[Congressional Record Volume 158, Number 115 (Tuesday, July 31, 2012)]
[House]
[Pages H5411-H5414]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
GOVERNMENT CHARGE CARD ABUSE PREVENTION ACT OF 2012
Mr CHAFFETZ. Mr. Speaker, I move to suspend the rules and pass the
bill (S. 300) to prevent abuse of Government charge cards, as amended.
The Clerk read the title of the bill.
The text of the amendment is as follows:
Amendment:
Strike out all after the enacting clause and insert:
S. 300
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Government Charge Card Abuse
Prevention Act of 2012''.
SEC. 2. MANAGEMENT OF PURCHASE CARDS.
(a) Government-wide Safeguards and Internal Controls.--
(1) In general.--Chapter 19 of title 41, United States
Code, is amended by adding at the end the following new
section:
``Sec. 1909. 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 transactions
and total transactions that are applicable to the use of each
such card or check by that purchase card holder.
``(2) Each purchase card holder and individual issued a
convenience check is assigned an approving official other
than the card holder with the authority to approve or
disapprove transactions.
``(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 a summary report to the certifying
official in a timely manner of information necessary to
enable the certifying official to ensure that the Federal
Government ultimately pays only for valid charges that are
consistent with the terms of the applicable Government-wide
purchase card contract entered into by the Administrator of
General Services.
``(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
Government-wide 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, sales
volume, or other actions by the agency on purchase card
accounts are reviewed 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 card holder has a need for the purchase card.
``(9) Appropriate training is provided to each purchase
card holder and each official with responsibility for
overseeing the use of purchase cards issued by the executive
agency.
``(10) The executive agency has specific policies regarding
the number of purchase cards issued by various component
organizations and categories of component organizations, the
credit limits authorized for various categories of card
holders, 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 card holders.
``(11) The executive agency uses effective systems,
techniques, and technologies to prevent or identify illegal,
improper, or erroneous purchases.
``(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 unless the agency
determines that the units are covered by the same purchase
card authority.
``(13) The executive agency takes steps to recover the cost
of any illegal, improper, or erroneous purchase made with a
purchase card or convenience check by an employee, including,
as necessary, through salary offsets.
``(b) Guidance.--The Director of the Office of Management
and Budget shall review existing guidance and, as necessary,
prescribe additional guidance governing the implementation of
the requirements of subsection (a) by executive agencies.
``(c) Penalties for Violations.--
``(1) In general.--The head of each executive agency shall
provide for appropriate adverse personnel actions or other
punishment to be imposed in cases in which employees of the
agency violate agency policies implementing the guidance
required by subsection (b) or make illegal, improper, or
erroneous purchases with purchase cards or convenience
checks.
``(2) Dismissal.--Penalties prescribed for employee misuse
of purchase cards or convenience checks shall include
dismissal of the employee, as appropriate.
``(3) Reports on violations.--The guidance prescribed under
subsection (b) shall direct each head of an executive agency
with more than $10,000,000 in purchase card spending
annually, and each Inspector General of such an executive
agency, on a semiannual basis, to submit to the Director of
the Office of Management and Budget a joint report on
violations or other actions covered by paragraph (1) by
employees of such executive agency. At a minimum, the report
shall set forth the following:
``(A) A summary description of confirmed violations
involving misuse of a purchase card following completion of a
review by the agency or by the Inspector General of the
agency.
``(B) A summary description of all adverse personnel
action, punishment, or other action taken based on each
violation.
``(d) Risk Assessments and Audits.--The Inspector General
of each executive agency shall--
``(1) conduct periodic assessments of the agency purchase
card or convenience check programs to identify and analyze
risks of illegal, improper, or erroneous purchases and
payments in order to develop a plan for using such risk
assessments to determine the scope, frequency, and number of
periodic audits of purchase card or convenience check
transactions;
``(2) perform analysis or audits, as necessary, of purchase
card transactions designed to identify--
``(A) potentially illegal, improper, or erroneous uses of
purchase cards;
``(B) any patterns of such uses; and
``(C) categories of purchases that could be made by means
other than purchase cards in order to better aggregate
purchases and obtain lower prices (excluding transactions
made under card-based strategic sourcing arrangements);
``(3) report to the head of the executive agency concerned
on the results of such analysis or audits; and
[[Page H5412]]
``(4) report to the Director of the Office of Management
and Budget on the implementation of recommendations made to
the head of the executive agency to address findings of any
analysis or audit of purchase card and convenience check
transactions or programs for compilation and transmission by
the Director to Congress and the Comptroller General.
