-uncle, great-aunt, first
cousins, nephew, niece, husband, wife, grandfather, grandmother, grandson,
granddaughter, father-in-law, mother-in-law, son-in-law, stepsister, half
brothers, half sisters, or who is the grandfather or grandmother of the spouse
of the reporting individual, and includes the fiancé/fiancee of the reporting
individual.
S.
Remedial action.
Steps taken to avoid potential violations of ethics laws and regulations that
have been identified.
T.
Reporting period. The time frame for which a reporting individual must
disclose his/her financial interests. (See paragraphs 2.11A, and
B
for
designations of time frames.)
U. Reviewing official. The ethics counselor responsible for
collecting, reviewing, and certifying financial disclosure reports.
V. Special Government Employee (SGE). An employee who is
retained, designated, appointed, or employed to perform temporary duties, with
or without compensation, for a period not to exceed 130 days during any period
of 365 consecutive days, either on a full-time or intermittent basis.
W. Value. A good faith estimate of the fair market value of
an item if the exact value is neither known nor easily obtainable by the
reporting individual without undue hardship or expense.
X. Waiver. A written determination that allows an employee
to retain an interest that would otherwise be prohibited to the employee in a
particular position because of a conflict of interest restriction. A waiver is
a form of remedial action.
2.6 Who are the responsible ethics officials? See 212 FW 1.6 as it relates to financial disclosure
reporting.
2.7 Who files the SF 278?
(1) The Director.
(2) Career and non-career Senior Executive Service employees.
(3) Schedule C employees.
(4) SGEs
who meet the SF 278 criteria for filing and who are
expected to work more than 60 days in any calendar year.
(5) Any employee detailed into a covered position from a
non-covered position for more than 60 days.
2.8
Who should file a report? Employees who work 60
days or less in a calendar year in a position covered by the SF 278 filing
requirement, such as some SGEs and persons assigned in an acting capacity, do
not need to file an incumbent SF 278 for that year. Also, employees who enter a
covered position with less than 60 days left in the calendar year do not need
to file an annual report for that year, but must file a new entrant report.
2.9 Who files the OGE 450?
A. Employees who occupy
positions classified at GS-15 and below and when they participate personally and substantially through
decision or the exercise of significant judgment, in taking an official action for:
(1) Contracting or procurement.
(2) Administering or monitoring grants, subsidies, licenses,
or other Federal benefits.
(3) Regulating or auditing any non-Federal entity.
(4) Other activities in which the final decision or action
will have a direct and substantial economic impact on the interest of any
non-Federal entity.
B. Employees who occupy any other position that the agency
determines requires filing to avoid actual or apparent conflict of interest.
C. SGEs who do not meet the SF 278 criteria.
D. Any employee detailed into a covered position from a
non-covered position for more than 60 days.
2.10.
Who files the OGE 450A? Any annual filer (except SGEs) may file the OGE 450A if they have no new interests to report since the
last report, and if they do not have a new position description or
significantly changed duties. The OGE
450A
may only be filed for 3 consecutive years and then a new OGE 450 must be filed as a baseline.
2.11 When do the forms need to be filed?
A. SF 278 Public Financial Disclosure Reports.
(1) New Entrant/Nominee. Due within 30 days after assuming a
position covered by the SF 278 filing requirements
or for the Director no later than 5 days after nomination. A new entrant form
is not required when an employee transfers from one covered position to
another.
(2) Incumbent. Due annually, no later than May 15
following the covered calendar year. (The Department asks for the forms in
January in order to give the reviewers additional time.) An employee who works
less than 60 days in a calendar year would file a new entrant report, but need
not file an annual report for that year.
(3) Termination. Due within 30 days of leaving a
covered position. The filer must sign
and date a termination report no earlier than the last day of service in the
position. A termination report is not necessary if he or she worked less than
60 days in the covered position or if there is less than 30 days between
leaving one covered position and starting a new covered position.
B. OGE 450 Confidential Financial Disclosure Reports
(1) New Entrant. Due within 30 days
after assuming a position covered by the OGE
450
filing requirements. The reporting period is the preceding 12 months from the
date of filing. A new entrant form is not required when an employee transfers
from one covered position to another.
