[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[S. 1744 Introduced in Senate (IS)]

  1st Session
                                S. 1744

              To prevent abuse of Government credit cards.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                            October 16, 2003

Mr. Grassley (for himself and Mr. Byrd) introduced the following bill; 
  which was read twice and referred to the Committee on Governmental 
                                Affairs

_______________________________________________________________________

                                 A BILL


 
              To prevent abuse of Government credit cards.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Credit Card Abuse Prevention Act of 
2003''.

SEC. 2. MANAGEMENT OF PURCHASE CARDS.

    (a) Required Safeguards and Internal Controls.--The head of each 
executive agency that issues and uses purchase cards and convenience 
checks shall establish and maintain safeguards and internal controls to 
ensure the following:
            (1) That there is a record in each executive agency of each 
        holder of a purchase card issued by the agency for official 
        use, annotated with the limitations on single transaction and 
        total credit amounts that are applicable to the use of each 
        such card by that purchase cardholder.
            (2) That the holder of a purchase card and each official 
        with authority to authorize expenditures charged to the 
        purchase card are responsible for reconciling the charges 
        appearing on each statement of account for that purchase card 
        with receipts and other supporting documentation and forwarding 
        such reconciliation to the designated official who certifies 
        the bill for payment in a timely manner.
            (3) That any disputed purchase card charge, and any 
        discrepancy between a receipt and other supporting 
        documentation and the purchase card statement of account, is 
        resolved in the manner prescribed in the applicable 
        Governmentwide purchase card contract entered into by the 
        Administrator of General Services.
            (4) That payments on purchase card accounts are made 
        promptly within prescribed deadlines to avoid interest 
        penalties.
            (5) That rebates and refunds based on prompt payment on 
        purchase card accounts are monitored for accuracy and properly 
        recorded as a receipt to the agency that pays the monthly bill.
            (6) That records of each purchase card transaction 
        (including records on associated contracts, reports, accounts, 
        and invoices) are retained in accordance with standard 
        Government policies on the disposition of records.
            (7) That periodic reviews are performed to determine 
        whether each purchase cardholder has a need for the purchase 
        card.
            (8) That appropriate training is provided to each purchase 
        cardholder and each official with responsibility for overseeing 
        the use of purchase cards issued by an executive agency.
            (9) That each executive agency has specific policies 
        regarding the number of purchase cards issued by various 
        organizations and categories of organizations, the credit 
        limits authorized for various categories of cardholders, and 
        categories of employees eligible to be issued purchase cards, 
        and that those policies are designed to minimize the financial 
        risk to the Federal Government of the issuance of the purchase 
        cards and to ensure the integrity of purchase cardholders.
            (10) That the head of each executive agency evaluate the 
        creditworthiness of an individual before issuing the individual 
        a purchase card, and that no individual be issued a purchase 
        card if the individual is found not creditworthy as a result of 
        the evaluation. Notwithstanding any other provision of law, 
        such evaluation shall include an assessment of an individual's 
        consumer report from a consumer reporting agency as those terms 
        are defined in section 603 of the Fair Credit Reporting Act. 
        The obtaining of a consumer report under this subsection is 
        deemed to be a circumstance or purpose authorized or listed 
        under section 604 of the Fair Credit Reporting Act.
            (11) That each executive agency invalidate the purchase 
        card of each employee who--
                    (A) ceases to be employed by the agency immediately 
                upon termination of the employment of the employee; or
                    (B) transfers to another unit of the agency 
                immediately upon the transfer of the employee.
    (b) Management of Purchase Cards.--The head of each executive 
agency shall prescribe regulations implementing the safeguards and 
internal controls in subsection (a). Those regulations shall be 
consistent with regulations that apply Governmentwide regarding the use 
of purchase cards by Government personnel for official purposes.
    (c) Penalties for Violations.--The regulations prescribed under 
subsection (a) shall provide for appropriate adverse personnel actions 
or other punishment to be imposed in cases in which employees of an 
executive agency violate such regulations or are negligent or engage in 
misuse, abuse, or fraud with respect to a purchase card, including 
removal in appropriate cases.
    (d) The Inspector General of each executive agency shall--
            (1) periodically conduct risk assessments of the agency 
        purchase card program and associated internal controls and 
        analyze identified weaknesses and the frequency of improper 
        activity in order to develop a plan for using such risk 
        assessments to determine the scope, frequency, and number of 
        periodic audits of purchase cardholders;
            (2) perform periodic audits of purchase cardholders 
        designed to identify--
                    (A) potentially fraudulent, improper, and abusive 
                uses of purchase cards;
                    (B) any patterns of improper cardholder 
                transactions, such as purchases of prohibited items; 
                and
                    (C) categories of purchases that should be made by 
                means other than purchase cards in order to better 
                aggregate purchases and obtain lower prices;
            (3) report to the head of the executive agency concerned on 
        the results of such audits; and
            (4) report to the Director of the Office of Management and 
        Budget and the Comptroller General on the implementation of 
        recommendations made to the head of the executive agency to 
        address findings during audits of purchase cardholders.
    (e) Definition of Executive Agency.--For the purpose of this 
section the term ``executive agency'' has the meaning provided in 
section 4(1) of the Office of Federal Procurement Policy Act (41 U.S.C. 
403(1)).
    (f) Relationship to Department of Defense Purchase Card 
Regulations.--
            (1) The requirements under this section shall not apply to 
        the Department of Defense.
            (2) Section 2784(b) of title 10, United States Code, is 
        amended--
                    (A) in paragraph (8), by striking ``periodic 
                audits'' and inserting ``risk assessments of the agency 
                purchase card program and associated internal controls 
                and analyze identified weaknesses and the frequency of 
                improper activity in order to develop a plan for using 
                such risk assessments to determine the scope, 
                frequency, and number of periodic audits of purchase 
                cardholders.''; and
                    (B) by adding at the end the following new 
                paragraphs:
            ``(11) That the Secretary of Defense shall evaluate the 
        creditworthiness of an individual before issuing the individual 
        a purchase card, and that no individual be issued a purchase 
        card if the individual is not found creditworthy as a result of 
        the evaluation. Notwithstanding any other provision of law, 
        such evaluation shall include an assessment of an individual's 
        consumer report from a consumer reporting agency as those terms 
        are defined in section 603 of the Fair Credit Reporting Act. 
        The obtaining of a consumer report under this subsection is 
        deemed to be a circumstance or purpose authorized or listed 
        under section 604 of the Fair Credit Reporting Act.
            ``(12) That the Secretary of Defense invalidate the 
        purchase card of each employee who ceases to be employed by the 
        department immediately upon termination of the employment of 
        the employee or transfers to another agency or subunit within 
        the department immediately upon transfer.''.

