U.S. OFFICE OF GOVERNMENT ETHICS

 

 

 

Fiscal Year 2007 

Performance Accountability Report 

Management Discussion and Analysis 

Annual Program Performance Report 

 Management Assurances 

Audited Financial Statements

 

 November 2007 
 November 15, 2007 

The Honorable Jim Nussle 

Director 

Office of Management and Budget 

Washington, DC 20503 

Dear Mr. Nussle: 

 

 I am pleased to transmit to you the Performance 

Accountability Report (PAR) for the Office of Government Ethics 

(OGE) for FY 2007. Our PAR includes our Management Discussion 

and Analysis of OGE’s Mission, Goals, and Program Highlights for 

FY 2007, our Annual Performance Report on how we met our 

performance goals, Management Assurances, and the Audited 

Financial Statements. 

 In FY 2007, OGE had many noteworthy accomplishments which 

included preparing a comprehensive transition plan to assist 

ethics officials with their preparations for the upcoming 

transition, addressing emerging ethics issues as they arise, and 

using technology to improve the delivery of ethics services, 

information, and materials. These accomplishments are discussed 

in detail in this report. 

 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 
The Honorable Jim Nussle 

Page 2 

pleased to certify, with reasonable assurance, that OGE’s 

systems of accounting and internal control are in compliance 

with the provisions of the 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, 2007. 

In addition, the auditors found no material weaknesses related 

to OGE’s compliance and internal controls over financial 

reporting. 

 If you need additional information with regard to these 

statements, please contact Daniel D. Dunning, Deputy Director, 

Office of Administration and Information Resources Management, 

at 202-482-9203. 

 Sincerely, 

 

 /s/

 Robert I. Cusick 

 Director 
1 

 INTRODUCTION 

The Office of Government Ethics (OGE) is a separate 

executive branch agency established under the Ethics in 

Government Act of 1978, as amended (5 U.S.C. app. 401). The 

Director is appointed by the President with the advice and 

consent of the Senate for a five-year term. 

The Office of Government Ethics is headquartered in 

Washington, DC. Currently, OGE is authorized a staff of 

80 full-time equivalents. This discussion and analysis provides 

a brief overview of OGE’s mission, goals of its Strategic Plan, 

and highlights of its accomplishments in FY 2007. For detailed 

information on OGE, visit its website at HUwww.usoge.gov.U

SUMMARY OF OGE’S MISSION 

The Office of Government Ethics 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 agencies 

and departments, OGE fosters high ethical standards for 

employees and strengthens the public’s confidence that the 

Government’s business is conducted with impartiality and 

integrity. The chief responsibilities of OGE are: 

• Developing, in consultation with the Attorney General and 

the Office of Personnel Management (OPM), rules and 

regulations to be promulgated by the President or the 

Director of the Office of Government Ethics (OGE’s 

Director) pertaining to standards of ethical conduct of 

executive branch officials, public and confidential 

financial disclosure of executive branch officials, 

executive agency ethics training programs, and the 

resolution of conflicts of interest; 

• Monitoring compliance with the executive branch financial 

disclosure requirements of the Ethics in Government Act of 

1978, as amended; 

• Providing ethics program assistance and information to 

executive branch agencies through a desk officer system; 

• Developing and delivering training courses and creating 

materials and training aids to be used by agencies in 

conducting training of Federal employees; 
2 

• Conducting periodic reviews of the ethics programs of 

executive agencies; 

• Ordering corrective action on the part of agencies that 

OGE’s Director deems necessary, including orders to 

establish or modify an agency’s ethics program; 

• Providing guidance on and promoting understanding of 

ethical standards in executive agencies through an 

extensive program of Government ethics advice, education 

and training; 

• Evaluating the effectiveness of the Ethics in Government 

Act, the conflict of interest laws, and other related 

statutes; 

• Recommending appropriate new legislation or amendments; and 

• Supporting U.S. international anticorruption initiatives by 

providing technical assistance primarily to prevention 

programs. 

GOALS OF OGE’S STRATEGIC PLAN for FY 2007-2011 

To achieve its mission and ultimately its stated vision, OGE 

has established the following three strategic goals: 

• Strengthening the ethical culture within the executive 

branch 

• Preventing conflicts of interest; and 

• Promoting good governance. 
3 

HIGHLIGHTS OF FY 2007 ACCOMPLISHMENTS 

OGE’s accomplishments in FY 2007 reflect the successful outcomes 

of its strategic plan. Its report of those achievements is

described in detail below. A few highlights of OGE’s FY 2007 

accomplishments include: 

FY 2007 was the first year of OGE’s new five-year Strategic 

Plan. Last year’s budget document outlined how the OGE would 

meet those new objectives during the first two years of that 

Plan. OGE announced that it would undertake initiatives to 

support three main priorities in FY 2007 and FY 2008, and OGE 

made substantial progress during FY 2007 in all three areas: 

• Assisting in the transition to a new Administration. OGE 

created a comprehensive transition plan listing the 

guidance documents, regulations, training and other 

materials it would produce during FY 2007 and 2008 to 

assist ethics officials with their preparations for the 

upcoming transition. OGE then began to meet those 

objectives, for example, by issuing memoranda for ethics 

officials and drafting or revising several pamphlets for 

Federal employees. OGE also worked on materials it will 

provide to ethics officials in FY 2008 to help them with 

the anticipated upsurge in nominee financial disclosure 

reports during the Presidential transition, and met with a 

focus group of ethics officials to determine what they 

viewed their needs to be in preparing for the transition. 

In addition, OGE completed draft revised rules on blind 

trusts and submitted them to Department of Justice (DOJ) 

and OPM for review. 

• Addressing emerging ethics issues as they arise. A key 

emerging issue on which OGE has focused involves the ethics 

issues associated with contractors in the Federal 

workplace. A number of media reports in FY 2007 noted 

questions about contractor conflicts of interest in certain 

Federal programs, and many of these programs also attracted 

Congressional attention. OGE continued to seek 

opportunities to raise awareness about these concerns, 

through presentations to outside organizations such as the 

Defense Industry Initiative conference and an ABA Public 

Contracts section meeting, and by other means such as 

coordinating with Office of Management and Budget’s (OMB) 

Office of Federal Procurement Policy and the Government 
4 

Accountability Office regarding their work on related 

issues. 

• Using technology to improve the delivery of ethics 

services, information, and materials. OGE sought new ways 

to use technology to deliver ethics training and 

information to Federal employees and ethics officials in FY 

2007. OGE released a series of online training courses on 

topics ranging from working with contractors to a tutorial 

on the ethics rules that apply to special Government 

employees. It also partnered with another Federal agency 

to present web-based training that allowed OGE to train 

ethics officials at multiple locations simultaneously. In 

addition, OGE worked with several agencies that are 

developing their own electronic financial disclosure 

formats to ensure the legal sufficiency the forms and 

instructions. 

The successful planning and delivery of the 15th National 

Government Ethics Conference (National Conference) was another 

significant undertaking for OGE in FY 2007. The conference’s 

agenda provided a major opportunity to address OGE’s priorities. 

The National Conference was comprised of workshops organized 

into six themed tracks, with one track devoted to emerging 

issues. The track included several workshops on contractor 

ethics issues. Another track focused on preparing for the next 

transition and offered sessions on topics such as reviewing 

nominee financial disclosure reports and what ethics officials 

need to know about the transition process. At the National 

Conference, OGE’s Director introduced a Leadership Initiative to 

the ethics community. This effort was initiated in FY 2007 to 

engage the leadership of Federal departments and agencies in 

developing and supporting an ethical culture in the executive 

branch. 

Finally, in FY 2007, OGE played an important role in the 

United States’ anti-corruption foreign policy initiatives, many 

of which focused on the prevention of corruption. OGE has 

internationally recognized experience in designing ethics 

programs that complement other government systems. Accordingly, 

OGE was asked by the Department of State to provide significant 

assistance in the development of programs and policies related 

to good governance, including various working groups and task 

forces of the APEC and the U.S.-China Joint Liaison Group, and 

in the development of a review mechanism for implementation of 
5 

the UN Convention Against Corruption. These efforts not only 

enhanced foreign policy goals, but also highlighted the United 

States’ commitment to an ethical public workforce. 
6 

Annual Program Performance Report 

Office of Government Ethics for FY 2007 

UFY 2007 Results

Strategic Goal One: Strengthening Ethical Culture Within the 

Executive Branch 

Objective 1.1: Improving the Effectiveness of Ethics Policy 

In FY 2007, OGE began to prepare for the Presidential 

transition that will take place in FY 2008 and FY 2009. As an 

initial step, OGE developed a comprehensive plan for identifying 

and updating guidance relevant to the transition, including 

guidance for officials leaving the current Administration. 

OGE’s first new policy memorandum in support of this goal 

addressed the issue of whether, and under what circumstances, an 

executive branch employee may assist someone in seeking a job in 

the private sector. During FY 2007, OGE also began the process 

of training its newer employees on topics that are particularly 

relevant to the transition, such as the rules applicable to 

seeking employment and post-employment activities and financial 

disclosure. 

As part of OGE’s effort to continually review and update 

policy guidance for ethics officials, OGE published a number of 

comprehensive memoranda providing advice on key questions. 

These memoranda, which are provided to agency ethics officials 

and are available to the public on OGE’s website, discussed 

issues such as the ethics rules that apply to detailees under 

the Intergovernmental Personnel Act, gifts of tickets, and 

Government employees asked to serve as expert witnesses. The 

memoranda also provided guidance on issuing conflict of interest 

waivers to employees, counting days of service for special 

Government employees, and determining what is a “matter” for 

purposes of the ethics rules. In FY 2007, 93 percent of ethics 

officials surveyed said that OGE policy guidance was useful. 

