[Senate Report 115-129]
[From the U.S. Government Publishing Office]


                                                   Calendar No. 169

115th Congress}                                            { Report
                                 SENATE
 1st Session  }                                            { 115-129
____________________________________________________________________

                     SAVING FEDERAL DOLLARS THROUGH

     BETTER USE OF GOVERNMENT PURCHASE AND TRAVEL CARDS ACT OF 2017

                               __________

                              R E P O R T

                                 OF THE

                   COMMITTEE ON HOMELAND SECURITY AND

                          GOVERNMENTAL AFFAIRS

                          UNITED STATES SENATE

                              TO ACCOMPANY

                                S. 1099

          TO PROVIDE FOR THE IDENTIFICATION AND PREVENTION OF
         IMPROPER PAYMENTS AND THE IDENTIFICATION OF STRATEGIC
 SOURCING OPPORTUNITIES BY REVIEWING AND ANALYZING THE USE OF FEDERAL 
                          AGENCY CHARGE CARDS

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


                 July 11, 2017.--Ordered to be printed
        
        
                             __________
	                               
	
	            U.S. GOVERNMENT PUBLISHING OFFICE                    
	                  WASHINGTON : 2017       
        
      
        
        
        COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS

                    RON JOHNSON, Wisconsin, Chairman
JOHN McCAIN, Arizona                 CLAIRE McCASKILL, Missouri
ROB PORTMAN, Ohio                    THOMAS R. CARPER, Delaware
RAND PAUL, Kentucky                  JON TESTER, Montana
JAMES LANKFORD, Oklahoma             HEIDI HEITKAMP, North Dakota
MICHAEL B. ENZI, Wyoming             GARY C. PETERS, Michigan
JOHN HOEVEN, North Dakota            MAGGIE HASSAN, New Hampshire
STEVE DAINES, Montana                KAMALA D. HARRIS, California

                  Christopher R. Hixon, Staff Director
                Gabrielle D'Adamo Singer, Chief Counsel
                  Daniel J. Spino, Research Assistant
               Margaret E. Daum, Minority Staff Director
               Stacia M. Cardille, Minority Chief Counsel
       Charles A. Moskowitz, Minority Senior Legislative Counsel
                 Katherine C. Sybenga, Minority Counsel
                     Laura W. Kilbride, Chief Clerk


======================================================================
                                                   Calendar No. 169

115th Congress}                                            { Report
                                 SENATE
 1st Session  }                                            { 115-129

======================================================================
 
 SAVING FEDERAL DOLLARS THROUGH BETTER USE OF GOVERNMENT PURCHASE AND 
                        TRAVEL CARDS ACT OF 2017

                                _______
                                

                 July 11, 2017.--Ordered to be printed

                                _______
                                

 Mr. Johnson, from the Committee on Homeland Security and Governmental 
                    Affairs, submitted the following

                              R E P O R T

                         [To accompany S. 1099]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Homeland Security and Governmental 
Affairs, to which was referred the bill (S. 1099) to provide 
for the identification and prevention of improper payments and 
the identification of strategic sourcing opportunities by 
reviewing and analyzing the use of Federal agency charge cards, 
having considered the same, reports favorably thereon without 
amendment and recommends that the bill do pass.

                                CONTENTS

                                                                   Page
  I. Purpose and Summary..............................................1
 II. Background and the Need for Legislation..........................2
III. Legislative History..............................................4
 IV. Section-by-Section Analysis......................................4
  V. Evaluation of Regulatory Impact..................................5
 VI. Congressional Budget Office Cost Estimate........................5
VII. Changes in Existing Law Made by the Bill, as Reported............6