``(e) Relationship to Department of Defense Purchase Card
Regulations.--The requirements of this section shall not
apply to the Department of Defense. See section 2784 of title
10 for provisions relating to management of purchase cards in
the Department.''.
(2) Clerical amendment.--The table of sections at the
beginning of chapter 19 of title 41, United States Code, is
amended by adding at the end the following new item:
``1909. Management of purchase cards.''.
(b) Conforming Amendments to Department of Defense Purchase
Card Provisions.--Subsection (b) of section 2784 of title 10,
United States Code, is amended--
(1) by moving paragraph (8) to the end of the subsection
and redesignating that paragraph as paragraph (14);
(2) by redesignating paragraphs (2), (3), (4), (5), (6),
and (7) as paragraphs (3), (4), (5), (6), (7), and (8),
respectively;
(3) by inserting after paragraph (1) the following new
paragraph (2):
``(2) That each purchase card holder and individual issued
a convenience check is assigned an approving official other
than the card holder with the authority to approve or
disapprove transactions.'';
(4) by adding after paragraph (10) the following new
paragraphs:
``(11) That the Department of Defense uses effective
systems, techniques, and technologies to prevent or identify
potential fraudulent purchases.
``(12) That the Department of Defense takes appropriate
steps to invalidate the purchase card of each card holder
who--
``(A) in the case of an employee of the Department--
``(i) ceases to be employed by the Department, immediately
upon termination of the employment of the employee; or
``(ii) transfers to another unit of the Department,
immediately upon the transfer of the employee unless the
Secretary of Defense determines that the units are covered by
the same purchase card authority; and
``(B) in the case of a member of the armed forces, is
separated or released from active duty or full-time National
Guard duty.
``(13) That the Department of Defense takes steps to
recover the cost of any illegal, improper, or erroneous
purchase made with a purchase card or convenience check by an
employee or member of the armed forces, including, as
necessary, through salary offsets.''; and
(5) by adding at the end the following new paragraph:
``(15) That the Inspector General of the Department of
Defense conducts periodic audits or reviews of purchase card
or convenience check programs to identify and analyze risks
of illegal, improper, or erroneous purchases and payments and
that the findings of such audits or reviews, along with
recommendations to prevent abuse of purchase cards or
convenience checks, are reported to the Director of the
Office of Management and Budget and Congress.''.
(c) Deadline for Guidance on Management of Purchase
Cards.--The Director of the Office of Management and Budget
shall prescribe the guidance required by section 1909(b) of
title 41, United States Code, as added by subsection (a), not
later than 180 days after the date of the enactment of this
Act.
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 the following
internal control activities to ensure the proper, efficient,
and effective use of such travel charge cards:
``(A) There is a record in each executive agency of each
holder of a travel charge card issued on behalf of 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 card holder.
``(B) Rebates and refunds based on prompt payment, sales
volume, or other actions by the agency on travel charge card
accounts are monitored for accuracy and properly recorded as
a receipt of the agency that employs the card holder.
``(C) Periodic reviews are performed to determine whether
each travel charge card holder has a need for the travel
charge card.
``(D) Appropriate training is provided to each travel
charge card holder and each official with responsibility for
overseeing the use of travel charge cards issued by the
executive agency.
``(E) Each executive agency has specific policies regarding
travel charge cards issued for various component
organizations and categories of component organizations, the
credit limits authorized for various categories of card
holders, and categories of employees eligible to be issued
travel charge cards, and designs those policies 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 card holders.