One of the emerging issues in which OGE has been active is 

the area of contractor ethics. Because an increasing number of 

contractor employees are assigned to work in Federal buildings 

alongside Federal employees, ethics issues that arise from 

working in such close proximity continue to raise concerns. In 

January 2007, the Acquisition Advisory Panel released its final 

report on Federal contracting to the OMB and Congress. The 

report adopted several recommendations by OGE regarding the need 
7 

for executive branchwide ethics rules on contractors in the 

Federal workplace. 

In a related development, OGE submitted comments on 

proposed rules prepared by the Federal Acquisition Regulatory

Council that would establish certain ethics requirements for 

Federal contractor employees. OGE also advised the Government 

Accountability Office (GAO) on its inquiry into ethics issues 

involving contractors in the Department of Defense. In 

addition, OGE launched an online training course specifically 

for contractor employees. The course is designed to inform 

contractors about the rules that apply to Government employees 

and to alert contractor employees to avoid conduct that might 

trigger an inadvertent ethics violation. 

Another emerging ethics issue addressed by OGE in FY 2007 

was the impact of alternative pay systems on financial 

disclosure requirements. OGE previously had conducted a survey 

of agencies that have implemented non-standard pay systems 

(e.g., other than the GS or SES systems) to determine how the 

agencies were deciding who was required to file a public 

financial disclosure report. OGE determined that, generally, 

agencies were adequately addressing financial disclosure, and 

OGE issued advice to assist those agencies who were still 

dealing with the issue. OGE exceeded its FY 2007 goal for the 

percentage of ethics officials who rate OGE as responsive to 

emerging ethics program issues. 

In addition, since January, Congress has considered several 

pieces of legislation affecting Government ethics laws. OGE has 

closely tracked the development of these proposals and has 

provided technical assistance regarding the impact of these 

proposals on the existing executive branch program. OGE also 

has responded to Congressional and OMB requests for comment on 

draft bills, legislation, bill reports and testimony. 

Specifically, OGE timely completed 169 OMB requests for review 

and comment in FY 2007 with OGE’s comments on direct ethics 

issues incorporated 97 percent of the time. This represents a 

48 percent increase in the number of requests for review over FY 

2006 (114) and a 31 percent increase over FY 2005 (129). The 

percentage of OGE’s comments incorporated on direct ethics 

issues also increased from 89 percent in FY 2005 and FY 2006 to 

97 percent in FY 2007. 
8 

UPerformance 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. 

OGE’s success in meeting its performance targets is shown 

below: 

Objective 1.1 

Improve the Effectiveness of Ethics Policy UPerformance Targets – Projected 

FY Actual Results in bold 

Performance Measures 

Baseline FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 

Percent of ethics 

officials who rate 

OGE as responsive 

to emerging ethics 

program issues 

78% 80% 

81% 

80% 80% 80% 80% 

Percent of ethics 

officials who rate 

guidance as useful 

94% 95% 

93%

95% 95% 95% 95% 

Percent of ethics 

officials who say 

they receive the 

guidance they need 

to do their jobs 

effectively 

85% 85% 

82%

85% 85% 90% 90% 

Objective 1.2: Enhance Assistance to and Oversight of Agency 

Ethics Programs 

OGE hosted its National Conference in March 2007 that 

provided a major opportunity to address OGE’s priorities. Almost 

600 ethics officials from 85 agencies or components of executive 

branch departments located at headquarters and regional offices 

participated in the three-and-a-half day conference. In 

addition, representatives from the Inspector General (IG) 

community and civil society organizations participated. 

National Conference participants attended workshops organized 

into six themed tracks, including tracks devoted to leadership, 

emerging issues, and preparation for the Presidential transition 

following the general election in November 2008. 
9 

For the first time, all conference materials were available 

in electronic format and distributed to participants on flash 

drives, thus enabling participants to refer easily to the 

information after the conference and providing an archive for 

future course development. 

At the National Conference OGE launched two initiatives, 

both developed by OGE in FY 2007: the “Leadership Initiative” 

focused on the critical role of high-level agency leadership in 

promoting an ethical culture and the “Compliance Plus” 

initiative focused on the need for agencies to maintain 

effective ethics programs by establishing and meeting goals 

beyond minimum compliance with statutory and regulatory 

requirements. The initiatives were created as a result of close 

coordination with the ethics community. OGE’s Director 

introduced the Leadership Initiative in the conference’s keynote 

address. 

Because leadership support is a critical component of a 

successful agency ethics program, OGE is committed to raising 

the level of discourse between the leadership of executive 

branch agencies and the ethics community. As part of the 

Leadership Initiative, OGE developed and provided to agencies 

suggestions for concrete actions that can be implemented at the 

leadership level to enhance agency ethics programs. 

The Compliance Plus approach enhances the usefulness of the 

program review process by emphasizing the goal of identifying 

and sharing model practices. Model practices focus on improving 

the processes and systems necessary to achieve compliance 

requirements, thus freeing up ethics program resources. Model 

practices assist ethics officials in setting comprehensive 

performance targets for their programs. The approach encourages 

cooperative work among ethics offices to establish benchmarks 

over time to facilitate program assessments. 

OGE took additional steps to leverage the resources of the 

ethics community. First, OGE convened various focus groups to 

discuss its leadership initiative and to promote wider access to 

and use of training products that received awards at the 

National Conference. Second, OGE instituted lunch-time forums 

to focus on the emerging issue of the upcoming transition and 

enhance program management. Third, OGE continued to forge a 

stronger relationship with regional ethics officials and the IG 

community by including topics of interest to them in the 

conference agenda. 
10 

OGE also focused on Presidential transition issues as part 

of its efforts to enhance assistance to agency ethics officials 

in FY 2007. For example, OGE offered a presentation at its 

National Conference on book deals by executive branch officials. 

OGE expects to issue written guidance on this topic in FY 2008. 

In FY 2007, OGE also began training additional staff to review 

financial disclosure reports. This action was taken in 

anticipation of a significant surge in the volume of reports 

filed by Presidential nominees for positions requiring Senate 

confirmation during the Presidential transition following the 

general election in November 2008. The National Conference also 

included an OGE presentation urging executive branch agencies to 

begin preparations for this upcoming Presidential transition, by 

training additional review of financial disclosures. In 

addition, OGE produced written guidance for ethics officials on 

the requirements of public financial disclosure and conflicts 

analysis for 20 financial instruments, as a supplement to OGE’s 

financial disclosure guidance manual, Financial Disclosure: A 

Reviewer’s Reference. 

OGE worked on several issues in connection with tax matters 

related to ethics programs. In order to assist executive branch 

agencies in requesting Certificates of Divestiture (which allow 

employees to defer capital gains taxes on assets they are 

required to divest), OGE issued a DAEOgram describing the 

processing of such requests and developed a draft recommended 

format for requests. OGE provided technical advice to officials 

from the Supreme Court and the Administrative Office of the 

United States Courts regarding draft rules they had created to 

implement a newly authorized judicial branch program for 

Certificates of Divestiture. OGE also worked with officials of 

the Internal Revenue Service (IRS) to develop IRS regulations 

regarding the tax treatment of accelerated payments under 

deferred compensation plans pursuant to 26 U.S.C. § 409A, when 

such payments are accelerated as a means of complying with 

Governmental ethics requirements. 

In FY 2007, OGE also continued to provide strong liaison 

services to ethics officials in executive branch departments and 

agencies through the OGE desk officer program and the random 

call desk. Desk officers delivered timely, accurate, and 

consistent guidance to executive branch ethics officials on a 

wide range of ethics issues, from answering questions about 

conflicts of interest and other ethics rules to identifying 

model practices and programs in other agencies and offering 

suggestions for improving program operations. In addition, 

numerous complex legal and policy questions were answered by OGE 
11 

attorneys. OGE also continued its efforts to enhance individual 

programs and the ethics community as a whole through its 

identification, development and dissemination of model 

practices. 

OGE provided quality ethics education and training to over 

one thousand agency ethics officials in FY 2007, in addition to 

the training provided during the National Conference. To measure 

the effectiveness of the training, OGE administered an 

assessment tool during the training. The results: 100 percent 

of ethics officials indicated that their knowledge of, and 

ability to apply, ethics laws and rules increased as a result of 

the training they received. Using feedback provided by ethics 

officials who attended OGE training and from the instructors, as 

well as observations made by the instructional designers, OGE 

revised certain courses to ensure that they are up-to-date and 

effective. To further ensure the accuracy and quality of its 

products, OGE expanded the formal internal review and approval 

process for course materials. OGE also developed numerous job 

aids -- e.g., flow charts, timelines, and summaries -- to help 

ethics officials perform their jobs. Copies of these job aids 

were distributed to ethics officials either as part of ethics 

training or upon request. 

In FY 2007, OGE launched a new award program to recognize 

agency educational achievements and invited ethics officials to 

submit their best training products. OGE selected the 10 most 

effective agency ethics training programs, from more than 60 

entries, and met with representatives of the agencies that 

developed the products to discuss how to leverage the programs 

for use by all executive branch agencies. 

OGE conducted onsite reviews of 24 ethics programs at 

executive branch departments and agencies in order to: 

(1) identify and report on strengths and weaknesses of the 

programs; (2) make specific recommendations for program 

enhancements; (3) provide technical assistance to agencies; 

(4) identify and share model practices; (5) provide guidance on 

correcting deficiencies and implementing specific 

recommendations and suggestions; and (6) promote the goal of 

reaching beyond mere compliance with regulatory standards. 

