u.s. postal service ethics program reviews for 2006, 2000, 1995, 1993, 1991, 1987 and 1981

8/7/2019 U.S. Postal Service Ethics Program Reviews for 2006, 2000, 1995, 1993, 1991, 1987 and 1981

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~ E ~ ~ f ~ ~ United Statesp ~ Office of Government Ethics, ~ 1201 ~ e w York Avenue, NW, Suite 500

~ ~ N ' f ~ ~ Washington, DC 20005-3917

Mr. John Greenewald, Jr.

Tracking No.: OGE FOIA FY 11/19Dear Mr. Greenewald:

December2, 2010

The Office ofGovernment Ethics (OGE) is granting in part and denying in part your Freedom ofInformation Act (FOIA) request, which we received on November 22, 2010 . (There is no charge forprocessing your request.) In response to your request, we are enclosing copies of the U.S. PostalService Ethics Program Reviews for 2006, 2000, 1995, 1993 , 1991, 1987 and 1981.1

Of the records we located, we are withholding in part one page of the Ethics Program Reviewthat was issued in 2006. That page is being withheld in part under FOIA Exemption (b)(6), 5 U.S.C. 552(b)(6) and is marked as such . The redaction and withholding have been made in accordance withJustice Department policy guidance pursuant to FOIA Exemption (b)(6), 5 U.S.C. 552(b)(6) asinformation the disclosure ofwhich would constitute a clearly unwarranted invasion of personal privacy.The OGE official responsible for this FOIA determination is the undersigned . In accordancewith the FOIA, as codified at 5 U.S.C. 552(a)(6)(A), and OGE's FOIA regulations, at 5 C.F.R. 2604.304, you may administratively appeal this denial of your request. The name and address of the

OGE official to whom such an appeal would have to be submitted are: Don W. Fox, General Counsel,Office of Government Ethics, Suite 500, 1201 New York Avenue, NW., Washington, DC 20005-3917.Any such appeal must be in writing and must be sent within 30 days of the date you receive thisresponse letter. If you do appeal, you should include copies of your request and this response, togetherwith a statement of why you believe this initial determination is in error. Also, if you appeal, youshould clearly indicate on the envelope and in the letter that it is a "Freedom of Information ActAppeal."

Enclosures

Sincerely,

Elaine NewtonOGE FOIA Officer

1 In your request, you asked for the Ethics Program Reviews that were conducted in 1982, 1988 and2005. OGE does not have U.S. Postal Service Ethics Program Reviews for those years so we areenclosing the reviews that were issued in 1981, 1987 and 2006. If these are not the reviews you areseeking, please notify our office as soon as you receive this response.


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c : , ~ . o \ . ' f R S O ~ . ~ ~ Office of Government Ethtcsc United States . ;

~ . {J 1201 New York Avenue, NW, Suite 500~ ~ " , , . , ~ Washington, DC 20005-3917iVMEN't

Mary Anne Gibbons .Designated Agency Ethics OfficialUnited States Postal ServiceRoom 6147475 L'EnfantPlaza West, SW.Washington, DC 20260Dear Ms. Gibbons:

February 22r 2006

The Office of Government Ethics (OGE) has completed its review of the United StatesPostal Service's (USPS) ethics program within USPS headquarters. The review was conducted .pursuant to section 402 of the Ethics in Government Act of 1978, as amended (Ethics Act). Ourobjective was to determine the strengths and weaknesses of the ethics program and to assess itscompliance with applicable statutes and regulations. The review was conducted from Julythrough October 2005. The following is a summary ofour findings and conclusions.HIGHLIGHTS

We found serious deficiencies m the administration . of the confidential financialdisclosure system within some headquarters components. Most importantly, a significantnumber of confidential financial disclosure reports are not being reviewed or reviewedadequately for conflicts of interest. We are also concerned that there is no process ii1 place toaccurately track the number of days special Governn1e11t employees (SGE) serve. Additionally, we believe that guidance provided to employees regarding widely attended gatherings fWAG)was not adequate. Our report discusses each of these issues in det!lil. We also observed that you incorporate a number of best practices into your ethicsprogram. These include the issuance of "vigilance letters" to financial disclosure report filersand the preparation of a monthly "Conflict of Interest Memorandum" which highlights potential

conflicts of interest for members of the Postal Board of Governors (Board) prior to monthlyBoard meetings. We also strongly endorse your practice of specifically tailoring annual ethicstraining to particular components or offices.

PROGRAM STRUCTURE The USPS ethics program provides required ethics-related services to USPS employeeswithin headquarters components. As USPS' Senior Vice President and General Counsel, you

also serve as the DAEO. Within your immediate office, you are assisted by the AlternateDAEO, who is the Chief Counsel, Ethics and Federal Requirements, and one other full-time andtwo part-time attorneys. Additionally, the ethics program is supported by one full-time

OGE- 1August 19


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Ms. Mary Anne GibbonsPage2.paralegal; however, that position was vacant at the time of our review. There is also at least oneperson (ethics official) appointed within each of headquarters' 25 components who primarilyserves to administer the confidential system within their respective component. Additionally,there are more than 20 part-time ethics officials who serve the employees within USPS' 10regionally-based area offices.

We interviewed ethics officials from 6 of the 25 headquarters components. According .tothem, their ethics responsibilities are not clearly, if at all; included in their position descriptions.Further, their performance appraisals do not typically include a significant discussion of theirethics-related activities. As discussed below, we consider this to be a potentially contributingfactor to the most serious deficiencies identified during our review.PUBLIC AND CONFIDENTIALFINANCIAL DISCLOSURE SYSTEMS

We found serious deficiencies in the administration of the confidential financialdisclosure system within some of the 25 headquarters components. Most importantly, asignificant number of confidential financial disclosure reports are not being reviewed orreviewed adequately for conflicts of interest. Also, some components have no process to identifynew entrant confidential filers and ensure they submit timely new entrant confidential reports.Additionally, the criteria found at 5 C.F.R. 2634.904, which define who should be required to .file confidential reports, are not always applied consistently. These failures leave USPS and itsemployees vulnerable to the consequences of real or apparent conflicts of interest. They alsosubvert the purpose, usefulness, and regulatory requirements ofthe confidential system and mustbe addressed immediately.

Based on our interviews with component ethics officials and experience with othersimiiarly structured ethics programs, we conclude that, in large part, the deficiencies are a resultof delegating ethics functions to ethics officials who perform those functions as additional dutiesand who are not directly supervised by a more experienced ethics official (e .g., the AlternateDAEO). We also acknowledge that it may be impractical for the Alternate DAEO or anothersenior ethics official to directly administer one confidential system for all headquarterscomponents. We are, therefore, recommending that you and the Alternate DAEO providegreater oversight. of the confidential system within the components.

As a part of this recommendation, and.to further enhance the chances of componentethics officials' success, USPS should incorporate ethics-related responsibilities into theirposition descriptions and encourage supervisors to evaluate their performance, specifically asethics officials, as part of the performance appraisal process. We consider these steps to bestrong management tools to ensure ethics officials are aware of their responsibilities and thatthey will be held accountable for their performance as ethics officials.


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. Ms. Mary Anne GibbonsPage3In contrast to our findings regarding the confidential system, we found the publicfinancial disclosure system to be administered effectively imd in compliance with applicable

regillations. We note that the Alternate DAEO and other senior ethics officials within her officeare responsible for directly administering this element ofUSPS' ethics program.Confidential Financial Disclosure

A significant number of confidential reports filed within headquarters' 25 componentsare not being adequately reviewed fo r conflicts of interest. Each of the 25 components whichmake up USPS headquarters essentially administers its own confidential system. We met withethics officials from six headquarters components. Ethics officials from three of these sixcomponents told us that they do not conduct a conflict of interest analysis before they sign areport as the certifying official. These three components alone account for almost one third(29 percent) of the confidential reports filed within headquarters. Additionally, some of thecomponents made no attempt to identify new entrant filers within 3 0 days of the date they entercovered positions and did not apply consistently the confidential filing criteria at 5 C.F .R. 2634.904.Ethics officials who are reviewing officials have a responsibility with regard to thecertifications of confidential reports, as provided at 5 C.P.R. 2634.605 and 2634.909(a):.. . [A] report which is signed by a reviewing official certifies that the filer'sagency has reviewed the report, and that the reviewing official has concluded thateach required item has been completed and that on the basis of informationcontained in such report the filer is in compliance with [the criminal conflict ofinterest statutes, the Ethics in Government Act, Executive Order 12731, theStandards of Conduct for Employees of the Executive Branch, and any otheragency-specific statute or regulation governing the filer].

Typically, when OGE examines financial disclosure reports, we seek to identify any potentialconflicts of interest by considering a filer's disclosed interests, the filer's title, the agency's listof contractors or vendors, L and any other available means. If we suspect there is a conflict ofinterest, we ask an ethics ofiicial who signed the report, either as the intermediate reviewer orcertifying official, how he or she determined that the holding in question does not constitute a "conflict of interest.

In addition to the sections of part 2634 governing the review and certification of reports, 2634.903(b) requires that new entrant filers submit their reports not later than 30 days after

1 The Alternate DAEO explained that USPS does not maintain a contractor list because it wouldbe prohibitively large and expensive to maintain. The Alternate DAEO also explained thatreviewers of both public and confidential financial disclosure reports are instructed to assumethat any entity the filer discloses an interest in could be a USPS contractor.


