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A Step Forward to Stop Abuse of Government Charge Cards
My reform legislation to establish safeguards, controls and penalties for abuse of government charge cards by government workers has been approved by the full Senate, with bipartisan support. Similar action is needed in the House of Representatives.
The Government Charge Card Abuse Prevention Act is about accountability. The public trust has been violated by abusive use of government charge cards. The federal bureaucracy needs to improve the way it manages the use of these cards. I’m not talking about creating expensive new bureaucracy to solve this problem, just requiring that agencies take common-sense steps, such as reviewing statements to look for improper charges, that are second nature to businesses and families but not always done in government agencies. In fact, the nonpartisan Congressional Budget Office has confirmed that my bill can be implemented with minimal administrative cost.
My effort to crack down on abuses responds to outrageous accounts of purchases made with government charge cards, as well as independent analysis that found inadequate and inconsistent controls within government agencies. At issue are purchase cards, which are used by authorized federal employees for the small-scale items needed for official business, such as office supplies, as well as travel cards, which are issued to federal employees to pay for official travel expenses. Purchase cards are directly paid with taxpayer money, so every wasteful or fraudulent charge squanders dollars that were earned by hard-working Americans. In the case of travel cards, an individual who might be denied for a personal credit card could be issued an unrestricted card by a federal agency if that agency doesn’t have in place the proper controls. If this individual racks up debts he or she cannot pay off, then the federal government loses out on rebates offered by the banks, which amount to millions of dollars each year. Also, when banks have to write off bad debt that was accumulated with the complicity of the federal government, it costs all Americans more in interest rates and fees. This can be prevented by common-sense controls in my bill, including disabling a card when an employee is not on official travel, electronically restricting the types of purchases that can be made with a card, and denying a credit line to employees with bad credit.
I’ve put the spotlight on the problematic use of these cards for the last decade, first at the Department of Defense and then also at the Department of Housing and Urban Development, the U.S. Forest Service, the Federal Aviation Administration, and elsewhere.
Over the years, the nonpartisan Government Accountability Office, or GAO, has documented fraudulent, questionable and overly expensive purchases made by federal workers with government purchase and travel cards. Sometimes this is just a case of an employee purchasing Cadillac-style office supplies when something cheaper would do just fine. However, GAO has also documented outrageously abusive personal purchases, including kitchen appliances, jewelry, gambling, cruises, and even the tab at gentlemen’s clubs and legalized brothels. While instances of fraud can be prosecuted, that can only happen if agencies have controls in place to catch them, and they are reported to federal prosecutors. Even when waste, fraud and abuse is detected, agency policies are not consistent. My bill requires federal agencies to put in place consistant penalties, including firing employees when warranted, so that would-be abusers know there will be consequences.
The Senate passed the reform during the last Congress, too, but the House of Representatives never took it up. I hope the outcome will be different under the new leadership of the House.
The bill would require all federal agencies to establish certain safeguards and internal controls for government charge card programs and to establish penalties for violations, including dismissal, when circumstances warrant. The bill would also increase oversight by providing that each agency Inspector General periodically conduct risk assessments and audits to identify fraud and improper use of government charge cards. These reforms are based on my experience as well as that of other members of Congress, the GAO, and agency Inspectors General in investigating the weaknesses in agency policies and procedures that have led to instances of waste, fraud, and abuse in government charge card programs.
The required safeguards and internal controls include:
• performing credit checks for travel card holders and issuing restricted cards for those with poor or no credit to reduce the potential for misuse
• maintaining a record of each cardholder, including single transaction limits and total transaction limits so agencies can effectively manage their cardholders
• implementing periodic reviews to determine if cardholders have a need for a card
• properly recording rebates to the government based on prompt payment, sales volume, etc.
• providing training for cardholders and managers
• utilizing effective systems, techniques, and technologies to prevent or catch fraudulent purchases
• establishing specific policies about the number of cards to be issued, the credit limits for certain categories of cardholders, and categories of employees eligible to be issued cards
• invalidating cards when employees leave the agency or transfer
• establishing an approving official other than the purchase card holder so employees cannot approve their own purchases
• reconciling purchase card charges on the bill with receipts and supporting documentation
• reconciling disputed purchase card charges and discrepancies with the bank, according to the proper procedure
• making purchase card payments promptly to avoid interest penalties
• retaining records of purchase card transactions in accordance with standard government record-keeping polices
• utilizing direct payments to the bank when reimbursing employees for travel card purchases to ensure that travel card bills get paid
• comparing items submitted on travel vouchers with items already paid for with centrally billed accounts to avoid reimbursing employees for items already paid for by the agency
• submitting refund requests for unused airline tickets so the taxpayers don’t pay for tickets that were not used
• disputing unauthorized charges and tracking the status of disputed charges to proper resolution
Friday, July 29, 2011
My reform legislation to establish safeguards, controls and penalties for abuse of government charge cards by government workers has been approved by the full Senate, with bipartisan support. Similar action is needed in the House of Representatives.