OGE’s program reviews continued to emphasize the importance of 

having written procedures for following up with delinquent 

financial disclosure filers. OGE also conducted six-month 

follow-up reviews to address recommendations and suggestions 

made in its reports. Through discussions with ethics officials 

and examination of relevant documentation, OGE determines 
12 

whether appropriate practices and procedures are in place to 

provide reasonable assurances that the identified program 

weaknesses are appropriately addressed. 

OGE completed a special project at the Federal Emergency 

Management Agency (FEMA), providing the Department of Homeland 

Security, FEMA and OGE leadership with suggestions to enhance 

the overall effectiveness of the FEMA ethics program. The 

project arose from FEMA’s interest in working informally with 

OGE to examine and improve their program outside the structure 

of routine onsite review. This project complemented an ongoing 

series of program reviews of other components of the Department 

of Homeland Security, provided a basis for developing 

improvements to OGE’s general review process, and established a 

framework for an improved approach to program review that is 

designed to more actively engage agency ethics officials in 

understanding OGE’s program concerns and in developing 

strategies to effectively address agency-specific challenges. 

OGE administered surveys to evaluate agency ethics programs 

and establish baseline data for OGE’s FY 2007-2011 strategic 

plan. OGE developed and used a newly designed survey --

administered to ethics officials throughout the approximately 

130 departments and agencies of the executive branch -- to 

assess the effectiveness of the services and support provided by 

OGE and to help establish benchmarks for performance measures 

defined in the strategic plan. OGE also administered surveys to 

measure employees' perceptions of their agencies’ ethical 

culture and ethics program. 
13 

UPerformance Measures

OGE’s success in meeting its performance targets is shown 

below: 

Objective 1.2

Enhance Assistance and Oversight 

UPerformance Targets – Projected 

FY Actual Results in bold 

Performance 

Measures 

Baseline FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 

Percent of ethics 

officials who are 

satisfied with 

education and 

training provided 

by OGE to support 

ethics officials 

64% 70% 

72% 

75% 80% 90% 90% 

Percent of ethics 

officials who view 

OGE’s program 

review process as 

adding value to 

their own programs 

 

65% 75% 

57%* 

 

85% 

 

90% 

 

90% 

 

90% 

Percent of 

agencies that 

conduct internal 

reviews or audits 

to evaluate their 

program’s 

compliance with 

applicable ethics 

laws and 

regulations 

59% 60% 

60% 

65% 70% 75% 80% 

Percent of 

agencies that use 

self-assessment 

surveys to 

evaluate employee 

perceptions of 

their agency’s 

ethics program and 

ethical culture 

24% 25% 

28% 

30% 40% 40% 50% 

Percent of ethics 

officials who are 

satisfied with 

information shared 

on ethics program 

model practices 

 

55% 65% 

63% 

70% 75% 

 

85% 

 

85% 

* The phrasing of the request for this information may have suggested that only agencies 

participating in a program review in 2007 had relevant data. OGE believes that the program 

review process, particularly in identifying and promoting implementation of model practices, 

adds value to the overall ethics program. Notably, the Compliance Plus initiative is intended 

to enhance the overall understanding of the usefulness of program review as a tool to identify 

and share model practices with the entire ethics community. 
14 

Objective 1.3: Increase Employee Awareness of Their Ethics 

Responsibilities 

OGE finalized improvements to the confidential financial 

disclosure reporting system in FY 2007. OGE issued a new 

reporting form to be used by approximately 300,000 employees. 

The form was designed to be completed electronically, although 

paper submission is still required. OGE implemented changes in 

the system that included a new reporting date (February 15) and 

a new reporting period (calendar year), as well as streamlined 

reporting requirements. OGE launched an online training course 

for confidential filers to acquaint them with the new reporting 

requirements and form, and provided a set of Frequently Asked 

Questions (FAQs) that confidential filers can access through the 

OGE website. OGE has received strong positive feedback from 

ethics officials on the improvements in this form. The FAQs 

were also one of the website’s most frequently reviewed 

sections. 

As exemplified by the training materials related to 

financial disclosure, OGE plays an important role in preparing 

training materials that can either be used by agencies as issued 

or modified for agency-specific needs. While individual 

departments and agencies prepare much of the training 

information distributed to their staffs, OGE-produced materials 

reduce the time and resources that agencies would otherwise have 

to spend in producing their own training. For example, in 

support of OGE’s efforts to emphasize ethics issues that result 

from the Government’s increasing use of contractors, OGE issued: 

(1) a brochure that outlines ethics rules for Government 

employees who are primarily involved in contracting and 

procurement activities, and (2) an online training course for 

Government employees who work with contractors on a frequent 

basis. OGE launched another online course that explains how 

the ethics rules apply to special Government employees (SGEs) 

(i.e., temporary or intermittent employees who work for 130 days 

or less). This course is expected to be particularly useful to 

members of Federal advisory committees. 

OGE expanded its use of low-cost technology to deliver 

ethics training and information to Federal employees and ethics 

officials in FY 2007. Many of its training products are 

available on its website. Here are some creative ways OGE 

presented ethics information in FY 2007, in addition to the 

web-based courses described above: 
15 

• OGE successfully partnered with the Environmental 

Protection Agency to conduct OGE’s first live, online, 

interactive training. The training was broadcast to 25 

ethics officials at 4 separate sites. Because EPA funded 

the program, the broadcast focused exclusively on the needs 

of EPA staff. The project provided a solid framework for 

OGE’s future development and delivery of live, costeffective training programs. 

• OGE developed comic strip-style posters, Ethics Guardian, 

which can be used to educate employees on ethics rules and 

regulations. The posters are available to agencies in an 

electronic format that allows customization of information 

about agency ethics contact points. In response to 

requests from ethics officials, OGE provided over 350 

customized versions of the posters to representatives from 

more than 65 agency components. OGE continues to receive 

requests for customized versions. 

• OGE began to develop a series of instructor-led courses for 

employee ethics training. The courses consist of 

instructor and participant guides and an evaluation 

instrument. OGE distributes the courses via email in 

response to agency requests. Over 150 ethics officials 

have requested and received the first course, “Initial 

Ethics Orientation.” Other courses in the series will be 

released in FY 2008. 

• OGE developed a series of online ethics crossword puzzles. 

The crossword puzzles focused on topics including: Misuse 

of Position, Outside Activities, and Gifts. Agencies have 

downloaded puzzles from its website and have begun to 

create their own crossword puzzles. 
16 

UPerformance Measures

OGE’s success in meeting its performance targets is shown 

below: 

Objective 1.3 

Increase Employee Awareness and Understanding

UPerformance Targets – Projected 

FY Actual Results in bold 

Performance Measures 

Baseline FY 

2007 

FY 2008 FY 2009 FY 2010 FY 2011 

Percent of agencies that 

incorporate OGE 

education and training 

products into their 

program 

66% 70% 

72% 

75% 80% 90% 90% 

Percent of participants 

whose knowledge of the 

ethics rules increased 

after participating in 

OGE conducted training 

87% 90% 

100% 

90% 100% 100% 100% 

Percent of ethics 

officials who are 

satisfied with employee 

education and training 

programs provided by OGE 

44% 55% 

57% 

60% 70% 80% 80% 

Percent of employees who 

indicate they are 

familiar with ethics 

rules 

52% 60% 

59% 

70% 70% 80% 80% 

Percent of employees who 

indicate that they 

recognize ethics issues 

when they arise 

59% 65% 

66% 

70% 75% 80% 80% 

Percent of employees who 

believe that if ethics 

concerns are reported to 

the agency, action is 

taken to resolve them 

51% 55% 

56% 

65% 70% 75% 75% 

Percent of employees who 

believe that employees 

who are caught violating 

ethics rules are 

disciplined 

42% 45% 

50% 

45% 50% 55% 60% 

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

in Implementing Ethics Program 

 OGE's Director introduced the Leadership Initiative to the 

broader ethics community at the National Conference. The 

initiative provides agency leaders with suggestions for concrete 

actions that they can implement to fulfill their ethics 

responsibilities. Leadership support is a critical component of 

a successful agency ethics program. OGE is committed to raising 
17 

the level of discourse between the leadership of executive 

branch agencies and the ethics community. To achieve this goal, 

OGE consulted with several sources to identify specific steps 

that agency leaders may institute to promote an ethical culture 

and to support an agency’s ethics program. OGE worked closely 

with the Department of the Interior, which developed a 

comprehensive program to ensure compliance with regulatory 

requirements and to underscore their Secretary’s commitment to 

establishing an ethical culture throughout the Department. 

The theme was further reinforced by the Secretary of the 

Department of the Interior, who was a keynote speaker at OGE’s 

National Conference. The leadership theme also was interwoven 

into all of the presentation streams of the conference. The 

Leadership Initiative continued after the conference with a 

series of working groups of ethics officials to discuss 

strategies to engage agency leadership and implement effective 

leadership actions. 

 OGE also instituted a practice of inviting agency 

leadership to meet with OGE’s leadership in connection with 

ethics program reviews. In addition to promoting the importance 

of the ethics program, this practice serves to help ensure 

personal commitment to the program by agency leadership as well 

as to define and allocate sufficient agency resources for the 

program. OGE’S Director met with several high-level agency 

leaders, including the Secretaries or other top officials of 

cabinet-level and other executive branch agencies that were 

scheduled for onsite reviews in FY 2007: the Department of 

Agriculture, the Department of Education, the Department of the 

Interior, the Federal Trade Commission and the Pension Benefits 

Guaranty Corporation. As a result, many agencies have 

implemented or are developing plans to improve their programs. 

