BNUMBER: B-270423
DATE: July 1, 1996
TITLE: Department of Transportation-Inspector General-Bonus Points
for Use of Personal Credit Cards for Certain Official Travel
Expenses
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Matter of:Department of Transportation-Inspector General-Bonus Points
for Use of Personal Credit Cards for Certain Official Travel
Expenses
File: B-270423
Date:July 1, 1996
DIGEST
Government employees using personal credit cards to charge lodging and
rental car expenses incident to official travel are not precluded
under current regulations from retaining for personal use frequent
flyer mileage points earned on the amounts charged to such credit
cards, provided that the use of such cards for such expenses is
consistent with agency guidance and does not increase the costs to the
government. Under applicable federal regulation, individual agencies
have discretion to place additional requirements for employee use of
agency-furnished cards for official travel, and by implication may
also place further limitations on employee use of personal credit
cards for charging expenses of official travel.
DECISION
By letter of October 25, 1995, the Inspector General (IG), Department
of Transportation, asks whether, and under what circumstances, a
government employee may use a personal credit card to charge lodging
and automobile rental costs incurred on official business and thereby
accumulate bonus points for the employee's personal use. The IG
states that her question arises because of an apparent conflict
between our holding in Discover Charge Cards, B-236219, May 4, 1990,
and a statement made in a footnote in Panama Canal Commission,
B-257525, Nov. 30, 1994.
Although the IG did not specify the particular credit card involved,
we assume it is one of the "affinity" cards now in wide use. Those
involved here, as we understand it, are standard credit cards (e.g.,
MasterCard, VISA) issued by a bank under arrangement with an airline
or hotel chain, which in turn awards bonus or mileage points under a
frequent traveler program based on amounts charged using the card
(e.g., an award of a bonus mile for each dollar charged). Points are
awarded for any purchase charged on the card, and are not limited to
purchases of the services of the particular airline or hotel
affiliated with the card. Points or miles awarded in this manner,
based on aggregate amounts charged on the affinity card, are separate
from, and in addition to, any points or miles awarded for flying on an
affiliated airline or for using an affiliated hotel's services, the
costs of which may be charged on the same affinity card.
The general rule is that a federal employee is required to account for
any gift, gratuity, or benefit received from private sources incident
to the performance of official duty, and any payments tendered to the
employee are viewed as having been received on behalf of the
government. See 63 Comp. Gen. 229 (1984), and decisions cited
therein. Therefore, an employee may not retain any bonus or gift
coupon or similar item of value received from a commercial air carrier
on the basis of purchase of an airline ticket to be used for official
travel. Id. Bonus travel entitlements received by an employee
through accumulation of frequent flyer mileage credits earned on
government travel are considered to be the property of the government
and may not be retained by the employee. Id. See also, Johnny Clark,
B-215826, Jan. 23, 1985, applying these rules to bonus lodging points
received for using a motel while on government travel. The Federal
Travel Regulation (FTR), 41 C.F.R. sec. 301-1.103, in essence, restates
these rules.[1]
As the IG recognizes, in Discover Charge Cards, supra, we held that
the rules set out above do not apply to a cash or credit rebate an
employee receives from a credit card company based on all purchases he
or she makes during a year using the credit card, including official
travel expenses charged to the card. The rebate in these
circumstances is distinguishable from such promotional benefits as
half-fare coupons and bonus points which are directly related to the
official travel for which the benefits are received, i.e., awarded
incident to the purchase of an airline ticket for official travel.
The use of the personal credit card in the course of official travel
is a matter of personal convenience not directly related to the
official travel, and the choice of payment mechanism is purely
personal on the part of the employee, consistent with applicable
regulations governing official travel, provided for in the FTR. See
Richard E. Stuart, 72 Comp. Gen. 251 (1993).
The Panama Canal Commission decision cited by the IG as in conflict
with Discover Charge Cards dealt with the problem of establishing
ownership of frequent flyer credits an employee receives incident to
purchase of tickets for personal use when they are commingled in the
same airline frequent flyer account with credits received for travel
on official business. We held that, if adequate records clearly
distinguish mileage credits earned on personal travel from those
obtained from official travel, employees would be free to make use of
those personal mileage credits. Footnote 3, which gives rise to the
IG's concern, states:
"We also recognize that employees may earn mileage credits by
using certain credit cards for personal purchases or by other
means. The same rule applies to these credits, i.e., the
employee may keep those credits for personal use if he or she has
adequate records to show that they were derived from personal
funds."
