before the beginning of an SGE's appointment
period.

(g) Develop written procedures as to what information should be documented in an SGE's case file which served as the basis for the conflict-of-interest determination and the restrictions placed on an

SGE's activities.

SCOPE

We made our review primarily at FDA headquarters, Rockville, Maryland. It was made pursuant to a request from the Chairman, Subcommittee on Oversight and Investigations, House Committee on Interstate and Foreign Commerce. We were asked to consider whether:

--FDA has an effective financial disclosure system for
SGES.

--Financial disclosure statements are filed promptly
by SGES and reviewed by FDA in a timely manner.
--SGES appear to have financial conflicts of interest
which could affect the quality and objectivity of
their work for FDA.

A principal objective was to evaluate FDA's system to surface and effectively deal with conflict-of-interest situations relating to an SGE's personal financial interests. This included FDA's (1) policy for making conflict-of-interest determinations and supporting procedures, (2) procedures and practices to prevent committee members from participating in restricted activities, and (3) system to publicly disclose potentially controversial cases.

We reviewed 906 SGE case files, 810 of which were active as of May 31, 1976, and another 96 covering initial appointments or reappointments of inactive SGES between May 31 and July 31, 1976. These cases were reviewed to determine whether (1) all statements were filed, (2) the statements were filed and reviewed in a reasonable time frame, and (3) they were properly filed and adequately reviewed.

We also selected files where some type of problem appeared to exist; i.e., certain information seemed to be missing, the SGE had employment and financial interests in several categories, the case involved several complex issues not clearly covered by agency policy and criteria, or a PRDC memorandum was in the file. We reviewed these cases to gain a perspective on the effectiveness of the overall system.

We did not reveal any cases involving actual conflict of interest. However, we did not evaluate specific financial interests in relation to an individual's stated duties and

responsibilities nor did we talk with SGEs regarding their actual duties or financial interests. The confidentiality of employees who filed these statements was maintained at all time.