These improvements include restructuring their ethics programs 

to ensure that the programs are optimally located within the 

organizational hierarchy to most effectively carry out their 

responsibilities and reflect leadership commitment to their 

objectives. 
18 

UPerformance Measures

OGE’s success in meeting its performance targets is shown 

below: 

Objective 1.4 

Promoting Agency Leadership

U Performance Targets – Projected 

FY Actual Results in bold

Performance 

Measures 

Baseline FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 

Percent of 

employees who 

believe their 

agency leaders pay 

attention to ethics 

64% 65% 

69% 

70% 75% 75% 80% 

Percent of 

employees who 

believe their 

immediate 

supervisors pay 

attention to ethics 

75% 75% 

80% 

75% 80% 80% 80% 

Strategic Goal Two: Preventing Conflicts of Interest 

Objective 2.1: Enhance Assistance to the President and Congress 

in the Presidential Appointment Process 

In preparation for the Presidential transition, OGE began 

assessing the training needs of individual agencies on the 

review of public financial disclosure reports. In the course of 

reviewing nominee reports in FY 2007, OGE scrutinized the work 

of agency ethics officials and met internally to discuss the 

issues that were arising in the course of these reviews. Also, 

OGE’s financial disclosure team and program reviewers met to 

discuss specific issues with agency programs in connection with 

the review of financial disclosure reports. Based on this 

assessment, OGE will continue in FY 2008 to provide agency 

reviewers with guidance and instruction that will improve their 

review of public financial disclosure reports. 

OGE worked more closely with ethics officials to provide 

guidance on ethics agreements for nominees to resolve the 

nominees’ potential conflicts of interest. Heightened scrutiny 

of the quality of these ethics agreements increased the emphasis 

on resolving conflicts prospectively. In order to build the 

skills of agency ethics officials, OGE contacted agency ethics 

officials directly to explain and negotiate changes to their 

nominees’ ethics agreements. In FY 2007, 98 percent of 
19 

officials complied with their ethics agreements within the 

required time frame. 

In addition to this individualized work, OGE has developed 

draft written guidance on ethics agreements as a supplement to 

OGE’s financial disclosure guidance manual, Financial 

Disclosure: A Reviewer’s Reference. OGE will issue a final 

version of this guidance in FY 2008. 

In addition, several presentations at OGE’s National 

Conference addressed both technical disclosure issues and 

substantive conflicts issues related to nominee financial 

disclosure. OGE also conducted training for new financial 

disclosure reviewers in Washington, DC. 

In OGE’s FY 2008 budget request, OGE indicated that it 

intended to convert its Financial Disclosure: A Reviewer’s 

Reference to a primarily electronic format so that it could be 

timely updated to respond to emerging trends in financial 

arrangements. The guide is currently available on OGE’s website 

in HTML and PDF versions. OGE had planned in FY 2007 to convert 

this document to a new format that would be easier to update. 

However, OGE lacked the financial resources to accomplish the 

technological steps necessary to complete this task. Instead, 

OGE published a separate supplement to this manual. 

OGE submitted a proposed regulation on qualified blind 

trusts and qualified diversified trusts to DOJ and OPM for 

review. This proposed regulation revises existing regulations 

in order to clarify the process for establishing such trust 

instruments. OGE had hoped to issue the proposed regulation in 

FY 2007, but a staffing shortage in 2007 delayed its issuance. 

After the review process is completed, OGE will adopt a final 

regulation on its trust program before the beginning of the 

Presidential transition. 

In FY 2007, OMB informed OGE that its request to 

undertake an OMB-sanctioned e-Gov Initiative for the development 

of an e-filing system for financial disclosure reports in the 

executive branch would not be approved. OGE considered the 

possibility of attempting to manage an informal non-OMB 

sanctioned e-Gov initiative, but rejected that approach because 

OGE has neither the finances nor staff resources to oversee such 

an uphill effort of a strictly voluntary nature without definite 

funding sources. Instead, OGE decided to allow each agency to 

undertake its own development of an electronic filing process to 
20 

use with either the public (SF 278) or confidential (OGE Form 

450) reporting system. 

Even though each department or agency will decide its own 

progression into the electronic filing arena, the integrity of 

financial disclosure processes will continue to be one of OGE’s 

highest priorities. Accordingly, OGE will take the following 

steps: (1) continue to monitor the executive branch’s movement 

into this area by requesting basic information on future Annual 

Ethics Program Questionnaires; (2) be a member of the 

“Electronic Filing Workgroup” formed late in FY 2007 to promote 

the development and advancement of executive branchwide 

electronic financial disclosure report filing; and (3) oversee 

agency electronic filing efforts as part of its Program Review 

Division’s future reviews of agency ethics programs. 

Accordingly, OGE provided assistance to executive branch 

agencies that are developing electronic financial disclosure 

systems. OGE communicated with agencies regarding plans and 

requirements for such systems in a DAEOgram, at a special 

meeting of Designated Agency Ethics Officials, and at OGE’s 

National Conference. OGE’s staff provided feedback to the Army, 

the Federal Deposit Insurance Corporation, and the Federal 

Aviation Administration regarding electronic filing formats they 

had developed. OGE also provided evaluations of the legal 

sufficiency of frequently asked questions and screen 

instructions that the Army had developed in connection with its 

electronic filing system. 

UPerformance Measures

OGE’s success in meeting its performance targets is shown 

below: 

 Objective 2.1 

Enhance Assistance to the President and the Congress 

UPerformance Targets – Projected 

FY Actual Results in bold Performance 

Measures 

Baseline FY 

2007 

FY 

2008 

FY 

2009 

FY 

2010 

FY 

2011 

Number of agencies 

using an 

electronic filing 

system 

 

2 

 

6 

4 

* * * * 

Percent of users 

who are satisfied 

with electronic 

filing systems 

 

** 

 

** 

 

** 

 

** 

 

** 

 

** 
21 

 Objective 2.1 

Enhance Assistance to the President and the Congress 

UPerformance Targets – Projected 

FY Actual Results in bold Performance 

Measures 

Baseline FY 

2007 

FY 

2008 

FY 

2009 

FY 

2010 

FY 

2011 

Percent of 

officials who 

comply with ethics 

agreements within 

required time 

frames 

95% 95% 

98% 

95% 95% 95% 95% 

Resolves all 

conflicts and 

technical 

reporting issues 

for nominee 

financial 

disclosure reports 

no later than five 

days after a 

nomination is 

made. 

90% 90% 

95% 

90% 95% 95% 95% 

Objective 2.2: Monitor Continued Compliance With Conflict of 

Interest Laws 

In FY 2007, OGE continued to identify and address executive 

branch compliance with annual financial disclosure report 

requirements and ethics agreements. During the fiscal year, 

over 900 Presidentially appointed, Senate confirmed (PAS) SF 278 

annual and termination reports were filed with OGE for its final 

review and certification. During this process, OGE worked with 

agencies to ensure that the reports were technically accurate 

and conflict free. In addition, OGE strengthened its monitoring 

system to ensure that reports are filed as quickly as possible. 

As a result, OGE experienced an 8 percent increase in reports 

that did not require a filing extension. OGE also analyzed the 

quality of the reviews performed at the agency level. This 

analysis will serve as the focus of a targeted program review in 

FY 2008. 

OGE also continued its monitoring of ethics agreements of 

PAS officials. During this fiscal year, OGE monitored a total 

of 212 agreements made by 127 PAS officials. Because of OGE’s 

strict follow-up procedures, 98 percent of all required actions 

were completed within the standard initial period of 90 days. 
22 

In FY 2007, OGE program reviewers routinely emphasized the 

importance of notifying public filers once their reports had 

been reviewed and certified. In those cases where reports had 

not been certified or were certified late due to filing errors 

or inconsistencies, OGE program reviewers ensured that agency 

officials were making efforts to collect or correct the 

information that was delaying certification. In addition, OGE’s 

reviews of agency ethics programs identified and reported on 

systemic weaknesses that led to the late submission and review 

of annual and termination public financial disclosure reports. 

OGE has recommended a variety of strategies that agencies could 

use to correct these weaknesses, including: utilizing human 

resources officials to ensure that the ethics office is timely 

notified of incoming, incumbent, and departing filers; including 

the filing requirement in filers’ position descriptions; and 

foregoing raises or promotions for those employees who are 

delinquent in filing. 

IGs provide critical support to the enforcement of ethics 

laws and rules, as they usually conduct the primary 

investigations of alleged violations. Therefore, OGE seeks 

opportunities to strengthen the relationship between IGs and the 

ethics community and to help IGs understand the application of 

the ethics requirements. For example, OGE provided IGs with 

training on the review of public financial disclosure reports 

and provided a briefing on the OGE program review process. In 

addition, OGE staff consulted regularly with IG offices to 

advise them on ongoing investigations. 
23 

UPerformance Measures

OGE’s success in meeting its performance targets is shown 

below: 

Objective 2.2 

Monitoring Compliance with Conflict of Interest Laws UPerformance Targets – Projected 

FY Actual Results in bold Performance 

Measures 

Baseline FY 2007 FY 2008 FY 2009 FY 2010 FY 2011

Percent of 

audited entities 

that provide 

public financial 

disclosure report 

filers with 

feedback after 

their reports 

have been 

reviewed 

84% 85% 

100% 

90% 90% 95% 95% 

Percent of 

audited entities 

that have written 

procedures for 

following up with 

delinquent filers 

49% 60% 

91% 

75% 90% 100% 100% 

Objective 2.3: Administer an Effective Confidential Financial 

Disclosure System 

OGE made improvements to the confidential financial 

disclosure process through the issuance of new rules and a new 

form that streamlines the reporting requirements. (See 

discussion in Strategic Goal One, Objective 1.2.) In addition, 

OGE continued to encourage and approve the use of alternative 

confidential financial disclosure procedures to permit agencies 

to obtain information about specific kinds of financial 

interests that can present conflicts for their employees. In FY 

2007, OGE approved the use of alternative confidential financial 

disclosure procedures for the Department of the Army, the 

Department of Justice, the Defense Science Board, the InterAmerican Foundation, the President’s Foreign Intelligence 

Advisory Board, and the Office of Thrift Supervision. Finally, 

during the course of its onsite evaluations of agency ethics 

programs, OGE ensured that previously approved alternative 

procedures were being administered in compliance with the plan 

approved by OGE. 
24 

UPerformance Measures

 OGE’s success in meeting its performance targets is shown 

below: 

Objective 2.3 

Improved Administration of Confidential System UPerformance Targets – Projected 

FY Actual Results in bold Performance 

Measures 

Baseline FY 2007 FY 2008 FY 2009 FY 2010 FY 2011

Percent of 

alternative 

systems judged by 

program review to 

have been 

effectively 

implemented 

60% 65% 

100% 

70% 80% 90% 90% 

Percent of 

required 

confidential 

filers who filed 

by end of 

reporting year 

70% *** 75% 75% 80% 80% 

***The regulation was amended for this reporting period. Results for FY2007 will be available in 

FY2008. 