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Ms. Mary Anne GibbonsPage4assuming a covered position, and 2634.904 provides the confidential filing criteria that OGE

. expects each agency to apply consistently.USPS requires ethics officials within each headquarters component to ensure that masterlists of filers are up


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Ms. Mary Anne GibbonsPage 5.The following infoimation was gleaned from the interviews we conducted with ethics

officials from the six components.Network Operations ManagementWe selected NOM primarily because f i l e r s ~ reports from 2002 and 2003 were notcertified . .The ethics official from NOM stated that he conducts no conflict of interest analysis ofreports, even though he signs as the certifying official and there is no intermediate review ofreports he certifies. Unless something appeared to be an "obvious conflict of interest," he wouldtake no action to determine ifthere was a conflict of interest. For instance, ifhe was not familiarwith a particular stock symbol listed as an asset, he would not seek to d e t e r m i n ~ what company

the symbol represented. Or, if a report disclosed the filer he1d stock in a company which waslisted by its full name and he was not familiar with the company, he would not make an effort todetermine what business it was engaged in or if it was a USPS contractor. The NOM ethics official also stated that there was no system in place to identify newentrant filers within 30 days of their entering a covered position. However, he told us that hewould implement procedures to do so. Since the ethics official only recently assumed the duties

of the component ethics official, he could not explain why reports from 2002 and 2003 werenever certified.Chief Technology OfficerWe selected this component because of its size and because we noted that some filersreports from prior years were missing from their individual file folders (e.g ., the folder holdingthe filers' reports contained reports from 2005, 2004 and 2000, but no reports for 2001-03).The ethics official from CTO stated that she conducts no conflict of interest analysis ofreports, even though she signs as the certifying official. She relies on fiiers' supervisors, whosign their subordinates' confidential reports as intermediate reviewers, to review theirsubordinates' financial disclosure reports for conflicts of interest.While the ethics official did recall attending training to prepare her to administer theconfidential financial disclosure system, which was provided by the Alternate DAEO, she did.not recall that the training included instruction on how to conduct a conflict of interest analysis.Regarding the apparently missing reports, we were told that a series of reorganizationsover the last few years has resulted in employees moving in and out of covered positions andfrom one supervisor to another. The CTO ethics official stated that supervisors are not alwaysconsistent in deciding who should file financial disclosure reports.


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Ms. MaryAnne GibbonsPage6

FacilitiesWe selected this component primarily because of its size and some minor technical errorsnoted during the examination of reports from the component 's filers.The two ethics officials we spoke with from this component also stated that they do not .

conduct a conflict of interest analysis of reports befo.re they sign as the certifying officials. Theyrely on supervisors, as intermediate r e v i ~ w e r s , to identify conflicts of interest. The ethicsofficials also stated that prior to 2005 there was no system in place to identify new entrantsVlrithin 30 days of the date they enter covered positions. They have since developed proceduresto capture new entrants as they enter covered positions and feel the new system has beensuccessful.

EngineeringWe selected this component because we noted that most of the 2004 annual confidentialreports we examined were filed in February and March 2005.The ethics official who administers the confidential system within Engineering wasappointed to her ethics -position in February 20Q5.

5 OS c._ 55 2. (_ Io)(ro)_ _ _ The

cmrent ethics official further advised us that there has been no system in place to identify newentrants within 30 days of the date they enter covered positions.We are encouraged that headquarters ethics officials took action toaddress the problems

in Engineering's confidential financial disclosure system. Our discussion with the current ethicsofficial within Engineering also left us confident that the component's confidential financialdisclosure system will be brought into full compliance with applicable regulations. Although thereports we examined were not filed timely, they were reviewed and certified timely and thecurrent ethics official assured us they were thoroughly reviewed for conflicts of interest Wefound no issues in our examination of reports, aside from those already discussed.

Consumer Advocate andSupply ManagementWe chose to interview ethics officials from these components because the ethics. official

from Consumer Advocate certified her own report and Supply Management is one of the largesth e a d q u ~ e r s components in terms of the number of confidential reports required to be filed.

We found the confidential system within both of these components to generally be sound.The Consumer Advocate ethics official recognized that it was inappropriate for l).er to certify herown report, even though she had no reportable assets or liabilities, and agreed to have a


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Ms. Mary Anne GibbonsPage 7supervisor certify her report in the future. Aside from this particular issue, we were satisfied thatthese two components were in compliance with 5 C.F.R. part 2634, subpart I, governing theadministration of the confidential system, including a thorough conflict of interest analysis ofeach report. We found no substantive issues in our examination of reports from thesecomponents, aside from that alreadymentioned.

Summary ofFindingsYou and the Alternate D AEO must provide greater oversight of the confidential financialdisclosure system within headquarters c6mponents. Accordingly, as part ofour recorrunendatiori .that there be greater oversight of the system, USPS should: ensure that all component ethicsofficials who re\riew or certify confidential reports conduct a thorough conflict of interestanalysis of each report before it is signed; ensure that all component ethie:s officials work withsupervisors to consistently apply the criteria at 5 C.F.R. 2634.904, which definewho should berequired to file a report; and ensure that all components have a process to identify new entrantswithin 30 days of entering covered positions. Additionally, as previously discussed, you.should

incorporate ethics-related responsibilities into component ethics officials' position descriptionsand encourage supervisors to specifically evaluate ethics officials on the performance of theirethics-related duties during the performance appraisal process. This recommendation applies toall25 headquarters components.Public Financial Disclosure

The USPS public financial disclosure system is in compliance with applicableregulations. The system is administered by the Alternate DAEO with assistance from other .senior ethics officials who review financial disclosure reports. Ethics officials told us that theyconduct a thorough conflict of interest analysis of each report. They use their lmowledge offilers' duties and, when necessary, consult filers' supervisors to determine if disclosed financialinterests could conflict with filers' official duties. Written records of requests for follow-upinformation and analysis are maintained.

We saw a variety of documentation indicating thorough reviews were conducted. Evenwhen a determination was made that a filer had no conf)icts of interest, ethics officials oftenprepared a "vigilance letter" which highlighted the filer's responsibility to avoid participating inany matter which could cause a conflict of interest in the future. The vigilance letters identifiedthe particular interests most likely to create a conflict of interest and advised filers toiinmediately recuse themselves and seek advice any time they learn their official duties mayinvolve an entity in which they have an interest. We consider this to be a best practice andencourage you to continue providing these letters to individuals when appropriate.

We examined the five public financial disclosure reports required to be filed by USPS'Presidentally-appointed, Senate-confirmed (PAS) employees in 2005; all but one of the reportswere annual reports. They were all filed, reviewed and certified timely. Those reports requiredto be forWarded to OGE were forwarded timely.


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Ms. Mary Anne GibbonsPage 8We also examined a sample of 73 of the 986 public reports required to be filed in 2004 bynon-PAS employees. The sample consisted of 14new entrant reports, 44 aimual reports, and 15

termination reports. They were generally filed timely or less than 30 days after the applicabledue date. The reports were reviewed and certified timely. Five of the reports in our sample werefiled more than 30 days beyond the applicable due date. We received documentation showingthat report filers who filed their reports more than 30 days late were assessed the $200 late filingfee, as appropriate. Our examination identified no substantive deficiencies.ETI:IICS AGREEMENTS

We examined the ethics agreements entered into by the mf(mbers of the Board, all ofwhom are PAS/SGE employees, during 2004-05. These included two 18 U.S.C. 208(b)(l)waivers and two recusals. OGE received the final versions of the waivers which identified theparticular matters covered and the personal participation that was permissible. The AlternateDAEO stated that OGE was consulted concerning both waivers. The recusals appeared to havebeen appropriately handled. They were in regard to particular matters to be discussed at Boardmeetings, Wherein the Board members agreed to leave the room while the matter was discussed.

In an ongoing effort to help Board members avoid conflicts of interest, ethics officialsprepare a monthly Conflict of Interest Memorandum. This memorandum provides an analysis ofpotential conflicts of interest based on Board members ' disclosed interests and the matters to bediscussed at Board meetings. Any private entities which may be doing or seeking to do businesswith USPS are identified for Board members. The memorandum reminds Board members of the obligation to avoid confljcts of interest and provides them with guidance to determine if theymay have a potential conflict of interest. If ethics officials identify a conflict, a recusal isprepared for the affected Board member to sign. The USPS General Counsel and the Secretaryto the.Board are provided copies of the recusals. One or both of these officials is always presentat Board meetings and ensure that recusals are carried out. We consider the memorandum to bea best practice and will suggest it to other agencies when appropriate.STATUS OF THE MEMBERS OF THEBOARD OF GOVERNORS

As previously indicated, you have determined that Board members are SGEs, based onyour interpretation of relevant guidance and your good faith estimate that they are not expectedto serve in excess of 130 days during any period of 365 consecutive days. However, we areconcerned that you do not track the total number of days each member serves. USPS does trackmembers' attendance at regular Board meetings, other scheduled meetings and conference calls,and official meetings with members of Congress, with the understanding that working even partof a day counts as one entire day of work. However, USPS makes no attempt to track thesubstantive ad hoc phone calls, e-mails, or other occasional work that members do.


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Ms. Mary Anne GibbonsPage9The Secretary to the Board told us that members "probably'' do not appr-oach the 130-daylimit, even including the ad hoc or other occasional work they perform. Iri addition, you and the

Alternate DAEO assured us that ethics tniining provided to members includes an explanation ofthe 13 0-day limit and the consequences for exceeding that limit. You may continue to designatemembers as .SGEs based on your good faith estimate that they will serve no more than 130 daysin the ensuing 365-day period. However, you must have some valid basis for making thatestimate. We suggest that you could begin by establishing a written policy defining whatconstitutes a day of work and providing that policy to Board members. Then, take somereasonable steps to demonstrate that the work perfonn.ed does not constitute more than 130 d C ~ - y s . This could be something as simple as canvassing Board members to determine if, under thewritten policy, the work they perform exceeds the. 130-day limit. Accordingly, our reportrecommends that you take action to establish a sustainable method to provide a valid basis foryour good faith estimate.ENFORCEMENT

Ethics officials have a close working relationship with the Office of Inspector General (OIG), in accordance with 5 C.F.R. 2638.203(b)(ll ) and (12). Ethics officials, OIGrepresentatives, and other officials were confident that USPS takes effective actions against thosewho commit ethics violations, as required by 5 C.F.R. 2638.203(b)(9). However, their abilityto provide documentation regarding those actions was very limited, precluding us from assessingUSPS' compliance with 2638.203(b)(9). USPS is aware of the requirement to concurrentlynotify OGE of referrals to the Department of Justice (DOJ) of alleged violations of the criminalconflict of interest laws, as required by 5 C.F.R. 2638.603(b), and has done so, although inmost cases not timely.