                         I. PURPOSE AND SUMMARY

    S. 1099 authorizes the existing Office of Charge Card 
Management within the General Services Administration (GSA) 
review and analyze the use of charge cards by employees of the 
Federal government to identify trends of abuses of charge and 
travel cards as well as opportunities for strategic sourcing. 
The legislation also requires the Office of Management and 
Budget (OMB) to issue new guidance to agencies for the 
oversight and administration of Federal charge cards. In 
addition, S. 1099 establishes an interagency task force to 
develop and share best practices, requires the development of 
an interagency library of analytics tools and data sets for use 
in managing charge card transactions, and sets requirements for 
GSA and other agencies to report to Congress on implementation 
of the bill.\1\
---------------------------------------------------------------------------
    \1\On June 24, 2015, the Committee approved S. 1616, Saving Federal 
Dollars Through Better Use of Government Purchase and Travel Cards Act 
of 2015. That bill is substantially similar in purpose to S. 1099. 
Accordingly, this committee report is in large part a reproduction of 
Chairman Johnson's committee report for S. 1616, S. Rep. No. 114-174.
---------------------------------------------------------------------------

              II. BACKGROUND AND THE NEED FOR LEGISLATION

    The use of Federal agency purchase cards and travel cards 
poses ongoing challenges and opportunities for Federal 
agencies. Improved oversight, controls and analysis of Federal 
charge card use could result in reduced improper payments and 
misuse. The Federal Government could also analyze charge card 
use for potential savings through strategic sourcing 
opportunities.
    Federal charge cards have been the subject of congressional 
hearings and Office of Inspector General (OIG) reviews 
highlighting their misuse. For example, the misuse of 
government travel cards by the Department of Defense (DOD) 
employees at casinos and adult entertainment establishments was 
the subject of a DOD OIG report in 2015.\2\ That OIG report 
detailed specific steps needed for improved oversight by the 
DOD, many of which could also be adopted by other agencies. 
Similar problems at the DOD spurred a 2006 Committee 
hearing,\3\ and a subcommittee of the House Oversight and 
Government Reform Committee also held a hearing on the misuse 
of Federal charge cards for high-end gym memberships, gift 
cards, and hair salons.\4\ The misuse of Federal purchase cards 
within the Department of Veterans Affairs, where cardholders at 
the agency appeared to have avoided using competitive bidding 
by breaking up large purchases into many smaller ones, was also 
the topic of news articles and a congressional hearing.\5\ The 
Government Accountability Office has also issued reports 
recommending action to curb abuse and improper payments.\6\
---------------------------------------------------------------------------
    \2\Department of Defense Office of Inspector General, DOD 
Cardholders Used Their Government Travel Cards for Personal Use at 
Casinos and Adult Entertainment Establishments (2015), available at 
http://www.dodig.mil/pubs/documents/DODIG-2015-125.pdf.
    \3\DHS Purchase Cards: Credit without Accountability: Hearing 
Before the Comm. on Homeland Sec. & Governmental Affairs, 109th Cong. 
(2006), available at http://www.hsgac.senate.gov/hearings/dhs-purchase-
cards-credit-without-accountability.
    \4\Gym Memberships, Gift Cards and Hair Salons: Examining the 
Misuse of Government-Supplied Credit Cards: Hearing Before the H. 
Subcomm. on Government Operations, 113th Cong. (2014), available at 
https://oversight.house.gov/hearing/gym-memberships-gift-cards-hair-sa- 
lons-examining-misuse-government-supplied-credit-cards/.
    \5\Lisa Rein, The mysterious case of $54 million VA spent on 
prosthetics in $24,999 payments, The Washington Post (June 16, 2015), 
available at http://www.washingtonpost.com/blogs/federal-eye/wp/2015/
06/16/the-mysterious-case-of-54-million-va-spent-on-prosthetics-in-
24999-payments/; Waste, Fraud, and Abuse in the VA Purchase Card 
Program: Hearing Before the H. Comm. on Veterans Affairs, 114th Cong. 
(2015), available at https://veterans.house.gov/hearing/waste-fraud-
and-abuse-in-va-s-purchase-card-program.
    \6\See, e.g., Gov't Accountability Office, GAO-08-333, 
Governmentwide Purchase Cards: Actions Needed to Strengthen Internal 
Controls to Reduce Fraudulent, Improper, and Abusive Purchases (2008), 
available at http://www.gao.gov/new.items/d08333.pdf.
---------------------------------------------------------------------------
    The oversight of Federal purchase cards also has been a 
focus of previous Committee legislation. In 2012, the Committee 
favorably reported the Government Charge Card Abuse Prevention 
Act, sponsored by Senator Charles Grassley, which was signed 
into law later that year.\7\ The law requires agencies to 
establish safeguards and internal controls for charge cards, 
including use of systems and technologies to identify illegal, 
improper, or erroneous purchases. The law also requires annual 
reporting by Federal agencies and OMB, as well as periodic risk 
assessments by Inspectors General of agency purchase card 
programs.
---------------------------------------------------------------------------