(2) Incumbent. Due annually, no later than October 31 for the
12-month period ending the preceding September 30. SGEs do not file incumbent
reports. Instead, they are required to file an additional new entrant report
each year, upon their "reappointment or redesignation" as an SGE for
a new 365-day period.
2.12 What are applicable schedules and reporting periods for the SF 278?
2.13 Will a filing extension be granted?
A. Public filers. The Designated Agency Ethics Official
(DAEO) or his or her designee may grant an extension of the SF 278 deadline up to 90 days beyond May 15. The request
should be made prior to the due date.
B. Confidential filers. The reviewing official may grant
extensions of due dates for both new entrant and annual filers up to 90 days.
2.14 What is the annual financial disclosure filing
cycle? In
approximately August or September of each year, the Service Ethics Counselor
and/or Deputy Ethics Counselor will issue guidance and instructions regarding
processes and procedures for the upcoming annual financial disclosure filing
cycle. The written notice will, provide for:
A. Updating the Service's annual listing of positions
requiring the filing of financial disclosure reports from the incumbents.
B. Timetables for requesting, receiving, reviewing, and
certifying financial disclosure reports.
C. Statistical reporting requirements for financial
disclosure reports.
2.15 What are review procedures for financial disclosure
reports? The following provide basic review procedures for ethics counselors in
reviewing SF 278's and OGE 450's.
A. Note the date of receipt on the report. A report is
considered filed when it is received by the ethics counselor. This date is
critical in determining timeliness of filing and review.
B. Verify that the report was required against the master
list and log the report into the list.
C. Inform public filers of any late filing fees that may
have been incurred.
D. Ensure that there are no missing pages or attachments and
that all schedules and/or parts of the reports have been completed, if
applicable. A report cannot be certified if all required schedules/parts are
not completed.
E. Gather the "tools of review." Such tools may
include:
(1) The filer's previous report, if any.
(2) The instructions that accompany the financial disclosure
report.
(3) A copy of the filer's position description or knowledge
of the filer's duties.
(4) Copies of the Federal ethics laws and regulations.
(5) Financial reference materials concerning financial
institutions, corporate affiliations, mutual funds, et cetera.
2.16 What is the time period for review? Financial
disclosure reports must be initially reviewed within 60 days from the date of receipt. Final certification,
however, may occur at a later date where additional information is being sought
or remedial action is being taken.
2.17 What is final certification? A financial
disclosure report that is signed by a reviewing official certifies that the
reviewing official has reviewed the report and that he or she has concluded
that each required item has been completed, and that on the basis of
information contained in the report, the filer is in compliance with applicable
ethics and conflict of interest laws and regulations.
2.18 When should additional information be requested? Generally, there
is no requirement to audit a report to determine if disclosures are accurate.
Reviewing officials should take disclosures at "face value" except as
indicated below. It is appropriate to assume that a filer has read and understood
the instructions and has made an accurate report unless the filer's history
demonstrates otherwise. Reviewing officials must seek additional information on
a report and annotate the report when:
A. The form is incomplete (i.e., when a filer fails to list
all required information on a reportable entry).
B. The form reveals one entry (or the absence of one) that
is inconsistent with another entry on the report or on the filer's previous
report. Each entry should either continue on the next report, appear or
disappear because of a reported transaction or disappear because it slipped
below the threshold or dissipated.
C. The form omits an entry of which the reviewing official
has independent knowledge.
D. The reviewing official requires more information to
ensure the filer's compliance with Federal ethics laws and regulations.
2.19 How should additional information be recorded? A reviewing
official must annotate the report when the entries require additional
information, clarification, or correction. The reviewer must initial all
annotations and, as appropriate, indicate the source of the information.
2.20 How are conflicts of interest resolved? Violations of the
conflict of interest regulations or statutes may be cause for mandatory
remedial action. However, such remedial action should normally be considered
only after attempts to obtain voluntary resolution from the employee have
failed. All resolutions of conflicts of interest must be documented in writing
regardless of how they were obtained; i.e., voluntary or mandated means.
