Federal statutes and regulations collectively require agencies to establish an ethics program intended to preserve and promote public confidence in the integrity of federal officials through their self-reporting of potential conflicts-of-interest (financial disclosure), through knowledge of post- government employment restrictions (training), and through independent investigations of alleged wrongdoing. A key objective of an ethics program is to provide a formal and systematic means for agencies to prevent and detect ethics violations. The elements of a comprehensive ethics program include (1) a written policy of standards of ethical conduct and ethics guidance; (2) effective training and dissemination of information on ethical standards, procedures, and compliance; (3) monitoring to ensure the ethics program is followed; (4) periodically evaluating the effectiveness of the ethics program; and (5) levying disciplinary measures for misconduct and for failing to take reasonable steps to prevent or detect misconduct. The joint ethics regulation is DOD’s written policy establishing its ethics program. The ethics program emphasizes training and counseling to raise awareness of standards of ethical behavior and to prevent misconduct. DOD’s ethics training requirement includes educating employees about the procedures to follow when considering employment outside of DOD and the post-government employment restrictions that may apply and to inform employees of the resources that are available to them to address ethics questions and concerns. The training includes an initial briefing to introduce employees to ethics regulations, such as conflict-of-interest and procurement integrity rules, and exit briefings to discuss restrictions that may apply once employees leave government service. Additional ethics briefings are held for certain senior employees on an annual basis. DOD’s ethics counseling aims to address employee concerns and questions as they arise. The training and counseling is also to raise awareness so that DOD employees can recognize misconduct and report the matter to ethics officials, inspectors general officials, the head of the command or agency, criminal investigative offices, or any number of DOD hotlines. Responsibility for recognizing and reporting potential misconduct rests with all DOD employees. Additionally, the joint ethics regulation requires ethics officials to track and follow up on reports of potential misconduct. Finally, the DOD regulation requires periodic evaluations of local activities, which implement DOD’s ethics program, to ensure they meet standards. Defense regulations provide that government contractors should have standards of conduct and internal control systems to promote ethical standards, facilitate timely discovery and disclosure of improper conduct in connection with government contracts, and ensure corrective measures are promptly implemented. The regulations provide that contractors should have a written code of business ethics and conduct, an ethics training program for all employees, and to periodically review practices, procedures, policies, and internal controls for compliance with standards of conduct. The federal government has a host of laws and regulations governing the conduct of its employees and contractors. The Compilation of Federal Ethics laws prepared by the United States Office of Government Ethics includes nearly 100 pages of statutes alone. For the purposes of this report, however, we note a few laws relevant to DOD officials whose responsibilities involved participation in DOD’s acquisition process. The statutes are complex, and the brief summaries here are intended only to provide context for the issues discussed in this report. The principal restrictions concerning employment for federal employees after leaving government service are found in 18 U.S.C. 207 and 41 U.S.C. 423 (procurement integrity). The title 18 provision generally prohibits former federal employees and their supervisors from representing non- government entities concerning matters they handled while working for the federal government. Violation of the statute entails criminal penalties. In contrast, the title 41 provision more narrowly applies to contracting officials and also entails civil and administrative penalties. The provision generally restricts employment with a contractor if the official performed certain functions involving the contractor and a contract valued in excess of $10,000,000. The law, however, permits employees to accept compensation “from any division or affiliate of a contractor that does not produce the same or similar products or services” that were produced under the contract. There are also provisions related to post-government employment that are applicable to federal employees’ actions while still in federal service. 18 U.S.C. 208 prohibits government employees from participating in matters in which they have a financial interest. The statute imposes criminal penalties on federal employees who begin negotiating future employment without first disqualifying themselves from any duties related to the potential employer. In addition 41 U.S.C. 423(c) requires officials who participate personally and substantially in a procurement exceeding $100,000 to report promptly contacts by bidders or offerors regarding future employment. The official must either reject the possibility of employment or disqualify himself or herself from further participation in the procurement. DOD’s joint ethics regulation, administered by DOD’s General Counsel, requires DOD to provide training and counseling to educate employees regarding applicable ethics laws and regulations. To implement its ethics program, DOD