    \7\Pub. L. No. 112-194 (112th Cong.).
---------------------------------------------------------------------------
    The Obama administration also took action to strengthen 
Federal charge card oversight during the past several years. In 
2014, President Obama signed Executive Order 13681, Improving 
the Security of Consumer Financial Transactions, which included 
the promotion of more secure charge card operations for Federal 
agencies.\8\ Also, the OMB Circular A-123 Appendix B, Improving 
the Management of Government Charge Card Programs, detailed 
improved policies and procedures for federal charge card 
programs.\9\
---------------------------------------------------------------------------
    \8\Exec. Order No. 13681, available at https://
obamawhitehouse.archives.gov/the-press-office/2014/10/17/executive-
order-improving-security-consumer-financial-transactions.
    \9\OMB Circular A-123, App. B, available at https://
www.whitehouse.gov/sites/whitehouse.gov/files/omb/circulars/A123/
a123_appendix_b.pdf.
---------------------------------------------------------------------------
    However, there is still a clear need for strengthening and 
improving Federal oversight and administration by Federal 
agencies of charge card programs. While agencies are required 
to individually develop new oversight techniques to discuss 
misuse, there is no consistent method for Federal agencies to 
quickly share the identified fraud schemes or oversight 
techniques, such as those identified by the DOD OIG.\10\ In 
addition, not all government agencies have established robust 
data mining, or anti-waste and fraud analytics, for their 
charge card programs. The Federal Government could also do a 
better job surveying agency-wide purchase card data to identify 
ways to improve efficiency, as well as taking aggressive 
efforts to recover inappropriately spent dollars.
---------------------------------------------------------------------------
    \10\Department of Defense Office of Inspector General, DOD 
Cardholders Used Their Government Travel Cards for Personal Use at 
Casinos and Adult Entertainment Establishments (2015), available at 
http://www.dodig.mil/pubs/documents/DODIG-2015-125.pdf.
---------------------------------------------------------------------------
    Of the two types of charge cards, travel cards and purchase 
cards, purchase cards present the greater risk to taxpayers. In 
most cases, individual employees are only reimbursed for 
authorized charges on travel cards and must pay for any 
unauthorized charges using their own personal funds. On the 
other hand, in most cases, agencies pay the entire monthly bill 
for purchase cards and can only identify unauthorized charges 
after they have already been paid.
    Still, travel cards data presents insight into the travel 
patterns of agencies and can help GSA identify things like 
excess conference spending, first-class travel, and travel 
charges incurred near the employee's home. Many of these 
charges may not be fraudulent, and likely were approved by 
supervisors.
    Similarly, purchase cards--due to the structured, 
electronic nature of the transactions--provide government-wide 
insight into small-dollar spending patterns that is not 
available elsewhere, such as USAspending.gov. GSA analytics can 
use this information to find ways to save money.
    The Saving Federal Dollars Through Better Use of Government 
Purchase and Travel Cards Act of 2017 would improve anti-waste 
and fraud analysis and facilitate the sharing of information 
about charge card abuse and best practices among Federal 
agencies. The legislation would also establish procedures to 
identify strategic sourcing opportunities through analysis of 
Federal charge card transactions.
    The bill instructs the GSA to develop a strategy to review 
charge card purchases to better identify patterns of 
questionable transactions and recover improper payments. GSA 
already collects charge card transaction data in its 
administrative role of overseeing Federal agency charge card 
programs. S. 1099 is intended to require GSA to assist agencies 
in their ongoing oversight responsibilities through the 
analysis of the transaction data.
    S. 1099 builds on the 2012 Government Charge Card Abuse 
Prevention Act, which required agencies to establish certain 
types of control and oversight over the agency's charge card 
usage.\11\ Under S. 1099, GSA would assist agencies by 
conducting sophisticated, government-wide analysis for 
potential waste and fraud schemes, high-risk sellers and other 
risks of charge card misuse, and share best practices across 
the Federal Government.
    Finally, the legislation would facilitate analysis of 
government-wide purchase card data spending patterns to better 
leverage Federal Government purchasing power when buying in 
bulk. This is often called ``strategic sourcing,'' and has 
become a proven way to save taxpayer funds.\12\
---------------------------------------------------------------------------
    \11\Pub. L. No. 112-194 (112th Cong.).
    \12\Gov't Accountability Office, GAO-13-417, Strategic Sourcing: 
Leading Commercial Practices Can Help Federal Agencies Increase Savings 
When Acquiring Services (2013), available at http://www.gao.gov/
products/GAO-13-417.
---------------------------------------------------------------------------

