U.S. Office of Government Ethics 

FY 2010 

PERFORMANCE & 

ACCOUNTABILITY REPORT
United States 

Office of Government Ethics 

1201 New York Avenue, NW, Suite 500 

Washington, DC 20005-3917 

November 12, 2010 

The Honorable Barack Obama 

President 

United States ofAmerica 

The White House 

1600 Pennsylvania Avenue, NW 

Washington, DC 20500 

Dear Mr. President: 

I am pleased to transmit to you the Performance Accountability Report (PAR) for the 

Office of Government Ethics (OGE) for FY 2010. The PAR includes a Summary ofOGE's Key 

Accomplishment for FY 2010 and OGE's Management Discussion and Analysis of its Results. 

OGE's Management Assurances and the Audited Financial Statements. 

In FY 2010, OGE focused on meeting the Agency's strategic goals and performance 

objectives including the implementation of the President's Executive Order 13490. While 

continuing its brisk pace ofreviewing and certifying the financial disclosure reports of nominees 

to Senate-confirmed, Presidential appointments, OGE provided substantial support to United 

States anti-corruption foreign policy initiatives, increased its training efforts, developed a New 

Ethics Official Certificate Program, hosted the 17th National Government Ethics Conference and 

benchmarked Cabinet-level agency ethics programs. 

OGE management is responsible for establishing and maintaining effective internal 

control over financial reporting, which includes safeguarding of assets and compliance with 

applicable laws and regulations. In accordance with OMB guidance, I have determined that the 

performance and financial data included in this report are complete and reliable. I am pleased to 

certify, with reasonable assurance, that OGE's systems of accounting and internal control are in 

compliance with the provisions ofthe Federal Managers' Financial Integrity Act. 

I am also pleased to report OGE has received an unqualified opinion on its financial 

statements, as of September 30, 2010. In addition, the auditors found no material weaknesses 

related to OGE's compliance and internal controls over financial reporting. 

OGE·106 


August 1992 

The Honorable Barack Obama 

Page 2 

If you need additional information with regard to these statements, please contact Don W. Fox, 

General Counsel, at 202-482-9292. 

Jil/J£v


Robert 1. Cusick 


Director 

 

 

UNITED STATES OFFICE OF GOVERNMENT ETHICS 

About OGE _____________________ 

The United States Office of Government Ethics (OGE), established by the Ethics in 

Government Act of 1978, is the agency within the Executive Branch which provides overall 

direction of Executive Branch policies designed to prevent and resolve conflicts of interest and to 

promote high ethical standards for Executive Branch employees. Specifically, OGE is 

responsible for promulgating and maintaining enforceable standards of ethical conduct for nearly 

4 million civilian employees and military members in over 130 Executive Branch agencies and 

the White House; overseeing a financial disclosure system that reaches approximately 28,000 

public and over 325,000 confidential filers; conducting onsite reviews of agency ethics 

programs; providing education, training, and technical assistance to the over 5,700 ethics 

officials; conducting outreach to the general public, the private sector, and civil society; and 

sharing good practices with and providing technical assistance to state, local, and foreign 

governments and international organizations. 

OGE’s greatest resource is its multi-disciplinary staff of attorneys; ethics, finance, and 

training experts; and support staff. OGE leverages its human resources by organizing crossfunctional teams to perform such diverse tasks as reviewing for financial conflicts of interest the 

financial disclosure filings of Senate-confirmed, Presidential appointees, training Executive 

Branch ethics officials, and enhancing oversight of Executive Branch ethics programs. 

Mission Statement_____________________________________________ 

OGE exercises leadership in the Executive Branch to prevent conflicts of interest on the 

part of Government employees, and to resolve those conflicts of interest that do occur. In 

partnership with Executive Branch departments and agencies, OGE fosters high ethical standards 

for employees and strengthens the public's confidence that the Government's business is 

conducted with impartiality and integrity. OGE’s mission directly supports the President’s goal 

of responsibly governing the Nation. 
 

 

 

 

 


 


 

Table of Contents __________________ 

Letter from the Director 

United States Office of Government Ethics..................................................................... i 

Table of Contents ............................................................................................................. ii
 

Section I – Purpose.............................................................................................................1 

A. Long Term Strategic Goals .....................................................................................1 

B. Performance Measures ............................................................................................1 

Section II –Fiscal Year 2010 Key Accomplishments ......................................................2 

A. Summary Results ....................................................................................................2 

B. Implementation of Executive Order 13490 .............................................................3 

C. Training ...................................................................................................................5 

D. Benchmarking Cabinet-level Agency Ethics Programs ..........................................7 

Section III – Management Discussion & Analysis of Results ........................................9 

Strategic Goal 1: Strengthening Ethical Culture Within the Executive
 

Branch............................................................................................................................9 

Objective 1.1: Improve the Effectiveness of Ethics Policy ..............................9 

Objective 1.2: Enhance Assistance to and Oversight of 

Objective 1.3: Increase Employees’ Awareness of 

Objective 1.4: Increase OGE’s Focus on Senior Officials’ Roles in 

Objective 2.1: Enhance Assistance to the President and the Senate in 

Objective 2.2: Monitor Continued Compliance with Conflict of
 

Objective 2.3: Administer an Effective Confidential Financial 

Agency Ethics Programs .........................................................10 

Their Ethics Responsibilities ...................................................11 

Implementing Ethics Programs................................................13 

Strategic Goal 2: Preventing Conflicts of Interest ......................................................14 

the Presidential Appointment Process .....................................14 

 Interest Laws............................................................................15 

 Disclosure System ....................................................................15 

Strategic Goal 3: Promoting Good Governance ........................................................16 

Objective 3.1: Support and Cooperate with Federal, State, and 

Local Agencies Implementing Programs that 

Help Support Good Governance..............................................16 

Objective 3.2: Enhance Outreach to the Public and 

Private Sector and Civil Society ..............................................18 

Objective 3.3: Support United States Foreign Policy Anti-Corruption 

and Good Governance Initiatives.............................................19 

ii 
 


 


 

Section IV – Management Assurances ..........................................................................22
 

Section V – Financial Statement & Independent Auditor’s Report ...........................23 

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Section I – Purpose____________________________________________ 

A. Long Term Strategic Goals 

OGE established a five-year strategic plan in 2007 with three goals. The daily work of 

OGE is driven by performance measures for the objectives within each of these goals. 

	 Strengthening Ethical Culture Within the Executive Branch: 

o	 Objective 1.1: Improve the Effectiveness of Ethics Policy 

o	 Objective 1.2: Enhance Assistance to and Oversight of Agency Ethics Programs 

o	 Objective 1.3: Increase Employees’ Awareness of Their Ethics Responsibilities 

o	 Objective 1.4: Increase OGE’s Focus on Senior Officials’ Roles in Implementing 

Ethics Programs 

	 Preventing Conflicts of Interest: 

o	 Objective 2.1: Enhance Assistance to the President and the Senate in the Presidential 

Appointment Process 

o	 Objective 2.2: Monitor Continued Compliance with Conflict of Interest Laws 

o	 Objective 2.3: Administer an Effective Confidential Financial Disclosure System 

	 Promoting Good Governance: 

o	 Objective 3.1: Support and Cooperate with Federal, State, and Local Agencies 

Implementing Programs that Help Support Good Governance 

o	 Objective 3.2: Enhance Outreach to the Public and Private Sector and Civil Society 

o	 Objective 3.3: Support United States Foreign Policy Anti-Corruption and Good 

Governance Initiatives 

B. Performance Measures 

OGE tracks its progress toward achieving its strategic goals through specific objectives 

assessed with reference to established performance measures. Baseline data for the majority of 

measures was established by merging statistical data from a variety of existing sources, including 

ethics training surveys, annual ethics program questionnaires, employee ethics surveys, and 

surveys of ethics officials. Over time, some performance targets have been modified as a result 

of surveys and OGE’s experience in implementing the Strategic Plan. A few current targets are 

less than current performance levels. Other targets have been raised based on past positive 

results in meeting the targets. For example, OGE raised its targets related to the percentage of 

ethics officials who rate OGE as responsive to emerging ethics program issues, who say that they 

receive the guidance necessary to do their jobs effectively, and who are satisfied with education 

and training products provided by OGE to support ethics officials (See Figures 1.and 2.). 

Generally, targets have been set pursuant to a five-year-old Strategic Plan. In deciding whether 

to adjust targets upward when performance levels have been met or exceeded, OGE balances the 

availability of resources to meet other targets and emerging issues such as those presented by 

Executive Order 13490 entitled “Ethics Commitments by Executive Branch Personnel,” issued 

by the President on January 21, 2009. OGE is currently developing a new Strategic Plan; 

objectives, measures, and targets will be re-evaluated and appropriately modified. 

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Section II – Fiscal Year 2010 Key Accomplishments ____ ____________ 

A. Summary Results 

Key themes addressed in working to meet OGE’s strategic goals and performance 

objectives in FY 2010 included: implementing the President’s Executive Order 13490, resolving 

potential conflicts of interest for Presidential nominees requiring Senate confirmation, training, 

benchmarking Cabinet-level agency ethics programs, and providing substantial support to United 

States anti-corruption foreign policy initiatives. 

In FY 2010, OGE undertook numerous efforts to ensure the effective implementation of 

the President’s first Executive Order, Executive Order 13490 of January 21, 2009, “Ethics 

Commitments by Executive Branch Personnel,” (Order). OGE also continued to increase its 

training efforts by developing and conducting a New Ethics Official Certificate Program; hosting 

the 17th National Government Ethics Conference; providing in-person, instructor-led courses; 

and expanding the number of courses offered in a web-based format. Finally, OGE successfully 

completed a comprehensive benchmarking of every Cabinet-level agency in FY 2010. The 

benchmarking project allowed OGE to identify model practices, vulnerabilities, and needs of the 

Executive Branch ethics program at the broadest level. 