2.21 What are the procedures for voluntary resolution? An attempt to
obtain voluntary resolution by an employee is the responsibility of
Associate/Assistant Ethics Counselors (see 212 FW 1.6D(2)). Voluntary resolution may include, but is not limited to, the
following actions being taken.
A. Voluntary divestiture.
B. Voluntary conversion to securities that are not
prohibited or that do not create actual or apparent conflicts of interest with
the employee's duties.
C. Voluntary reassignment to another position.
2.22 What are the procedures for remedial action? If attempts at
voluntary resolution have failed and it is necessary to initiate remedial
action to remedy the holding of a prohibited financial interest or to eliminate
the conflict or appearance of a conflict of interest created by the holding of
a prohibited financial interest, such remedial action must be taken within 90
days from the date the filer receives notice that the action is required. Only
the Director can order remedial action. In cases where remedial action is
warranted, Assistant Ethics Counselors should contact the Associate Ethics
Counselor in the Division of Human Resources for specific instructions on how
to proceed. Remedial action may include, but is not limited to:
A. Reassignment or disqualification of the employee. It may be possible
for the employee to be reassigned to another job, or to be disqualified from
performing particular duties. Although the number of cases where this remedy
can be used should be rare, the possibility should be explored before
divestiture of an interest is ordered.
B.
Waiver. The Deputy Ethics Counselor may determine in an individual
case that a disqualifying financial interest in a particular matter is not so
substantial as to be deemed likely to affect the integrity of the employee's
services to the Government. Upon making that determination, he/she may then
issue a 18 U.S.C. 208(b)(1) waiver permitting the employee to participate in
the particular matter.
C. Divestiture of the interest. An employee may be
required to divest an interest, including outside employment, that is
prohibited by law or regulation. Divestiture of the interest will be ordered in
all situations where it is determined by the appropriate official that there is
no other satisfactory remedy. Evidence of divestiture must be provided in the
form of broker sales receipts or other appropriate documents.
D. Establishment of a qualified trust.
The
Director, Office of Government Ethics may allow an employee the option to place
holdings in a qualified trust. A qualified trust is established when, by
written agreement, the employee gives control and legal title to a trustee.
Detailed provisions concerning qualified trusts are found in 5 CFR 2634,
Subpart D.
E. Other forms of trust. Employees who have
pre-existing trusts or inherited trusts (not established by themselves) may, in
rare instances and on a case-by-case basis, receive authorization to continue
the trust, provided the employee has no control over its management or assets.
2.23 Who is authorized to order remedial action? The Director is
authorized to order remedial actions. The advice of the appropriate Regional
Solicitor, the Associate Solicitor-Division of General Law, or the (DAEO) or
his or her designee, may be sought before such an order is issued. This
authority to order remedial action may not be redelegated.
2.24 What happens to an employee who
fails to comply with an order for remedial action? Any employee who
fails to comply with an order for remedial action will be considered to be in
violation of the conflict of interest regulations and will be subject to
disciplinary action. Disciplinary action may include oral or written warning or
admonishment, reprimand, suspension, reduction in grade or pay, removal from
position or removal from office.
2.25 Can an employee appeal? An employee has the
right to appeal an order for remedial action and has 30 days from the date of
the remedial action order to exercise this right before any disciplinary action
may be initiated against him/her. Each appeal must be in writing and contain:
A. The basis for appeal.
B. Facts supporting the basis.
C. The telephone number where the
appellant can be reached to discuss facts pertinent to the appeal.
2.26 Where does an employee appeal? Orders for remedial
action issued by the Director may be appealed to the Deputy Secretary, whose
decision will be final.
2.27 Who considers the appeal? Appeals will be
considered by a Review Board consisting of a program Assistant Secretary
selected by the DAEO, the Associate Solicitor or the Deputy Associate
Solicitor, Division of General Law, and the Director or Deputy Director of the
Office of Personnel Policy within the Department. Assistant Secretaries may
assign responsibility to serve on the Review Board to a Deputy Assistant
Secretary who has not been involved, and who has not advised or made a decision
on the issue or on the order for remedial action. The DAEO or his/her assistant
will serve as secretary to the Board, except cases in which he she has
previously participated. In such cases, the Board will designate an employee
who has not previously been involved with the case to serve as secretary.