                        III. LEGISLATIVE HISTORY

    Senator Tom Carper, Ranking Member Claire McCaskill, and 
Senator Charles Grassley introduced S. 1099, the Saving Federal 
Dollars through Better Use of Government Purchase and Travel 
Cards Act of 2017, on May 11, 2017. The bill was referred to 
the Homeland Security and Governmental Affairs Committee.
    The Committee considered S. 1099 at a business meeting on 
May 17th, 2017. The bill was ordered reported favorably en bloc 
by voice vote. Members present for the vote on the bill were 
Senators Johnson, McCain, Portman, Paul, Lankford, Enzi, 
Hoeven, Daines, McCaskill, Tester, Heitkamp, Peters, Hassan, 
and Harris.

        IV. SECTION-BY-SECTION ANALYSIS OF THE BILL, AS REPORTED

Section 1. Short title

    This section presents the bill's title as ``Saving Federal 
Dollars Through Better Use of Government Purchase and Travel 
Cards Act of 2017.''

Sec. 2. Definitions

    This section provides definitions for ``Improper Payment,'' 
``Questionable Transaction,'' and ``Strategic Sourcing.''

Sec. 3. Expanded use of data analytics

    This section instructs OMB and GSA to develop a strategy to 
better use data analytics in overseeing travel and purchase 
cards. It states that GSA's existing capabilities should 
suffice. The purpose of the analytics expanded use is to (1) 
identify patterns or trends of questionable transactions, (2) 
find potential areas for agencies to further use streamlining 
processes and cost reduction practices, (3) develop metrics for 
high-risk activities, and (4) devise a plan to create a library 
of analytic tools for agencies.

Sec. 4. Guidance on improving information sharing to curb improper 
        payments

    This section states that no later than 180 days after this 
bill is enacted, the director of OMB, the Administrator of GSA 
and the interagency charge card data management group 
established in section 5 shall issue guidance to improve 
information sharing by (1) requiring Federal agencies to 
identify high-risk activities and communicate that information, 
(2) requiring Federal agencies to review reports by charge 
card-issuing banks on possible fraud or improper transactions, 
(3) share information that may be related to potential 
questionable transactions, (4) consider recommendations made by 
Inspectors General, and (5) include other requirements 
determined by the Director to carry out the bill.