In addition to the measurable accomplishments highlighted in detail in this report, OGE 

achieved the following in FY 2010 to meet its strategic goals and performance objectives: 

	 Developed a legislative proposal to reauthorize OGE and to update the Ethics in 

Government Act: (1) to allow OGE to be more flexible in adapting to new technologies 

and a changing financial and Government workplace climate, (2) to further streamline the 

review of the financial disclosure forms of nominees to Senate-confirmed, Presidential 

appointments for financial conflicts of interest; and (3) to ensure OGE’s Director has 

sufficient tools to fulfill his statutory responsibilities. (Budget Priority 1 – Modernizing 

Government Ethics Laws, Regulations, and Programs) 

	 Developed, through participation with the Federal Acquisition Regulatory (FAR) Council 

law team, a unified, Government-wide set of ethical requirements for Government 

contractors implemented through standardized contract clauses. (Budget Priority 1 – 

Modernizing Government Ethics Laws, Regulations, and Programs) 

	 Represented the Executive Branch ethics community to the Congress and provided ethics 

expertise on legislative proposals with Executive Branch-wide implications. In addition, 

OGE updated ethics officials on legislative developments affecting the federal ethics 

community and individual agencies. (Budget Priority 1 – Modernizing Government 

Ethics Laws, Regulations, and Programs) 

	 Began redesigning OGE’s website to increase accessibility to government ethics 

documents, an effort that has been OGE’s flagship technology initiative. As part of this 

initiative, OGE developed and executed an acquisition strategy to acquire a web content 

management solution for OGE’s new website. (Budget Priority 2 – Harnessing 

Technology to Promote Transparency, Training, and Oversight) 

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	 With the Office of Science and Technology Policy in the Executive Office of the 

President, OGE determined the content of the Ethics.gov project. In connection with this 

project, OGE removed a barrier to the posting of Ethics Pledge waivers on the Internet by 

securing a routine use exception from OPM. (Budget Priority 2 – Harnessing 

Technology to Promote Transparency, Training, and Oversight) 

	 Tested several agencies’ financial disclosure e-filing systems to determine whether there 

is an existing system that could be deployed to allow those individuals who file with 

OGE, including all Presidential nominees, to prepare their financial disclosure reports 

electronically. As a result of this effort, OGE has identified an existing system 

potentially suitable for this use. (Budget Priority 2 – Harnessing Technology to Promote 

Transparency, Training, and Oversight) 

	 Continued to work with agencies to ensure that systems they implement meet standards 

established by agencies’ CIOs and embedded information is accurate. In FY 2010, 

13 agencies used an electronic filing system. This number steadily increases every year. 

(Budget Priority 2 – Harnessing Technology to Promote Transparency, Training, and 

Oversight) 

	 Continued its brisk pace of reviewing and certifying the financial disclosure reports of 

nominees to Senate-confirmed, Presidential appointments. In FY 2010, OGE reviewed 

the reports of nominees for over 35 percent of the Senate-confirmed, Presidential 

appointee positions. Since the start of the Presidential transition in January 2009, OGE 

has reviewed the reports of nominees for approximately 80 percent of the Presidentiallyappointed positions requiring Senate-confirmation. In the course of this process, OGE 

carefully ensured that all of these nominees’ financial disclosure reports were compliant 

with disclosure and conflicts of interest requirements. OGE and agency ethics officials 

also introduced the nominees to the broader scope of the Executive Branch’s ethical 

requirements. In addition, OGE emphasized the need for ethical leadership and 

impressed upon these nominees the importance of the ethics programs at their agencies. 

(Budget Priority 3 – Promoting Continuity and Succession Planning of the Executive 

Branch Ethics Program) 

B. Implementation of Executive Order 13490 

The Order requires that full-time, non-career Presidential appointees take an “Ethics 

Pledge” relating to lobbyist gifts, the “revolving door ban,” and hiring employees based on merit. 

Pursuant to the Order, OGE is required to provide an annual public report on administration of 

the Ethics Pledge and the Order. OGE’s first annual public report was released on March 31, 

2010. 

OGE’s oversight was multifaceted. OGE met with Designated Agency Ethics Officials 

(DAEOs) and provided ongoing formal and informal guidance. In addition, OGE developed and 

administered assessment questionnaires, and drafted and released the first annual public report. 

3
 
 

 

 

 

 


 

To assess compliance with the Ethics Pledge and the Order, OGE administered two 

assessment questionnaires; responses were received from all 130 Executive Branch agencies and 

the White House. The interim, mid-year, assessment of the implementation process was 

conducted in July and August 2009. The final assessment focused on implementation of the 

Ethics Pledge as of December 31, 2009. 

As required, all 2,638 appointees serving 

at the end of 2009 signed the Ethics Pledge. 

Below is a graphical representation of highlights of OGE’s year-long work to ensure 

effective implementation of the Ethics Pledge and the Order and to timely release the annual 

public report. 

In FY 2010, OGE also published two additional substantive policy memoranda to implement the 

Ethics Pledge contained in Executive Order 13490, bringing the number of substantive policy 

guidance documents on the Pledge to 10. 

Through providing guidance, administering the assessments, and releasing the annual 

public report, OGE has largely implemented the Ethics Pledge. OGE is now in the initial stages 

of implementing other provisions of the Order and will continue these efforts into FY 2011 and 

beyond. Implementing the next phase of the Order includes: 

 extending the Ethics Pledge’s post-Government cooling-off period to all Executive 

Branch procurement personnel, 

 evaluating for the President the adequacy of current restrictions on procurement 

lobbying and related disclosure requirements, 

4 
 
 

 reporting to the President on activities involving lobbying for Presidential pardons, 

 revising the Standards of Ethical Conduct to apply the lobbyist gift ban to all 

Executive Branch employees, and 

 reporting annually to the President on implementation of the Ethics Pledge. 

Over the next two years, OGE will continue to provide interpretive guidance, training, 

and support to ethics officials in every agency. OGE also will review compliance with the Ethics 

Pledge and will develop and produce the separate, required annual reports. Additionally, OGE 

will collaborate with other Executive Branch agencies as required by several of the remaining 

Order provisions. For example, the Director of OGE is required to consult with the Attorney 

General, the Counsel to the President, and the Director of the Office of Personnel Management 

to develop a plan for extending the post-Government cooling-off period to procurement 

employees. Likewise, any changes to the Standards of Ethical Conduct currently require OGE to 

consult with the Office of Personnel Management and the Department of Justice. 

C. Training 

Training is a particularly important aspect of successful continuity and succession 

planning. Retirements and employee turnover rates throughout the Federal Government 

underscore the need for widely-available, effective training in the technically challenging arena 

of Government ethics. In FY 2010, registrations for OGE's training exceeded 2,600. 

New Ethics Official Certificate Program 

In FY 2010, OGE launched an initiative to improve the training delivered to new ethics 

officials; the New Ethics Official Certificate Program provided comprehensive training to over 

200 new ethics officials. OGE delivered the original 2-day course to a group of 154 new ethics 

officials in May 2010, in Chicago, Illinois. Having revised and extended the course to 3 days, 

OGE delivered the course to 64 new ethics officials in September 2010, in Atlanta, Georgia. Post 

training evaluations administered to the participants showed that 97 percent (1) were satisfied 

with the training, and (2) felt they were better equipped to do their jobs because of the training. 

The New Ethics Official Certificate Program is a "boot camp" for those new to the 

practice of ethics. Participants learn to apply relevant ethics authorities to a series of critical 

tasks, assess and discuss the importance of effective processes in the management of an ethics 

program, and use tools and resources critical to practicing ethics officials. By the end of the 

program, new ethics officials: 

 have the knowledge and skills needed to perform entry level ethics official duties, 

 understand what it takes to build an ethical culture within the executive branch, 

 appreciate ways they can effectively network with the ethics community, and 

 formulate strategies to build a successful career in ethics. 

Participants who completed the entire program and successfully passed an examination receive a 

Certificate of Completion. Because effective implementation of financial disclosure requirements 

5
 
 

 

 

 

 


 

is a central part of ethics officials’ responsibilities, the Certificate Program focused significantly 

on processes for the collection and review of financial disclosure reports. 

Building the Certificate Program was a multi-stage project involving a multi-disciplined 

team. The graphic below illustrates highlights of the work that went into developing, delivering, 

evaluating, and revising the program. 

OGE intends to the make the Certificate Program a permanent part of its ongoing program 

offerings. 

17th National Government Ethics Conference 

In May 2010, OGE hosted the 17th National Government Ethics Conference. The 

conference included over 700 Executive Branch ethics officials, Inspector General officials, and 

representatives from state, local, and foreign governments. The conference’s extensive range of 

training sessions – 45 training sessions were offered – included presentations on emerging ethics 

issues, the Ethics Pledge, program management, continuity and succession planning, reviewing 

complex nominee reports, and other important ethics issues. 

Ongoing Training 

In FY 2010, OGE continued to deliver a significant number of training courses for over 

1,200 participants in addition to the training provided during the Certificate Program and the 

conference. For example, 54 training classes were offered in Washington, D.C. Over 30 classes 

were targeted at the introductory level for new and otherwise inexperienced ethics officials. 

OGE developed 14 new courses: 12 for ethics officials, 1 for employees of the offices of the 

Inspectors General, 1 for public financial disclosure filers, and 1 for confidential financial 

disclosure filers. Topics addressed were wide-ranging, including: implementation of basic 

program elements, leveraging technology to improve ethics program management, OGE’s role in 

6
 
 

 

 


 

conflict of interest investigations, and consideration of highly technical issues faced by 

experienced ethics officials. OGE continued its practice of routinely soliciting and using 

feedback from participants, instructors, and instructional designers to refine and revise courses, 

ensuring that OGE’s training is up-to-date and effective. 

As turnover and retirement rates within the ethics community have accelerated, demand 

for training on core program elements has increased. In particular, the ethics community has 

expressed a need for training on financial disclosure review at all levels of complexity. OGE 

developed a new course targeting advanced reviewers of public financial disclosure reports. 

Eight training sessions on basic and advanced public financial disclosure were offered, reaching 

120 ethics officials. In all, 18 training sessions on financial disclosure were offered, reaching 

over 250 ethics officials. 

D. Benchmarking Cabinet-level Agency Ethics Programs 

During FY 2010, OGE conducted a comprehensive benchmarking project focusing on the 

ethics programs in all 15 Cabinet-level agencies. As part of the project, OGE identified, in 

consultation with the Cabinet-level agencies, four critical factors necessary for a successful 

ethics program (success factors): leadership, awareness, resources, and oversight. OGE executed 

an effective methodology for gathering information by multi-disciplinary teams, analyzed 

responses, compiled comparative demographic data, and presented the results. 

The project required working in close partnerships with agency Designated Agency 

Ethics Officials (DAEOs) and Alternate DAEOs. Through a self-assessment process, agencies 

examined a wide range of program structures and processes in order to efficiently identify 

concrete actions an agency can take to address each of the success factors. The majority of the 

agencies reported that they are consistently taking concrete actions to address each of the critical 

success factors in the areas of financial disclosure, ethics training, and ethics counseling. 

One notable concrete action taken 

to address leadership involvement is the Senior Executive use of a “business case” for presentation 

SES 

73% 

EX 

20% 

PAS 

7% 

Service to agency leadership in order to facilitate 

appropriate resource allocation. OGE also 

noted during the review that the DAEOs Executive Level 

in every Cabinet-level agency served at the 

SES level or higher, indicating that ethics 

officials themselves play a vital leadership 

Presidential role. 

Appointments 

Requiring Senate 

Confirmation 

7
 
 

 


 

The Cabinet-level benchmarking project emphasized the need for agencies to establish 

and maintain goals beyond minimum compliance with statutory and regulatory requirements, 

paving the way for continuing refinements to OGE’s onsite evaluation process. In all aspects, 

OGE’s work continued to encourage a strategic – rather than a reactionary – approach on the part 

of agency ethics programs and to highlight the importance of succession management and ethics 

workforce planning. OGE will use the information collected during the project to focus future 

training, advisory, and monitoring initiatives. OGE will also disseminate the information so that 

agencies can meaningfully compare themselves to similarly situated agencies. 

Below is a timeline representing highlights of OGE’s work in conducting the 

benchmarking review. 

