SUPPLEMENTARY INFORMATION:

I. Background and Proposal

a. The Ethics in Government Act and Schedule Policy/Career

The Ethics in Government Act of 1978, Public Law 95-521, as amended, mandates public financial disclosure reports for a range of officials in all three branches of government and for candidates for Federal office. It requires financial disclosure reports to be filed by employees who are “in a position in the executive branch which is excepted from the competitive service by reason of being of a confidential or policymaking character.” 5 U.S.C. 13103(f)(5). This provision further prescribes that the Director of OGE may, by regulation, exclude from the application of this paragraph any individual, or group of individuals, who are in such positions, but only in cases in which the Director determines such exclusion “would not affect adversely the integrity of the Government or the public's confidence in the integrity of the Government.” Id.

Historically, the only category of Federal employees that were “excepted from the competitive service by reason of being of a confidential or policymaking character” were Schedule C employees, who are political appointees expected to resign at the conclusion of a Presidential term. However, E.O. 14171, “Restoring Accountability to Policy-Influencing Positions Within the Federal Workforce,” 90 FR 8625 (Jan. 31, 2025), ordered the Office of Personnel Management (OPM) to initiate a rulemaking to prepare for the transfer of positions into Schedule Policy/Career. That Executive Order contemplated a new excepted service schedule for career employees in a “confidential, policy-determining, policy-making, or policy-advocating position” who would be exempted from Chapter 75 adverse action proceedings in order to ensure their competence and effectiveness in fulfilling the President's agenda. It further ordered OPM to work with agencies to compile lists of positions that should be placed into Schedule Policy/Career.

On February 6, 2026, OPM published a final rule, “Improving Performance, Accountability and Responsiveness in the Civil Service,” 91 FR 5580, effective March 9, 2026.^[1] The final rule amended OPM's regulations to implement Schedule Policy/Career, including by adding 5 CFR 213.3601. Under that section, as authorized by the President, agencies may make appointments to career positions of a confidential, policy-determining, policy-making, or policy-advocating character that are not in the Senior Executive Service, and positions filled under that authority are excepted from the competitive service and constitute Schedule Policy/Career.

In its rulemaking, OPM stated that “confidential, policy-determining, policy-making, or policy-advocating character” are not terms of art that apply exclusively to political appointees, but rather terms that refer to distinct, sometimes overlapping, categories of occupational positions.^[2] In addition, these terms bear their ordinary language meanings and refer to positions that determine, make, or advocate for Government policy, or that are confidential in nature. Because section 13103(f)(5) specifies that a public financial disclosure report must be filed by employees who are “excepted from the competitive service by reason of ( printed page 46240) being of a confidential or policymaking character,” an employee in a position placed into Schedule Policy/Career because the position's duties are of a “confidential” or “policymaking” character would be required by statute to file unless the position is excluded from filing by the OGE Director.

Executive Order 14410 of June 3, 2026, “Implementing Schedule Policy/Career in the Excepted Service,” 91 FR 34893 (June 10, 2026), effectuated the initial transfer of positions into Schedule Policy/Career. Section 5 of E.O. 14410 determined that the positions set forth in the Appendix to that order have a confidential, policy-determining, policy-making, or policy-advocating character and placed those positions in Schedule Policy/Career of the excepted service. E.O. 14410 also required agency heads, within 7 days of the date of the order, to notify officers or employees encumbering those positions of their placement in Schedule Policy/Career and to conform agency records and practices to reflect the changes made by the order. OPM subsequently advised agencies that employees encumbering positions listed in the Appendix became Schedule Policy/Career employees as of the date of E.O. 14410 and that agencies should process an SF-50, Notification of Personnel Action, with an effective date of June 3, 2026, to transition each employee into Schedule Policy/Career.

E.O. 14410 placed approximately 7,600 positions into Schedule Policy/Career. Per OPM, the large majority of employees encumbering those positions are Federal employees who were not previously required to file a public financial disclosure report. Financial disclosure reporting serves important transparency and conflicts-of-interest identification purposes for certain senior career employees. However, the action of moving positions into Schedule Policy/Career in and of itself should not serve as a determination that the employees encumbering those positions are now at risk of having new conflicts of interest. The duties of these employees do not change upon their transfer to Schedule Policy/Career. Moreover, there is currently no evidence that continuing to exempt ^[3] this group of employees from public filing requirements when their positions are placed into Schedule Policy/Career would create new risks of conflicts of interest, misuses of positions, other improprieties, or the appearance thereof, as the duties of these employees will not substantially change upon their transfer to Schedule Policy/Career. Accordingly, the Acting Director of OGE has found that this action would not adversely affect the integrity of the Government or the public's confidence in the integrity of the Government.