The Government Charge Card Abuse Prevention Act is about accountability. The public trust has been violated by abusive use of government charge cards. The federal bureaucracy needs to improve the way it manages the use of these cards. I’m not talking about creating expensive new bureaucracy to solve this problem, just requiring that agencies take common-sense steps, such as reviewing statements to look for improper charges, that are second nature to businesses and families but not always done in government agencies. In fact, the nonpartisan Congressional Budget Office has confirmed that my bill can be implemented with minimal administrative cost.
My effort to crack down on abuses responds to outrageous accounts of purchases made with government charge cards, as well as independent analysis that found inadequate and inconsistent controls within government agencies. At issue are purchase cards, which are used by authorized federal employees for the small-scale items needed for official business, such as office supplies, as well as travel cards, which are issued to federal employees to pay for official travel expenses. Purchase cards are directly paid with taxpayer money, so every wasteful or fraudulent charge squanders dollars that were earned by hard-working Americans. In the case of travel cards, an individual who might be denied for a personal credit card could be issued an unrestricted card by a federal agency if that agency doesn’t have in place the proper controls. If this individual racks up debts he or she cannot pay off, then the federal government loses out on rebates offered by the banks, which amount to millions of dollars each year. Also, when banks have to write off bad debt that was accumulated with the complicity of the federal government, it costs all Americans more in interest rates and fees. This can be prevented by common-sense controls in my bill, including disabling a card when an employee is not on official travel, electronically restricting the types of purchases that can be made with a card, and denying a credit line to employees with bad credit.
I’ve put the spotlight on the problematic use of these cards for the last decade, first at the Department of Defense and then also at the Department of Housing and Urban Development, the U.S. Forest Service, the Federal Aviation Administration, and elsewhere.
Over the years, the nonpartisan Government Accountability Office, or GAO, has documented fraudulent, questionable and overly expensive purchases made by federal workers with government purchase and travel cards. Sometimes this is just a case of an employee purchasing Cadillac-style office supplies when something cheaper would do just fine. However, GAO has also documented outrageously abusive personal purchases, including kitchen appliances, jewelry, gambling, cruises, and even the tab at gentlemen’s clubs and legalized brothels. While instances of fraud can be prosecuted, that can only happen if agencies have controls in place to catch them, and they are reported to federal prosecutors. Even when waste, fraud and abuse is detected, agency policies are not consistent. My bill requires federal agencies to put in place consistant penalties, including firing employees when warranted, so that would-be abusers know there will be consequences.
The Senate passed the reform during the last Congress, too, but the House of Representatives never took it up. I hope the outcome will be different under the new leadership of the House.
Summary of the Government Charge Card Abuse Prevention Act, S.300
The bill would require all federal agencies to establish certain safeguards and internal controls for government charge card programs and to establish penalties for violations, including dismissal, when circumstances warrant. The bill would also increase oversight by providing that each agency Inspector General periodically conduct risk assessments and audits to identify fraud and improper use of government charge cards. These reforms are based on my experience as well as that of other members of Congress, the GAO, and agency Inspectors General in investigating the weaknesses in agency policies and procedures that have led to instances of waste, fraud, and abuse in government charge card programs.
The required safeguards and internal controls include:
• performing credit checks for travel card holders and issuing restricted cards for those with poor or no credit to reduce the potential for misuse
• maintaining a record of each cardholder, including single transaction limits and total transaction limits so agencies can effectively manage their cardholders
• implementing periodic reviews to determine if cardholders have a need for a card
• properly recording rebates to the government based on prompt payment, sales volume, etc.
• providing training for cardholders and managers
• utilizing effective systems, techniques, and technologies to prevent or catch fraudulent purchases
• establishing specific policies about the number of cards to be issued, the credit limits for certain categories of cardholders, and categories of employees eligible to be issued cards
• invalidating cards when employees leave the agency or transfer
• establishing an approving official other than the purchase card holder so employees cannot approve their own purchases
• reconciling purchase card charges on the bill with receipts and supporting documentation
• reconciling disputed purchase card charges and discrepancies with the bank, according to the proper procedure
• making purchase card payments promptly to avoid interest penalties
• retaining records of purchase card transactions in accordance with standard government record-keeping polices
• utilizing direct payments to the bank when reimbursing employees for travel card purchases to ensure that travel card bills get paid
• comparing items submitted on travel vouchers with items already paid for with centrally billed accounts to avoid reimbursing employees for items already paid for by the agency
• submitting refund requests for unused airline tickets so the taxpayers don’t pay for tickets that were not used
• disputing unauthorized charges and tracking the status of disputed charges to proper resolution
Friday, July 29, 2011