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Section III – Management Discussion & Analysis of Results 

This section of OGE’s PAR provides data on OGE’s success in achieving its strategic 

goals and performance objectives. The following measures are based on statistical data from a 

variety of existing sources, including ethics training surveys, annual ethics program 

questionnaires, employee ethics surveys, and surveys of ethics officials. 

Strategic Goal 1 – Strengthening Ethical Culture Within the Executive Branch 

o Objective 1.1: Improve the Effectiveness of Ethics Policy 

OGE continues to earn high marks in customer satisfaction by providing guidance to 

ethics officials that serves to improve the effectiveness of ethics policy. OGE’s assessment of 

agency ethics officials’ customer satisfaction focused on three areas: 

 responsiveness to emerging ethics program issues, 

 usefulness of ethics policy guidance, and 

 effectiveness of ethics policy guidance. 

The positive results related to Objective 1.1 performance measures again met or surpassed 

OGE targets. (See Figure 1) 

Figure 1. Ethics Policy: Customer Satisfaction Measures

100

% of ethics officials who rate

OGE as responsive to emerging

ethics program issues

% of ethics officials who

rate OGE guidance as useful

% of ethics officials who say

they receive the guidance

80% necessary do their jobs

87%

95%

85%

92%

80

90

%

effectively

Target

Actual

70

FY 07 FY 08 FY 09 FY 10 FY 11

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o Objective 1.2: Enhance Assistance to and Oversight of Agency Ethics Programs 

Assessment of agency ethics programs is a main aspect of OGE’s assistance to and 

oversight of Executive Branch ethics programs. To gauge its performance in this area, OGE 

solicits ethics officials’ opinions as to whether OGE’s program review process adds value to 

agency ethics programs. 

In addition, OGE continues to devote considerable resources to training ethics officials. 

As previously noted, in FY 2010 OGE offered training to over 2,600 ethics officials and others 

(e.g., Inspectors General). 

Also in furtherance of Objective 1.2, OGE continues to share model practices to assist in 

improving ethics program operations. Specifically, in FY 2010 OGE shared results of the 

Cabinet-level agency benchmarking review detailing unique and successful program practices. 

OGE plans to conduct another round of benchmarking at a second group of Executive Branch 

agencies and will again share the model practices identified. 

The results of these efforts to advance Objective 1.2 are illustrated in the figure below. 

(See Figure 2) 

Figure 2. Assistance and Oversight: Customer Satisfaction Measures

100 100%

% of ethics officials who are satisfied

with education and training

provided by OGE to support ethics

officials

% of ethics officials who view OGE's

program review process as adding

value to their own programs

% of ethics officials who are

satisfied with information shared

on ethics program model practices

90

%

80

70

80%

85%

90%

75%

71%

60 Target

Actual

50

FY 07 FY 08 FY 09 FY 10 FY 11

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Finally, OGE encourages and supports internal reviews or audits (self-assessments) by 

agencies to evaluate their program’s compliance with applicable ethics laws and regulations. 

(See Figure 3). OGE’s Cabinet-level benchmarking review identified conducting internal 

reviews as a concrete action that directly supports oversight: a critical success factor in an 

agency’s ethics program. OGE will use this information to raise awareness among all agencies 

that conducting internal reviews is a critical component in ensuring the enduring success of their 

ethics programs. 

Figure 3. Assistance and Oversight: Ethics Program Self‐Assessment

FY 07 FY 08 FY 09 FY 10 FY 11
 

70

% of agencies that conduct internal

65% reviews or audits (self‐assessments) to

evaluate their program's compliance

% 60 with applicable ethics laws and

58% regulations

Target 50

Actual

o Objective 1.3: Increase Employees’ Awareness of Their Ethics Responsibilities 

To strengthen the ethical culture within the Executive Branch, OGE continues efforts to 

raise employee awareness of their ethics responsibilities. OGE provides training to agency ethics 

officials to assist them in carrying out their responsibilities. OGE also provides education and 

training products that agencies can incorporate into their ethics training programs and distributes 

the products throughout the Executive Branch. 

To evaluate effectiveness in the area of increasing awareness, OGE assesses ethics 

officials’ satisfaction with the extent to which OGE’s training enhances the skills necessary to 

carry out their ethics duties as well as their satisfaction with our education and training products. 

(See Figure 4) Additionally, OGE measures agency incorporation of OGE education and 

training products. (See Figure 5) 

Ethics officials were overwhelmingly satisfied with the training provided to assist them in 

doing their jobs. While many ethics officials are relatively new to the ethics program and thus 

may not know that the products their agencies are already using were developed by OGE, we 

recognize the call for more employee education and training products. In response, OGE has 

increased its efforts to develop and share training products aimed at employees. For example, at 

the 17th National Government Ethics Conference in May, over 700 attendees were provided with 

customizable, electronic versions of 8 posters that OGE had developed to assist ethics officials 

raise employee awareness. 

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Figure 4. Employee Awareness and Understanding: Customer Satisfaction

100
 

% of ethics officials reporting that
 96% they are better able to do their jobs

as a result of OGE training (measure

added in FY 09) 90

% of ethics officials who are satisfied

85% with employee education and

training products provided by OGE

80 80%

% of agencies that are satisfied with

75% OGE‐provided education and training % products to promote employee

awareness of ethics responsiblilites 70

67%	 (measure added in FY 08)

66%

Target

Actual 60

50

FY 07 FY 08 FY 09 FY 10 FY 11

Figure 5. Employee Awareness and Understanding: Incorporation of OGE

100
 % of agencies that incorporate
 

OGE education and training
 

90
 products into their program

% of agencies that incorporate OGE‐

provided education and training

80 80% products to promote employees'

% 76%	 awareness of ethics responsibilities

(measure added in FY 08) 70 71%

Target

Actual

60

50

FY 07 FY 08 FY 09 FY 10 FY 11

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100

o	 Objective 1.4: Increase OGE’s Focus on Senior Officials’ Roles in Implementing 

Ethics Programs 

OGE recognizes that commitment and action by agency leadership is the keystone for 

ensuring an agency’s ethical culture and for fostering public confidence in the decision-making 

processes of Government. OGE assesses its success in the area of leadership by measuring the 

extent to which ethics officials indicate that their agencies’ leaders pay attention to ethics and 

their agencies’ leadership demonstrates support for the ethics program. In FY 2010 OGE met or 

exceeded its leadership targets. (See Figures 6 and 7) 

Figure 6. Agency Leaders Pay Attention to Ethics

% of ethics officials who indicate

that their leaders pay attention

95% to ethics

%90 90%

Target

Actual (measure

80 added in FY 08)

FY 07 FY 08 FY 09 FY 10 FY 11

Figure 7. Agency Leadership Demonstrates Support for the Ethics Program

100

% of ethics officials who indicate

that their agencies' leadership

demonstrates support for the 90

ethics program

Target

80 Actual (measure

FY 07 FY 08 FY 09 FY 10 FY 11 added in FY 08)

%

90%

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Strategic Goal 2 – Preventing Conflicts of Interest 

o	 Objective 2.1: Enhance Assistance to the President and the Senate in the Presidential 

Appointment Process 

To further Objective 2.1, in coordination with agency ethics officials, OGE monitors the 

timeliness of employee compliance with ethics agreements. In general, agencies are to ensure 

that employees comply within 90 days of entering into the agreement. In FY 2010, OGE 

received documentation that 88% of employees complied with their ethics agreements within the 

required timeframe. This figure does not necessarily indicate that the remaining 12% of 

employees who entered into ethics agreements during the fiscal year were out of compliance. 

Rather, the figure indicates that OGE was not provided with documentation that the employees 

had complied with their ethics agreements within the required timeframe. OGE continues to 

follow up with agencies to ensure timely compliance with ethics agreements, in accordance with 

its internal written procedures. 

Additionally, OGE measures the resolution of conflicts and technical reporting issues for 

nominee financial disclosure reports. OGE’s established standard is to resolve conflicts and 

technical issues no later than five days after a nomination is made. 

The figure below illustrates the results of OGE’s efforts to further Objective 2.1. (See 

Figure 8) 

Figure 8. Assistance to the President and the Senate: Compliance Measures

100 % of officials who comply with ethics

agreements within required time frames

% of nominee financial disclosure reports for

which all conflicts and techincal reporting

issues were resolved no later than five days

80 after a nomination was made

70 Target

Actual

60

FY 07 FY 08 FY 09 FY 10 FY 11

95%

88%

90

%

14
 
 

         

                  

       

         

   

         

                 

         

        

     

           

       

     

  

	 

 

 

 

 

 


 

50

o	 Objective 2.2: Monitor Continued Compliance with Conflict of Interest Laws; and 

Objective 2.3: Administer an Effective Confidential Financial Disclosure System 

Financial disclosure serves an important public function. Through monitoring and 

oversight, OGE ensures that agencies have implemented effective financial disclosure processes. 

Two measures that OGE uses to assess agency compliance with conflict of interest laws are to 

ensure as part of the OGE review process that (1) agencies provide public filers with feedback 

after reports have been reviewed and (2) agencies have written procedures for following up with 

delinquent filers. In FY 2010, OGE met or exceeded the targets for these measures. (See Figure 9) 

Figure 9. Conflict of Interest Laws: Compliance Measures Relative to Audited Entities

% of audited entities that provide

public filers with feedback after

their reports have been reviewed

% of audited entities that have

written procedures for following

70 up with delinquent filers

95%

90%

91%

80

90

100

%

60

Target

Actual

FY 07 FY 08 FY 09 FY 10 FY 11

In furtherance of Objectives 2.2 and 2.3, OGE continued to encourage agencies to use 

alternative procedures for handling confidential financial disclosure. Appropriate implementation 

of alternative procedures promotes efficient allocation of ethics program resources and allows 

agencies to focus increased resources on other important program objectives, including: 

leadership support, succession planning, training, awareness building, and self-assessment. OGE 

also assesses whether confidential filers have filed their reports by the end of the reporting period 

to ensure that potential conflicts identified on the reports are resolved in a timely manner. The 

following two charts show continued positive results. (See Figures 10 and 11) 

Figure 10. Administration of Confidential System : Compliance with Implementation of

Alternative Systems

100 100% % of alternative systems judged

90%

70

80

90

Target

Actual

by program review to be

effectively implemented

%

60

FY 07 FY 08 FY 09 FY 10 FY 11

15 
 

 

 

         

       

     

         

           

           

       

   
 


 

 

 

	 


 

60

Figure 11. Administration of Confidential System :
 

Compliance with Confidential Financial Disclosure Filing Requirement
 

80%

99%

70

80

90

100

%

% of confidential filers who filed

by end of reporting year

Target

Actual (Note: FY 10 projected;

data available Feb. 2011)

FY 07 FY 08 FY 09 FY 10 FY 11

Strategic Goal 3 – Promoting Good Governance 

o	 Objective 3.1: Increase OGE’s Support of and Cooperation with Federal, State, and 

Local Agencies Implementing Programs that Help Support Good Governance 

Active coordination and cooperation with other government agencies having 

complementary missions and programs is important in promoting integrity, accountability, 

predictability, and transparency of Government. Agencies that promote transparent and 

consistent processes and information, and agencies that assist with participatory and efficient 

government functions, share a role in good governance, and can learn from the good practices of 

others. OGE’s engagement with other federal, state, and local government organizations and 

agencies with these complementary roles continued to prove mutually beneficial, both to OGE in 

meeting its other goals, and based on responses received from them, to the organizations and 

agencies with which OGE interacted. Some examples of the range of these engagements follow. 