``(F) Each executive agency has policies to ensure its
contractual arrangement with each travel charge card issuing
contractor contains a requirement that the creditworthiness
of an individual be evaluated before the individual is issued
a travel charge card, and that no individual be issued a
travel charge card if that individual is found not
creditworthy as a result of the evaluation (except that this
paragraph shall not preclude issuance of a restricted use,
prepaid, declining balance, controlled-spend, or stored value
card when the individual lacks a credit history or has a
credit score below the minimum credit score established by
the Director of the Office of Management and Budget). The
Director of the Office of Management and Budget shall
establish a minimum credit score for determining the
creditworthiness of an individual based on rigorous
statistical analysis of the population of card holders 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 (15 U.S.C. 1681a).
``(G) Each executive agency uses effective systems,
techniques, and technologies to prevent or identify improper
purchases.
``(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 (or, in the case of a member of the uniformed
services, upon separation or release from active duty or
full-time National Guard duty).
``(I) Each executive agency shall ensure that, where
appropriate, travel card payments are issued directly to the
travel card-issuing bank for credit to the employee's
individual travel card account.
``(2) Guidance on management of travel charge cards.--Not
later than 180 days after the date of the enactment of the
Government Charge Card Abuse Prevention Act of 2012, the
Director of the Office of Management and Budget shall review
the existing guidance and, as necessary, prescribe additional
guidance for executive agencies governing the implementation
of the requirements in paragraph (1).
``(3) Inspector general audit.--The Inspector General of
each executive agency with more than $10,000,000 in travel
card spending shall conduct periodic audits or reviews of
travel card programs to analyze risks of illegal, improper,
or erroneous purchases and payments. The findings of such
audits or reviews along with recommendations to prevent
improper use of travel cards shall be reported to the
Director of the Office of Management and Budget and Congress.
``(4) Penalties for violations.--Consistent with the
guidance prescribed under paragraph (2), each executive
agency shall provide for appropriate adverse personnel
actions to be imposed in cases in which employees of the
executive agency fail to comply with applicable travel charge
card terms and conditions or applicable agency regulations or
commit fraud with respect to a travel charge card, including
removal in appropriate cases.
``(5) Definitions.--In this subsection:
``(A) Executive agency.--The term `executive agency' means
an agency as that term is defined in subparagraphs (A) and
(B) of section 5701(1) of title 5, United States Code.
``(B) Travel charge card.--The term `travel charge card'
means any Federal contractor-issued travel charge card that
is individually billed to each card holder.''.
SEC. 4. MANAGEMENT OF CENTRALLY BILLED ACCOUNTS.
(a) Required Internal Controls for Centrally Billed
Accounts.--The head of an executive agency that has employees
who use a travel charge card that is billed directly to the
United States Government shall establish and maintain the
following internal control activities:
(1) The executive agency shall ensure that officials with
the authority to approve official travel verify that
centrally billed account charges are not reimbursed to an
employee.
(2) The executive agency shall dispute unallowable and
erroneous charges and track the status of the disputed
transactions to ensure appropriate resolution.
(3) The executive agency shall submit requests to servicing
airlines for refunds of fully or partially unused tickets,
when entitled to such refunds, and track the status of unused
tickets to ensure appropriate resolution.
(b) Guidance.--Not later than 180 days after the date of
the enactment of this Act, the Director of the Office of
Management and Budget shall review the existing guidance and,
as necessary, prescribe additional guidance for executive
agencies implementing the requirements of subsection (a).
SEC. 5. DEFINITIONS.
In this Act:
(1) Executive agency.--The term ``executive agency'' has
the meaning given such term in section 133 of title 41,
United States Code.
(2) Employee.--The term ``employee'' has the meaning given
such term in section 2(d)(3) of the Travel and Transportation
Reform Act of 1998 (Public Law 105-264; 5 U.S.C. 5701 note).
SEC. 6. CONSTRUCTION.
(a) Executive Agency Accounting.--Nothing in this Act, or
the amendments made by this Act, shall be construed to excuse
the head of an executive agency from the responsibilities set
out in section 3512 of title 31, United States Code, or in
the Improper Payments Information Act of 2002 (31 U.S.C. 3321
note).
