Problems With the Financial Disclosure System

The Federal Aviation Administration (FAA) plays a vital role in most aspects of civil aviation. It is important that the agency develop an effective financial disclosure system to protect itself, its employees, and the public from possible appearances of conflict of interest caused by employees' financial interests. GAO reviewed the financial disclosure systems of FAA in response to several congressional requests.

GAO found that FAA did not have: (1) adequate criteria to determine which employees should file financial disclosure statements; (2) effective procedures with adequate criteria for reviewing financial disclosure statements; and (3) adequate procedures for collecting, processing, and controlling financial disclosure statements. Although more stringent prohibitions are imposed on financial interests of designated categories of employees, the Department of Transportation's regulations state that, for the most part, a financial interest of less than $5,000 and less than 1 percent of a company's outstanding stock does not represent a potential conflict of interest. GAO also identified a number of potential problems with the criteria which indicate a need for better guidance for agency officials who are responsible for reviewing the financial disclosure statements.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

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