At the federal level, the Inspector General community serves as a critical component in 

the detection and investigation stages of an effective program to promote integrity and 

accountability; OGE continued to maintain a healthy engagement with this community through 

the Director’s regular participation at the monthly meetings of the Council of Inspectors General 

on Integrity and Efficiency (CIGIE), through the Director’s service as a member of CIGIE’s 

Integrity Committee where a thorough understanding of conduct standards is integral to 

addressing complaints against IGs, and through other OGE personnel’s increasing and wellreceived service as instructors in courses for the Inspector General Criminal Investigation 

Academy. 

16
 
 
 

Like OGE’s engagement with the detection and investigative function provided by the 

Inspector General community, OGE began this year to reach out more formally to federal 

employment lawyers regarding effectively imposed discipline based on the standards of ethical 

conduct. This program was also well-received and indicated further opportunities to expand this 

outreach. 

The federal advisory committee system involves the participation of thousands of private 

citizens in helping provide advice and counsel throughout Government in its development of 

policies and procedures. Understanding that the valuable work of these committees can be 

undercut through the actual or perceived conflicts of its members, OGE continued this year to 

work with the General Services Administration to improve training for federal advisory 

committee management officers in departments, and agencies—the individuals who are on the 

front line of ensuring that the conflicts and transparency issues which may arise with these 

committees are addressed in a timely and appropriate manner. 

OGE has continued to share good practices with and learn from state and local 

government agencies involved in administering programs that support good governance. Much 

of that sharing occurs through or because of OGE’s active participation with the Council on 

Governmental Ethics Laws (COGEL), an organization of federal, state, and local government 

agencies whose responsibilities include ethics, campaign finance, freedom of information, and 

lobbying disclosure. OGE has gathered and shared good practices through active participation in 

the annual conference (where OGE organized a panel on negotiating for employment/postemployment in a time of furloughs and downsizing), through posting and responding to requests 

for information and assistance on the COGEL website, and through direct communications with 

members. This year for the first time, OGE also combined its international efforts with 

cooperation with state and local governments by inviting seven international participants and 

three state and local government agency COGEL members to OGE’s 17th National Government 

Ethics Conference. Participant feedback from this pilot program indicated this combination was 

productive and worthwhile. 

OGE was also able to leverage the experiences of state and local government agencies in 

support of United States foreign policy initiatives. Working with the members of COGEL, OGE 

created a list of state and local COGEL agencies for the State Department’s International Visitor 

Leadership Program (ILVP). The ILVP invites individuals from around the world to participate 

in visiting programs within the United States and those visits often include meetings with state 

and local government agencies. The list was extremely well-received by the ILVP and its 

network of local hosts and its use has given COGEL members new opportunities to share good 

practices with and to learn from the experiences of their international visitors. 

17
 
 

 

 

             

     

     

   

     

   

     


 

Figure 12. Outreach Activities with Federal, State, and Local Entities

For FY10 OGE

#

30

20

10

0

was able to

gather

feedback for 21

90% of these

13 programs, all

Target of which was

Actual positive.

FY 07 FY 08 FY 09 FY 10

o Objective 3.2: Enhance Outreach to the Public and Private Sector and Civil Society 

While OGE constructively engaged the private sector and civil society, it also recognized 

that information provided on OGE’s website is one of the most effective ways of reaching the 

largest audience and of helping to reinforce that public service ethics should be transparent and 

based on shared expectations of employees and the public. This year, OGE began the substantial 

pre-execution planning of an in-depth project to redesign its website. The purpose of the 

redesign is to make the increasingly large amount of information available on OGE’s website 

more intuitively accessible and easily navigable. This involves not just a revision of the look and 

feel of the website, but a complete overhaul of the information architecture, i.e., how information 

is categorized, organized, and presented. The website redesign project should be substantially 

complete during FY 2011. 

While the website project has diverted significant personnel resources that might 

otherwise have been available for individual outreach efforts, OGE has continued to engage the 

private sector. OGE met with organizations interested in the programs it administers, made 

presentations to university, public administration and bar association groups about the federal 

executive branch ethics program and more specifically to government contractors about federal 

gifts rules. Based upon reactions from these groups, these interactions were valued and valuable. 

Particularly effective efforts with the private sector involved OGE’s continued work with 

representatives of the academic and private sector through both the Ethics Resource Center 

(ERC) and the Ethics and Compliance Officer Association (ECOA). Together, the members of 

the organizations and OGE have been able to develop projects that mutually assist the ethics 

programs of federal agencies as well as the ethics programs of the private sector members of 

those organizations. For example, the novel and highly successful keynote presentation at the 

17th National Government Ethics Conference which required audience participation, and the 

conceptualization, design, and delivery of the New Ethics Official Certificate Program were 

direct results of OGE’s work with these organizations. Conversely, largely as a result of OGE’s 

participation in its programs, ECOA significantly increased its attention to issues of common 

18
 
 

             

     

     

   

     

   

     

	 

	 


 

#

concern to the private and government sectors, developed a better understanding of the needs of 

federal government ethics programs, and created a new membership category to better serve 

government ethics officials, thus supporting OGE’s efforts to promote succession planning and 

ethics as a profession. 

Figure 13. Outreach Activities with Private Sector and Civil Society

For FY10 OGE

was able to 20

gather

feedback for 14

12 86% of these 10

programs, all Target

Actual of which was

positive. 0

FY 07 FY 08 FY 09 FY 10

o	 Objective 3.3 Support U.S. Foreign Policy Anti-corruption and Good Governance 

Initiatives 

This fiscal year saw a continued increase in the requests for assistance received from or 

through United States foreign policy agencies, particularly as the interest in programs that help 

prevent corruption and programs of mutual evaluation has heightened. OGE now represents the 

United States at the following fora and working groups: 

	 UN Office of Drugs and Crime meetings of the Council of States Parties to the UN 

Convention Against Corruption (UNCAC), the UNCAC Implementation Review Group, 

and the UNCAC working group on Prevention; 

 Council of Europe’s Group of States Against Corruption (GRECO); 

 Asia-Pacific Economic Corporation (APEC) Anti-Corruption and Transparency Task 

Force; 

 Organization for Economic Co-operation and Development’s (OECD) Public 

Governance Directorate experts group on Integrity; 

 Follow-up mechanism of the Inter-American Convention Against Corruption (MESICIC) 

within the Organization of American States; and 

 Anti-Corruption Working Group of the US-China Joint Liaison Group. 

In addition, staff of OGE continued to serve as expert evaluators for individual GRECO 

member reviews, and for the UNCAC pilot review program, and will serve as reviewers for the 

formal UNCAC review program and continuing rounds of GRECO. Staff also continued to 

19
 
 

 

          

                      

         

 


 

assist in the reviews conducted through MESICIC. These services have resulted in increased 

requests from within the United States Government for assistance in international fora and a 

commensurate increase in financial reimbursement support where OGE’s resources would not 

otherwise allow it to accommodate the requests. 

Figure 14. OGE Cooperation with International Organizations

OGE represented the United States at anti‐corruption and governance bodies of five

multi‐national organizations and one bilateral group.

OGE’s work with these organizations has not just focused on policy development, it has 

also included very practical assistance to other members in support of those policies. Highly 

successful programs included a workshop supporting the prevention portion of the APEC AntiCorruption and Transparency Taskforce agenda jointly hosted by the United States and China. 

The program was primarily designed by OGE and included representatives of all of the APEC 

economies in the program, a result that had not been achieved before in an ACTTF event. As a 

resource for all of the participants in the program, as well as all the member economies, OGE 

compiled and provided an electronic copy of available English versions of the codes of conduct 

of the members. In addition, as a co-Chair of the workshop, the Director of OGE met with Wu 

Bangguo, Chairman of the Standing Committee of the National People's Congress; this 

meeting was a part of United States efforts to strengthen the relationship with China in APEC 

and in the US-China Joint Liaison Group. Later in the fiscal year, the United States – again 

through the efforts of OGE – co-sponsored a program with Japan (2010 APEC host) on highly 

effective techniques for training public officials on ethics and conduct standards. In addition to 

selecting and coordinating all the speakers, as well as making presentations, OGE compiled 

samples of training materials throughout the APEC region for display at the workshop and a 

provided links to those and other materials to all the participants. Both of these workshops and 

the materials provided were extremely well-received by the participants as well as by OGE’s 

United States agency partners. 

Individual anti-corruption programs from countries throughout the world often reach out 

to OGE through these international organizations or United States embassies for assistance with 

particular issues or for participation in important public programs. OGE has written articles for 

foreign agency publications, has shared materials created by OGE or compiled by OGE, and 

made seven presentations at programs hosted by these organizations – programs where 

cumulatively the audience represented 77 countries. For example, during this fiscal year, the 

Director provided a key-note address at an international program sponsored by the Centre of 

Anti-Corruption Studies of the Hong Kong Independent Commission Against Corruption. Other 

20
 
 

              

 

                           

              


 

staff spoke at conferences of the European Partners Against Corruption and the Organization of 

American States. 

In support of individual country programs, and as a pilot program, OGE invited 

participants from six individual country anti-corruption programs (2 from Asia, 1 from South 

America, 3 from the new Europe) to join the over 700 executive branch officials at OGE’s 17th 

National Ethics Conference. In addition, OGE invited representatives of three United States 

state or local government agencies to participate with the international attendees, as state and 

local programs are more often of the same size and have similar functional jurisdictions as did 

many of OGE’s international participants. All of the participants indicated that the conference 

was highly useful and thought-provoking for them and encouraged OGE to continue to invite 

both international and state and local participants. Their observations of the conference were 

also extremely useful to OGE in designing the next national conference, to which OGE plans to 

continue to invite international attendees. 

OGE regularly has an opportunity to discuss its program with delegations of foreign 

visitors from throughout the world, at international forums during and after a presentation, and 

through individual e-mail communications from those who find the agency on the internet. 

Many of the visiting delegations come through the State Department’s International Visitor 

Leadership program and associated programs. While OGE shares its experiences with these 

representatives of other countries, it also learns from their experiences. In an attempt to enhance 

the usefulness of the briefings given in Washington, D.C., OGE provides a short survey to all the 

participants. The responses consistently indicate that the presentations are useful and that the 

candor with which the presentations are given refreshing. This past year, OGE met with 43 

delegations with a cumulative participant number of 473 individuals representing 84 countries. 

The breadth and depth of OGE’s foreign policy assistance and international technical 

assistance has, in FY 2010, continue to be wide and significant. 