(b) Personal Information.--Nothing in this Act, or the
amendments made by this Act, shall be construed to require
the disclosure of personally identifying information that is
otherwise protected from disclosure under section 552a of
title 5, United States Code (popularly known as the Privacy
Act of 1974).
The SPEAKER pro tempore. Pursuant to the rule, the gentleman from
[[Page H5413]]
Utah (Mr. Chaffetz) and the gentlewoman from New York (Mrs. Maloney)
each will control 20 minutes.
The Chair recognizes the gentleman from Utah.
Mr. CHAFFETZ. Mr. Speaker, I yield myself such time as I may consume.
General Leave
Mr. CHAFFETZ. I ask unanimous consent that all Members may have 5
legislative days within which to revise and extend their remarks and
include extraneous material on the bill under consideration.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Utah?
There was no objection.
Mr. CHAFFETZ. S. 300 puts commonsense controls on the users of
government charge cards which allow Federal workers to purchase goods
and to travel in a timely and cost-efficient manner. In any economy,
but especially the one we're in now, there is no room for waste, much
less fraud and abuse. These safeguards will make all users of Federal
charge cards accountable for their use.
While the use of charge cards has saved the Federal Government both
time and money when compared to a paper reimbursement system, some
Federal employees have abused their purchase and travel card
privileges, resulting in unnecessary and sometimes fraudulent expenses.
Numerous GAO reports over the last decade have called for additional
controls to prevent waste, fraud, and abuse in the government charge
card program. In 2008, GAO estimated that nearly 41 percent of purchase
card transactions failed to meet basic internal control standards.
Senator Grassley has put the spotlight on the problematic use of
government charge cards for more than a decade, and the GAO has
documented fraudulent purchases made by Federal workers with these
cards, including jewelry, gambling, cruises, and even the tab at
gentlemen's clubs. Government charge cards were used to pay for the
infamous GSA 2010 Western Regional Conference.
The Oversight Committee was able to work on a bipartisan basis with
the Armed Services Committee to bring Senator Grassley's bill, S. 300,
to the floor today. The bill brings needed accountability to the
process by which the Federal Government manages charge cards used by
Federal employees.
S. 300 requires agencies to improve their internal controls for
government charge cards. It is based largely on GAO's recommendations
for preventing waste, fraud, and abuse. The additional safeguards
resulting from the bill will avoid the waste of millions of dollars of
taxpayer money on fraudulent or questionable purposes. The controls
also help ensure the Federal Government benefits from rebates available
from charge card vendors for prompt payment.
S. 300 requires agency inspectors general to periodically conduct
risk assessments and perform audits to identify potential abuse of
government charge cards. The bill also requires agencies to take
appropriate disciplinary action, including removal, for Federal
employees who misuse charge cards. This provision responds to GAO
investigations that found inconsistent or nonexistent consequences for
Federal employees who abuse these charge card privileges.
I will be placing into the Record a jurisdictional exchange of
letters between the Committee on Armed Services and the Committee on
Oversight and Government Reform.
With that, Mr. Speaker, I reserve the balance of my time.
Committee on Armed Services,
House of Representatives,
Washington, DC, February 14, 2012.
Hon. Darrell E. Issa,
Chairman, Committee on Oversight and Government Reform, House
of Representatives, Washington, DC.
Dear Chairman Issa: I am writing to you concerning the bill
S. 300, Government Charge Card Abuse Prevention Act of 2011,
as amended. This legislation includes provisions that deal
with the Department of Defense policies regarding government
charge cards which fall within the Rule X jurisdiction of the
Committee on Armed Services.
Our committee recognizes the importance of S. 300, and the
need for the legislation to move expeditiously. Therefore,
while we have a valid claim to jurisdiction over this
legislation, the Committee on Armed Services will waive
further consideration of S. 300. I do so with the
understanding that by waiving consideration of the bill, the
Committee on Armed Services does not waive any future
jurisdictional claim over the subject matters contained in
the bill which fall within its Rule X jurisdiction. I
appreciate your willingness to work with the Committee on
Armed Services to incorporate modifications requested by the
Office of the Secretary of Defense to the legislation to be
considered in the House. I request that you urge the Speaker
to name members of this committee to any conference committee
which is named to consider these provisions.