In addition, financial disclosure reporting creates an administrative burden for both the filing employees and the agency ethics officials responsible for reviewing those filings. There are over 27,000 public financial disclosure filers in the Executive branch. Based on data provided by agencies, OPM estimates that about 16 percent of employees being moved to Schedule Policy/Career are currently public filers. Applying that estimate to the 7,600 positions placed in Schedule Policy/Career by E.O. 14410, OPM has advised OGE that approximately 6,400 employees encumbering positions moved into Schedule Policy/Career do not currently file public financial disclosure reports. Thus, absent this regulatory change, the number of public filers would increase significantly and would create an administrative burden in time and work for both these new filers and the agency ethics officials responsible for reviewing those filings. The administrative burden created by this increase in filers is not justified when the positions and employees encumbering them are otherwise unchanged.

While OGE has existing exclusions to section 13103(f)(5) filing, found at § 2634.203, those exclusions would apply to relatively few Schedule Policy/Career employees. Employees in positions at or below the GS-13 grade level may be excluded from filing a public financial disclosure report if the designated agency ethics official (DAEO) finds that they “do not have a substantial policymaking role with respect to agency programs,” and employees at the GS-14 and GS-15 grade levels may be excluded on a case-by-case basis by the Director if their positions have “no policy-making role with regard to agency programs.” Neither exclusion is appropriate for most Schedule Policy/Career positions because many such positions will have a policy-making role with regard to agency programs.^[4] Accordingly, a new exclusion is required to maintain an unchanged and consistent filing status for employees whose only basis for public filing would be the placement of their positions into Schedule Policy/Career.

The baseline presumption is that employees whose positions were moved to Schedule Policy/Career from the competitive service or other excepted service schedules and who are not currently required to file any type of financial disclosure report will continue to not be required to file such a report under this new regulation. “n. However, those Schedule Policy/Career employees who currently file a public financial disclosure report or a confidential financial disclosure report pursuant to § 2634.904 will continue to do so. Consequently, OGE is excluding from the public filing requirements those Schedule Policy/Career positions for which the only basis for public filing is their position being in Schedule Policy/Career. The Acting Director of OGE does not find that the integrity of the Government, or the public's confidence in the integrity of the Government, will be adversely impacted by employees maintaining their current filing status.

II. Regulatory Analysis

A. Statement of Need

The President and OPM have determined that Schedule Policy/Career is necessary to enhance the efficiency and responsiveness of the Executive branch. OPM's final Schedule Policy/Career rule established the regulatory framework for the new excepted service schedule, and E.O. 14410 placed 7,600 positions into Schedule Policy/Career. ( printed page 46241) However, requiring all employees encumbering positions placed into Schedule Policy/Career by E.O. 14410 to file public financial disclosure reports is not necessary to maintain the integrity of Government. Most employees whose positions were placed into Schedule Policy/Career by E.O. 14410 do not currently file public financial disclosure reports, and the act of reclassifying these positions on its own would not give rise to additional risk of conflicts of interest, misuses of position, other improprieties, or the appearance thereof. This rule is therefore needed to preserve the pre-existing filing status of employees whose positions and duties have not otherwise changed. Notably, Schedule Policy/Career employees who are otherwise required to file public financial disclosure reports for reasons outside the scope of 5 U.S.C. 13103(f)(5) will still be required to file those reports.

B. Impact

The primary impact of the current rule will be to preserve the filing status of existing employees. Absent this regulatory change, the placement of positions into Schedule Policy/Career by Executive Order 14410 would create a new class of public filers numbering in the thousands. These employees are currently serving in the same positions they will be under Schedule Policy/Career and have not previously been required to file public reports under the Ethics in Government Act. Since the duties of these employees will not change upon their transfer to Schedule Policy/Career, the action of placing their positions into Schedule Policy/Career should not serve as a determination that these employees have new conflicts-of-interest risks.

C. Costs

OGE estimates that the costs of implementing this rule will be comparatively minimal. Agency ethics officials will have to review the incumbents of positions moved into Schedule Policy/Career to determine whether the financial reporting status of the employees encumbering these positions has been altered by this rule. Because ethics officials are required to undertake this analysis for existing employees under the status quo, OGE estimates an average of at most one hour of additional labor to review each Schedule Policy/Career position encumbered by an employee who currently does not file, for a total of no more than approximately 6,400 hours of labor. A reasonable estimate for the average yearly pay rate for ethics officials, in the Washington, DC locality pay area, would be the Fiscal Year 2026 GS 13, Step 5 rate of $138,024 per ethics official, corresponding to an hourly rate of $66.14. OGE assumes the total value of labor to be 200 percent of the hourly wage rate, for an hourly cost of $132.28. OGE thus estimates implementation costs of approximately $0.85 million. After reevaluating the filing status for the initial cohort of Schedule Policy/Career employees, there would presumably be no additional costs for newly appointed Schedule Policy/Career employees beyond the ethics analyses which would still be required without this regulatory change.

