SEAD 3 and Cleared Employees Reporting Financial Issues

Now that you were granted clearance eligibility it does not mean you are done being evaluated as a trusted clearance holder. In accordance with Security Executive Agent Directive (SEAD) 3, you are required to report certain things, including financial issues that arise which may cause you to become delinquent on your debts. SEAD 3 states that clearance holders at the “Secret” level are required to report all bankruptcies and any debts that are over 120 days delinquent. If you have a “Top Secret” clearance you are required to report all bankruptcies, garnishments, debts over 120 days delinquent, and any financial gain of more than $10,000.

Why is it important to report these things? First, it is required by SEAD 3. Second, when a Continuous Evaluation (CE) alert comes into your agency’s Central Adjudication Facility and shows financial issues that you have not reported, you have now compounded the issue. When an adjudicator reaches out to you, they now have two issues to resolve; financial considerations and personal conduct (failure to follow a rule or regulation). The top issues for a clearance denial over the last several years has been financial considerations and is usually in concert with personal conduct for failure to disclose them. DCSA has not released statistics on the number of CE alerts that result in a clearance revocation, but it would be prudent as a clearance holder to report any financial issues that may arise, why, and what you are doing to resolve them to give yourself a better chance at retaining your eligibility.