Ethics officials consult on information and findings developed by OIG and utilize theservices of OIG as necessary. In addition, ethics officials work closely with the Chief Counsel,Employment Law, who assists supervisors in taking appropriate administrative actions againstemployees for misconduct, including ethics violations. Coordination of efforts to identifypotential ethics violations, investigate those potential violations, and take actions when violationsare substaritiated were evident in our discussions with ethics and OIG officials and the ChiefCounsel.Ethics and OIG officials and the Chief Counsel agreed that USPS is aggressive inpursuing allegations of ethics violations and taking effective administrative actions against thosefound to have committed violations. However, they also concurred that their ability to provide

comprehensive records of potential violations, subsequent investigations, and possibleadministrative actions taken was extremely limited. Ethics officials do not maintain records ofindividual cases of ethics violations. The Chief Counsel was adamant that the financial burdenalone of maintaining a data base of disciplinary actions taken against employees would notpermit such an effort or justify any benefits that could accrue.


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M$. Mary Anne GibbonsPage 10OIG also does not maintain a data base that can readily provide either statistical orsubstantive information restricted to ethics violations that occurred or were investigated within a

given time frame. We met with representatives of OIG to discuss USPS' ability to track thisinformation and requested that they provide examples of cases of potential ethics violations thatoccurred between January 2003 and August 2005. biG subsequently provided six Reports ofInvestigation (RI) concerning allegations of ethics violations which were investigated during2003-05. One of these cases concerned an alleged violation of 18 U.S.C. 207 and anotherconcerned an alleged violation of 18 U.S.C. 209. The four rermiining Ris involved the mistiseofGovernment equipment and official position and failure to pay a just debt (income taxes).

All six Rls concerning allegations of ethics violations documented that thoroughinvestigations were carried out. They recorded numerous interviews and the collection of otherevidence (contracts, e-mail, correspondence, etc.). The two Rls involving criminal violationsresulted in referrals to DOJ. The case.involving 18 U.S.C. 207 was referred to the local U.S.Attorney on April 28, 2003 who declined to prosecute because it was detern1ined the case lackedprosecutorial merit. The investigation was subsequently closed and there was no indication inthe RI if any administrative action was considered or taken. OGE .did not receive notification ofthe referral until February 17, 2005, almost two years later. The case involving 18 U.S.C. 209was referred to the local U.S . Attorney on November 1, 2004 and was declined because theamount involved fell below minimum dollar thresholds. The Rl for this case indicated only that"actions by the [redacted] postmaster are pending." OGE received notification of the referral onNovember 24, 2004. Another case, involving an alleged violation of 18 U.S.C. 201, wa.Sreferred on October 24, 2003, but declined for prosecution because the local U.S. Attorney foundthat it "lacked the prosecutorial appeal and the financial threshold of his office." While agenciesare not required to provide OGE with concurrent notification when referring cases -involvingonly 18 U.S;C. 201, notification was provided on February 3, 2004. There was no indication ifany action was taken after this investigation was closed.

. Rls concerning two of the four non-criminal investigations determined that theallegations were not substantiated and no action against the subject employees was considered.A third RI substantiated allegations of misuse of Government property and failure to pay a justdebt. The case was "closed and forwarded to Postal Service management for review"; no furtherinformation was provided in the RL The remaining RI involved multiple parties and wasredacted in a way which made it difficult to determine what specific violations were allegedagainst which parties. The RI did state that a letter from an individual identified as "Manager,""concluded that [redacted] failed to perform the duties as a COR [Contracting Officer'sRepresentative] in a satisfactory and ethical manner."ln addition to the two Ris provided by OIG that resulted in referrals to DOJ, USPSprovided notification of seven additional referrals made to DOJ during 2003-05, as described inthe following table:


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Ms. Mary Anne GibbonsPage 11USPS Assigned CaseNumber

01HIRS0245C2NC0 1HIRS0245C2NC04UIHQ0701B2FU02UISM03 71M3NC04UIML0226C4FC04UlliQ1301Cl SI03UIP0472C3FC

Date ofReferral toDOJFebruary 3, 2003February 20, 2003June 25,2004July9, 2003March 26, 2004December 10, 2004December 29, 2004

. Date OGE Received Statute(s) AllegedlyNotification V i o l ~ t e d April 24, 2003 18 u.s. c. 207April 24, 2003 18 u.s. c. 208October 20, 2004 . 18 u.s. c . 201, 208

. February 17,2005 18 U.S. C. 208February 17, 2005 18 U.S. C. 208, 209April4 , 2005 18 u.s. c . 208J a n u ~ 14,2005 18 U.S. C. 208

As demonstrated by the Ris provided by OIG during the review and the table above,USPS has not been timely in its notification to OGE of referrals made to DOJ. Prior to ourreview, OIG officials provided quarterly reports to OGE of referrals made to DOJ. OIG willnow provide monthly reports to OGE to satisfy the requirement at 5 C.P.R. 2638.603(b) toprovide concurrent notification to OGE when such referrals are made. They are confident thiswill greatly improve the timeliness of repotting.ADVICE AND COUNSELING

Ethics advice and counseling services generally met the requirements of 5 C.P.R. 2638.203(b)(7) and (8). We examined a sample of ethics-related advice and counselingprovided by ethics officials to PAS and non-PAS employees. We concluded that most of thewritten advice, which covered a variety of subjects, was consistent.with applicable ethics statutesand regulations and was provided timely. However, we had some concerns regarding the adviceand counseling provided to employees regarding WAG, one of the exceptions to the giftprohibitions a t 5 C.P.R. 2635.204(g).We examined five individual WAG detenninations and provided our analysis to theAlternate DAEO. As a result, ethics officials have agreed to consider including someadditionalstandard language in future WAG determinations. The language would address the requirementthat financial disclosure report filers who accept gifts of free attendance at WAGs disclose thosegifts on their reports when they meet the reporting threshold. Additionally, determinationswould mention that employees subject to a leave system must attend WAG events on their owntime unless they are officially authorized excused absence.

EDUCATION AND TRAININGUSPS's education and training program generally exceeds OGE's requirements at

5 C.P.R. 2638.703 and 2638.704.Initial Ethics Orientation Program

All new employees receive initial ethics orientation during new employee in-processingsessions which are conducted every two weeks. We attended one of these sessions and found thetraining to be comprehensive, well-prepared, well-presented, and well-suited for the wide variety


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Ms. Mary Anne GibbonsPage 12of new employees that may be in-processing at any given time. The content of the training metrelevant requirements. While necessarily general in nature, the training video and materialsprovided to new employees and the discussion facilitated by an ethics official were all designedto show new employees that ethics rules are relevant to them, regardless of their position. Sinceall new employees are required to attend an in-processing session, and all sessions include initialethics orientation, it is accepted that all new employees receive the required training.

The Alternate DAEO confinned that she provided in-person initial ethics orientation toall PAS employees appointed during the current and precedingthree calendar years.Annual Ethics Training Program

All covered employees, both at headquarters and throughout USPS' various componentsand field offices, received annual training during calendar year 2004. Ethics officials solicitedinput from USPS' components regarding issues that should be addressed during training for theiremployees. With this input, ethics officials prepared a wide variety of Power Point slidepresentations, incorporating suggestions and covering all the material required by 5 C.F.R: 2638.704. They used these individual presentations in appropriate combinations to providewell-tailored training for USPS' components. When necessary, they created new presentationsto address issues specific to the component being trained. We examined a number of thesepresentations. It was obvious that a great deal of effort was required to develop both the numberof presentations and their tailored content. We consider the use of training specificallitai loredfor individual components/offices to be a best practice w h i c ~ enhances the impact of ethicstraining.

. All USPS officers (USPS' rough equivalent of the Senior Executive Service), includingPAS employees, received in-person verbal training from either headquarters or local ethicsofficials in 2004. Training was provided to other covered employees through a combination ofin-person and computer-based verbal presentations. Moreover, ethics officials provided tailoredverbal training to any office that requested it. This often included training for non-coveredemployees whom the component felt would benefit from the training. Ethics officials ensuredcompletion of annual training by all covered employees through USPS' national tracking database.We were provided with USPS' 2004 and 2005 annual training plans. They were highlydetailed and comprehensive in scope. However, they did not estimate the numbers of employeeswho would be required to receive annual training, as required by 5 C.P.R. 2638.706. The

Alternate DAEO agreed to include the estimate in the 2006 annual training plan.AGENCY SPECIFIC ETHICS PROHIBITIONS,RESTRICTIONS, AND REQUIREMENTS

USPS' supplemental standards of conduct regulation is located at 5 C .P.R. part 7001.Section 7001.102(a) prohibits certain outside employment and business activities with or for


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Ms. Mary Anne GibbonsPage 13persons who conduct certain types of business with USPS. S.ection 7001.102(b) requires priorwritten approval for outside employment and business activities with or for persons who havecertain other types of business with USPS. Other than USPS' implementing procedures, there .were only a few written approvals available as documentation of the enforcement of the

supplemental regulation. Ethics officials explained that USPS employees were very sensitive tothe restrictions on outside employment and.only rarely engaged in any activity that would requireprior approval or which could be called into question under the supplemental regulation.TRAVELPAYMENTSFROMNON-FEDERAL SOURCES

USPS is not eligible to accept payments for travel, subsistence, and related expenses from non-Federal sources under 31 U.S.C. 1353. USPS does not fit the definition of an "executiveagency' as defined in section 105 of title 5, which detennines which agencies have the authorityto accept such payments. Section 105 of title 5 defines "Executive Agency" to mean anExecutive department, a Government corporation, or an independent establishment. The U.S.Code Annotated contains a note of decision stating that .the ''Postal Service is not an 'executiveagency' ...." Consistent with this interpretation, USPS has not accepted any such payments.RECOMMENDATIONS

We recommend that you:1. Provide greater oversight of the confidential financial disclosuresystem within headquarters components, to include:

Ensuring that all component ethics officials who reView or certifyreports conduct a thorough conflict of interest analysis of each reportbefore they are signed, including annual reports filed during the 2005annual filing cycle.-- Ensuring that all component ethics officials work with supervisors toconsistently apply the criteria at 5 C.F.R. 2634.904, which define whoshould be required to file a report.-- Ensuring that all components have a process to identify new entrants and require them file a confidential reports within 30 days of entering acovered position.-- Incorporating ethics-related responsibilities into component ethicsofficials' position descriptions and encouraging supervisors to specificallyevaluate ethics officials on the performance of their ethics-related dutiesduring the performance appraisal process.


