Financial Disclosure:

USDA's Systems Limited by Insufficient Top Management Support

GGD-90-100: Published: Jul 13, 1990. Publicly Released: Aug 15, 1990.

Additional Materials:

Contact:

Nancy R. Kingsbury
(202) 512-4268
contact@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

Pursuant to a congressional request, GAO evaluated the Department of Agriculture's (USDA) financial disclosure systems to determine how USDA used those systems to detect and resolve potential conflicts between employees' outside financial interests and their official duties.

GAO found that: (1) the USDA financial disclosure system did not ensure that conflicts of interest would be detected and resolved; (2) USDA did not obtain confidential disclosure reports from employees in certain positions, since it believed that the positions did not pose significant risks; (3) USDA did not have procedures to ensure that all disclosure reports were filed and reviewed; (4) USDA did not follow procedures to ensure that employees timely filed public and confidential disclosure reports; (5) USDA reviewers did not follow a systematic approach in identifying and resolving conflicts of interest; (6) USDA reviewers did not regularly receive internal management reports on the operation and the effectiveness of the ethics program; and (7) USDA lacked adequate criteria for reviewing disclosure reports.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: USDA obtained authority from OGE to collect financial disclosure reports from ASCS county executive directors and FmHA county supervisors, which USDA began collecting in April 1991. USDA did not agree that ASCS and FmHA county committee members should file because they do not take actions on their own cases.

    Recommendation: To correct specific weaknesses in the systems, the Secretary of Agriculture should direct DAEO to require confidential disclosure reports from all employees in positions that pose conflicts of interest and meet Office of Government Ethics (OGE) criteria for confidential disclosure.

    Agency Affected: Department of Agriculture

  2. Status: Closed - Implemented

    Comments: USDA is following the new confidential disclosure regulations issued by the Office of Government Ethics on April 7, 1992, and effective October 1, 1992. Those regulations require the reporting all assets held during the previous 12 months of the reporting year. This requirement meets the recommendation for disclosure of transactions.

    Recommendation: To correct specific weaknesses in the systems, the Secretary of Agriculture should direct the designated agency ethics official (DAEO) to develop and implement procedures, forms, and instructions for: (1) requesting confidential disclosure reports from employees in covered positions within 30 days after they enter the positions; (2) obtaining sufficient information, including information on financial transactions, for making conflict-of-interest determinations; and (3) notifying all employees in covered positions of filing requirements in sufficient time.

    Agency Affected: Department of Agriculture

  3. Status: Closed - Implemented

    Comments: By September 1990, USDA OP had begun recording report filing dates on public reports. USDA required agencies to begin stamping filing dates on confidential reports filed in April 1991. USDA OP began documenting extensions for public disclosure reports required to be filed by May 1991.

    Recommendation: To correct specific weaknesses in the systems, the Secretary of Agriculture should direct DAEO to develop and implement procedures for monitoring compliance with due dates for public and confidential disclosure reports and include requirements for recording receipt dates of reports, requesting and granting time extensions for filing, and following up with employees who have not filed reports by required dates.

    Agency Affected: Department of Agriculture

  4. Status: Closed - Implemented

    Comments: The Ethics Handbook was completed in December 1992 and distributed in January 1993. USDA conducted training for financial disclosure report reviewers based on the revised Handbook.

    Recommendation: To correct specific weaknesses in the systems, the Secretary of Agriculture should direct the designated agency ethics official (DAEO) to implement review guidance, such as that contained in the USDA Ethics Handbook, to ensure that thorough reviews of public and confidential disclosure reports are made and all conflicts of interest indicated in reports are identified and fully resolved.

    Agency Affected: Department of Agriculture

  5. Status: Closed - Implemented

    Comments: Action described by USDA in the report as its procedures for amending financial disclosure reports meets the recommendation. Substantive changes in the financial disclosure reports are to be made by the filer.

    Recommendation: To correct specific weaknesses in the systems, the Secretary of Agriculture should direct DAEO to require employees, rather than reviewing officials, to amend disclosure reports that do not contain required information.