SEC. 3. MANAGEMENT OF TRAVEL CARDS.

    Section 2 of the Travel and Transportation Reform Act of 1998 
(Public Law 105-264; 5 U.S.C. 5701 note) is amended by adding at the 
end the following new subsection:
    ``(h) Management of Travel Charge Cards.--
            ``(1) Required safeguards and internal controls.--The head 
        of each executive agency that has employees that use travel 
        charge cards shall establish and maintain safeguards and 
        internal controls over travel charge cards to ensure the 
        following:
                    ``(A) That there is a record in each executive 
                agency of each holder of a travel charge card issued by 
                the agency for official use, annotated with the 
                limitations on amounts that are applicable to the use 
                of each such card by that travel charge cardholder.
                    ``(B) That rebates and refunds based on prompt 
                payment on travel charge card accounts are properly 
                recorded as a receipt of the agency that employs the 
                cardholder.
                    ``(C) That periodic reviews are performed to 
                determine whether each travel charge cardholder has a 
                need for the travel charge card.
                    ``(D) That appropriate training is provided to each 
                travel charge cardholder and each official with 
                responsibility for overseeing the use of travel charge 
                cards issued by an executive agency.
                    ``(E) That each executive agency has specific 
                policies regarding the number of travel charge cards 
                issued by various organizations and categories of 
                organizations, the credit limits authorized for various 
                categories of cardholders, and categories of employees 
                eligible to be issued travel charge cards, and that 
                those policies are designed to minimize the financial 
                risk to the Federal Government of the issuance of the 
                travel charge cards and to ensure the integrity of 
                travel charge cardholders.
                    ``(F) That the head of each executive agency 
                evaluates the creditworthiness of an individual before 
                issuing the individual a travel charge card, and that 
                no individual be issued a travel charge card if the 
                individual is found not creditworthy as a result of the 
                evaluation (except that this paragraph shall not 
                preclude issuance of a restricted use travel charge 
                card when the individual lacks a credit history). 
                Notwithstanding any other provision of law, such 
                evaluation shall include an assessment of an 
                individual's consumer report from a consumer reporting 
                agency as those terms are defined in section 603 of the 
                Fair Credit Reporting Act. The obtaining of a consumer 
                report under this subsection is deemed to be a 
                circumstance or purpose authorized or listed under 
                section 604 of the Fair Credit Reporting Act.
                    ``(G) That each executive agency ensures that the 
                travel charge card of each employee who ceases to be 
                employed by the agency is invalidated immediately upon 
                termination of the employment of the employee.
            ``(2) Regulations.--The Administrator of General Services 
        shall prescribe regulations governing the implementation of the 
        safeguards and internal controls in paragraph (1) by executive 
        agencies.
            ``(3) Penalties for violations.--The regulations prescribed 
        under paragraph (2) shall provide for appropriate adverse 
        personnel actions or other punishment to be imposed in cases in 
        which employees of an executive agency violate such regulations 
        or are negligent or engage in misuse, abuse, or fraud with 
        respect to a travel charge card, including removal in 
        appropriate cases.
            ``(4) The Inspector General of each executive agency 
        shall--
                    ``(A) periodically conduct risk assessments of the 
                agency travel card program and associated internal 
                controls and analyze identified weaknesses and the 
                frequency of improper activity in order to develop a 
                plan for using such risk assessments to determine the 
                scope, frequency, and number of periodic audits of 
                purchase cardholders;
                    ``(B) perform periodic audits of travel cardholders 
                designed to identify potentially fraudulent, improper, 
                and abusive uses of travel cards;
                    ``(C) report to the head of the executive agency 
                concerned on the results of such audits; and
                    ``(D) report to the Director of the Office of 
                Management and Budget and the Comptroller General on 
                the implementation of recommendations made to the head 
                of the executive agency to address findings during 
                audits of travel cardholders.
            ``(5) Definitions.--For purposes of this subsection:
                    ``(A) The term `executive agency' means an agency 
                as that term is defined in section 5701 of title 5, 
                United States Code, except that it is in the executive 
                branch.
                    ``(B) The term `travel charge card' means the 
                Federal contractor-issued travel charge card that is 
                individually billed to each cardholder.''.

SEC. 4. REGULATIONS.

    (a) In General.--Not later than 180 days after the date of the 
enactment of this Act--
            (1) the head of each executive agency shall promulgate 
        regulations to implement the requirements of section 2; and
            (2) the Administrator of General Services shall promulgate 
        regulations required pursuant to the amendments made by section 
        3.
    (b) Best Practices.--Regulations promulgated under this section 
shall reflect best practices for conducting purchase card and travel 
card programs.
                                 <all>