Strategic Goal Three: Promoting Good Governance 

Objective 3.1 Increase OGE’s Support of and Cooperation With 

Federal, State and Local Agencies Implementing Programs That 

Help Support Good Governance 

In FY 2007 OGE engaged in a number of activities with 

Federal, State and local agencies that promote integrity, 

accountability, and transparency in Government. At the Federal 

level, OGE’s Director maintained consistent communication with 

the IG community through regular attendance at the President’s 

Council on Integrity and Efficiency’s (PCIE) and the Executive 

Council on Integrity and Efficiency’s (ECIE) monthly meetings. 

The Director continued to serve on the PCIE Integrity Committee 

and was a featured speaker at the 2007 PCIE/ECIE Conference. 

OGE also maintained a consistent presence at the Federal 

Interagency Ethics Council, an informal group of executive 

branch ethics officials who meet monthly to share model 

practices and practical information. In support of the 

substantial number of federal advisory committees, OGE staff 

participated in a multi-day curriculum development exercise held 

by the General Services Administration to improve training for 
25 

Federal Advisory Committee management officers in Departments 

and agencies. 

At the State and local level, OGE continued to be an active 

member of the Council on Governmental Ethics Laws (COGEL), an 

organization of Federal, State and local government agencies 

primarily from the United States and Canada that, in part, are 

responsible for Government ethics and access to information 

programs. In FY 2007, OGE received requests for good practice 

information from several COGEL member organizations including 

the ethics offices in New York City and the State of Illinois. 

OGE made its own requests of COGEL members for practical 

information on topics of mutual interest such as the ethics 

issues associated with the increasing number of contractor 

employees in the Government workforce. OGE staff participated 

in both COGEL Conferences that were, for scheduling reasons, 

held during the same fiscal year. 

Throughout FY 2007, OGE coordinated extensively with 

Federal, State and local government agencies in conjunction with 

U.S. obligations under international anti-corruption conventions 

and mutual evaluation mechanisms. In addition to obtaining 

specific information on the laws, regulations and policies for 

the programs of these agencies that support anti-corruption 

efforts, OGE used the anti-corruption conventions and evaluation 

mechanisms as platforms for discussions of specific 

internationally recognized good governance and integrity issues. 

OGE worked cooperatively with Federal agencies to implement or 

report on implementation of recommendations made specifically to 

the United States through these evaluations. 

OGE exceeded its targets for the year. As expected, 

however, the range of cooperative endeavors in which it engaged 

with Federal, state and local agencies did not always lend 

itself easily to gathering written, qualitative feedback. It 

was pleased to note that in its discussions with these agencies 

and entities, they indicated they found their interactions with 

OGE to be useful. OGE certainly found them to be. 
26 

UPerformance Measures

OGE’s success in meeting its performance targets is shown 

below: 

Objective 3.1 

Increase OGE’s Support of and Cooperation With 

Federal, State and Local Agencies Implementing 

Programs That Help Support Good Governance

UPerformance Targets

FY Actual Results in bold

Performance 

Measures 

Baseline FY 2007 FY 2008 FY 2009 FY 2010 FY 2011

Number of programs/ 

projects involving 

federal agencies/ 

organizations 

6 8 

14 

8 10 10 10 

Percent of feedback 

from federal 

program/project 

attendees 

indicating OGE 

participation was 

useful 

30% 30% 

95% 

40% 50% 50% 60% 

Number of 

programs/projects 

involving 

state/local/ 

government 

agencies/ 

organizations 

2 2 

5 

2 3 3 3 

Percent of feedback 

from state and 

local 

program/project 

attendees 

indicating OGE 

participation was 

useful 

30% 30% 

100% 

40% 50% 50% 60% 

Objective 3.2: Enhance Outreach to the Public and Private 

Sector and Civil Society 

OGE continued to serve the public effectively by providing 

timely and thorough responses to public requests for information 

relating to public financial disclosure reports and the semiannual reports of travel payments accepted from non-Federal 

sources, as well as queries from the general public handled 

through its call desk system. To enhance general public access 

to information about the agency and the executive branch ethics 

program, OGE also continued to work with the Government Printing 
27 

Office to refine OGE's website design and to modernize the 

features of the site. 

The Director and other members of the staff made numerous 

presentations in FY 2007 to private sector and civil society 

organizations whose understanding of the Federal ethics program 

would help support public trust in Government. The audiences 

included non-Government organizations, professional and business 

associations and educational institutions. The OGE Director and 

his staff specifically reached out to organizations OGE wished 

to engage in a dialogue on key emerging issues. For example, 

the Director spoke to the Defense Industry Initiative, a 

coalition of major defense contractors on the ethics issues of 

contractors in the Federal workplace. Others in OGE made 

presentations to organizations such as the Public Contracts 

section of the American Bar Association, a large group of 

private-sector companies who market products and services to the 

Government, and a national association of scientists. Overall, 

these interactions resulted in consistently positive responses. 

UPerformance Measures

OGE’s success in meeting its performance targets is shown 

below: 

Objective 3.2 

Enhance Outreach to the Private Sector and Civil Society

UPerformance Targets

FY Actual Results in bold

Performance 

Measures 

Baseline FY 2007 FY 2008 FY 2009 FY 2010 FY 2011

Number of 

meetings, 

speeches, 

presentations and 

similar outreach 

efforts to 

organizations 

that represent 

the public, civil 

society and 

persons who do 

business with the 

Government 

8 10 

12 

10 12 12 15 

Percent of 

feedback from 

attendees 

indicating that 

interaction with 

OGE was useful 

30% 30% 

100% 

40% 50% 50% 60% 
28 

Objective 3.3: Support U.S. Foreign Policy Anti-Corruption and 

Good Governance Initiatives 

OGE’s provision of ethics program expertise and an 

understanding of an ethics program’s role in good governance 

have had an appreciable and positive effect on the recipients of 

United States anti-corruption foreign policy initiatives as well 

as within the executive branch. FY 2007 was an extremely active 

and highly successful year for OGE in its support of United 

States foreign policy initiatives in the area of corruption 

prevention -- certainly more active than initially anticipated. 

OGE served as a primary representative of the United States 

Government at the plenary meeting of the Council of Europe’s 

Group of States Against Corruption (GRECO) during the 

consideration and adoption of the second round evaluation report 

on the United States; continued to represent the United States 

at GRECO meetings throughout the year; and was selected to 

continue to serve as expert evaluators of other GRECO members 

during the third round of evaluations which will begin in FY 

2008. 

The United Nations Convention Against Corruption has been 

and continues to be a priority United States anti-corruption 

foreign policy initiative. At the request of the Department of 

State and because of its expertise in mutual evaluation 

mechanisms, OGE served as a principal member of an interagency 

committee responsible for developing the United States’ position 

on review of implementation of the Convention; represented the 

United States at UN meetings to develop a system for reviewing 

implementation of the Convention; coordinated a substantial 

portion of the United States’ response to the checklist required 

of all States Parties to the Convention; and assisted in the 

initial stages of a pilot review program. 

Throughout FY 2007, OGE provided expertise in a number of 

initiatives of other international organizations in which the 

United States is a member. OGE worked with the Asia Pacific 

Economic Cooperation (APEC) Anticorruption and Transparency Task 

Force by developing and leading the Task Force discussion on 

proposed Conduct Principles for Public Officials in the APEC 

economies. These Principles were ultimately adopted by APEC 

leaders in their September, 2007 meeting in Australia. 

OGE continued to serve as a United States expert resource 

to the Organization for Economic Cooperation and Development 

Public Governance and Territorial Development Directorate on a 
29 

variety of topics and programs including post-employment, 

lobbying, and assessing integrity programs. OGE also served as 

the head of the United States delegation to the Fifth Global 

Forum on Fighting Corruption and Safeguarding Integrity in South 

Africa and as a United States host in high-level exchanges with 

China in support of the Anti-Corruption Working Group of the 

U.S.-China Joint Liaison Group. 

In long-standing support of the Department of State's 

International Visitor Leadership Program, OGE continued to meet 

with delegations of foreign visitors interested in ethics, 

conflicts of interest, transparency, and other good governance 

initiatives. During FY 2007, OGE hosted approximately 40 

delegations made up of approximately 300 visitors from over 60 

countries. Nearly 60 percent of the surveyed visitors were 

public officials and the others included journalists, academics, 

and members of non-governmental organizations. In FY 2007, OGE 

began surveying the delegations and found that nearly all 

visitors reported that OGE’s presentations helped them 

understand the role of OGE and how the executive branch ethics 

program works and that they felt the knowledge they gained from 

the presentations would be useful to them in their countries. 

