Grassley Bill to Reign in Government Credit Card Abuse Clears Committee


For Immediate Release
Thursday, April 10, 2008
 
Grassley Bill to Reign in Government Credit Card Abuse Clears Committee
 
            WASHINGTON – After exposing millions of dollars in government credit card abuse, legislation led by Senator Chuck Grassley today cleared the Senate Homeland Security and Government Affairs Committee.  The bill now must be considered by the full Senate. 
 
            Grassley’s legislation would require all federal agencies to establish safeguards and internal controls for government charge card programs as well as establish penalties for violations.  The legislation is based on his past oversight work with the Government Accountability Office (GAO) and was introduced with Senators Norm Coleman of Minn., Joe Lieberman of Conn., and Susan Collins of Maine.  Congressman Joe Wilson filed companion legislation in the House of Representatives.
 
“In 2000, we leaped into the government credit card mess head first not knowing what we would find. We started with the Defense Department, and unfortunately that was just the beginning.  As each new layer of abuse has been peeled back, we've made new discoveries.  I said at the beginning of my investigation that I hope to soon see the bottom of the pit.  Eight years later, I’m still not sure we’ve reached the bottom,” Grassley said.  “By moving this legislation forward, we’ve made a tremendous step in the right direction.  We’re going to take care of the rotten apples.”
 
Grassley said the legislation would also stipulate that cases of fraud be referred to the U.S. Attorney for prosecution and employees that egregiously misuse or commit fraud with a government charge card be fired.  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 credit cards.
 
            Grassley introduced similar legislation in the last two Congresses that was not acted upon.  He has worked to expose government credit card abuse since 2001, starting with the Department of Defense.  The Government Accountability Office has documented abuses in the Departments of Defense, Veterans Affairs and Housing and Urban Development, the U.S. Forest Service, the Federal Aviation Administration and others. 
 
Here is a summary of Grassley’s legislation.
 
"Government Credit Card Abuse Prevention Act" Summary
 
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. Cases of fraud will be investigated by the agency IG and referred to the U.S. Attorney for prosecution.  Employees that egregiously abuse or commit fraud with a government charge card will be fired. 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 the experience of Senator Grassley and other members of Congress, the GAO, and agency Inspectors General in investigating the weaknesses in agency policies and procedures that have lead 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 credit 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
 
$                   providing training for cardholders and managers
 
$                   utilizing available 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
 
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