Figure 15. OGE International Technical Assistance

In FY10 OGE provided some form of technical assistance in support of U.S. foreign

policy interests to the countries highlighted in blue.

21 
Section IV - Management Assurances 

Annual Assurance Statement on Internal 


Controls and Internal Control over Financial Reporting 


OGE's management is responsible for establishing and maintaining effective internal 

control and financial management systems that meet the objectives of the Federal Managers' 

Financial Integrity Act (FMFIA). OGE conducted its assessment of the effectiveness of internal 

control over the effectiveness and efficiency of operations and compliance with applicable laws 

and regulations in accordance with OMB Circular A-123, Management's Responsibility for 

Internal Control. Based on the results of this evaluation, OGE can provide reasonable assurance 

that its internal control over the effectiveness and efficiency of operations and compliance with 

applicable laws and regulations as of September 30, 2010, was operating effectively and no 

material weaknesses were found in the design or operation of the internal controls. 

In addition, OGE conducted its assessment of the effectiveness of internal control over 

financial reporting, which includes safeguarding of assets and compliance with applicable laws 

and regulations, in accordance with the requirements of Appendix A of OMB Circular A-123. 

Based on the results of this evaluation, OGE can provide reasonable assurance that its internal 

control over financial reporting as of June 30, 2010, was operating effectively and no material 

weaknesses were found in the design or operation of the internal controls over financial 

1ifi-CLRobert I. Cusick 

Director 

Office of Government Ethics 

November 10, 2010 

22 

 

 

 

 

 

 

 

 

 


 

Section V – Financial Statements and Independent Auditor’s Report________ 

Limitations of the Financial Statements 

The principal financial statements for the Office of Government Ethics (OGE) have been prepared to report 

the financial position and results of operations of the Office of Government Ethics, pursuant to the 

requirements of 31 U.S.C.3515(b). While the statements have been prepared from the books and records of 

the OGE in accordance with generally accepted accounting principles (GAAP) for Federal entities and formats 

prescribed by the Office of Management and Budget (OMB), the statements are in addition to the financial 

reports used to monitor and control budgetary resources, which are prepared from the same books and records. 

These statements should be read with the realization that they are for a component of the United States 

Government, a sovereign entity. 

23
 
~~~== ~~~== "'-= ~=====BROWN BROWN BROWN && COMPANY COMPANY CPAs, CPAs, PLLC=======I PLL PLLC============= C=======I 

CERI'IFIED CERI'IFIED PUBLIC PUBLIC ACCOUNTANTS ACCOUNTANTS AND AND MANAGEMENT MANAGEMENT CONSULTANTS CONSULTANTS 

INDEPENDENT INDEPENDENT AUDITOR'S AUDITOR'S REPORT REPORT ONON THE THE FINANCIAL FINANCIAL STATEMENTS STATEMENTS 

U.S. U.S. Office Office ofGovernment Government Ethics Ethics 

Washington, Washington, D.C. D.C. 

We We have have audited audited the the accompanying accompanying balance balance sheet sheet of of the the U.S. U.S. Office Office of of Government Government Ethics Ethics (OGE) (OGE) asas of of 

September September 30, 30, 2010 2010 and and 2009, 2009, and and the the related related statements statements of of net net cost, cost, changes changes inin net net position, position, and and 

budgetary budgetary resources, resources, for for the the years years then then ended ended (collectively (collectively referred referred toto asas the the financial financial statements). statements). These These 

financial financial statements statements are are the the responsibility responsibility of of OGE's OGE's management. management. Our Our responsibility responsibility isis toto express express anan 

opinion opinion onon these these financial financial statements statements based based onon our our audit. audit. 

We We conducted conducted our our audits audits inin accordance accordance with with auditing auditing standards standards generally generally accepted accepted inin the the United United States States of of 

America America and and the the standards standards applicable applicable toto fmancial fmancial audits audits contained contained inin us. us. Government Government Auditing Auditing 

Standards, Standards, issued issued byby the the Comptroller Comptroller General General of of the the United United States; States; and, and, Office Office of of Management Management and and 

Budget Budget (OMB) (OMB) Bulletin Bulletin No. No. 07-04 07-04 asas amended, amended, Audit Audit Requirements Requirements for for Federal Federal Financial Financial Statements. Statements. 

Those Those standards standards and and OMB OMB Bulletin Bulletin No. No. 07-04 07-04 asas amended, amended, require require that that we we plan plan and and perform perform the the audit audit toto 

obtain obtain reasonable reasonable assurance assurance about about whether whether the the financial financial statements statements are are free free of of material material misstatement. misstatement. An An 

audit audit includes includes examining, examining, onon aa test test basis, basis, evidence evidence supporting supporting the the amounts amounts and and disclosures disclosures inin the the fmancial fmancial 

statements. statements. An An audit audit also also includes includes assessing assessing the the accounting accounting principles principles used used and and significant significant estimates estimates 

made made byby management, management, asas well well asas evaluating evaluating the the overall overall financial financial statement statement presentation. presentation. We We believe believe that that 

our our audit audit provides provides aa reasonable reasonable basis basis for for our our opinion. opinion. 

InIn our our opinion, opinion, the the financial financial statements statements referred referred toto above above present present fairly, fairly, inin all all material material respects, respects, the the 

financial financial position position of of the the OGE OGE asas of of September September 30, 30, 2010 2010 and and 2009 2009 and and itsits net net costs, costs, changes changes inin net net 

position, position, and and budgetary budgetary resources resources for for the the years years then then ended ended inin conformity conformity with with accounting accounting principles principles 

generally generally accepted accepted inin the the United United States States of of America. America. 

InIn accordance accordance with with US. US. Government Government Auditing Auditing Standards Standards and and OMB OMB Bulletin Bulletin No. No. 07-04 07-04 asas amended, amended, we we 

have have also also issued issued reports reports dated dated November November 12, 12, 2010 2010 onon our our consideration consideration of of the the OGE OGE internal internal control control over over 

fmancial fmancial reporting reporting and and itsits compliance compliance with with provisions provisions of of laws laws and and regulations. regulations. Those Those reports reports are are anan 

integral integral part part of of anan audit audit performed performed inin accordance accordance with with Us. Us. Government Government Auditing Auditing Standards Standards and and should should 

bebe read read inin conjunction conjunction with with this this report report inin considering considering the the results results of of our our audit. audit. 

The The OGE's OGE's Management's Management's Discussion Discussion && Analysis Analysis contains contains aa wide wide range range of of information, information, some some of of which which isis 

not not directly directly related related toto the the financial financial statements. statements. We We dodo not not express express anan opinion opinion onon this this information. information. 

However, However, we we compared compared this this information information for for consistency consistency with with the the fmancial fmancial statements statements and and discussed discussed the the 

methods methods of of measurement measurement and and presentation presentation with with OGE OGE officials. officials. Based Based onon this this limited limited work, work, we we found found nono 

material material inconsistencies inconsistencies with with the the financial financial statements, statements, U.S. U.S. generally generally accepted accepted accounting accounting principles, principles, or or 

OMB OMB guidance. guidance. 

LARGO LARGO RICHMOND RICHMOND 

44 SANTA SANTA ROSA ROSA ROAD, ROAD, SUITE SUITE 1

RICHMOND, RICHMOND, VAVA 23229 23229 

4) 4) 288-2006· 288-2006· FAX: FAX: (804) (804) 288-22

150 0707 

(80 3333 

1101 1101 MERCANTILE MERCANTILE LANE, LANE, SUITE SUITE 122 122 

LARGO, LARGO, MD MD 20774 20774 

(240) (240) 492-1400· 492-1400· FAX: FAX: (301) (301) 773·2090 773·2090 

mail@brownco-cpas,com mail@brownco-cpas,com 
This This report report isis intended intended solely solely for for the the information information and and use use of of the the management management of of the the OGE, OGE, OMB OMB and and 

Congress, Congress, and and isis not not intended intended toto bebe and and should should not not bebe used used byby anyone anyone other other than than these these specified specified parties. parties. 

=-M~~ =-M~~ November November 12, 12, 2010 2010 

.-============= 

••============= BROWN BROWN && COMPANY COMPANY CPAS, CPAS, PLLC PLLC ======~. ============~. 

25
~=====BROWN && COMPANY COMPANY CPAs, CPAs, PLLC===========3~ PLLC===========3~

CERTIFIED CERTIFIED PUBLIC PUBLIC ACCOUNTANTS ACCOUNTANTS AND AND MANAGEMENT MANAGEMENT CONSULTANTS CONSULTANTS 

INDEPENDENT INDEPENDENT AUDITOR'S AUDITOR'S REPORT REPORT 


ONON INTERNAL INTERNAL CONTROL CONTROL OVER OVER FINANCIAL FINANCIAL REPORTING REPORTING 


U.S. U.S. Office Office of of Government Government Ethics Ethics 

Washington, Washington, D.C. D.C. 

We We have have audited audited the the financial financial statements statements of of the the U.S. U.S. Office Office of of Government Government Ethics Ethics (OGE) (OGE) asas of of and and for for 

the the year year ended ended September September 30, 30, 2010 2010 and and have have issued issued our our report report thereon thereon dated dated November November 12, 12, 2010. 2010. We We 

conducted conducted our our audit audit inin accordance accordance with with auditing auditing standards standards generally generally accepted accepted inin the the United United States States of of 

America; America; the the standards standards applicable applicable toto financial financial audits audits contained contained inin u.s. u.s. Government Government Auditing Auditing Standards, Standards, 

issued issued byby the the Comptroller Comptroller General General of of the the United United States; States; and and Office Office of of Management Management and and Budget Budget (OMB) (OMB) 

Bulletin Bulletin No. No. 07-04 07-04 asas amended, amended, Audit Audit Requirements Requirements for for Federal Federal Financial Financial Statements. Statements. 

InIn planning planning and and performing performing our our audit, audit, we we considered considered the the OGE's OGE's internal internal control control over over financial financial reporting reporting 

byby obtaining obtaining anan understanding understanding of of the the OGE's OGE's internal internal control, control, determined determined whether whether internal internal controls controls had had 

been been placed placed inin operation, operation, assessed assessed control control risk, risk, and and perfonned perfonned tests tests of of controls controls inin order order toto determine determine our our 

auditing auditing procedures procedures for for the the purpose purpose of of expressing expressing our our opinion opinion onon the the financial financial statements. statements. We We limited limited our our 

internal internal control control testing testing toto those those controls controls necessary necessary toto achieve achieve the the objectives objectives described described inin OMB OMB Bulletin Bulletin 

No. No. 07-04 07-04 asas amended. amended. The The objective objective of of our our audit audit was was not not toto provide provide anan opinion opinion onon internal internal control control and and 

therefore, therefore, we we dodo not not express express anan opinion opinion onon internal internal control. control. 

Our Our consideration consideration of of the the internal internal control control over over financial financial reporting reporting would would not not necessarily necessarily disclose disclose all all 

matters matters inin the the internal internal control control over over financial financial reporting reporting that that might might bebe aa significant significant deficiency deficiency or or material material 

weakness. weakness. Under Under standards standards issued issued byby the the American American Institute Institute of of Certified Certified Public Public Accountants Accountants and and OMB OMB 

Bulletin Bulletin No. No. 07-04 07-04 asas amended, amended, aa material material weakness weakness isis aa deficiency, deficiency, or or combination combination of of deficiencies, deficiencies, inin 

internal internal control, control, such such that that there there isis aa reasonable reasonable possibility possibility that that aa material material misstatement misstatement of of the the entity's entity's 

financial financial statements statements will will not not bebe prevented, prevented, or or detected detected and and corrected corrected onon aa timely timely basis. basis. AA significant significant 

deficiency deficiency isis aa deficiency deficiency inin internal internal control, control, or or aa combination combination of of deficiencies, deficiencies, inin internal internal control control that that isis 

less less severe severe thail thail aa material material weakness, weakness, yet yet important important enough enough toto merit merit attention attention byby those those charged charged with with 

governance. governance. Because Because of of inherent inherent limitations' limitations' inin internal internal controls, controls, misstatements, misstatements, losses, losses, or or noncompliance compliance may may nevertheless nevertheless occur occur and and not not bebe detected. detected. However, However, we we noted noted nono matters matters involving involving the the 

internal internal control control and and itsits operation operation that that we we considered considered toto bebe aa material material weakness weakness asas defined defined above. above. 

This This report report isis intended intended solely solely for for the the infonnation infonnation and and use use of of the the management management of of the the OGE, OGE, OMB OMB and and 

Congress, Congress, and and isis not not intended intended toto bebe and and should should not not bebe used used byby anyone anyone other other than than these these specified specified parties. parties. 