OGE continued to support a number of other Department of 

State programs in FY 2007, including the International 

Information Program, by participating in video conferences and 

web-chats with groups of individuals from numerous countries 

including Bangladesh, Paraguay, Mozambique and Cameroon, and in 

Speaker Program visits in Thailand and Vietnam. Additionally, 

OGE worked with the Bureau for International Narcotics and Law 

Enforcement Affairs within the State Department, to provide 

technical assistance to individual country anti-corruption 

programs and continued to review follow-up reports on anticorruption prevention efforts made by countries who have signed 

on to the Follow up Mechanism of the Inter-American Convention 

Against Corruption. 
30 

UPerformance Measures

OGE’s success in meeting its performance targets is shown 

below: 

Objective 3.3 

Support U.S. Foreign Policy Anti-Corruption and Good 

Governance Initiatives

UPerformance Targets

FY Actual Results in bold

Performance 

Measures 

Baseline FY 

2007 

FY 

2008 

FY 

2009 

FY 

2010 

FY 

2011 

Number of 

programs/projects 

OGE participates 

in at the request 

U.S. foreign 

policy agencies/ 

organizations 

7 7 

21 

7 8 8 8 

Percent of 

feedback from 

program/project 

participants 

indicating that 

interaction with 

OGE was useful 

30% 30% 

90% 

40% 50% 50% 60% 

Enhanced Internal Administrative Support 

Without critical, internal administrative support, OGE 

could not successfully pursue or reach its strategic goals. 

During FY 2007, OGE maintained vital services related to budget 

and finance, human resources, graphics, facilities and property 

management, travel, procurement, telecommunications, records 

management, and information and website technologies. 

To add to this array of services and related reporting 

requirements, OGE took steps to better enable OGE to attract and 

retain a highly efficient workforce. OGE met the Office of 

Personnel Management deadlines for requesting recertification of 

its SES pay-for-performance system and revised both its Human 

Resources Manual Chapter on OGE’s SES Performance Appraisal 

System and its SES performance appraisal form. OGE also revised 

its Manual chapters dealing with employee training, telework, 

incentive awards, and time and attendance. OGE also adopted 

policies regarding the credit of prior experience for leave 

purposes and the recruitment of attorneys. 
31 

 OGE completed a review of its pandemic plan for continuity 

of operations in such an event. In addition to enhancing its 

security profile by complying with HSPD-12 deadlines, OGE 

entered into an extensive review of emergency and security 

issues with other Federal agencies sharing the same worksite, 

the General Services Administration, and the Federal Protective 

Service. OGE also revised its Administrative Manual chapters 

concerning mail, procurement, travel, and forms management. 

In FY 2007, OGE undertook several initiatives to improve 

business processes. For example, OGE initiated a review of its 

storage and tracking of SF-278s and a review of the control and 

disposition of e-mail. It also successfully completed a test of 

OGE’s access to the Army’s electronic Financial Disclosure 

Management System. OGE procured software to better permit the 

IT Security Officer to monitor IT network changes. OGE 

developed a database to enable a more expeditious reporting of 

training data to the Office of Personnel Management. OGE 

participated in the National Finance Center’s migration of its 

IT functions from New Orleans to Denver. OGE also developed a 

data breach policy. Looking to the future, OGE initiated steps 

for the transition from WITS2001 to WITS3 and for the 

implementation of a standardized desktop configuration developed 

by OMB, as well as continuing the transition to Internet 

Protocol version 6, all of which are to be finalized in 2008. 

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, 2007 was operating effectively 

and no material weaknesses were found in the design or operation 

of the internal controls. 
32 

 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, 2007 was operating effectively and no material weaknesses 

were found in the design or operation of the internal controls 

over financial reporting. 

/s/ 

Robert I. Cusick 

Director 

Office of Government Ethics 

November 15, 2007 
33 

OFFICE OF GOVERNMENT ETHICS 

FINANCIAL STATEMENTS 

AND 

INDEPENDENT AUDITOR’S REPORT 

FOR THE YEARS ENDED 

SEPTEMBER 30, 2007 AND 2006 
34 

OFFICE OF GOVERNMENT ETHICS 

FOR THE YEARS ENDED SEPTEMBER 30, 2007 AND 2006

TABLE OF CONTENTS 

INDEPENDENT AUDITOR’S REPORT ON THE FINANCIAL STATEMENTS.........................1 

INDEPENDENT AUDITOR’S REPORT ON INTERNAL CONTROL .........................................2 

INDEPENDENT AUDITOR’S REPORT ON COMPLIANCE WITH LAWS AND 

REGULATIONS ..... ..........................................................................................................................4 

BALANCE SHEET. ..........................................................................................................................5 

 

STATEMENT OF NET COST .... .....................................................................................................6

STATEMENT OF CHANGES IN NET POSITION .......... ....... .....................................................7 

STATEMENT OF BUDGETARY RESOURCES...... ......................................................................8 

NOTES TO THE FINANCIAL STATEMENTS...... ........................................................................9 
INDEPENDENT AUDITOR'S REPORT ON THE FINANCIAL STATEMENTS 

Board of Directors 

Office of Government Ethics 

Washington, D.C. 

We have audited the accompanying balance sheet of the Office of Government Ethics (OGE) as of 

September 30, 2007 and 2006, and the related statements of net cost, changes in net position, 

budgetary resources, and financing for the years then ended (collectively referred to as the financial 

statements). These financial statements are the responsibility of OGE’s management. Our 

responsibility is to express an opinion on these financial statements based on our audit. 

We conducted our audits in accordance with auditing standards generally accepted in the United 

States of America and the standards applicable to financial audits contained in U.S. Government 

Auditing Standards, issued by the Comptroller General of the United States; and, Office of 

Management and Budget (OMB) Bulletin No. 07-04, Audit Requirement for Federal Financial 

Statements. Those standards and OMB Bulletin No. 07-04 require that we plan and perform the 

audit to obtain reasonable assurance about whether the financial statements are free of material 

misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and 

disclosures in the financial statements. An audit also includes assessing the accounting principles 

used and significant estimates made by management, as well as evaluating the overall financial 

statement presentation. We believe that our audits provide a reasonable basis for our opinion. 

In our opinion, the financial statements referred to above present fairly, in all material respects, the 

financial position of the OGE as of September 30, 2007 and 2006, and its net costs, changes in net 

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

generally accepted in the United States of America. 

In accordance with U.S. Government Auditing Standards and OMB Bulletin No. 07-04, we have 

also issued a report dated November 9, 2007 on our consideration of the OGE’s internal control 

over financial reporting and its compliance with provisions of laws and regulations. Those reports 

are an integral part of an audit performed in accordance with U.S. Government Auditing Standards 

and should be read in conjunction with this report in considering the results of our audit.

The information in “Management’s Discussion & Analysis” is presented for the purpose of 

additional analysis and is required by OMB Circular No. A-136, revised Financial Reporting 

Requirements. We have applied certain limited procedures, which consisted principally of inquiries 

of management regarding the methods of measurement and presentation of the supplementary 

information. However, we did not audit the information and, accordingly, express no opinion on it. 

Largo, Maryland 

 November 9, 2007 

1 
INDEPENDENT AUDITOR’S REPORT ON INTERNAL CONTROL 

Board of Directors 

Office of Government Ethics 

Washington, D.C. 

We have audited the financial statements of the Office of Government Ethics (OGE) as of and for the 

year ended September 30, 2007 and have issued our report thereon dated November 9, 2007. We 

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

America; and the standards applicable to financial audits contained in U.S Government Auditing 

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

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

In planning and performing our audit, we considered the OGE’s internal control over financial 

reporting by obtaining an understanding of the OGE’s internal control, determined whether internal 

controls had been placed in operation, assessed control risk, and performed tests of controls in order to 

determine our auditing procedures for the purpose of expressing our opinion on the financial 

statements. We limited our internal control testing to those controls necessary to achieve the 

objectives described in OMB Bulletin No. 07-04. We did not test all internal controls relevant to 

operating objectives as broadly defined by the Federal Managers' Financial Integrity Act of 1982, such 

as those controls relevant to ensuring efficient operations. The objective of our audit was not to 

provide an opinion on internal control and therefore, we do not express an opinion on internal control. 

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

matters in the internal control over financial reporting that might be significant deficiencies. Under 

standards issued by the American Institute of Certified Public Accountants and OMB Bulletin No. 07-

04, a significant deficiency is a deficiency in internal control, or a combination of deficiencies, that 

adversely affects the entity’s ability to initiate, authorize, record, process, or report financial data 

reliably in accordance with generally accepted accounting principles such that there is more than a 

remote likelihood that a misstatement of the entity’s financial statements that is more than 

inconsequential will not be prevented or detected. Our consideration of the internal control over 

financial reporting would not necessarily disclose all matters in the internal control over financial 

reporting that might be a material weakness. A material weakness is a significant deficiency, or 

combination of significant deficiencies, that result in a more than remote likelihood that a material 

misstatement of the financial statements will not be prevented or detected. Because of inherent 

limitations in internal controls, misstatements, losses, or non-compliance may nevertheless occur and 

not be detected. However, we noted no matters involving the internal control and its operation that we 

considered to be significant deficiencies or material weaknesses as defined above. 

2 
In addition, with respect to internal control objective related to the performance measures included in 

the “Management’s Discussion & Analysis,” we obtained an understanding of the design of internal 

controls relating to the existence and completeness assertions, and determined whether they have been 

placed in operation as required by OMB Bulletin No. 07-04. Our procedures were not designed to 

provide an opinion on internal control over reported performance measures, and, accordingly, we do 

not express an opinion on such controls. 

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

and Congress, and is not intended to be and should not be used by anyone other than these specified 

parties. 