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Ms. Mary Anne GibbonsPage 14

. - - - .- - . . . - - - -

2. Establish a sustainable method of providing a valid basis for theestimate of the number of days each Board member serves in a 365day period following .their designation or re-designation as anSGE.

Please advise me as soon as possible, but no later than 60 days from the date of thisreport, of the specific actions you have taken or plan to take to implement our recmiunendations.It would be particularly useful to provide at least a preliminary proposal outlining a plan ofaction to address our reCommendations. The Office of Government Ethics is committed toassisting your agency in resolving the noted deficiencies. If you believe that we can be ofass istance, we invite you to contact your desk off1cer, Jennie Keith, at (202) 482-9295, or DougChapman, at (202) 482-9223 . A follow-up review will be scheduled approximately six monthsfrom the date of this report. IIi view of the corrective action authority vested with the Director ofOGE under subsection 402(b)(9) of the Ethics Act as implemented in subpart D of 5 C.F.R. part2638, it is important that you take timely action.

In closing, I would like to thank you for your efforts on behalfof the ethics program. Welook forward to working with your agency towards achieving full compliance with regulatoryrequirements;

Report Number 06- 004

Sincerely, t ( h /~ ~ g l o f f /"/uty DirectorOffice ofAgency Pro arns


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United StatesOffice of Govet.nment Ethics1201 Nc,v York Aven ue'.?\\ \-' ., Suite 500Washin gto n, DC 2000)-:.:;


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Ms. Mary Anne GibbonsPage 2ADMINISTRATION OF THE ETHICS PROGRAM

As the Designa ted Agency Eth ics O ff i c i a l (DAEO) , you a rer espons ib le fo r the o v era l l admin i s t ra t ion of th e e t h i c s program.Our review di sc losed t h a t . Pos ta l Serv ic e has a genera l lydecen t ra l i zed e th i c s program, with the Chief Counsel , Eth ics andFederal Requirements (CCEFR), i n t he C i v i l Prac t i ce Sec t ion of theLaw Department , provid ing coord ina t ion and direct io .n fo r the d a i lyopera t ions of the program. The CCEFR i s ass i s t ed by a number ofe th i c s rep resen ta t i v es wi th in P os t a l S e r v i c e ' s componentorganiza t ions , both a t headquar ters and a t f i e ld l o ca t io n s . HumanResources (HR) a lso a s s i s t s the CCEFR wi th var ious e lements of th eprogram. Our review examined only headquar t e r s components.PUBLIC FINANCIAL DISCLOSURE

Pos ta l Service has a cen t ra l i zed publ i c f i n a n c i a l d i sc l o su r esystem which i s a&ninis tered by CCEFR. HR provides the CCEFR withan annua l l y updated list of f i l e r s whose p o s i t i o n s meet th e sa laryth r esho ld fo r pub l i c d i sc lo su re . The CCEFR, a s s i s t e d by apara lega l s p e c i a l i s t and othe r Law Department s t a f f , i s re spons ib lefo r the d i s t r i b u t i o n and co l l ec t io n of annual , new en t ran t , andt e rmina t ion r ep o r t s . Fol lowing a t echn ica l review by the pa r a l e ga ls p e c i a l i s t , the CCEFR or o t he r e th i c s a t to rney per forms a f i n a lreview and ce r t i f i c a t i o n of publ i c f i n an c i a l d i s c lo su re rep o r t s .According to th e CCEFR, any l a t e f i l i n g fees co l l ec t ed a re to beforwarded to the Pos ta l Serv ice ' s Manager, Nat iona l Account ing tothe U.S. Treasu ry .

In 1999, 866 employees were requ i red to f i l e pub l i c r ep o r t s .Of t h i s t o t a l , 745 were incumbent f i l e r s and 121 were new en t ran tor t e rmina t ion f i l e r s .We examined a sample of 179 publ i c d i sc losure r e p o r t s , which

included 151 incumbent , 15 new en t ran t , and 13 t e rmina t ion r ep o r t s .Our review of these r ep o r t s di sc losed no subs tan t ive d ef i c i en c i e s .A t o t a l of 49 f i l e r s in our sample d id no t submit r ep o r t s with in 30days of th e due da te and were t he re fore sub jec t to the $200 l a t ef i l i n g fee . Of these r ep o r t s , 13 were incumbent and 33 were newe n t r a n t o r t e rmina t ion r ep o r t s (more than a q u ar t e r of the t o t a lnew e n t r a n t /terminat ion r ep o r t s requ i red to be f i l ed in 1999) . Inaddi t ion , th ree r ep o r t s (two ne w en t ran t s and one incumbent) hadnot y e t been co l l ec t ed and w i l l be sub jec t to a l a t e f i l i n g f ee .You or the CCEFR should c o l l e c t the t h ree miss ing pub l i c r e po r t sand c o l l e c t the $200 l a t e f i l i n g f ees due, unles s th e f i l e r s havereques ted and have been gran ted waivers of th e fee from OGE, inaccordance wi th 5 C.P.R. 2634.704 .

During our review, we discussed with th e CCEFR and thepara lega l s p e c i a l i ~ t the s t a t u s of th e t h ree apparen t ly miss ing


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Ms. Mary Anne GibbonsPage 3publ ic repor t s , and the co l lec t ion of the $200 l a t e f i l ing feesfrom th e 49 l a t e f i l e r s . When ques t ioned about the miss ing andl a t e repor t s , the p ara l eg a l s p e c i a l i s t reca l l ed t h a t an employeehad been provided a f i l ing extens ioni however, t h i s ex tens ion wasnot documented on the employee's repor t , nor was it en tered in thef inancia l disc losure t racking system . The CCEFR reca l led t h a t ,fo r another employee, a $200 l a t e f i l i n g fee had been co l lec ted ihowever, she had d i f f i cu l t y f inding any documentat ion . Receip t ofthe fee had not been documented on the employee's repor t , nor wasit entered in the f inanc ia l disc losure t rack ing system. Wediscussed these i s sues with the CCEFR, who agreed to make changesto the wri t t en procedures to r e f l e c t the process fo r rece iv ing thel a t e f i l i n g fees and forwarding them through the Manager, Nat ionalAccounting to the U ~ S . Treasury. The CCEFR a lso agreed to modifyth e t racking system and annota te the appl i cab le repor t s to r e f l e c textended f i l ing da tes and da tes of rece ip t and d i sp o s i t i o n of l a tef i l i ng fees .

We also examined the publ i c f i n an c i a l d i s c lo su re r ep o r t reviewprocess . We found the review process to be thorough, whichresu l t ed in our f inding no subs tan t ive d e f i c i en c i e s .CONFIDENTIAL FINANCIAL DISCLOSURE

Posta l Serv i ce ' s co n f id en t i a l f i n an c i a l d i s c lo su re system i sdecen t ra l ized . At headquar ters , covered posi t ions are annual lydesigna ted by Pos ta l Service Vice Presidents with headquar te r s HRproviding the rev ised master l i s t s of f i l e r s . At f i e ld loca t ions ,covered posi t ions a re determined by des ignated occupat ional codes.Lis t s of covered f i e ld posi t ions a re rev ised annual ly by HR tor e f l e c t changes in designated occupat ional codes. According to theCCEFR, HR n o t i f i e s e th ics represen ta t ives in f i e ld loca t ions everytwo weeks regarding new en t ran t s and those who have l e f t coveredpos i t ions . However , headquarters . new en t ran t s a re i d e n t i f i e d onlyannual l y. According to the CCEFR, supervisors a t both headquar tersand f i e ld loca t ions genera l ly perform an i n i t i a l review of repor t sand e t h i c s r ep resen ta t i v es perform a f i n a l review andce r t i f i c a t i o n .We examined a t o t a l of 293 co n f id en t i a l repor t s a t fourheadquar ters components: Purchasing and Mater ia l s , InformationSystems, OIG, and PIS . Of the t o t a l we reviewed, 264 were annual

repor t s and 29 were new en t ran t repor t s . While our reviewdi sc losed t h a t most repor t s were f i l ed t imely , e t h i c s o f f i c i a l swere reminded of the need to rev ise t he i r procedures to ensure tha ta l l new en t ran t s , inc luding those a t headquar ters , are not i f i edregarding the requi rement to f i l e repor t s within 30 days of t he i rentrance in to covered posi t ions .


