[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5581 Introduced in House (IH)]
109th CONGRESS
2d Session
H. R. 5581
To prevent abuse of Government credit cards.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
June 9, 2006
Mr. Wilson of South Carolina introduced the following bill; which was
referred to the Committee on Government Reform, and in addition to the
Committee on Armed Services, for a period to be subsequently determined
by the Speaker, in each case for consideration of such provisions as
fall within the jurisdiction of the committee concerned
_______________________________________________________________________
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 ``Government Credit Card Abuse
Prevention Act of 2006''.
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 each purchase card holder is assigned an approving
official other than the card holder with the authority to
approve or disapprove expenditures.
(3) That the holder of a purchase card and each official
with authority to authorize expenditures charged to the
purchase card are responsible for--
(A) reconciling the charges appearing on each
statement of account for that purchase card with
receipts and other supporting documentation; and
(B) forwarding such reconciliation to the
designated official who certifies the bill for payment
in a timely manner.
(4) 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.
(5) That payments on purchase card accounts are made
promptly within prescribed deadlines to avoid interest
penalties.
(6) 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.
(7) 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.
(8) That periodic reviews are performed to determine
whether each purchase cardholder has a need for the purchase
card.
(9) 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.
(10) That the 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.
(11) That the executive agency utilizes technologies to
prevent or identify fraudulent purchases, including controlling
merchant codes and utilizing statistical machine learning and
pattern recognition technologies that review the risk of every
transaction.
(12) That the executive agency invalidates 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.
(13) That the executive agency takes steps to recover the
cost of any improper or fraudulent purchase made by an
employee, including, as necessary, through salary offsets.
(b) Management of Purchase Cards.--The head of each executive
agency shall prescribe regulations implementing the safeguards and
internal controls in subsection (a). The 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 (b) 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
imposition of the following penalties:
(1) In the case of an employee who is suspected by the
executive agency to have engaged in fraud, referral of the case
to the United States Attorney with jurisdiction over the
matter.
(2) In the case of an employee who is found guilty of fraud
or found by the executive agency to have egregiously abused a
purchase card, dismissal of the employee.
(d) Risk Assessments and Audits.--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.--In this section, the term
``executive agency'' has the meaning given such term 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) Except as provided under paragraph (2), 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 all that follows through the period at the
end 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 Department of Defense utilizes technologies
to prevent or identify fraudulent purchases, including
controlling merchant codes and utilizing statistical machine
learning and pattern recognition technologies that review the
risk of every transaction.
``(12) That the Secretary of Defense--
``(A) invalidates the purchase card of each
employee who ceases to be employed by the Department of
Defense immediately upon termination of the employment
of the employee; and
``(B) invalidates the purchase card of each
employee who transfers to another agency or subunit
within the Department of Defense immediately upon such
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
negotiates with the holder of the applicable travel
card contract, or a third party provider of credit
evaluations if such provider offers more favorable
terms, to evaluate 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 or the issuance of a pre-paid card when
the individual has a credit score below the minimum
credit score established by the agency). Each executive
agency shall establish a minimum credit score for
determining the creditworthiness of an individual based
on rigorous statistical analysis of the population of
cardholders and historical behaviors. 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 utilizes
technologies to prevent or identify fraudulent
purchases, including controlling merchant codes and
utilizing statistical machine learning and pattern
recognition technologies that review the risk of every
transaction.
``(H) 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.
``(I) That each executive agency utilizes mandatory
split disbursements for travel card purchases.
``(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) Inspector general requirements.--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.--In 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. MANAGEMENT OF CENTRALLY BILLED ACCOUNTS.
The head of an executive agency that has employees who use a
centrally billed account shall establish and maintain safeguards and
internal controls to ensure the following:
(1) That items submitted on an employee's travel voucher
are compared with items paid for using a centrally billed
account to ensure that an employee is not reimbursed for an
item already paid for through a centrally billed account.
(2) That the executive agency submits requests for refunds
for unauthorized purchases to the holder of the applicable
contract for a centrally billed account.
(3) That the executive agency submits requests for refunds
for fully or partially unused tickets to the holder of the
applicable contract for a centrally billed account.
SEC. 5. 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 sections 2 and 4;
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>