~~~ ~~~ Largo, Largo, Maryland Maryland 

November November 12, 12, 2010 2010 

LARGO LARGO RICHMOND RICHMOND 

1101 1101 MERCANTILE MERCANTILE LANE, LANE, SUITE SUITE 122 122 1504 1504 SANTA SANTA ROSA ROSA ROAD, ROAD, SUITE SUITE 107 107 

LARGO, LARGO, MDMD 20774 20774 RICHMOND, RICHMOND, VAVA 23229 23229 

(240) (240) 492·1400' 492·1400' FAX: FAX: (301) (301) 773·2090 773·2090 

(804) (804) 288-2006' 288-2006' FAX: FAX: (804) (804) 288-2233 288-2233 

mail mail brownco~cpas.com
~=====JBRAJWN& ~~~=BRO.WN& COMPANY COMPANY CPAs, CPAs, PLLC============3~ PLLC============3~

CERrIFIED CERrIFIED PUBLIC PUBLIC ACCOUNTANTS ACCOUNTANTS AND AND MANAGEMENT MANAGEMENT CONSULTANTS CONSULTANTS 

INDEPENDENT INDEPENDENT AUDITOR'S AUDITOR'S REPORT REPORT ONON 


COMPLIANCE COMPLIANCE WITH WITH LAWS LAWS AND AND REGULATIONS REGULATIONS 


u.s. u.s. Office Office of of Government Government Ethics Ethics 


Washington, Washington, D.C. D.C. 


We We have have audited audited the the [mancial [mancial statements statements of of the the U.S. U.S. Office Office of of Government Government Ethics Ethics (OGE) (OGE) asas of of and and for for 

the the year year ended ended September September 30,2010, 30,2010, and and have have issued issued our our report report thereon thereon dated dated November November 12, 12, 2010. 2010. We We 

conducted conducted our our audit audit inin accordance accordance with with auditing auditing standards standards generally generally accepted accepted inin the the United United States States of of 

America; America; the the standards standards applicable applicable toto financial financial audits audits contained contained inin Us. Us. Government Government Auditing Auditing Standards, Standards, 

issued issued byby the the Comptroller Comptroller General General of of the the United United States; States; and and Office Office of of Management Management and and Budget Budget (OMB) (OMB) 

Bulletin Bulletin No. No. 07-04 07-04 asas amended, amended, Audit Audit Requirementsfor Requirementsfor Federal Federal Financial Financial Statements. Statements. 

The The management management of of the the OGE OGE isis responsible responsible for for complying complying with with laws laws and and regulations regulations applicable applicable toto the the 

OGE. OGE. As As part part of of obtaining obtaining reasonable reasonable assurance assurance about about whether whether the the OGE's OGE's financial financial statements statements are are free free of of 

material material misstatement, misstatement, we we performed performed tests tests of of itsits compliance compliance with with certain certain provisions provisions of of laws laws and and 

regulations, regulations, noncompliance noncompliance with with which which could could have have aa direct direct and and material material effect effect onon the the determination determination of of 

financial financial statement statement amounts, amounts, and and certain certain other other laws laws and and regulations regulations specified specified inin OMB OMB Bulletin Bulletin No. No. 07-04 07-04 

asas amended. amended. We We limited limited our our tests tests of of compliance compliance toto these these provisions provisions and and we we did did not not test test compliance compliance with with 

all all laws laws and and regulations regulations applicable applicable toto the the OGE. OGE. 

The The results results of of our our tests tests of of compliance compliance disclosed disclosed nono reportable reportable instances instances of of noncompliance noncompliance with with laws laws and and 

regulations regulations discussed discussed inin the the preceding preceding paragraph paragraph that that are are required required toto bebe reported reported under under Us. Us. Government Government 

Auditing Auditing Standards Standards or or OMB OMB Bulletin Bulletin No. No. 07-04 07-04 asas amended. amended. 

Providing Providing anan opinion opinion onon compliance compliance with with certain certain provisions provisions of of laws laws and and regulations regulations was was not not anan objective objective 

of of our our audit, audit, and, and, accordingly, accordingly, we we dodo not not express express such such anan opinion. opinion. However, However, we we noted noted nono noncompliance noncompliance 

with with laws laws and and regulations, regulations, which which could could have have aa direct direct and and material material effect effect onon the the determination determination of of financial financial 

statement statement amounts. amounts. 

This This report report isis intended intended solely solely for for the the information information and and use use of of the the management management of of the the OGE, OGE, OMB OMB and and 

Congress, Congress, and and isis not not intended intended toto bebe and and should should not not bebe used used byby anyone anyone other other than than these these specified specified parties. parties. 

~J~ ~J~ November November 12, 12, 2010 2010 

LARGO LARGO 


1101 1101 MERCANTILE MERCANTILE LANE, LANE, SUITE SUITE 122 122 


LARGO, LARGO, MDMD 20774 20774 


(240) (240) 492-1400· 492-1400· FAX: FAX: (301) (301) 773-2090 
 773-2090

mail@brownco-cpas,com mail@brownco-cpas,com 

RICHMOND RICHMOND 


1504 1504 SANTA SANTA ROSA ROSA ROAD, ROAD, SUITE SUITE 107 107 


RICHMOND, RICHMOND, VAVA 23229 23229 


(804) (804) 288-2006· 288-2006· FAX: FAX: (804) (804) 288-2233 
 288-2233

tdavis@brownco-cpas.com
 

2010 2009

Assets:

Intragovernmental

Fund Balance With Treasury (Note 2) $ 2,461,039 $ 1,701,883

Accounts Receivable, Net (Note 3) 14,278 -

Total Intragovernmental 2,475,317 1,701,883

Accounts Receivable, Net (Note 3) 141 985

Total Assets $ 2,475,458 $ 1,702,868

Liabilities:

Intragovernmental

Accounts Payable $ 186,713 $ 119,857

Other (Note 6) 181,860 163,760

Total Intragovernmental 368,573 283,617

Accounts Payable 192,529 253,188

Federal Employee and Veterans' Benefits (Note 4) 359,901 347,745

Other (Note 6) 1,319,780 1,218,663

Total Liabilities $ 2,240,783 $ 2,103,213

Net Position:

Unexpended Appropriations $ 1,418,281 $ 737,404

Cumulative Results of Operations (1,183,606) (1,137,749)

Total Net Position $ 234,675 $ (400,345)

Total Liabilities and Net Position $ 2,475,458 $ 1,702,868

UNITED STATES OFFICE OF GOVERNMENT ETHICS

BALANCE SHEET

AS OF SEPTEMBER 30, 2010 AND 2009

(In Dollars)

The accompanying notes are an integral part of these financial statements 

28 
 

2010 2009

Program Costs:

Salaries and Expenses:

Gross Costs (Note 8) $ 14,222,581 $ 13,614,907

Earned Revenue (546,058) (68,149)

Net Cost of Operations $ 13,676,523 $ 13,546,758

UNITED STATES OFFICE OF GOVERNMENT ETHICS

STATEMENT OF NET COST

FOR THE YEARS ENDED SEPTEMBER 30, 2010 AND 2009

(In Dollars)

The accompanying notes are an integral part of these financial statements 

29 
 

2010 2009

Cumulative Results of Operations:

Beginning Balances $ (1,137,749) $ (1,173,279)

Budgetary Financing Sources:

Appropriations Used 13,094,790 13,027,389

Other Financing Sources (Non-Exchange):

Imputed Financing Sources (Note 9) 535,875 554,899

Total Financing Sources 13,630,665 13,582,288

Net Cost of Operations (13,676,523) (13,546,758)

Net Change (45,858) 35,530

Cumulative Results of Operations $ (1,183,606) $ (1,137,749)

Unexpended Appropriations:

Beginning Balances $ 737,404 $ 1,228,435

Budgetary Financing Sources:

Appropriations Received 14,000,000 13,000,000

Other Adjustments (224,333) (463,642)

Appropriations Used (13,094,790) (13,027,389)

Total Budgetary Financing Sources 680,877 (491,031)

Total Unexpended Appropriations $ 1,418,281 $ 737,404

Net Position $ 234,675 $ (400,345)

UNITED STATES OFFICE OF GOVERNMENT ETHICS

STATEMENT OF CHANGES IN NET POSITION

FOR THE YEARS ENDED SEPTEMBER 30, 2010 AND 2009

(In Dollars)

The accompanying notes are an integral part of these financial statements 

30 
 

2010 2009

Budgetary Resources:

Unobligated Balance Brought Forward, October 1 $ 567,187 $ 885,266

Recoveries of Prior Year Unpaid Obligations 661,925 697,716

Budget Authority

Appropriation 14,000,000 13,000,000

Spending Authority From Offsetting Collections

Collected 531,780 105,897

Change In Receivables From Federal Sources 14,278 (37,748)

Without Advance From Federal Sources - (34,403)

Permanently Not Available (224,333) (463,642)

Total Budgetary Resources $ 15,550,837 $ 14,153,086

Status of Budgetary Resources:

Obligations Incurred 

Direct (Note 11) $ 14,397,217 $ 13,442,308

Reimbursable (Note 11) 546,252 143,591

Unobligated Balance

Apportioned 136,832 35,400

Unobligated Balance Not Available 470,536 531,787

Total Status of Budgetary Resources $ 15,550,837 $ 14,153,086

Change in Obligated Balance:

Obligated Balance, Net

Unpaid Obligations, Brought Forward, October 1 $ 1,134,695 $ 1,641,407

Uncollected Customer Payments From

Federal Sources, Brought Forward, October 1 - (72,151)