    Agency Affected: Department of Agriculture

  6. Status: Closed - Not Implemented

    Comments: USDA disagreed with this recommendation for the review of confidential financial disclosure reports. However, USDA acknowledged that FmHA and ARS do obtain supervisor input for reviewing confidential reports. USDA OP stated that, in the review of public disclosure reports, supervisors would be consulted when necessary.

    Recommendation: To correct specific weaknesses in the systems, the Secretary of Agriculture should direct DAEO to require line officials who are responsible for the integrity of USDA programs and operations to assist in disclosure report reviews and conflict-of-interest determinations.

    Agency Affected: Department of Agriculture

  7. Status: Closed - Implemented

    Comments: USDA OP has done this outside employment review pertaining to public financial disclosure reports. As of December 1990, the system was in place for USDA agencies to begin to obtain approvals for outside employment listed on confidential financial disclosure reports.

    Recommendation: To correct specific weaknesses in the systems, the Secretary of Agriculture should direct DAEO to require the verification of outside employment approvals as part of the review of financial disclosure reports.

    Agency Affected: Department of Agriculture

  8. Status: Closed - Implemented

    Comments: USDA agreed not to have officials review supervisors' disclosure reports where there was no further review by OGE. However, USDA stated that its officials would continue to review supervisors' reports that would also be reviewed by OGE.

    Recommendation: To correct specific weaknesses in the systems, the Secretary of Agriculture should direct DAEO to ensure that employees responsible for reviewing disclosure reports do not review and sign their superiors' reports.

    Agency Affected: Department of Agriculture

  9. Status: Closed - Implemented

    Comments: USDA has taken two actions. It has implemented a tracking system to provide current status on public financial disclosure reporting, and has revised its Personnel Management Evaluation System to incorporate a review of the USDA ethics program.

    Recommendation: To correct specific weaknesses in the systems, the Secretary of Agriculture should direct DAEO to require that management reports and audits provide information that is useful to top management in evaluating such things as whether required reports were filed and reviewed on time and whether the reviews provide an adequate basis for detecting and resolving conflicts of interest in a timely manner.

    Agency Affected: Department of Agriculture

  10. Status: Closed - Implemented

    Comments: A Management-by-Objectives approach was used to set specific milestones for actions to be completed by particular officials and offices in order to implement the recommendation. All actions USDA agreed to have met milestones set thus far.

    Recommendation: The Secretary of Agriculture should provide the leadership to improve the USDA ethics program by ensuring that specific milestones are established for correcting weaknesses in the financial disclosure systems.

    Agency Affected: Department of Agriculture

  11. Status: Closed - Implemented

    Comments: In May 1990, USDA Office of Personnel (OP) added a staff year to the 1-plus staff years already dedicated to the ethics program. In June 1990, OP further evaluated its ethics program staffing requirements and had three persons detailed to OP to meet ethics responsibilities. Agencies evaluated their ethics-related staffing requirements in December 1990 to determine if staffing changes were needed.

    Recommendation: The Secretary of Agriculture should provide the leadership to improve the USDA ethics program by ensuring that sufficient resources are devoted to the program.

    Agency Affected: Department of Agriculture

  12. Status: Closed - Implemented

    Comments: Specific elements were added to the DAEO performance standards to give him increased and more specific accountability for the ethics program, as of September 1990.

    Recommendation: The Secretary of Agriculture should provide the leadership to improve the USDA ethics program by ensuring that the DAEO, director of personnel, is held accountable for developing, implementing, and maintaining systems that adequately meet requirements of the 1978 Ethics Act and related executive orders and regulations.

    Agency Affected: Department of Agriculture

 

Explore the full database of GAO's Open Recommendations »

Sep 23, 2016

Sep 21, 2016

Sep 7, 2016

Aug 30, 2016

Aug 11, 2016

Jul 22, 2016

Jul 21, 2016

Jul 6, 2016

Looking for more? Browse all our products here