2.28 What are the procedures the
Review Board will follow? The Review Board members will:
A. Obtain from the Service Ethics
Counselor a full statement of actions and considerations that led to the order
for remedial action including any supporting documentation or files used by the
ethics counselor.
B. Obtain from the appellant all facts,
information, and exhibits for documents that he or she feels should be
considered before a final decision is made.
C. Prepare a summary of the facts
pertinent to the appeal. When appropriate, the Board may provide for a personal
appearance by the appellant to ascertain the circumstances concerning the
appeal or may designate the Board secretary or another employee to conduct
further fact-finding, or may do both. Fact-finding procedures will be carried
out by a person who:
(1) Has not been involved in the matter
being appealed.
(2) Does not occupy a position subordinate
to any official who recommended, advised, made a decision on, or who otherwise
is or was involved in the matter being appealed.
D. Establish a file containing all
documents related to the appeal that must be made available to the appellant
and his/her representative.
E. Provide to the official who will
decide the appeal an advisory recommendation on the appeal. The views of
dissenting members of the Board will also be provided.
2.29 What assurances are made to the
appellant? Each appellant is assured of:
A. Freedom from restraint, interference,
coercion, discrimination, or reprisal in presenting an appeal.
B. A reasonable amount of official time
to present the appeal if the employee is otherwise in a duty status.
C. The right to obtain counseling from an
ethics counselor of the Department.
D. The right to be accompanied,
represented, and advised by a representative of his/her own choosing. The Board
may disallow the choice of an individual as a representative if such
representation would result in a conflict of interest or position that would
conflict with the priority needs of the Department or that would give rise to
unreasonable costs to the Government.
2.30 What assurances are made to the
appellant's representative? Each person chosen to represent an appellant is assured
of:
A. Freedom from restraint, interference,
coercion, discrimination, or reprisal.
B. A reasonable amount of official time
to present an appeal if the representative is an employee of the Department and
is otherwise in a duty status.
2.31 What happens if an employee files
a financial disclosure report late? An individual who files any SF 278 more than 30 days after the due date
or more than 30 days after the last day of an extension, whichever occurs
later, must pay the United States a $200 late filing fee. Confidential filers
are not subject to the late filing fee.
2.32 What are the penalties for failure to file or for
falsifying reports?
A. Referral of cases. When there is reasonable cause to
believe that a reporting individual has willfully failed to file a public
report or information required on the report, or a reporting individual (public
or confidential) has willfully falsified any information required to be
reported, the reporting individual's name will be referred to the Attorney
General by either the Service Ethics Counselor or the DAEO.
B. Civil action. The Attorney General may bring a civil
action against any individual who knowingly and willfully falsifies or who
knowingly and willfully fails to file or report any information required by
filers of public reports. A civil penalty not to exceed $10,000 may be assessed
against the individual.
C. Criminal action. An individual may also be prosecuted
under criminal statutes for knowingly and willfully supplying false information
on any financial disclosure report.
D. Administrative action. Appropriate administrative action, to
include disciplinary and adverse personnel actions, may be taken against
individuals who fail to file public or confidential reports, file reports late,
or falsify or fail to report required information.
2.33 Can the public assess financial disclosure records?
A. Upon
request and in accordance with the provisions contained in 5 CFR 2634.603,
public financial disclosure reports must be made available to members of the
general public.
B. No member of the public is permitted
access to confidential financial disclosure reports except by order of a
Federal court or as otherwise provided for under the Privacy Act.
2.34 How long are financial disclosure
reports retained? Both confidential and public financial disclosure reports
must be retained for a period of 6 years after receipt. After the 6-year
period, these reports must be destroyed unless needed in an ongoing
investigation.
For information on the specific
content of this chapter, contact the Division of Human Capital. For
additional information regarding this Web page, contact Krista Holloway, in the
Division of Policy and Directives Management.
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