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Ms. Mary Anne GibbonsPage 4Our review disc losed t ha t repor t s were examined fo r co n f l i c t sand appropr ia te ly annota ted, and t h a t e th ics o f f i c i a l s had providedcaut ionary l e t t e r s and ce r t i f i c a t i o n s of no c o n f l i c t s when needed.A ll but 10 of the repor t s in our sample were f i l ed t imely and, withthe except ion of OIG, the remaining components ' repor t s were

genera l ly reviewed t ime ly . We noted t h a t 18 of the annual f i l e r shad submit ted t h e i r r ep o r t s before September 30. Eth ics o f f i c i a l swere reminded t h a t annual repor t s should i nc lude a f u l l andcomplete s ta tement of requ i red informat ion fo r the preceding 12months ending Septeffiber . 30.As l a t e as January 2000 when we began our v i s i t , OIG's e th icsr ep resen t a t i ves , the Deputy Direc tor HR, and Ass i s t an t GeneralCounsel . (AGC) had no t s t a r t ed the process o f reviewing 1999conf ident ia l f i n an c i a l disc losure repor t s . According to the AGC,t h i s was because of the l a rge increase in co n f i d en t i a l f i l e r s and

because of confus ion between the AGC and Deputy Direc tor HRregarding the re spons ib i l i t y fo r reviewing the . r ep o r t s : After ourv i s i t began, . the AGC and .Deputy Direc tor HR took immediate ac t ionto review the r ep o r t s . Our subsequent examinat ion of these repor t sdiE;closed t ha t . they had a l l been reviewed and ce r t i f i ed inaccordance with 5 C.P.R. 2634 . 605, a lb e i t l a t e .. We furnished OIGeth ics represen ta t ives with OGE' s September 14, 1994 DAEOgram,sub jec t : "Improving the co n f id en t i a l f inanc ia l d i sc lo su re system,"to a s s i s t them with fu tu re co n f id en t i a l d i s c lo su re f i l ings . OIGsubsequent ly developed wri t t en procedures to ensure a t imely ande f f ec t i v e process fo r reviewing co n f id en t i a l f i n an c i a l disc losurerepor t s . OIG e t h i c s represen ta t ives noted t h a t they would changethe review process to have supervisors perform an i n i t i a l reviewbefore OIG e t h i c s r ep resen ta t i v es conduct the f i n a l review andc e r t i f i c a t i o n .SPECIAL GOVERNMENT EMPLOYEES'FINANCIAL DISCLOSURE

Posta l Service has a number of sp ec i a l Government employeeswho a re the members of the Board of Governors. The Governors a renot sub jec t to the publ i c repor t ing requi rement because they workl ess than 61 days in each ca lendar year . Although the Governorsa re not cons idered publ ic f i l e r s , Pos ta l Service requ i res t h a t theyf i l e annual r ep o r t s using the publ ic . repor t ing form (SF 278) buta re t rea ted as . conf iden t i a l repor t s and no t re leasab le to thepubl ic .

Our review o f the nine repor t s of the Governors di sc losed t h a ta l l had been f i l ed and reviewed t imely. We found no subs tan t ivedef ic ienc ies .


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Ms. Mary Anne GibbonsPage 5EDUCATION AND TRAINING

Pos ta l Serv i ce ' s education -and t ra in ing program i s e f fec t iveand in compliance with regu la t ions a t subpar t G of 5 C.F.R.par t 2638.I n i t i a l e th ic s or ien ta t ion a t headquar te rs i s provided to a l lnew employees and inc ludes di s t r ibu t ion of the following: a summaryof 5 C.F.R. p a r t 2635 and Pos ta l Serv ice ' s supplemental regu la t ion ;the names, t i t l e s , of f i ce addresses , and te lephone numbers ofe th ics of f i c i a l s ; severa l OGE pamphlets (such as "Rules fo r theRoad"); and informat ion regarding Pos ta l Serv ice ' s In t rane t andIn te rne t Web s i t e s . As p a r t of the or ien ta t ion , employees a lsoview a Pos ta l Service videotape en t i t l ed "An Ethics Nightmare," anda headquarters a t to rney i s prepent to answer quest ions . I n i t i a l

e th ics or i en ta t ion in the f i e ld consi s t s of a s imi la r t ra in ingformat with a qua l i f i ed ins t ruc to r (genera l ly an HR spec ia l i s t )presen t a t the f i e ld loca t ion to answer quest ions .Annual e th ic s t r a in ing i s genera l ly conducted in the l a s tquar te r of the ca lendar year . The Pos ta l Serv i ce ' s videotape "AnEthics Nightmare" was broadcas t over t h e i r network th ree t imesduring the 1999 t ra in ing per iod. The videotape was a l so di s t r ibu tedto f i e ld o f f i ce s . A qual i f i ed i n s t ruc to r was ava i l ab le fo rques t ions dur ing and immediately fol lowing the annual e th icst ra in ing sess ions . Sign- in sheets were used a t both headquar te rsand the f i e ld of f i ce s to t rack a t tendance . Since both f i l e r s andnon-f i l e r s a t tended and s igned , the CCEFR s t a t ed tha t separa teshee ts would be used in the future to b e t t e r t rack those requi redto rece ive t r a in ing . Contact informat ion was provided a t the end-of the sess ions and i s avai lab le on Pos ta l Serv i ce ' s In t r an e t .Posta l Service plans to develop an agency-speci f ic e th ics t ra in ingvideotape for the CY 2000 annual t ra in ing cycle .

COUNSELING AND ADVICE SERVICESPos ta l Serv ice provides effec t ive e th ics counsel ing and adviceservices to i t s employees. Our review of approximate ly 78 wri t t endeterminat ions provided during the l a s t tw o years , d i sc losed t ha tthe advice i s t imely, comprehensive, and consi s t en t with e th icslaws and regu la t ions .According to the CCEFR, advice i s genera l ly provided inwri t ten form by E-mail or l e t t e r , with some rou t ine mat te r s handledora l ly . Ethics o f f i c i a l s maintain a log fo r t rack ing thet imel iness , the type of advice , and to whom it was provided. The

CCEFR noted t h a t advice corrrrnonly concerned such i s sues as . g i f t s .between employees, g i f t s from outs ide sources, pos t employment,seeking employment, and out s ide a c t i v i t i e s .


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Ms. Mary Anne GibbonsPage 6The CCEFR noted tha t Posta l Service does no t accept paymentsfrom non-Federal sources underAdminis t ra t io 'n' s Inter im Rule 4 a timplementing 31 U .S.C. 1353. Pos ta li t s own funds fo r a l l a c t i v i t i e s .

the General Services41 C.F.R. p a r t 304-1,Serv ice ' s p o l i cy i s to use

COORD I NATION WITH INVESTIGATIVE ORGANIZATIONSPos ta l Serv i ce ' s two major inves t iga t ive organ iza t ions a re thePIS and the more recen t ly formed OIG. According to the CCEFR,p r i o r to Apr i l 2000, PIS inves t iga ted cr iminal co n f l i c t - o f - i n t e r e s ta l l eg a t i ons i f they concerned nonexecutive l eve l employees whileOIG inves t iga ted those p er t a in in g to execut ive l ev e l employees. Asof Apr i l 2000, OIG was to have exc lus i ve au thor i ty fo r a l l e t h i c s r e l a t ed inves t iga t ions .In our di scuss ions with the CCEFR and the PIS and OIG e th icsrepresen t a t i ves , a l l agreed t h a t they have an e f fec t ive workingr e l a t i o n sh i p . Discuss ions with the CCEFR disc losed th ree r e f e r r a l sto DOJ involving c r iminal co h f l i c t - o f - i n t e r e s t a l l eg a t i o n s s inceour l a s t rev iew. One of these was an 18 U.S.C. 208 i s sueregardin g the former Postmaster General which had been concurrent lyrepor ted to OGE in accordance with 5 C.F.R. 2638 .603(b} .However, our review di sc losed t h a t the other tw o r e f e r r a l s to DOJhad no t been concurrent ly i epor ted to OGE. 1 We reminded e th icsrepresen ta t i ve s of the need to concurrent ly n o t i fy OGE whenevert he re i s a c r imina l co n f l i c t - o f - i n t e r e s t r e f e r r a l to DOJ.

CONCLUSIONS AND RECOMMENDATIONSPos ta l Service has es tab l i shed systems t h a t provide thefoundation of an e f f ec t i v e e t h i c s program. However, while Pos ta l

Service has undertaken a number of measures to improve i t s programs ince our l a s t review , such as adopt ing wri t t en procedures andensur ing compliance with i n i t i a l t ra in ing requirements , many of thedef ic ienc i es c i t ed in our l a s t r ep o r t p e r s i s t .Pos ta l Serv ice ' s publ ic f i n an c i a l d i s c lo su re system cont inuesto requ i re improvement to ensure t h a t repor t s a re co l l ec t ed t imely

10ne r e f e r r a l involved an ac t ing execut ive l ev e l employee fromthe Pos ta l Serv ice ' s Finance Divis ion who wa s n eg o t i a t i n g foremployment. The other r e f e r r a l involved a member o f the Board ofGovernors and was recen t ly decl ined by DOJ. The CCEFR s t a t ed tha tthese cases were being inves t iga ted dur ing a reorgan iza t ion ofinves t ig a t ive r e s p o n s i b i l i t i e s between OIG and PIS. The CCEFRsugges ted t h a t t he reorgan iza t ion may account fo r Pos ta l Serv ice ' sfa i lu re to concur ren t ly no t i fy OGE of the r e f e r r a l s to DOJ .


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Ms. Mary Anne GibbonsPage 7and t ha t e i the r l a t e f i l i n g fees are co l lec ted when needed orwaivers of the fees are obtained from OGE. Notwithstandingimprovemen t s to the conf iden t i a l f inancia l d i sc losure system s inceour l a s t review, headquar ters new en t ran ts should be iden t i f i ed andt h e i r rep or t s obtained within 30 days of the employees enter ingcovered posi t ions . Conf iden t ia l repor t s should be reviewed within60 day s , and OGE should be concurrent ly not i f i ed regarding anycr iminal conf l i c t -o f - i n t e r e s t r e f e r r a l s to DOJ .

We a l so be l ieve tha t a s t ronger commitment on the pa r t ofmanagement regarding the implementat ion of these systems and be t t e rovers igh t are needed to ensure f u l l compliance with app l icab le lawsand regul a t ions .Accordingly , we recommend t h a t you:1. Col lec t the del inquent publ ic repor t s .2. Col lec t the $200 l a t e f i l ing fees due unlesswaivers of the l a t e f i l ing fees have beenob ta ined from OGE in accordance with 5 C.F.R.