Please place this letter and your committee's response into
the Congressional Record during consideration of the measure
on the House floor. Thank you for the cooperative spirit in
which you have worked regarding this matter and others
between our respective committees.
Sincerely,
Howard P. ``Buck'' McKeon,
Chairman.
____
Committee on Oversight and Government Reform, House of
Representatives,
Washington, DC, February 23, 2012.
Hon. Howard P. ``Buck'' McKeon,
Chairman, Committee on Armed Services, House of
Representatives, Washington, DC.
Dear Mr. Chairman: Thank you for your letter regarding the
Committee on Armed Services' jurisdictional interest in S.
300, the ``Government Charge Card Abuse Prevention Act of
2011,'' and your willingness to forego consideration of S.
300 by your committee.
I agree that the Armed Services Committee has a valid
jurisdictional interest in certain provisions of S. 300 and
that the Committee's jurisdiction will not be adversely
affected by your decision to forego consideration of the
bill. As you have requested, I will support your request for
an appropriate appointment of outside conferees from your
Committee in the event of a House-Senate conference on this
or similar legislation should such a conference be convened.
Finally, I will include a copy of your letter and this
response in the Congressional Record during the floor
consideration of this bill. Thank you again for your
cooperation.
Sincerely,
Darrell Issa,
Chairman.
Mrs. MALONEY. Mr. Speaker, I yield myself such time as I may consume.
The serious fiscal challenges facing the Federal Government demand
that agencies do everything they can to operate as efficiently as
possible. The Federal Government spends billions annually through its
purchase card programs, using purchase cards and convenience checks to
acquire millions of items--everything from paper and pencils to
computers--and to make payments on government contracts for a variety
of goods and services such as vehicles and relocation services.
The primary responsibility for purchasing these items rests with
cardholders and the officials who approve their purchases. Because of
the position of public trust held by Federal employees, Congress and
the American people expect cardholders and approving officials to
maintain stewardship over the Federal funds at their disposal.
Specifically, purchase cardholders and approving officials are expected
to follow published acquisition requirements and exercise a standard of
care in acquiring goods and services that is necessary and reasonable
for the proper operation of an agency.
Because every Federal dollar that is spent on fraudulent, improper,
and abusive purchases is a dollar that cannot be used for necessary
government goods and services, ensuring that purchase cards are used
responsibly is of particular concern at a time when the United States
is experiencing substantial fiscal challenges.
I strongly support Senator Grassley's bill, on which he has worked
many years, S. 300, because the legislation will require agencies to
establish internal control activities over travel and charge cards.
Agencies will be able to perform credit checks on potential recipients
of travel cards. Agencies will also be able to appropriately discipline
employees who misuse charge cards, including termination of their
employment.
Most importantly, this legislation will keep agencies accountable for
charge card misuse because the inspectors general of each agency will
be required to examine charge card use twice a year and report any
violations to the Office of Management and Budget.
I urge my colleagues to support this bill, and I yield back the
balance of my time.
Mr. CHAFFETZ. I appreciate the great work Senator Grassley has done
on this bill. I urge its adoption. I think
[[Page H5414]]
we can do so in a bipartisan way, and I urge a ``yes'' vote.
I yield back the balance of my time.
The SPEAKER pro tempore. The question is on the motion offered by the
gentleman from Utah (Mr. Chaffetz) that the House suspend the rules and
pass the bill, S. 300, as amended.
The question was taken.
The SPEAKER pro tempore. In the opinion of the Chair, two-thirds
being in the affirmative, the ayes have it.
Mrs. MALONEY. Mr. Speaker, I object to the vote on the ground that a
quorum is not present and make the point of order that a quorum is not
present.
The SPEAKER pro tempore. Pursuant to clause 8 of rule XX, further
proceedings on this question will be postponed.
The point of no quorum is considered withdrawn.
____________________