Largo, Maryland 

November 9, 2007 

3 
INDEPENDENT AUDITOR'S REPORT ON 

COMPLIANCE WITH LAWS AND REGULATIONS 

Board of Directors 

Office of Government Ethics 

Washington, D.C. 

We have audited the financial statements of the Office of Government Ethics (OGE) as of and for the year 

ended September 30, 2007, and have issued our report thereon dated November 9, 2007. We conducted 

our audit in accordance with auditing standards generally accepted in the United States of America, and 

the standards applicable to financial audits contained in U.S. Government Auditing Standards, issued by 

the Comptroller General of the United States; and Office of Management and Budget (OMB) Bulletin No. 

07-04, Audit Requirements for Federal Financial Statements.

The management of the OGE is responsible for complying with laws and regulations applicable to the 

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

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

regulations, noncompliance with which could have a direct and material effect on the determination of 

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

We limited our tests of compliance to these provisions and we did not test compliance with all laws and 

regulations applicable to the OGE. 

The results of our tests of compliance disclosed no reportable instances of noncompliance with other laws 

and regulations discussed in the preceding paragraph that are required to be reported under U.S. 

Government Auditing Standards or OMB Bulletin No. 07-04. 

Providing an opinion on compliance with certain provisions of laws and regulations was not an objective 

of our audit, and, accordingly, we do not express such an opinion. However, we noted no noncompliance 

with laws and regulations, which could have a direct and material effect on the determination of financial 

statement amounts. 

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

Congress, and is not intended to be and should not be used by anyone other than these specified parties. 

Largo, Maryland 

November 9, 2007

4 
The accompanying notes are an integral part of the financial statements.

5 

UNITED STATES OFFICE OF GOVERNMENT ETHICS 

BALANCE SHEET 

AS OF SEPTEMBER 30, 2007 AND 2006 

(In Dollars)

2007 2006 

ASSETS 

Intragovernmental: 

Fund Balance With Treasury (Note 2) $ 2,444,572 $ 2,522,555 

Total Intragovernmental 2,444,572 2,522,555 

Accounts Receivable, Net - 58 

Total Assets $ 2,444,572 $ 2,522,613 

LIABILITIES 

Intragovernmental Liabilities: 

Accounts Payable $ 179,683 $ - 

Unfunded FECA Liability 69,004 68,025 

Payroll Taxes payable 63,214 97,056 

Total Intragovernmental Liabilities 311,901 165,081 

Accounts Payable 277,991 271,703 

Payroll Taxes payable 7,443 8,123 

Accrued Fund Payroll Leave 420,901 516,530 

Unfunded Annual Leave (Note 3) 719,372 615,550 

Total Liabilities $ 1,737,608 $ 1,576,987 

NET POSITION 

Unexpended Appropriations $ 1,495,340 $ 1,629,143 

Cumulative Results of Operations (788,376) (683,517) 

Total Net Position $ 706,964 $ 945,626 

Total Liabilities and Net Position $ 2,444,572 $ 2,522,613 
The accompanying notes are an integral part of the financial statements.

6 

UNITED STATES OFFICE OF GOVERNMENT ETHICS 

STATEMENT OF NET COST 

FOR THE YEARS ENDED SEPTEMBER 30, 2007 AND 2006 

(In Dollars) 

2007 2006 

PROGRAM COSTS 

 SALARIES AND EXPENSE 

Gross Costs (Note 6) $ 12,044,502 $11,731,732 

Less: Earned Revenue (260,700) (600) 

 Net Program Costs 11,783,802 11,731,132 

 

Net Cost Of Operations $ 11,783,802 $11,731,132 
UNITED STATES OFFICE OF GOVERNMENT ETHICS 

STATEMENT OF CHANGES IN NET POSITION 

FOR THE YEARS ENDED SEPTEMBER 30, 2007 AND 2006 

(In Dollars) 

 

2007 2006 

CUMULATIVE RESULTS OF OPERATIONS: 

 Beginning Balances $ (683,517) $ (674,164) 

 

 Budgetary Financing Sources 

 Appropriation Used 11,069,035 10,940,873 

Other Financing Sources 

 Imputed Financing from Costs Absorbed by Others 609,908 780,906 

 Total Financing Sources 11,678,943 11,721,779 

 

 Net Cost of Operations 11,783,802 11,731,132 

 

 Net Changes (104,859) (9,353) 

 

 Cumulative Results Of Operations $ (788,376) $ (683,517) 

UNEXPENDED APPROPRIATIONS: 

Beginning Balances $ 1,629,143 $ 2,101,830 

 

Budgetary Financing Sources 

 Appropriations Received 11,115,085 11,148,000 

Other Adjustments (recissions, etc) (179,853) (679,814) 

Appropriations Used 11,069,035) (10,940,873) 

Total Budgetary Financing Sources (133,803) (472,687) 

Total Unexpended Appropriation $ 1,495,340 $ 1,629,143 

Net Position $ 706,964 $ 945,626 

The accompanying notes are an integral part of the financial statements.

7 
UNITED STATES OFFICE OF GOVERNMENT ETHICS 

STATEMENT OF BUDGETARY RESOURCES 

FOR THE YEARS ENDED SEPTEMBER 30, 2007 AND 2006 

(In Dollars) 

2007 2006 

BUDGETARY RESOURCES 

 Unobligated Balance brought forward, October 1 $ 1,006,499 $ 1,531,327 

Recoveries of Prior-Year unpaid obligation 186,569 155,259 

Budget Authority 

Appropriation 11,115,085 11,148,000 

Spending Authority from offsetting collections 

Collected 260,700 600 

Subtotal 12,568,853 12,835,186 

Permanently Not Available 

Cancellations of Expired and No-Year Accounts (179,853) (568,334) 

Enacted Rescissions - (111,480) 

Total Budgetary Resources $ 12,389,000 $ 12,155,372 

STATUS OF BUDGETARY RESOURCES 

Obligations Incurred: 

Direct $ 10,968,667 $ 11,148,873 

Reimbursable 260,964 - 

Subtotal 11,229,631 11,148,873 

Unobligated Balance: 

Available 157,939 76,981 

Unobligated Balance Not Available 1,001,430 929,518 

Total Status of Budgetary Resources $ 12,389,000 $ 12,155,372 

CHANGE IN OBLIGATED BALANCES 

Obligated Balance, Net, 

Net, Unpaid obligations, brought forward, October 1 $ 1,516,056 $ 1,764,801 

Total Unpaid Obligated Balance, Net, Beginning of Period 1,516,056 1,764,801 

 

Obligations Incurred, Net 11,229,631 11,148,873 

Less: Gross Outlays 11,273,915 11,242,359 

Less: Recoveries of Prior Year unpaid Obligations, Actual 186,569 155,259 

 Obligated Balance, Net, End of Period 

Unpaid Obligations $ 1,285,203 $ 1,516,056 

Total Unpaid Obligated Balance, Net, End of Period $ 1,285,203 $ 1,516,056 

NET OUTLAYS 

Net Outlays: 

Gross Outlays $ 11,273,915 $ 11,242,359 

Less: Offsetting Collections (260,700) (600) 

Net Outlays $ 11,013,215 $ 11,241,759 

The accompanying notes are an integral part of the financial statements.

8 
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 

A. Basis of Presentation 

The financial statements have been prepared to report the financial position, net cost of operations, 

changes in net position, status and availability of budgetary resources of Office of Government Ethics 

(OGE). The statements are a requirement of the Chief Financial Officers Act of 1990, the Government 

Management Reform Act of 1994, the Accountability of Tax Dollars Act of 2002 and the Office of 

Management and Budget (OMB) Bulletin Number 07-04, Audit Requirements for Federal Financial 

Statements. They have been prepared from, and are fully supported by, the books and records of OGE in 

accordance with the hierarchy of accounting principles generally accepted in the United States of 

America, standards approved by the principals of the Federal Accounting Standards Advisory Board 

(FASAB), OMB Circular A-136, Financial Reporting Requirement and OGE accounting policies which 

are summarized in this note. These statements, with the exception of the Statement of Budgetary 

Resources, are different from financial management reports, which are also prepared pursuant to OMB 

directives that are used to monitor and control OGE’s use of budgetary resources. 

The statements consist of the Balance Sheet, Statement of Net Cost, Statement of Changes in Net 

Position, and Statement of Budgetary Resources. In accordance with OMB Circular A-136, the financial 

statements and associated notes are presented on a comparative basis. Unless specified otherwise, all 

dollar amounts are presented in dollars. 

B. Reporting Entity 

The Office of Government Ethics (OGE), a small agency within the executive branch, was established by 

the Ethics in Government Act of 1978. In partnership with executive branch agencies and departments, 

OGE fosters high ethical standards for employees and strengthens the public’s confidence that the 

Government’s business is conducted with impartiality and integrity. 

C. Budgets and Budgetary Accounting 

OGE receives all funding through Congressional appropriation from the budget of the United States. 

Annual appropriations are used, within statutory limits, to incur obligations for specified purposes. 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. 

9
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 

E. Revenues & Other Financing Sources 

Congress enacts annual and multi-year 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. Revenues from service fees 

associated with reimbursable agreements are recognized concurrently with the recognition of accrued 

expenditures for performing the services. 

We recognize 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 or foreign currency 

balances. (See Note 2 for additional information). 

H. Accounts Receivable 

Accounts receivable consists of amounts owed to OGE by other Federal agencies and the 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 either (1) 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, or (2) an account for which no allowance has been established is submitted to the 

Department of the Treasury for collection, which takes place when it becomes 180 days delinquent. 

 

The accompanying notes are an integral part of the financial statements.

10
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

I. Property, Plant and Equipment, Net 

OGE’s property, plant and equipment is recorded at original acquisition cost and is depreciated using the 

straight-line method over the estimated useful life of the asset. 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, plant and equipment. 