2634 .704.3. Ensure t h a t a l l new en t r an t conf iden t i a lf i l e r s submit repor t s within 30 days ofen ter ing covered posi t ions .4. Ensure t ha t f inanc ia l disc losure repor t s are

reviewed t imely , in accordance with 5 C.F.R. 26 34.605(a) .5 . Co ns ider a system to t rack cr iminal co n f l i c t -of- i n t e r e s t r e f e r r a l s to DOJ and ensure t h a t

OGE i s concurrent ly not i f i ed of any r e f e r r a l s ,in accordance with 5 C.F.R. 2638.603(b) .In clos ing, I wish to thank e th ics of f i c i a l s fo r t h e i rcoopera t ion and t h e i r e f fo r t s on behal f of the e th ic s program.Please advise me wi t h in 60 days of the act ions you have taken orp lan to take on each of our recommendations. A b r i e f fol low-upreview wi l l be scheduled wi th in s ix months from the da te of th i srepor t . In view o f the cor rec t ive ac t ion au thor i ty ves ted with the


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Ms. Mary Anne GibbonsPage 8OGE Direc tor under subsec t ion 402 (b) (9) of the Eth i cs Ac t , asimplemented in subpar t D of 5 C . F.R. pa r t 2638, it i s impor t an tt h a t our recommendations be implemented in a t ime ly manner . Pleasecontac t Mike Berry a t 202-208-8000, extens ion 1215, if we may be offu r the r as s i s t ance .

Report number 00-016

Senior Assoc ia te Direc torOff ice of Agency Programs


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United StatesOffice of Government Ethics120 1 New Y o r l ~ Avenue, NW ., Suite 500Washington, DC 20005-3917

Mary S . El canoGeneral Counsel and Vice PresidentUnited Sta tes Posta l Service47 5 L'Enfant Plaza , SW., Room 6006Washington, DC 20260-1100Dear Ms. El cano:

August 9 , 1995

The Off ice of Government Ethics (OGE) has completed i t s f i f threview of the U.S. Posta l Serv ice ' s (Pos ta l Service} e th icsprogram. This review was conducted pursuant to sec t ion 402 of .theEthics in Government Act of 1978, as amended. Our objec t ives wereto determine the e th ics program's e f fec t iveness and c o r r i p l i ~ m c e withappl icable laws and regulat ions . We also sought to determinewhether improvements were made s ince OGE' s l a s t review in 1993 . :Toachieve our object ives , we examined the fol lowing program elements:publ ic and conf iden t ia l f inancia l di sc losure systems, .e th icseducation and t ra in ing, counsel i ng and advice serv ices , and : the .re la t ionsh ip with the Posta l Inspect ion Service (PIS} . .This reviewwas conducted in te rmi t t en t ly from December 1994 through Apr i l 199.5,and included the Posta l Service headquar ters and Memph,is ~ i e l d Office . . . . . . . . .Our review disc losed t ha t , while the Posta l Service h a ~ ~ d e some improvements to i t s e th ics program s ince our l a s t review, iriprework remains to be done to develop an ef fec t ive program. VirtgalJ._ya l l program elements require improvement, inc luding . the p\?lJlicf inancia l di sc losure system, e th ics education and tra::i.ning ,counsel ing and advice serv ices , and the re la t ionsh ip with t h P t . Moreover, because of the decent ra l ized nature of the e th ics p r o g c : u n .within components, there is a need fo r c loser .monitoring of the ac t iv i t i e s of headquar ters e th ics l i a i sons and f i e ld counsels .

PRIOR OGE REVIEWSThe fourth review, conducted in 1993, concluded t ha t thePos ta l Service did not have an ef fec t ive e th ics program . . We I i o t d t ha t some improvements had been made to the publ ic fi!lanci?LJ, disclosure system and the educat ion and t ra in ing program, but . t h,atmore improvemeqts were needed to s t rengthen these elements as. wel:l . .as the conf iden t ia l f inancia l disc losure system. M o r e o v ~ r i cons is ten t management oversight a nd support were needed to ensuret ha t our recommendations were imp l emented.

: .. '.

..

O G E ~ tA t ~ g s t t


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Ms. Mary S. ElcanoPage 2WRITTEN PROCEDURES FOR ADMINISTERING THEFINANCIAL DISCLOSURE SYSTEMS NEED TO BEDEVELOPED . .

t>ursvant: to sec t ion 402 (d) (1) of the Ethics in Government Actof 1978, as amended, the Postal Service i s requ i red to developwri t ten procedures fo r co l lec t ing , r ~ v i e w i n g , evaluat ing\ . 'andmaking publ ic ly ava i l ab le f inancia l disclosure r ep o r t s . c i u r : t : ~ v : i , . e w disc losed tha.t the Pos ta l Service has not developed wri t.tenprocedures fo r i t s publ i c and confident ial f inanc ia l d i e i c l o ~ u r e systems. ~ PUBLIC FINANCIAL DISCLOSURE SYSTEM

. .Although. e th ics o f f i c i a l s have implemented some of OGE' s recommendations from the l a s t review, severa l areas of the .pub,licf inancia l d i sc losure system continue to need improvement. .. ThePostal Service has a cen t ra l ized publ ic f inancia l d i sc losure systernwhich i s adminis tered by the Law Department. The Corporat:e.Perl3onnel Office i s responsible fo r the di s t r ibu t ion and co l lec t ionof annual , new en t ran t , and te rminat ion publ ic repor t s . . T 1 l ~ ! J a w Department 's para lega l spec ia l i s t i s responsible fo r the i n i t J a i .review of repor t s . The Chief Counsel, Ethics and Information .Law,i s responsib le fo r conducting the f ina l review and certifiC?L.tioil.

During the 1994 f i l ing cycle , 692 employees were r e ~ : i . i e d . h ~ f i l e publ ic repor t s . We examined 145 publ ic f inanc ia l d : i , . s C l o e ~ t J . r e .reports f i led during 1994. Our sample cons i s t ed o f 106 i n c l l i t i b e : n t ~ 2 6 new en t ran t , and 13 te rminat ion repor t s . we . found riosubstant ive def ic ienc ies and few technica l def ic ienc ies . . >


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Ms. Mary S. ElcanoPage 3cor rec t th i s problem, the Designated Agency Ethics Off ic ia l (DAEO),in November 1992, issued a memorandum which addressed theres t ruc tu r ing of the e th ics program. In the ensuing res t ruc tu r ing ,senior management o f f i c i a l s were des ignated to serve as AssociateEthica l Conduct Off icers . These o f f i ce r s subsequently appointedwithin headquar ters components e th ics l i a i sons who were to ac tua l lyimplement the new conf iden t ia l f inancia l d i sc losure system. Inconsul ta t ion with personnel managers, sen ior e th ics o f f i c i a l s .a theadquarters ( i . e . , the DAEO, Alternate DAEO, and Chief Cqurisel,Ethics and Informat ion Law) determined agencywide which p o s i t i_oriswould be sub jec t to confident ial f inancia l d i sc losure . For tbe1994 f i l ing cycle , conf iden t ia l f i l e r s were granted an extens ion ofthe f i l ing deadl ine u n t i l February 1, 1995.

The Pos ta l Service Information Systems Service Center inMinneapolis, Minnesota i s responsible fo r dis t r ibut ing theconf iden t ia l repor t ing forms and f i l ing ins t ruc t ions to non-headquarters f i l e r s . The 17 headquar ters e th ics l i a i sons arerespons ible fo r dis t r ibu t ing the conf iden t ia l repor t ing forms toheadquarters f i l e r s within t h e i r funct iona l a rea and co l lec t ing thecompleted repor t s .Financia l Disclosure Reports Were Genera l lyFi led And Reviewed In A Timely MannerDuring the 1994 f i l ing cycle, 3,735 employees were requi red tof i l e conf iden t ia l repor t s . We examined a sample of 367 repor tswhich inc luded 329 annual repor t s and 18 new en t ran t r _eports .Twenty f i l e r s d id not ind ica te t he i r f i l ing s ta tus . We e x ~ i n e d

repor ts from the Engineering, Marketing, Operat ions Support, L ~ o r Re_ationsj and Purcha s ing components c.: the . Posta l Servipeheadquar ters . We also examined repor t s which had been f i l ed andreviewed a t the Memphis Fie ld Office .Our examinat ion disc losed t ha t 32 9 repor t s were f i l ed in at imely manner and 38 repor ts were f i l ed unt imely. Of the .. l a tef i l e r s , 19 were annual repor ts and 18 were new en t ran t repor t s .The f i l ing s t a tus of one l a te repor t could no t be determined. Wedetermined t ha t new en t ran t reports a t the Memphis Field O ~ f i p e were f i l ed dur ing the annual cycle ra ther than within .30 days ofenter ing covered pos i t ions . In addi t ion, 36 repor t s werE! notreviewed in a t imely manner. Th e conf iden t ia l repor t s we e x a m i 1 1 : ~ ~ d did not disc lose any substant ive def ic ienc ies . Some of the reports .contained t echn ica l def ic ienc ies , such as the family names ofvar ious mutual funds being indica ted ra ther than the spec i f i c mimesand other instances of incomplete information.