This statement was not intended to conflict with the holding in the
Discover Charge Cards case. It was intended as a recognition that
frequent flyer credits earned as a direct result of purchase of an
airline ticket for official business may be commingled in the same
frequent flyer account with credits earned by use of an affinity
credit card. For affinity credit card credits resulting from purchase
of tickets for personal travel to be usable by the employee for
personal travel, he or she must keep adequate records to distinguish
them from the credits in the account that are earned as a direct
result of tickets purchased for official business. The statement was
not intended to imply anything about the general rule regarding
benefits received by an employee from purchases incident to the
conduct of official business.
In the circumstances presented here, where the employee on official
business uses his or her credit card to charge lodging or rental car
expenses and thereby earns frequent flyer bonus points, those points
derive from the use of the personal credit card, regardless of the
type of purchase charged to the card, as was the case with the rebate
or credit in the Discover Charge Cards case.[2] As stated therein, if
the use of a personal credit card for purchases on official business
is not contrary to applicable travel regulations, the choice of this
method of payment is purely personal on the employee's part, and the
benefits and expenses that accrue to the employee as a result of use
of the personal credit card are the employee's, not the government's.
You also asked the extent to which an employee is permitted to use a
personal charge card for official travel. As to regulatory provisions
governing the use of personal credit cards for the expenses incurred
on official travel, FTR Part 301-10 prescribes the various payment
methods acceptable for procuring common carrier transportation (which
is not at issue in this case), and other necessities (such as the
lodging and automobile rental expenses in this case), including in
various circumstances, government travel requests, agency-issued
credit cards, cash, personal checks, and personal credit cards. FTR
Part 301-10 states that as a general policy, employees traveling on
official business are responsible for meeting their current travel
expenses (and may later seek reimbursement of allowable expenses) but
that an employee should not have to pay official travel expenses
entirely from personal funds unless the employee has elected not to
use government-provided access to funds, such as through an
agency-issued credit card. While the regulations do not describe the
circumstances permitting an employee to use his personal credit card
for lodging, automobile rental, and various other travel expenses,
they place strict limits on employee use of personal credit card for
procuring common carrier transportation, including airfare (FTR Part
301-10 and the Federal Property Management Regulations, 41 C.F.R.
Subpart 101-41.20). Note that subsection 101-41.203-2(c)(2) provides
that travelers shall not be reimbursed for nonemergency use of cash
(which includes personal credit cards) for procuring passenger
transportation in most instances unless written approval is granted by
the General Services Administration.
Further guidance on the question you pose is found in FTR Part 301-15,
Subpart C, which prescribes policies and procedures governing the use
of the General Services Administration's travel and transportation
expense payment system, including the use of agency-furnished,
contractor-issued charge cards for official travel. FTR sec.
301-15.44(b) provides that participating agencies shall determine and
name employees who may be issued such charge cards. FTR sec.
301-15.44(c) provides that such charge cards shall be used only to
charge expenses incurred in conjunction with official travel or to
obtain authorized ATM cash withdrawals, and the employee "shall use
the charge card to pay for official travel expenses to the maximum
extent possible." However, these provisions offer no further guidance
on when an employee may use a personal credit card rather than one
furnished by the employing agency.
Within the parameters of these provisions, the individual agencies
have discretion to place additional requirements on employees' use of
such agency-issued cards and could require, for example, that they be
used by those to whom they are issued to cover all official travel
expenses. One reason for such a requirement is the fact that
agencies may receive rebates from the credit card issuer based upon
the total amount charged by its employees. However, unless current
agency regulation specifically precludes the use of a personal credit
card to cover the expenditures for lodging or car rental in this case,
we see no basis to withhold reimbursement to the employee for the
expenditures in question, assuming they were otherwise appropriate.
Robert P. Murphy
General Counsel
1. See also Federal Property Management Regulations, 41 C.F.R. sec.
101-25.103-2, to the same effect. In addition, regulations
promulgated by the Office of Government Ethics state that frequent
flyer benefits earned on the basis of government-financed travel
belong to the agency rather than the employee. 5 C.F.R. sec.
2635.203(7), note. Also, section 6008, Public Law 103-355, Oct. 13,
1994, 108 Stat. 3367, directs the Administrator of the General
Services Administration (GSA) to issue guidelines to ensure that
agencies promote, encourage, and facilitate the use of frequent
traveler programs offered by airlines, hotels, and car rental vendors
by federal employees who engage in official air travel, for the
purpose of realizing to the maximum extent practicable cost savings
for official travel; and the act further provides that awards granted
under such a frequent traveler program accrued through official travel
shall be used only for official travel. However, neither the act nor
GSA Bulletin FTR 17, Oct. 24, 1995, providing the required guidelines
to agencies, makes reference to points awarded to the employee for the
use of a personal affinity card.
2. The factor which distinguishes this case and the Discover Charge
Cards case from others is the source of the benefit, here the general
use of the personal credit card, as opposed to any particular
purchase, whether or not directly related to official travel.