[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[S. 789 Introduced in Senate (IS)]







110th CONGRESS
  1st Session
                                 S. 789

              To prevent abuse of Government credit cards.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             March 7, 2007

Mr. Grassley (for himself, Mr. Lieberman, Ms. Collins, and Mr. Coleman) 
introduced the following bill; which was read twice and referred to the 
        Committee on Homeland Security and 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 ``Government Credit Card Abuse 
Prevention Act of 2007''.

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) 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) Each purchase cardholder is assigned an approving 
        official other than the cardholder with the authority to 
        approve or disapprove expenditures.
            (3) 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) 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) Payments on purchase card accounts are made promptly 
        within prescribed deadlines to avoid interest penalties.
            (6) 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) 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) Periodic reviews are performed to determine whether 
        each purchase cardholder has a need for the purchase card.
            (9) 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) 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) 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) 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) 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) In general.--Except as provided by the amendments made 
        by paragraph (2), the requirements under this section shall not 
        apply to the Department of Defense.
            (2) Exception.--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) 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) 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) Periodic reviews are performed to determine 
                whether each travel charge cardholder has a need for 
                the travel charge card.
                    ``(D) 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) 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) 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) 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) 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) 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) Assessments.--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) 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) The executive agency submits requests for refunds for 
        unauthorized purchases to the holder of the applicable contract 
        for a centrally billed account.
            (3) 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.
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