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Ms. Mary s. ElcanoPage 4Headquarters Ethics Off ic ia l s Need to MonitorComponents' And Areas ' Adminis t ra t ion of theEthics ProgramOur review disc losed tha t e th ics o f f i c i a l s do not rout inelymonitor the a c t i v i t i e s of the e th ics l i a i sons and f i e ld counse ls .While there i s occas ional l i a i son/counse l - in i t ia ted contac t . toobta in advice , sen ior headquar ters e th ics o f f i c i a l s do not P,i;oy;Ldefeedback concerning the operat ion of the program a t the coinponeiitl eve l s . Overal l , we bel ieve tha t more communication i s ::i:ieededbetween headquar ters e th ics o f f i c i a l s and the e th ics l i a i sons . :aridf i e ld counsels . While most e th ics l i a i sons were aware of the need t o p e ~ f o ~ technica l and substant ive reviews of f inancia l d i sc losure repor t s ,we found tha t in some ins tances e th ics l i a i sons were not provided

su f f i c i en t guidance. According to the Engineering e th ics l i a i son ,he was not p r o v d e d adequate t ra in ing or spec i f i c ins t ruc t l .ons :.fromsen ior e th ics o f f i c i a l s on how to conduct substant ive or technica lreviews, and viewed h is ro le regarding the conf iden t ia l repor t s .as"custodial . " Furthermore, our examination disclosed t ha t < theEngineering e th ics l i a i son had reviewed and ce r t i f i ed his ? ~ : i ; y J q i 3 .requi res t ha t they f i l e annual repor t s using the publ ic r e p o : i t ; b ~ g

form (SF 278) but which are t rea ted as conf iden t ia l repor t s an(i 'nptre leasab le to the publ i c . -:-. ' .,

I f t he Pos ta l Service bel ieves tha t a Governor wil l n ~ ~ ~ ~ .more than 60 days during the year , but recognizes t;he po6!3ibi:l?:.tyof h is or her going over 60 days, it can of fe r the Governor -the ' oppor tuni ty to f i l e conf iden t ia l ly on an SF 278 which wcmld _be marked "not fo r publ ic re lease ." I f the Governor does go o y ~ r . :6,q

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Ms. Mary S. ElcanoPage 5days, a second repo r t would not have to be completed and th e SF 27 8would become pub l i c ly ava i lab le . Furthermore, in determiningwhether o r not th e 60-day threshold has been exceeded, the Pos ta lService should count the days on which a Governor ac tu a l l y worked.I f the Governor works pa r t of a day, o r a Saturday , Sunday, o r ahol iday 1 then t ha t day counts as one day in determining th e numberof days worked. Fina l ly / in i t s DAEOgram of Apr i l 11 1 1995; OGEadvised agencies t h a t fo r conf iden t i a l repor t s being f i l ed a t thet ime of reappointment / redes ignat ion as an SGE, agencies couldco l l ec t them a l l a t one t ime (e .g . , May 15) , r a the r than ori theanniversary of each employee 's i n i t i a l appointment .

Most of the Governors ' annual r epor t s f i l ed in 1994 as wel l asin prev ious yea rs had n ot been cer t i f i ' ed . The Al terna te DAEO, whoi s re spons ib le fo r reviewing and ce r t i fy in g th e Governors ' r epor t s 1s t a t ed tha t t he r epor t s were reviewed fo r c o n f l i c t s of i n t e res t buthe did no t always document ac t ions t ha t resolved the i s su es .ETH I CS EDUCATION AND TRAINING

The educat ion and t ra in ing program needs improvement. Ourreview d i sc losed t h a t the i n i t i a l agency e th ic s o r i en t a t i o nprovided to new employees does not appear to meet the reqliiren:ieni::s ..of 5 C. F . R. 2638.703. On the o ther hand, annual t r a in ing ':wa$ ; .conducted agencywide during 1994 and appeared to meet >the'." .requirements of 2638.704.At headquar ters , new employees a re shown only ' the Pos ta l Serv ice ' s modif ied Department of Defense (DOD) videqtape

summarizing 5 C.F.R. pa r t 2635, en t i t l ed "Ethics and You," withoutb e'ing provide .: with the names, t i t l e s , of f i ce addresses , :.andte lephone numbers of th e DAEO and o ther agency e th ic s o f f i c i a l s ;Furthermore, in view of the fac t t h a t the v ideotape was considereds imply a summary of 5 C.F.R . p a r t 2635, the Pos ta l Service w : a ~ n o t : ensur ing t h a t copies of th e complete t ex t of p a r t 2635 were }:)eingr e t a ined and read i ly access ib l e in the employees ' immediateo f f i ce s .

We found s im i l a r problems with the i n i t i a l e th ic s o r i en t a t i o nin tw o Pos ta l Service d i s t r i c t s under th e Memphis Fie ld Of .f ice ..According to the Human Resource Sp ec i a l i s t a t the Pos ta l EmployeeDevelopment Center (PEDC) in the d i s t r i c t of T e n n e s s e ? ~ . ne:w:employees were shown the modif ied DOD videotape and provided :with :a booklet conta in ing Execut ive Order 12674, as modi f ied byExecutive Order 12731, and the names, t i t l e s , of f i ce addresses , arid te lephone numbers of the DAEO and o ther e th ic s o f f i c i a l s ai:: .headquar ters and in the d i s t r i c t . Once again , th e Pos ta l Serv icewas not ensur ing t h a t copies of the complete t e x t of 5 C. F. R.p a r t 2635 were being r e t a ined and read i ly access ib l e in theemployees ' immediate o f f i ce s .

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Ms. Mary S. ElcanoPage 6According to the Human Resource Special is t a t the PEDC inAlabama, the i n i t i a l ethics orientat ion simply consisted of new

employees being informed tha t they could obtain, a t the nearest11 associate post office, 11 the complete text of Executive Order 12674and par t 2635, along with the names, t i t l e s , office addresses, andtelephone numbers of the DAEO and other ethics off i c i a l s . In th i scase, new employees were neither given a copy of par t 2635,furnished a copy of part 2635 for the purposes of review only, norgiven materials which summarize Executive Order 12674 .. andpar t 2635 . Furthermore, i t appears l ikely the i n i t i a l ethicsorientat ion in Alabama fa i l s to meet the one hour of off i c i a l dutytime requirement found at 5 C.F.R . 263B.703(a) (3).COUNSELING AND ADVICE

The Postal Service 's counseling and advice were generallyconsistent with applicable laws and regulat ions. However,according to senior ethics off ic ia ls , most advice i s oral .

We reviewed the written determinations for 1994 and 1995 . . TheAlternate DAEO provides most of the counseling a t headquarters.The DAEO and attorneys in Ethics and Information Law also pJ::'ovideethics advice. In addit ion, ethics l ia isons a t headquartersprovide advice to headquarters employees, and counsels :and eth:i.gsresource persons in the f ie ld provide advice to non - headquc;trtersemployees . .Employees seeking advice on complex issues are urged to do so .in writ ing and are provided written responses. According t o t h eChief Counsel, Ethics and Information Law, post - employment ~ d v i c e i s given upon request in the form of a writ ten summaryof pOst-employment res t r ic t ions . While writ ten advice which we reviewed was generallyconsistent with applicable laws and regulations, we ident i f ied ..oneinstance where, perhaps, a written determination should have b ~ E : m rendered in advance. One of the Governors was a principal in acompany when it was merged into another company which was in :theprocess of obtaining a Postal Service contract . The . Governorserved as a member of the board of directors of the successorcompany for a shor t period of time af te r the contract was le t andbefore resigning from the company.Part 10 of 39 C.F.R . , which has been "grandfathered 11 pendingthe issuance of the Postal Service 's supplemental standards ofconduct regulation, s ta tes a t section 10.22(a} tha t :No Governor may have a f inancial in teres t , d i rec t orindirect , tha t confl icts substantial ly , or appears toconfl ict substantial ly , with his or her duties andresponsib i l i t ies to the Postal Service . For the purposes

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Ms. MaryS. ElcanoPage 7of t h i s Code, a Governor 's i n t e r e s t s inc lude those of h isor her spouse, his or her minor ch i ld or ch i ld ren , andothe r ind iv idua l s r e l a t ed to the Governor by blood whoa re res iden ts of the Governor 's household.Fur ther , sec t ion 10.22(b) of 39 C.F.R. s t a t e s tha t :No Governor s h a l l en ter in to a cont rac t with the . Posta lService o r otherwise have an i n t e re s t in any cont rac twith the Pos ta l Service unless there has been a p r i o rdeterminat ion by an e th ics o f f i c i a l t h a t the i n t e r e s t i sso minor tha t no r e a l i s t i c poss ib i l i t y of a co n f l i c t ofi n t e re s t , or the appearance of a conf l i c t of i n t e re s t ,ex i s t s .According to the Al te rna te DAEO, he d id not provide a wri t tendetermination al though he acknowledged in r e t ro sp ec t . t h a t . orie ,mayhave been warranted. Never the less , he s t a t ed t h a t {.1) whil.e Governors have au thor i ty over broad Posta l Service p o l i c i e s , t h ~ y d id not get involved with sp ec i f i c cont rac t s ; (2) he e:Xpected :: i:h,a,:t:th i s Governor would be leaving the Pos ta l Service shor t ly , i:u3 ':.herterm has expired , al though she cont inues to sit pending .t:J:ie .appointment of a replacement; (3) he bel ieved he had providecJ. q ~ a . , i advice to her ; and (4) the above-c i ted sec t ions of . the Po s t a lServ ice ' s s tandards of conduct wi l l be resc inded by : :.thesupplemental s tandards . . , .:

RELATIONSHIP WITH POSTALINSPECTION SERVICEThe working re la t ionsh ip between sen ior e th i c s o f f i c i a l s a ~ the PIS needs improvement, as sen ior e th i c s and PIS o f f i c i a i s


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Ms. MaryS. ElcanoPage 8conf l i c t -o f - in t e re s t v io l a t i o n s and t he i r dispos i t ion , as requiredby 5 C.F.R. 2638.603(b) and (c) . According to the PIS Counsel,he i s aware of the requirement but has waited fo r the DOJ toac tua l ly dec l ine the case before not i fying OGE or sen io r e th icsof f ic ia l s regarding the case. As fo r coordinat ion with seniore th ics o f f i c i a l s genera l ly , al though no formal agreement ex i s t s ,the PIS Counsel meets with the Al ternate DAEO a t l e a s t quar te r ly toshare informat ion.CONCLUSION