relies on local ethics counselors within DOD’s military services and agencies to train and counsel employees on conflict-of- interest and procurement integrity rules. Training is to raise individual awareness and to enable DOD employees to recognize misconduct and report any matter to appropriate officials. The joint ethics regulation also requires ethics officials to track and follow up on reports of misconduct. However, DOD lacks knowledge to evaluate the ability of its training and counseling efforts to prevent misconduct and ensure the public trust. DOD has delegated responsibility for training and counseling to more than 2,000 ethics counselors assigned to commands and organizations worldwide. These ethics counselors administer ethics training and briefings, provide advice and counseling, and review employees’ financial disclosure documents as outlined in the joint ethics regulation. At the 12 DOD locations we visited we found training and counseling efforts varied in the content of ethics information provided, who is required to attend training and counseling, and how often the training and counseling is provided. For example, some ethics counselors conduct extensive discussions about employees’ plans upon separation at the exit briefing, some provide written advice, and others distribute pamphlets summarizing employment restrictions. Some ethics counselors have supplemented their annual training because they do not believe that the minimum requirements in the joint ethics regulation—an annual ethics briefing—are sufficient to ensure employees understand employment restrictions both during and after they leave government service. For example, a Navy ethics office offers live, interactive ethics training to all personnel at its location approximately three to four times a year. DOD currently evaluates its ethics program’s performance in terms of process indicators—such as the number of financial disclosure forms completed, the number of ethics counselors, and the amount of time spent by ethics counselors on training and counseling services. According to DOD officials, the information on the number of ethics counselors at each location and the amount of time they spend with employees can provide insight into the level of resources used. However, these process indicators do not provide DOD knowledge of which employees are subject to restrictions, which employees receive training and counseling, the quality and content of training, and who is leaving DOD for employment with contractors. For example, DOD does not know if the population critical to the acquisition process, those employees covered by procurement integrity restrictions, are trained. Further, many ethics counselors could not provide evidence that employees received the annual ethics training. Additionally, DOD does not know whether the training and counseling includes all relevant conflict-of-interest and procurement integrity rules. As shown in Table 1, we found that the ethics counselors we interviewed did not consistently include information on the restrictions provided for in 18 U.S.C. 207, 18 U.S.C. 208, and 41 U.S.C. 423 in their annual ethics briefings for the past 3 years. Training is to raise awareness of procurement integrity and conflict-of- interest rules so DOD employees are able to recognize misconduct and report matters to appropriate officials. Ethics counselors are required to (1) review the facts of an allegation of misconduct and report the allegation to appropriate investigative organizations or the head of the DOD command of the suspected violator and the appropriate contracting officer, if applicable; (2) follow-up with the investigative office until a final determination is made on the allegation; and (3) periodically report on the status of the allegation of misconduct to the military service and defense agencies head ethics official. However, when we asked the ethics officials for information on allegations of misconduct and the status of investigations, they were not tracking or following-up on the status of alleged misconduct cases. For information on reported allegations of potential misconduct the ethics officials referred us to the inspectors general offices. According to inspectors general officials, DOD has not made an attempt to determine the extent that potential misconduct in terms of conflict-of-interest and procurement integrity is reported. The information on reports of potential misconduct is maintained in various files and databases by multiple offices. As a result, DOD has not determined if reports of potential misconduct are increasing or decreasing and why such a change may be occurring. DOD Inspector General’s hotline official told us that anecdotal evidence indicates post-government employment misconduct is a problem, but DOD has no basis for assessing the severity. At the locations we visited, we obtained information from the inspector general officials demonstrating at least 53 cases of potential misconduct reported in the last 5 years. However, ethics officials at the Office of Secretary of Defense and the military headquarters we spoke with were not tracking the status of the reports of potential misconduct. Lacking this knowledge DOD has no assurance that ethics-related laws and regulations are properly followed and that appropriate administrative or disciplinary action is taken. Also, the information on potential misconduct can help DOD understand the extent of the problem and the risk such behavior poses. Concerned about the effectiveness of its efforts to minimize misconduct and prevent violations of conflict-of-interest and procurement integrity rules, DOD has taken actions aimed at enhancing its ethics program.