D. Benefits/Cost Savings

OGE anticipates that this rule will avoid significant costs associated with an increased number of filers of ethics reports. OGE estimates that compliance with reporting requirements requires approximately 10 hours of labor per filer. Applying OPM's estimate that approximately 16% of employees being moved to Schedule Policy/Career are currently public filers to the 7,600 positions placed in Schedule Policy/Career by Executive Order 14410, OPM estimates that approximately 6,400 Schedule Policy/Career employees would become new public filers absent this rule, for a total of approximately 64,000 hours of labor for the initial cohort of would-be Schedule Policy/Career filers. OPM advised OGE that, in its experience, the review and processing of a public financial disclosure form will take agency ethics officials approximately five hours per filer for most filers, for a total of approximately 32,000 hours.^[5] Because, per OPM, Schedule Policy/Career employees are expected to be concentrated in higher GS-scale positions and because attorneys and others working in agency ethics offices are generally experienced attorneys in higher GS-scale brackets, a reasonable estimate for the yearly rate, in the Washington, DC locality pay area, would be the GS 15-1 rate of $169,279 per filer and the GS 13-5 rate of $138,024 per ethics official, corresponding to hourly rates of $81.11 and $66.14, respectively. OGE assumes the total value of labor to be 200 percent of the hourly wage rate, for an hourly cost of $162.22 and $132.28. OGE thus estimates cost savings from preparing and processing the initial wave of Schedule Policy/Career disclosures to be approximately $14.6 million. While this number would taper off following the initial processing of disclosures for all Schedule Policy/Career employees, Schedule Policy/Career employees would generally be replaced by other employees who would need to file disclosure forms. At a conservative estimate that one in fifteen employees would be separated and replaced per year, this would lead to approximately $1.0 million in additional annual savings.

Further, OGE would avoid the increased costs required to support the thousands of additional filers beyond the more than 26,000 filers currently in OGE's electronic public financial disclosure filing system, Integrity. The rule eliminates any additional costs related to housing, authentication and IT labor required to support a large number of new filers.

III. Procedural Issues and Regulatory Review

A. Rulemaking Procedures

a. There Exists Good Cause To Issue This Rule Without Public Comment Under 5 U.S.C. 553(b)(B)

OGE's authority for the rulemaking procedures followed in this action is provided by 5 U.S.C. 553(b)(B), a provision of the Administrative Procedure Act (APA) which allows an agency to forgo notice-and-comment requirements “when the Agency for good cause finds (and incorporates the finding and a brief statement of reasons therefor in the rule issued) that notice and public procedure thereon are impracticable, unnecessary, or contrary to the public interest.”

OGE finds good cause to forgo the notice-and-comment process because following those procedures would be “impracticable, unnecessary, or contrary to the public interest.” 5 U.S.C. 553(b)(B). E.O. 14410 placed 7,600 positions into Schedule Policy/Career effective June 3, 2026. Section 5 of E.O. 14410 required agency heads, within 7 days of the date of the order, to notify officers or employees encumbering those positions of their placement in Schedule Policy/Career and to conform agency records and practices to reflect the changes made by the order. OPM subsequently advised agencies that employees encumbering positions listed in the Appendix to E.O. 14410 became Schedule Policy/Career employees as of the date of the order and that agencies ( printed page 46242) should process SF-50s effective June 3, 2026.

Under current OGE regulations, Schedule Policy/Career employees who are required to file public financial disclosure reports by reason of 5 U.S.C. 13103(f)(5) would need to file public financial disclosure reports “[w]ithin 30 days of assuming” a Schedule Policy/Career position. 5 CFR 2634.201(b)(1). Were this rule promulgated using standard notice-and-comment procedures, employees whose positions were placed into Schedule Policy/Career by E.O. 14410 would have to go through the significant administrative burden of preparing financial disclosure reports while agency ethics officials would have to review those reports and while OGE is soliciting public comments on whether there is even a need for those employees to comply with that requirement. This would represent a significant expenditure of government resources for minimal public benefit. The purpose of this rule is therefore to avoid a significant increase in the number of public financial disclosure filers and thereby preserve the status quo filing obligations under the Ethics in Government Act for existing employees whose positions and duties have not changed. In other words, the purpose of this action is to maintain a current policy that would otherwise inadvertently change as an unintended consequence of E.O. 14410's placement of positions into Schedule Policy/Career.