The useful life classifications for capitalized assets are as follows: 

Description Useful Life (years)

Leasehold Improvements 9 

Office Furniture 5 

Computer Equipment 3 

Office Equipment 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 covered by budgetary or other resources are those liabilities for which Congress has 

appropriated funds or funding is otherwise available to pay amounts due. 

Liabilities not covered by budgetary or other resources represent amounts owed in excess of available 

Congressionally appropriated funds or other amounts. The liquidation of liabilities not covered by 

budgetary or other resources is dependent on future Congressional appropriations or other funding. 

Intragovernmental liabilities are claims against OGE by other Federal agencies. Additionally, the 

Government, acting in its sovereign capacity, can abrogate liabilities. (See Note 3 for additional 

information). 

L. Accounts Payable 

Accounts payable consists of amounts owed to other Federal agencies and the public. 

The accompanying notes are an integral part of the financial statements.

11
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

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 Office of Personnel Management upon the retirement of that 

individual. No credit is given for sick leave balances upon the retirement of Federal Employee’s 

Retirement System (FERS)-covered employees . 

N. Accrued Workers’ Compensation 

A liability is recorded for actual and estimated future payments to be made for workers’ compensation 

pursuant to the Federal Employees’ Compensation Act (FECA). The actual costs incurred are reflected as 

a liability because OGE will reimburse the Department of Labor (DOL) two years after the actual 

payment of expenses. 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 Civil Service Retirement System (CSRS) or the Federal 

Employees’ Retirement System (FERS). The employees who participate in CSRS are beneficiaries of 

AB’s matching contribution, equal to seven percent of pay, distributed to their annuity account in the 

Civil Service Retirement and Disability Fund. 

FERS went into effect on January 1, 1987. FERS and Social Security automatically cover most 

employees hired after December 31, 1983. Employees hired prior to January 1, 1984 elected to join either 

FERS and Social Security, or remain in CSRS. 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 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. 

The accompanying notes are an integral part of the financial statements.

12
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

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 communicates 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. Use of Estimates 

Management has made certain estimates and assumptions when reporting assets, liabilities, revenue, and 

expenses, and in the note disclosures. The preparation of financial statements in conformity with 

generally accepted accounting principles requires management to make assumptions that affect the 

reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of 

the financial statements and the reported amounts of revenues and expenses during the reporting period. 

Actual results could differ from these estimates. 

Q. 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. 

R. Contingencies 

Liabilities are deemed contingent when the existence or amount of the liability cannot be determined with 

certainty pending the outcome of future events. OGE recognizes contingent liabilities, in the 

accompanying balance sheet and statement of net cost, when it is both probable and can be reasonably 

estimated. OGE discloses contingent liabilities in the notes to the financial statements when the 

conditions for liability recognition are not met or when a loss from the outcome of future events is more 

than remote. In some cases, once losses are certain, payments may be made from the Judgment Fund 

maintained by the U.S. Treasury rather than from the amounts appropriated to OGE for agency 

operations. There are no contingencies that require disclosure. 

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. At the end of the fifth 

expired year, the expired account is cancelled. 

The accompanying notes are an integral part of the financial statements.

13
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

T. Reclassification 

Certain fiscal year 2006 balances have been reclassified, retitled, or combined with other financial 

statement line items for consistency with current year presentation. Under SFFAS 7, OMB has 

reclassified the Statement of Financing to be presented in a note as Reconciliation of Net Cost of 

Operations to Budget. 

NOTE 2. FUND BALANCE WITH TREASURY

Fund balance with Treasury account balances as of September 30, 2007 and 2006 were: 

2007 2006 

Appropriated Funds $ 2,444,572 $ 2,522,555 

Total $ 2,444,572 $ 2,522,555 

Status of Fund Balances with Treasury: 

2007 2006 

Unobligated Balance 

 Available $ 157,939 $ 76,981 

 Unavailable 1,001,430 929,518 

Obligated Balance not yet Disbursed 1,285,203 1,516,056 

Total $ 2,444,572 $ 2,522,555 

Restricted unobligated fund balances represent the amount of appropriations for which the period of 

availability for obligation has expired. These balances are 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. LIABILITIES NOT COVERED BY BUDGETARY RESOURCES 

The liabilities on OGE’s Balance Sheet as of September 30, 2007 and 2006, include liabilities not covered 

by budgetary resources, which are liabilities for which 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 FECA 

liability is an intragovernmental liability not covered by budgetary resources. Unfunded FECA liabilities 

are $69,004 and $68,025 as of September 30, 2007 and 2006, respectively. Other liabilities not covered 

by budgetary resources consist of unfunded leave. Unfunded leave balances are $719,372 and $615,550 

as of September 30, 2007 and 2006, respectively. 

The accompanying notes are an integral part of the financial statements.

14
NOTE 4. 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 

2008 $ 1,369,249 

2009 1,372,655

2010 1,386,826

2011 1,401,175

2012 1,415,909

Thereafter 1,909,753

Total Future Payments 

The accompanying notes are an integral part of the financial statements.

15

$ 8,855,567 

NOTE 5. INTRAGOVERNMENTAL COSTS AND EXCHANGE REVENUE 

Intragovernmental costs represent goods and services exchange transactions made between two reporting 

entities within the Federal government, and are in contrast to those with non-federal entities (the public). 

Such costs are summarized as follows: 

2007 2006 

Intragovernmental Costs $ 3,448,805 $ 3,669,971 

Public Costs 8,595,697 8,061,761 

Less: Earned Revenue 260,700 600 

Total Net Cost $ 11,783,802 $ 11,731,132 
NOTE 6. OPERATING/PROGRAM COSTS 

OGE’s operating and programs costs as of September 30, 2007 and 2006 were $12,044,502 and 

$11,731,732, respectively. Earned revenues for their Annual Ethics Conference was $260,700 for FY 

2007. OGE’s Annual Ethics Conference was canceled for FY 2006. 

Budgetary Object Classifications 2007 2006 

Personnel and Benefits $ 9,209,227 $ 9,178,569 

Travel and Transportation 111,059 79,959

Rents, Communication & Utilities 1,345,165 1,407,914 

Printing and Contractual Services 1,031,969 802,917 

Supplies and Materials 187,868 117,817 

Equipment 105,011 144,556 

Interest and Dividend 54,203 -

Total $ 12,044,502 $ 11,731,732 

NOTE 7. 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). Amounts paid 

from the U.S. Treasury’s Judgment Fund in settlement of claims or court assessments against OGE are 

also recognized as imputed financing. For the years ended September 30, 2007 and 2006, imputed 

financing was $609,908 and $780,906, respectively. 

The accompanying notes are an integral part of the financial statements.

16
NOTE 8. EXPLANATION OF DIFFERENCES BETWEEN THE STATEMENT OF 

BUDGETARY RESOURCES AND THE BUDGET OF THE UNITED STATES GOVERNMENT 

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

Sources and Concepts for Reconciling Budgetary and Financial Accounting, calls for explanations of 

material differences between amounts reported in the Statement of Budgetary Resources (SBR) and the 

actual balances published in the Budget of the United States Government (President’s Budget). However, 

the President’s Budget that will include FY 07 actual budgetary execution information has not yet been 

published. The President’s Budget is scheduled for publication in February 2008 and can be found at the 

OMB Web site: http://www.whitehouse.gov/omb. 

The 2008 Budget of the United States Government, with the Actual Column completed for 2006, has 

been reconciled with the Statement of Budgetary Resources, and there are no material differences. 

NOTE 9. UNDELIVERED ORDERS AT THE END OF THE PERIOD 

Beginning with FY 2006, the format of the Statement of Budgetary Resources has changed and the 

amount of undelivered orders at the end of the period is no longer required to be reported on the face of 

the statement. 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. For the years ended September 30, 2007 and 2006, undelivered orders amounted to $335,971 

and $622,644, respectively. 

The accompanying notes are an integral part of the financial statements.

17
The accompanying notes are an integral part of the financial statements.

18

NOTE 10. RECONCILIATION OF NET COST OF OPERATIONS TO BUDGET 

 RESOURCES USED TO FINANCE ACTIVITIES 2007 2006 

Budgetary Resources Obligated 

Obligations Incurred $ 11,229,631 $ 11,148,873 

Less: Spending Authority from Offsetting Collections and 

Recoveries 447,269 155,859 

Obligations Net of Offsetting Collections and Recoveries 10,782,362 10,993,014 

Other Resources 

Imputed Financing from Costs Absorbed by Others 609,908 780,906 

Net Other Resources Used to Finance Activities 609,908 780,906 

Total Resources Used to Finance Activities $ 11,392,270 $ 11,773,920 

RESOURCES USED TO FINANCE ITEMS NOT PART OF THE 

 NET COST OF OPERATIONS

Change in Budgetary Resources Obligated for Goods, Services and 

Benefits Ordered But Not Yet Provided $ 286,673 $ (52,141) 

Total Resources Used to Finance Items Not Part of the Net Cost of

Operations 286,673 (52,141) 

Total Resources Used to Finance the Net Cost of Operations $ 11,678,943 $ 11,721,779 

COMPONENTS OF THE NET COST OF OPERATIONS THAT 

 WILL NOT REQUIRE OR GENERATE RESOURCES 

 IN THE CURRENT PERIOD 

Components Requiring or Generating Resources in Future Periods 

Increase in Annual Leave Liability $ 103,822 $ 2,115 

Other 1,037 7,238 

Total Components of Net Cost of Operations That will not Require 

or 

 Generate Resources in the Current Period $ 104,859 $ 9,353 

NET COST OF OPERATIONS $ 11,783,802 $ 11,731,132