Eth ics o f f i c i a l s have made some progress in improving thee th ics program bu t continue to have d i f f i cu l ty in adminis ter ing anef fec t ive agencywide e th i c s program tha t i s in compliance withappl icable laws and regu la t ions . As noted in our l a s t review, theDAEO must provide cons is ten t overs ight and s t rong support to ensuretha t the e th ics program cont inues to improve. The publ ic f inancia ldi sc losure system, educat ion and t ra in ing , and coord ina t ion withthe PIS a l l requ i re more cons i s t en t overs igh t to ensure tha timprovement cont inues . Moreover, we be l i eve t ha t you . and thesen ior e th i c s s t a f f need to be more ac t iv e in coordinat ing with .e th i c s l i a i so n s .RECOMMENDATIONS:we recommend you ensure tha t :

1 . Writ ten procedures areadminis te r ing the publ icdisc losure systems.

developed fo rand conf iden t ia l2. Publ ic repor t s a re f i led in a t imely manner.3. Th e $200 l a te f i l i ng fee i s co l lec ted , o r th epubl ic f i l e r s reques t waivers from OGE.4. The i n i t i a l e th ics o r ien ta t ion meets therequirements of 5 C.F.R. 2638.703.5. Ethics o f f i c i a l s improve coordinat ion with thePIS and follow up on r e f e r r a l s fo rin v es t ig a t io n .6. OGE i s concurrent ly not i f i ed of any r e f e r r a l sto the DOJ of a l l eged conf l i c t - of- i n t e r e s tvio la t ions and t h e i r dispos i t ion .In closing, I wish to thank you fo r a l l of your e f fo r t s onbehalf of the e th ics program. Please advise me wi th in .60 days ofthe ac t ions you have taken o r plan to take on each of therecommendations in our repor t . A br i e f fol low -up review wi l l be


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Ms. Mary s . ElcanoPage 9scheduled s ix months from the date of th is repor t . In view of thecorrect ive act ion authori ty vested with the Director of the Officeof Government Ethics under subsection 402(b) (9) of the Ethics inGovernment Act, as implemented in subpart D of 5 C.F.R. par t 2638,i t is important that our recommendations be implemented in a t imelymanner. Please contact Mike Berry a t 202-523-5757, extension 1215,i f we can be of fur ther ass is tance.

Report Number 95 -029

Sincerely,t'\ ,J (_) ~ rv ... - if r..: ;) i t . . ~ L h f ( . . _ -C.J-v-r:o__j!y

;._) rack CovaleskiAssociate DirectorOffice of Program Assistanceand Review

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~ 1 ~ T E S ~ c United States5 ~ Office of Gover nment Ethics'6 p 1201 Ne w York Avenue , NW ., Suite 500

z ~ ~ - < . . . ~ Washington , DC 20005-39 17i\rJ\fEN't

Mary S. ElcanoGeneral Counsel and Vice Pres identUnited Sta te s Posta l Service475 L'Enfant Plaza West, SW.Room 6006Washington, DC 20260-1100Dear Ms. Elcano:

August 23, 1993

The Off ice o f Government Ethics {OGE) has completed i t s four threview of the United Sta tes Postal Service ' s (Posta l Service)e th ics program. This review was conducted pursuant to sec t ion 402of the Ethics in Government Act of 1978, as amended. Ourobject ives were to : (1) assess the e th ics program's ef fec t ivenessand compliance with appl icable laws and regu la t ions , and{2) determine whether the Pos ta l Service had implemented therecommendations from our February 5 , 1991, repor t . To achieve ourobject ives, we examined the following program elements: the e th icsof f i c i a l s ' dut ies and r espons ib i l i t i e s , the publ ic and conf iden t i a lf inanc ia l d i sc losure systems, and the e th ics education and t ra in ingprogram . This review was conducted i n t e rmi t t en t ly during May andJune 1993.

Overal l , we found t ha t the Pos ta l Service does not have aneffec t ive e .t h i c s program. In add i t ion , l imi ted progress has beenmade on implementing our 1991 r epor t ' s recommendations because ofthe Pos ta l Service ' s slowness in tak ing correc t ive ac t ions .However, we bel ieve t ha t the recent act ions taken are thefoundat ion s teps to bui ld ing an effec t ive e th ics program.Our review disclosed t ha t some improvements have been made tothe publ ic f inanc ia l disclosure system and the education andt ra in ing program. However, more improvements are needed tos t rengthen these elements of the program, as wel l as theconf iden t i a l f inanc ia l disclosure system. We s t rong ly recommendt ha t you provide consi s t en t management overs igh t and suppor t in

these th ree a reas of the e th ics program to ensure t h a t ourrecommendations are implemented .BACKGROUND

The Pos ta l Service i s responsib le fo r process ing anddel iver ing mail to ind iv iduals and businesses around the Uniteds t a t es . In add i t ion / the Posta l Serv ice i s respons ib le fo r

OGAugu


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Ms . .Mary S. ElcanoPage 2protect ing the mail from loss or thef t and for apprehending thosewho viola te postal laws.

Basical ly , the management structure of the Postal Serviceconsis ts of 21 Vice Presidents or employees a t a commensurate levelwithin headquarters off ices in Washington, DC. In addi t ion, thereare ten area off ices around the United States . Approximately oneyear ago, the Postal Service began an across-the-boardreorganization aimed a t reducing duplicat ion and streamliningprocesses. Some Postal Service off ices and ac t iv i t ies are s t i l lbeing reorganized.The General Counsel serves as the Designated Agency EthicsOfficial (DAEO). Within the General Counsel 's off ice , referred toas the Law Department, the Chief Counsel, Ethics and Information

Law, manages the ethics program Postal Service-wide on a day-to-daybasis. The Senior Counsel, Ethics and Information Law, serves asthe Alternate DAEO. The Alternate DAEO i s primari ly responsiblefor providing counsel ing and advice services and reviewing publicf inancial disclosure reports . Other at torneys within the LawDepartment perform ethics- re la ted dut ies on a part - t ime basis .Also within the Law Department, a ful l - time paralegal special i s tass i s t s in administering the. public f inancial disclosure system.The paralegal spec ia l i s t ' s duties include col lect ing , reviewing,monitoring, and maintaining the public repor t s . In addi t ion, theparalegal spec ia l i s t not i f ies f i le rs when the i r reports are notf i led on time or when addi t ional information i s needed to completethe technical review.PRIOR OGE REPORTS

OGE issued three pr ior repor ts - - in 1982, 1988, and 1 9 9 1 - ~ o n the Postal Service 's ethics program. The f i r s t review concludedtha t , al though the s t ructure fo r the ethics program had beendeveloped, some basic defic iencies needed to be addressed. Thesecond review disclosed tha t act ions had been taken to improve thedefic iencies ci ted in the 1982 report ; however, we ident i f ied moreser ious problems needing at tent ion. We recommended: (1) improvingthe t imeliness of f i l ing and reviewing public f inancial disclosurereports ; (2) improving the t imeliness of f i l ing and reviewingconfident ia l f inancial disclosure reports and el iminat ing technicalreporting defic iencies; (3) developing a formal ethics educationand t raining program; (4) establ ishing a program monitoring system;and (5) adding s ta f f resources to the program.The th i rd review was conducted in 1990 because of the PostalService 's lack of response to our 1988 report ' s recommendations.Our 1991 report d isclosed tha t there were s ignif icant defic iencieswithin both the public and confident ia l disclosure systems. Inaddit ion, we reported defic iencies in providing ethics educationand t raining due to haphazard administration of the program. We


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Ms. Mary S. ElcanoPage 3a l so found t ha t the genera l long-standing problems in the e th icsprogram were pr imar i ly a t t r ibu tab le to the lack o f s t rong suppor t by sen io r management o f f i c i a l s , spec i f i ca l ly the DAEO, andin su f f ic ien t s t a f f i n g .PUBLIC FINANCIAL DISCLOSURESYSTEM HAS IMPROVED

Ethics of f i c i a l s have implemented many of OGE'srecommendations to improve the publ ic f inanc ia l disc losure systems ince our l a s t review. Speci f i ca l ly , the l a rge backlog of repor t sfrom 1989 and 1990, not previously reviewed, have now beenreviewed, except fo r approximately 100 repor t s a t th e t ime of ourexamination. In addi t ion , reports which had not been f i l ed havenow been col lec ted and reviewed.We examined 106 of the approximately 1,100 publ ic f inanc ia ldisc losure repor t s f i l ed by the end of 1992. Our examinationdisc losed t h a t the repor t s were f i l ed t imely. However, 94 repor t s(89 percent ) were not reviewed and cer t i f i ed in a t imely manner.The untimely reviews were pr imar i ly due to the backlog of repor t s ,from p r io r years , which had not been reviewed. General ly , we wereimpressed with the para lega l s pe c i a l i s t ' s thoroughness in reviewingthe publ ic repor t s fo r completeness. Our examination of therepor t s disc losed t h a t 46 reports {43 percent ) had t echn ica ldef ic ienc ies which cons is ted mostly of format er ro r s , such ass ta tus of f i l e r s and date of appointment boxes l e f t blank or "N .A. 11used instead of checking the "None" box. We did not ident i fy anysubs tan t ive de f i c i enc ie s . While we could not examine a sample ofa l l of the publ ic repor t s f i l ed in the 1993 f i l i ng cycle , due tothe t ime frame of our examination, it appeared t h a t repor t s werebeing f i l ed in a t imely manner and t ha t some repor t s had a l readybeen reviewed.While many improvements have been made to the publ ic f inanc ia ldisc losure system, we bel ieve t ha t th e DAEO needs to monitor thesystem to ensure t h a t repor t s

u.s. postal service ethics program reviews for 2006, 2000, 1995, 1993, 1991, 1987 and 1981

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