Section 5. Interagency Charge Card Data Management Group

    This section creates the Interagency Charge Card Data 
Management Group to develop and share best practices. In 
addition to creating the group it lays out rules, oversight, 
and membership of the management group.

Section 6. Reporting requirements

    No later than one year after the enactment of the bill, GSA 
shall submit a report to Congress on its implementation. In 
addition to the report to Congress, the head of each Federal 
agency described in the Government Charge Card Abuse Prevention 
Act of 2012 shall submit a report to OMB. OMB shall also submit 
a report to Congress about the implementation of the bill. GSA 
shall submit a report to Congress identifying further potential 
saving opportunities for government agencies under the Federal 
charge program.

                   V. EVALUATION OF REGULATORY IMPACT

    Pursuant to the requirements of paragraph 11(b) of rule 
XXVI of the Standing Rules of the Senate, the Committee has 
considered the regulatory impact of this bill and determined 
that the bill will have no regulatory impact within the meaning 
of the rules. The Committee agrees with the Congressional 
Budget Office's statement that the bill contains no 
intergovernmental or private-sector mandates as defined in the 
Unfunded Mandates Reform Act (UMRA) and would impose no costs 
on state, local, or tribal governments.

             VI. CONGRESSIONAL BUDGET OFFICE COST ESTIMATE

                                                      July 5, 2017.
Hon. Ron Johnson,
Chairman, Committee on Homeland Security and Governmental Affairs, U.S. 
        Senate, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for S. 1099, the Saving 
Federal Dollars Through Better Use of Government Purchase and 
Travel Cards Act of 2017.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Matthew 
Pickford.
            Sincerely,
                                                        Keith Hall.
    Enclosure.

S. 1099--Saving Federal Dollars Through Better Use of Government 
        Purchase and Travel Cards Act of 2017

    S. 1099 would increase oversight of federal agencies' use 
of purchase and travel charge cards. The legislation would 
require the Office of Management and Budget and the General 
Services Administration (GSA) to develop a strategy to enhance 
the analysis of data to detect improper use of such cards. The 
bill also would establish an interagency task force to 
facilitate the sharing of information about the use of federal 
charge cards and to promote best practices to reduce fraud and 
improper payments. Finally, S. 1099 would require agencies to 
report to the Congress on the use of such cards.
    Information from the GSA suggests that most provisions of 
the bill would codify current policy and practice. Under 
current law and policy, agencies have many tools to combat 
fraud and misuse related to charge cards. Agencies have 
coordinators to oversee the use of charge cards; they also use 
tools such as credit limits, blocks on merchants based on the 
type of business, activity reports, and employee guides that 
explain best practices for using federal charge cards. In 
addition, the 73 Inspector Generals (IG) and their 13,000 
employees spend about $2.7 billion a year to detect and deter 
fraud, waste, and mismanagement of government funds. Because of 
those ongoing activities, CBO estimates that implementing the 
bill would not significantly increase costs.
    The bill could affect direct spending by agencies not 
funded through annual appropriations; therefore, pay-as-you-go 
procedures apply. CBO estimates, however, that any net increase 
in spending by those agencies would not be significant. 
Enacting S. 1099 would not affect revenues.
    CBO estimates that enacting S. 1099 would not increase net 
direct spending or on-budget deficits in any of the four 
consecutive 10-year periods beginning in 2028.
    S. 1099 contains no intergovernmental or private-sector 
mandates as defined in Unfunded Mandates Reform Act and would 
not affect the budgets of state, local, or tribal governments.
    The CBO staff contact for this estimate is Matthew 
Pickford. This estimate was approved by Theresa Gullo, 
Assistant Director for Budget Analysis.

       VII. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

    Because this legislation would not repeal or amend any 
provision of current law, it would not make changes in existing 
law within the meaning of clauses (a) and (b) of paragraph 12 
of rule XXVI of the Standing Rules of the Senate.

                                  [all]