Total Unpaid Obligated Balance, Net 1,134,695 1,569,256

Obligations Incurred Net 14,943,469 13,585,899

Gross Outlays (13,548,292) (13,394,895)

Recoveries of Prior Year Unpaid Obligations, Actual (661,925) (697,716)

Uncollected Customer Payments From Federal Sources (14,278) 72,151

 1,853,669 1,134,695

Obligated Balance, Net, End of Period

Unpaid Obligations 1,867,947 1,134,695

Uncollected Customer Payments From Federal Sources (14,278) -

Total, Unpaid Obligated Balance, Net, End of Period $ 1,853,669 $ 1,134,695

Net Outlays:

Gross Outlays $ 13,548,292 $ 13,394,895

Offsetting Collections (531,780) (105,897)

Net Outlays $ 13,016,512 $ 13,288,998

UNITED STATES OFFICE OF GOVERNMENT ETHICS

STATEMENT OF BUDGETARY RESOURCES

FOR THE YEARS ENDED SEPTEMBER 30, 2010 AND 2009

(In Dollars)

The accompanying notes are an integral part of these financial statements 

31 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


 


 


 

UNITED STATES OFFICE OF GOVERNMENT ETHICS
 

NOTES TO THE FINANCIAL STATEMENTS
 

NOTE 1. SUMMARY OF SIGNIFICANT General Funds are accounts used to record 

ACCOUNTING POLICIES financial transactions arising under 

congressional appropriations or other 

A. Reporting Entity authorizations to spend general revenues. 

The Office of Government Ethics (OGE), General Fund miscellaneous receipts are 

established by the Ethics in Government Act of accounts established for receipts of non1978, is the agency within the Executive recurring activity, such as fines, penalties, fees 

Branch that provides overall direction of and other miscellaneous receipts for services 

Executive Branch policies designed to prevent and benefits. 

and resolve conflicts of interest and to promote 

high ethical standards for Executive Branch OGE has rights and ownership of all assets 

employees. Specifically, OGE is responsible reported in these financial statements. OGE 

for promulgating and maintaining enforceable does not possess any non-entity assets. 

standards of ethical conduct for nearly 4 

million civilian employees and uniformed B. Basis of Presentation 

service members in over 130 Executive Branch 

agencies and the White House; overseeing a The financial statements have been prepared to 

financial disclosure system that reaches 25,000 report the financial position, net cost of 

public and nearly 300,000 confidential filers; operations, changes in net position, and the 

providing direct education and training status and availability of budgetary resources 

products to 5,600 ethics officials; conducting of OGE. The statements are a requirement of 

outreach to the general public, the private the Chief Financial Officers Act of 1990, the 

sector and civil society; and sharing good Government Management Reform Act of 1994 

practices with and providing technical and the Accountability of Tax Dollars Act of 

assistance to state, local, and foreign 2002. They have been prepared from, and are 

governments and international organizations. fully supported by, the books and records of 

OGE in accordance with the hierarchy of 

OGE’s greatest resource is its multi- accounting principles generally accepted in the 

disciplinary staff of attorneys, ethics and United States of America, standards approved 

finance experts, and support staff. OGE by the principals of the Federal Accounting 

leverages its human resources by organizing Standards Advisory Board (FASAB), OMB 

cross-functional teams to perform such diverse Circular A-136, Financial Reporting 

tasks as reviewing the financial disclosure Requirements and OGE accounting policies 

reports of Senate-confirmed, Presidential which are summarized in this note. These 

appointees for financial conflicts of interest, statements, with the exception of the Statement 

training Executive Branch ethics officials, and of Budgetary Resources, are different from 

enhancing oversight of Executive Branch financial management reports, which are also 

ethics programs. By necessity, OGE’s multi- prepared pursuant to OMB directives that are 

disciplinary staff must be flexible in order to used to monitor and control OGE's use of 

identify and respond to emerging needs within budgetary resources. 

the ethics community and the Government as a 

whole. The financial statements and associated notes 

are presented on a comparative basis. Unless 

32 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


 

specified otherwise, all amounts are presented 

in dollars. 

C. Budgets and Budgetary Accounting 

Congress usually enacts appropriations to 

permit OGE to incur obligations for specified 

purposes. In fiscal years 2010 and 2009, OGE 

was accountable for General Fund 

appropriations. OGE recognizes budgetary 

resources as assets when cash (funds held by 

the U.S. Treasury) is made available through 

the Department of Treasury General Fund 

warrants. OGE also has reimbursable authority 

to conduct an Annual Ethics Conference. 

Budgetary resources are recorded when funds 

on deposit with the Department of Treasury 

are made available to OGE through a 

warrant(s) for expenditures and liabilities. 

D. Basis of Accounting 

Transactions are recorded on both an accrual 

accounting basis and a budgetary basis. Under 

the accrual method, revenues are recognized 

when earned, and expenses are recognized 

when a liability is incurred, without regard to 

receipt or payment of cash. Budgetary 

accounting facilitates compliance with legal 

requirements on the use of federal funds. 

E. Revenues & Other Financing Sources 

Congress enacts annual appropriations to be 

used, within statutory limits, for operating and 

capital expenditures. Additional amounts are 

obtained from service fees and reimbursements 

from other government entities and the public. 

Appropriations are recognized as a financing 

source when expended. Revenue from service 

fees associated with reimbursable agreements 

are recognized concurrently with the 

recognition of accrued expenditures for 

performing the services. 

OGE recognized as an imputed financing 

source the amount of accrued pension and 

post-retirement benefit expenses for current 

employees paid on our behalf by the Office of 

Personnel Management (OPM). 

F. Taxes 

OGE, as a Federal entity, is not subject to 

Federal, State, or local income taxes, and, 

accordingly, no provision for income taxes has 

been recorded in the accompanying financial 

statements. 

G. Fund Balance with Treasury 

The U.S. Treasury processes cash receipts and 

disbursements. Funds held at the Treasury are 

available to pay agency liabilities. OGE does 

not maintain cash in commercial bank 

accounts. See Note 2 for additional 

information. 

H. Accounts Receivable 

Accounts receivable consists of amounts owed 

to OGE by other Federal agencies and the 

general public. Amounts due from Federal 

agencies are considered fully collectible. 

Accounts receivable from the public include 

reimbursements from employees. An 

allowance for uncollectible accounts 

receivable from the public is established 

when, based upon a review of outstanding 

accounts and the failure of all collection 

efforts, management determines that collection 

is unlikely to occur considering the debtor’s 

ability to pay. 

I. Property, Equipment, and Software 

Property, equipment and software represent 

furniture, fixtures, equipment, and information 

technology hardware and software which are 

recorded at original acquisition cost and are 

depreciated or amortized using the straight-line 

method over their estimated useful lives. 

Major alterations and renovations are 

capitalized, while maintenance and repair costs 

are charged to expense as incurred. OGE's 

capitalization threshold is $50,000 for 

individual purchases and $500,000 for bulk 

purchases. Applicable standard governmental 

guidelines regulate the disposal and 

convertibility of agency property, equipment, 

and software. The useful life classifications 

for capitalized assets are as follows: 

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Description Useful Life (years) 

Leasehold Improvements 9 

Office Furniture 5 

Computer Equipment 3 

Office Equipment 5 

Software 5 

J. Advances and Prepaid Charges 

Advance payments are generally prohibited by 

law. There are some exceptions, such as 

reimbursable agreements, subscriptions and 

payments to contractors and employees. 

Payments made in advance of the receipt of 

goods and services are recorded as advances or 

prepaid charges at the time of prepayment and 

recognized as expenses when the related goods 

and services are received. 

K. Liabilities 

Liabilities represent the amount of monies or 

other resources likely to be paid by the OGE as 

a result of transactions or events that have 

already occurred. No liability can be paid, 

however, absent an appropriation or other 

funding. Liabilities for which an appropriation 

has not been enacted or other funds received 

are, therefore, classified as not covered by 

budgetary resources. There is no certainty that 

the appropriation will be enacted. 

Additionally, the Government, acting in its 

sovereign capacity, can abrogate liabilities. 

L. Accounts Payable 

Accounts payable consists primarily of 

amounts owed to other Federal agencies and 

the public for contracts for goods or services, 

such as leases, utilities, telecommunications 

and consulting and support services. 

M. Annual, Sick, and Other Leave 

Annual leave is accrued as it is earned, and 

the accrual is reduced as leave is taken. 

The balance in the accrued leave account is 

adjusted to reflect current pay rates. 

Liabilities associated with other types of 

vested leave, including compensatory, 

restored leave, and sick leave in certain 

circumstances, are accrued at year-end, 

based on latest pay rates and unused hours of 

leave. Funding will be obtained from future 

financing sources to the extent that current or 

prior year appropriations are not available to 

fund annual and other types of vested leave 

earned but not taken. Nonvested leave is 

expensed when used. Any liability for sick 

leave that is accrued but not taken by a Civil 

Service Retirement System (CSRS) covered 

employee is transferred to the OPM upon the 

retirement of that individual. Credit is given 

for sick leave balances upon the retirement of 

Federal Employee’s Retirement System 

(FERS) covered employees effective at 50% 

beginning FY 2010 and 100% in FY 2014. 

N. Accrued and Actuarial Workers’ 

Compensation 

The Federal Employees' Compensation Act 

(FECA) administered by the U.S. Department 

of Labor (DOL) addresses all claims brought 

by the OGE employees for on-the-job injuries. 

The DOL bills each agency annually as its 

claims are paid, but payment of these bills is 

deferred for two years to allow for funding 

through the budget process. Similarly, 

employees that the OGE terminates without 

cause may receive unemployment 

compensation benefits under the 

unemployment insurance program also 

administered by the DOL, which bills each 

agency quarterly for paid claims. Future 

appropriations will be used for the 

reimbursement to DOL. The liability consists 

of (1) the net present value of estimated future 

payments calculated by the DOL, and (2) the 

unreimbursed cost paid by DOL for 

compensation to recipients under the FECA. 

O. Retirement Plans 

OGE employees participate in either the 

CSRS or the FERS. The employees who 

participate in CSRS are beneficiaries of 

OGE’s matching contribution, equal to seven 

percent of pay, distributed to their annuity 

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account in the Civil Service Retirement and 

Disability Fund. 

Prior to December 31, 1983, all employees 

were covered under the CSRS program. From 

January 1, 1984 through December 31, 1986, 

employees had the option of remaining under 

CSRS or joining FERS and Social Security. 

Employees hired as of January 1, 1987 are 

automatically covered by the FERS program. 

FERS offers a savings plan to which OGE 

automatically contributes one percent of pay 

and matches any employee contribution up to 

an additional four percent of pay. For FERS 

participants, OGE also contributes to the 

employer's matching share of Social Security. 

FERS employees and certain CSRS 

reinstatement employees are eligible to 

participate in the Social Security program after 

retirement. In these instances, OGE remits the 

employer's share of the required contribution. 

