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Report (OEI-04-10-00010)

08-24-2011
Conflict-of-Interest Waivers Granted to HHS Employees in 2009

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Summary

We found that most HHS conflict-of-interest waivers in our review were not documented as recommended in provisions of selected Governmentwide Federal ethics regulations and the January 2009 instructions of the Secretary of HHS (Secretary). In addition, although not required, 18 percent of waivers were signed and dated by the HHS employees receiving them.

HHS employees, including special Government employees (SGE) serving as subject-matter experts on Federal advisory committees (committees), play an influential role in the Federal Government's public health policies. HHS employees are prohibited from participating in certain official Government matters affecting their personal financial interests. These interests may include outside employment, grants, and stock ownership.

The Office of Government Ethics (OGE) promulgates Governmentwide Federal ethics regulations for all Executive Branch employees and oversees all Federal agencies' ethics programs. With oversight and guidance from OGC, an HHS Operating Division (OPDIV) or Staff Division (STAFFDIV) may grant conflict-of-interest waivers to HHS employees if the OPDIV or STAFFDIV determines that the conflicts are not likely to affect the integrity of the employees' services to the Government, or if the need for the employees' services outweighs the potential for conflicts. Waivers permit employees who have conflicts of interest to act in an official Government capacity on matters in which they would otherwise be prohibited from participating.

According to selected Governmentwide Federal ethics regulations and the Secretary's instructions, a waiver should describe, among other things, (1) the employee's specific financial interest that poses the conflict; (2) the particular matter(s) in which the employee is permitted to participate; and (3) the particular matter(s), if any, in which the employee is prohibited from participating. In addition, although it is not a Federal requirement for employees to sign and date their waivers, OGC's sample waivers have a signature line. Signatures and dates show that employees received, acknowledged, and may be held accountable for complying with their waivers.

We reviewed a stratified, random sample of 50 conflict-of-interest waivers granted to HHS employees in 2009 to determine whether they were documented as recommended in 3 provisions of selected Governmentwide Federal ethics regulations and the Secretary's instructions. We also determined whether employees signed and dated the 50 waivers in our sample.

We found that 56 percent of the 50 waivers from 2009 in our review were not documented as recommended in provisions of selected Governmentwide Federal ethics regulations and the Secretary's instructions. Of those waivers, most (27 of 28) were granted to SGEs on committees. Further, although not required, we found that 18 percent of the waivers we reviewed included HHS employees' signatures and dates.

We recommend that OGC (1) require OPDIVs and STAFFDIVs to document conflict-of-interest waivers as recommended in Governmentwide Federal ethics regulations and the Secretary's instructions; (2) develop additional guidance and training to assist OPDIVs and STAFFDIVs in documenting conflict-of-interest waivers as recommended in Governmentwide Federal ethics regulations and the Secretary's instructions; (3) take action to revise the conflict-of-interest waivers in our review that were not documented as recommended in Governmentwide Federal ethics regulations and the Secretary's instructions, if the waivers are still in effect; (4) expand the review of conflict-of-interest waivers for SGEs on committees; and (5) require all employees to sign and date their conflict-of-interest waivers or otherwise document that they received and acknowledged them.

OGC and OGE provided written comments on a draft of this report. OGC concurred with our second and fourth recommendations but did not concur with our first, third, or fifth recommendations. OGE was not asked to indicate whether it concurred with the recommendations, but it stated that, as a general matter, the recommendations support good documentation practices that it strongly recommends. In response to OGC's and OGE's comments, we conducted a second review of many of the waivers in our sample. We continued to find that many waivers were not documented as recommended in provisions of selected Governmentwide Federal ethics regulations and the Secretary's instructions, and we updated our findings accordingly. We made other technical and clarifying changes to the report based on OGC's and OGE's comments.

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