Although OGE has advised agencies that DAEOs may grant temporary filing extensions under § 2634.201(g), those extensions are temporary, require agency-by-agency action, and do not resolve the underlying legal uncertainty created by E.O. 14410's placement of positions into Schedule Policy/Career. Immediate regulatory action is therefore necessary to provide uniform government-wide treatment before temporary extensions expire and to avoid unnecessary preparation and review of reports that may not ultimately be required.

Despite this rule going into effect without prior public comment, OGE is providing an opportunity for comment on this rule. OGE will review and respond to any comments received, including by making changes to this rule, if appropriate. Thus, the net effect of this rule, even if OGE revises the rule following public comment, would be to delay the filing of financial disclosures for employees whose only basis for public filing is their placement in Schedule Policy/Career while OGE evaluates the policy reflected by this rule.

b. This Rule Does Not Need 30 Days' Notice Before Its Effective Date Under 5 U.S.C. 553(d)(1).

Pursuant to 5 U.S.C. 553(d)(1), this rule is not subject to the requirement that a rule be published at least 30 days prior to its effective date. Section 553(d)(1) provides that the 30-day delayed effective date does not apply to “a substantive rule which grants or recognizes an exemption or relieves a restriction.” The purpose of this rule is to grant an exclusion for Schedule Policy/Career employees from the requirement to file public financial disclosures under 5 U.S.C. 13103(f)(5) when the only basis for public filing is the placement of their positions into Schedule Policy/Career. Because E.O. 14410 placed 7,600 positions into Schedule Policy/Career effective June 3, 2026, this rule grants an exclusion from, and relieves, a newly triggered requirement to file. A delayed effective date is therefore unnecessary. As discussed, an immediate effective date will preserve the status quo as OGE evaluates the policy reflected by this rule in light of public comment.

B. Regulatory Flexibility Act

OGE certifies that this rule will not have a significant economic impact on a substantial number of small entities because it concerns only the internal personnel management of the Federal Government.

C. Regulatory Review

OGE has examined the impact of this rule as required by Executive Orders 12866 and 13563, which direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits, including potential economic, environmental, public health and safety effects, distributive impacts, and equity. A regulatory impact analysis must be prepared for rules that have an annual effect on the economy of $100 million or more or adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or tribal governments or communities. While this rulemaking does not reach that threshold, the Office of Management and Budget has determined that this rule is “significant” under section 3 of Executive Order 12866. The primary benefit of this regulation will be the preservation of the filing status of existing employees whose positions were placed into Schedule Policy/Career by E.O. 14410, compared to a baseline of OPM's final Schedule Policy/Career rule and E.O. 14410 taking effect without this regulatory change.

This rule is a deregulatory action under Executive Order 14192, “Unleashing Prosperity Through Deregulation,” 90 FR 9065 (Feb. 6, 2025), and provides annual cost savings. Implementation guidance for E.O. 14192, issued by the Office of Management and Budget, Memorandum M-25-20 (Mar. 26, 2025), defines an E.O. 14192 deregulatory action as “an action that has been finalized and has total costs less than zero.” As explained further in sections II(C) and II(D), above, in the first year, OGE estimates implementation costs of approximately $0.85 million and initial cost savings of approximately $14.6 million, for total annual net cost savings of approximately $13.7 million. Thereafter, OGE estimates total annual cost savings of approximately $1.0 million, plus any separately estimated savings associated with reduced support burdens for Integrity. As such, this action aligns with E.O. 14192, which promotes prudent financial management and alleviates unnecessary regulatory burdens.

D. Federalism

This regulation will not have substantial direct effects on the States, on the relationship between the Federal Government and the States, or the distribution of power and responsibilities among the various levels of government, as it concerns only the internal management of the Executive Branch. Therefore, in accordance with Executive Order 13132, OGE certifies that this rule does not have sufficient federalism implications to warrant preparation of a federalism assessment.

E. Civil Justice Reform

This regulation meets the applicable standards set forth in section 3(a) and (b)(2) of Executive Order 12988 (Feb. 7, 1996).

F. Unfunded Mandates Reform Act of 1995

Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA) requires that agencies assess anticipated costs and benefits before issuing any rule that may result in the expenditure by State, local, or Tribal governments, in the aggregate, or by the private sector, of $100 million or more in any one year, updated annually for inflation. The threshold is currently approximately $206 million. This rulemaking does not include a Federal mandate that might ( printed page 46243) result in the expenditure by State, local, or Tribal governments, in the aggregate, or by the private sector, of more than $206 million.

G. Paperwork Reduction Act

The Paperwork Reduction Act, as amended, (44 U.S.C. chapter 35) does not apply because this regulation does not contain information collection requirements that require the approval of the Office of Management and Budget.

Accordingly, for the reasons stated in the preamble, OGE amends 5 CFR part 2634 as follows:

91 FR 46239