OGE recognizes the imputed cost of pension 

and other retirement benefits during the 

employees’ active years of service. OPM 

actuaries determine pension cost factors by 

calculating the value of pension benefits 

expected to be paid in the future and 

communicate these factors to OGE for current 

period expense reporting. OPM also provides 

information regarding the full cost of health 

and life insurance benefits. OGE recognized 

the offsetting revenue as imputed financing 

sources to the extent these expenses will be 

paid by OPM. 

OGE does not report on its financial statements 

information pertaining to the retirement plans 

covering its employees. Reporting amounts 

such as plan assets, accumulated plan benefits, 

and related unfunded liabilities, if any, is the 

responsibility of the OPM. 

P. Other Post-Employment Benefits 

OGE employees eligible to participate in the 

Federal Employees' Health Benefits Plan 

(FEHBP) and the Federal Employees' Group 

Life Insurance Program (FEGLIP) may 

continue to participate in these programs after 

their retirement. The OPM has provided the 

OGE with certain cost factors that estimate the 

true cost of providing the post-retirement 

benefit to current employees. The OGE 

recognizes a current cost for these and Other 

Retirement Benefits (ORB) at the time the 

employee's services are rendered. The ORB 

expense is financed by OPM, and offset by the 

OGE through the recognition of an imputed 

financing source. 

Q. Use of Estimates 

The preparation of the accompanying financial 

statements in accordance with generally 

accepted accounting principles requires 

management to make certain estimates and 

assumptions that affect the reported amounts 

of assets, liabilities, revenues, and expenses. 

Actual results could differ from those 

estimates. 

R. Imputed Costs/Financing Sources 

Federal Government entities often receive 

goods and services from other Federal 

Government entities without reimbursing the 

providing entity for all the related costs. In 

addition, Federal Government entities also 

incur costs that are paid in total or in part by 

other entities. An imputed financing source is 

recognized by the receiving entity for costs 

that are paid by other entities. OGE 

recognized imputed costs and financing 

sources in fiscal years 2010 and 2009 to the 

extent directed by OMB. 

S. Expired Accounts and Cancelled 

Authority 

Unless otherwise specified by law, annual 

authority expires for incurring new obligations 

at the beginning of the subsequent fiscal year. 

The account in which the annual authority is 

placed is called the expired account. For five 

fiscal years, the expired account is available 

for expenditure to liquidate valid obligations 

incurred during the unexpired period. 

Adjustments are allowed to increase or 

decrease valid obligations incurred during the 

unexpired period but not previously reported. 

35
 
Fund Balances:

2010 2009

Appropriated Funds $ 2,461,039 $ 1,701,883 

Total $ 2,461,039 $ 1,701,883 

Status of Fund Balance with Treasury:

2010 2009

Unobligated Balance

 Available $ 136,832 $ 35,400 

 Unavailable 470,536 531,787 

Obligated Balance Not Yet Disbursed 1,853,671 1,134,696 

Total $ 2,461,039 $ 1,701,883 

 

 

 

 

 

 

 

 

 


 

At the end of the fifth expired year, the expired T. Reclassification 

account is cancelled. 

Certain fiscal year 2009 balances may have 

been reclassified, retitled, or combined with 

other financial statement line items for 

consistency with current year presentation. 

NOTE 2. FUND BALANCE WITH TREASURY 

Fund balance with Treasury account balances as of September 30, 2010 and 2009 were as 

follows: 

The unavailable unobligated fund balances represents the amount of appropriations for which the 

period of availability for obligation has expired. This balance is available for upward adjustments 

of obligations incurred only during the period for which the appropriation was available for 

obligation or for paying claims attributable to the appropriations. 

NOTE 3. ACCOUNTS RECEIVABLE, NET 

Accounts receivable balances as of September 30, 2010 and 2009 were as follows: 

2010 2009

 Intragovernmental

Accounts Receivable $ 14,278 $ -

With the Public

Accounts Receivable 141 985

Total Accounts Receivable $ 14,419 $ 985

36
 
of September 30, 2010 and 2009. 

2010 2009

Intragovernmental – FECA $ 78,521 $ 75,132

Intragovernmental – Unemployment Insurance 3,010 -

Unfunded Leave 745,325 715,857

Actuarial FECA 359,901 347,745

Total Liabilities Not Covered by Budgetary Resources 1,186,757 1,138,734 

Total Liabilities Covered by Budgetary Resources 1,054,026 964,479

Total Liabilities $ 2,240,783 $ 2,103,213

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


 

The accounts receivable is primarily employee receivables. Historical experience has indicated 

that the majority of the receivables are collectible. There are no material uncollectible accounts as 

NOTE 4. LIABILITIES NOT COVERED BY BUDGETARY RESOURCES 

The liabilities on OGE’s Balance Sheet as of September 30, 2010 and 2009, include liabilities 

not covered by budgetary resources. Congressional action is needed before budgetary resources 

can be provided. Although future appropriations to fund these liabilities are likely and 

anticipated, it is not certain that appropriations will be enacted to fund these liabilities. 

Unfunded leave represents a liability for earned leave and is reduced when leave is taken. The 

balance in the accrued annual leave account is reviewed quarterly and adjusted as needed to 

accurately reflect the liability at current pay rates and leave balances. Accrued annual leave is 

paid from future funding sources and, accordingly, is reflected as a liability not covered by 

budgetary resources. Sick and other leave is expensed as taken. 

NOTE 5. ACTUARIAL LIABILITY 

FECA provides income and medical cost protection to covered federal civilian employees harmed 

on the job or who have contracted an occupational disease, and dependents of employees whose 

death is attributable to a job-related injury or occupational disease. Claims incurred for benefits 

under FECA for OGE's employees are administered by the DOL and ultimately paid by OGE 

when funding becomes available. 

OGE bases its estimate for FECA actuarial liability on the DOL's FECA model. The model 

considers the average amount of benefit payments incurred by OGE for the past three fiscal years, 

multiplied by the medical and compensation liability to benefits paid (LBP) ratio for the whole 

FECA program. For the years ending September 30, 2010 and 2009, OGE used the overall 

average percentages of the LBP ratio to calculate the $359,901 and $347,745 FECA actuarial 

liablities, respectively. 

37
 
 

 

NOTE 6. OTHER LIABILITIES 

2010 2009

Intragovernmental Liabilities

FECA Liability $ 78,521 $ 75,132

Payroll Taxes Payable 100,329 88,628

Unemployment Liability 3,010 -

Total Intragovernmental Liabilities $ 181,860 $ 163,760

2010 2009

With the Public

 Payroll Taxes Payable $ 14,957 $ 13,140

 Accrued Funded Payroll and Leave 559,498 489,666

 Unfunded Annual Leave 745,325 715,856

Total Public Liabilities $ 1,319,780 $ 1,218,663

All Other Liabilities are considered current liabilities. 

NOTE 7. LEASES 

Operating Leases 

OGE occupies office space under a lease agreement that is accounted for as an operating lease. 

The lease term is for a period of ten (10) years commencing on February 2, 2004 and ends 

February 1, 2014: 

Fiscal Year Totals

2011 $ 1,401,175

2012 1,415,909

2013 1,431,042

2014 478,711

Total Future Payments $ 4,726,837

38
 
NOTE 8. INTRAGOVERNMENTAL COSTS AND EXCHANGE REVENUE 

2010 2009

Program Costs

 Intragovernmental Costs $ 4,353,814 $ 4,334,388

 Public Costs 9,868,767 9,267,520

 Total Program Costs 14,222,581 13,601,908

 Intragovernmental Earned Revenue (70,858) (65,661)

 Public Earned Revenue (475,200) (2,488)

Total Net Cost $ 13,676,523 $ 13,533,759

 

 

 

 

 

 

 

 

 

 

 


 

Intragovernmental costs and intergovernmental exchange revenue represent goods and services 

exchange made between two reporting entities within the Federal government, and are in contrast 

to those with non-federal entities (the public). Intragovernmental costs include payments to 

federal vendors for personnel benefits, rent, utilities, and other services. Payments made to nonfederal entities (the public) are comprised primarily of employee salaries and other services. 

Such costs are summarized as follows: 

NOTE 9. IMPUTED FINANCING SOURCES 

OGE recognizes as imputed financing the amount of accrued pension and post-retirement benefit 

expenses for current employees. The assets and liabilities associated with such benefits are the 

responsibility of the administering agency, the Office of Personnel Management (OPM). For the 

year ended September 30, 2010 and 2009, imputed financing was as follows: 

2010 2009

Office of Personnel Management $ 535,875 $ 554,899 

Total Imputed Financing Sources $ 535,875 $ 554,899 

NOTE 10. BUDGETARY RESOURCE COMPARISONS TO THE BUDGET OF THE 

UNITED STATES GOVERNMENT 

The President’s Budget that will include FY 10 actual budgetary execution information has not 

yet been published. The President’s Budget is scheduled for publication in February 2011 and can 

be found at the OMB Web site: http://www.whitehouse.gov/omb/. The 2011 Budget of the 

United States Government, with the Actual column completed for 2009, has been reconciled to 

the Statement of Budgetary Resources and there were no material differences. 

39
 
NOTE 11. APPORTIONMENT CATEGORIES OF OBLIGATIONS INCURRED 

2010 2009

Resources Used to Finance Activities:

Budgetary Resources Obligated

Obligations Incurred $ 14,943,469 $ 13,585,899

Less: Spending Authority From Offsetting Collections and Recoveries (1,207,983) (731,462)

Net Obligations 13,735,486 12,854,437

Other Resources

Imputed Financing From Costs Absorbed By Others 535,875 554,899

Net Other Resources Used to Finance Activities 535,875 554,899

Total Resources Used to Finance Activities 14,271,361 13,409,336

Resources Used to Finance Items Not Part of the Net Cost of Operations: 639,852 (122,924)

Total Resources Used to Finance the Net Cost of Operations 13,631,509 13,532,260

Components of the Net Cost of Operations That Will Not Require or

Generate Resources in the Current Period: 45,014 14,498

Net Cost of Operations $ 13,676,523 $ 13,546,758

 

 

 

 

 

 

 


 

Obligations incurred and reported in the Statement of Budgetary Resources in 2010 and 2009 

consisted of the following: 

2010 2009

Direct Obligations, Category A $ 14,397,217 $ 13,442,308

Reimbursable Obligations, Category A 546,252 143,591

Total Obligations Incurred $ 14,943,469 $ 13,585,899

NOTE 12. UNDELIVERED ORDERS AT THE END OF THE PERIOD 

Statement of Federal Financial Accounting Standards No. 7, Accounting for Revenue and Other 

Financing Sources and Concepts for Reconciling Budgetary and Financial Accounting, states that 

the amount of budgetary resources obligated for undelivered orders at the end of the period 

should be disclosed. 

2010 2009

Undelivered Orders $ 810,912 $ 170,217 

Total Undelivered Orders $ 810,912 $ 170,217 

NOTE 13. RECONCILIATION OF NET COST OF OPERATIONS TO BUDGET 

OGE has reconciled its budgetary obligations and non-budgetary resources available to its net 

cost of operations. 

40